April 1, 2016

TPP would boost nation’s small businesses

While small businesses represent the majority of American exporters, their export sales represent less than a third of the overall value of American exports. Ninety-five percent of the world’s consumers live outside of our country’s borders, but only 1 percent of American small businesses are selling to them.

Small businesses make up nearly 98 percent of exporters in the six states I represent – Colorado, Montana, North Dakota, South Dakota, Utah and Wyoming. Exporting can be profitable for businesses of all sizes. On average, sales grow faster, more jobs are created and employees earn more than in non-exporting firms. The recent Commerce International Trade Administration state report shows how critical exporting is in each state across the nation.

The power of exporting will only be increased with the ratification of the Trans-Pacific Partnership. TPP would unlock additional opportunities for U.S. small businesses, which are the backbone of the U.S. economy. By addressing trade barriers that are particularly challenging for small businesses to navigate, TPP allows our small businesses to reach new markets in the Asia-Pacific region. Additionally, TPP will help more small businesses navigate the barriers by eliminating 18,000 taxes and tariffs that deter many from considering foreign markets.

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U.S. agriculture is likely to be a primary beneficiary of the agreement, as 85 percent of U.S. agricultural exports currently are sold to TPP nations. The deal would boost agricultural trade even further by significantly lowering tariffs and opening up nations such as Japan, New Zealand and Malaysia to competition in agricultural trade. For example, taxes immediately would be removed on more than half of our agricultural exports to Japan and on more than 90 percent of exports to Malaysia and New Zealand.

In other words, if ratified by Congress, TPP would help open doors for small businesses that would otherwise remain closed. It would be the first trade agreement that incorporates a chapter regarding American small and medium-sized enterprises. The chapter bolsters substantive commitments on these issues in chapters such as those on customs and trade facilitation, e-commerce and others by providing readily accessible information to small and medium-sized enterprises on the opportunities TPP will offer, and giving them an ongoing means to engage with TPP governments on ways to enhance the functioning of the agreement so as to benefit small- and medium-sized enterprises.

By 2030, two-thirds of the world’s middle-class consumers are projected to live in the Asia Pacific region. The Internet and e-commerce have opened up a new world of opportunity for small businesses to sell to them with the click of a mouse. TPP would help them realize that promise.

Opponents of the deal contend that increased global trade moves jobs overseas. But for our small-business sector, which creates two out of three new jobs in our country, the opposite actually is true. According to a study published by the Institute for International Economics, exporting firms not only grow faster but are less likely to go out of business than non-exporting companies. Also, firms that export pay up to 18 percent more than companies that don’t.

Overall, TPP levels the playing field for American workers and American businesses, leading to more Made-in-America exports and more higher-paying jobs here at home. Passing TPP would help small businesses share their ingenuity with vast new pools of waiting consumers who believe in the American brand, keeping alive that intrepid entrepreneurial spirit that makes this nation so great.

Former 4th District congresswoman Betsy Markey serves as the Small Business Administration’s Region VIII administrator and is based in Denver.

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