Letter to the Hon. Robert Lighthizer, United States Trade Representative - Cut Red Tape, Level Playing Field for Small Businesses Selling Overseas

Letter

Dear Ambassador Lighthizer:

Ecommerce has been a tremendous boon to American small businesses, especially when it comes to exporting. Online tools have enabled many small businesses to reach new customers and break down traditional barriers to selling overseas, like communicating in a foreign language and conducting market research. Despite these positive trends, however, antiquated and complex trade laws stand in the way of small businesses reaching their full exporting potential. We write today to call your attention to one such barrier -- excessively low de minimis thresholds -- and urge you to work to cut red tape for American small businesses selling online.

As you know, countries establish de minimis thresholds to facilitate the flow of low-value goods across borders. When small American ecommerce businesses make sales to foreign buyers above the destination country's de minimis threshold, their packages are subject to heightened clearance processes, duties and taxes. As a result, when a foreign trading partner has a low de minimis threshold, American small businesses face additional government red tape at the border. For small businesses with limited time and resources, these burdens can be excessive and discourage them from exporting altogether.

Congress recognized the need to update antiquated de minimis thresholds in the Trade Facilitation and Enforcement Act of 2015 (PL 114-125). Through that law, Congress both raised the U.S. de minimis threshold on imported goods to $800 USD and urged the United States Trade Representative to "encourage other countries, through bilateral, regional, and multilateral fora, to establish commercially meaningful de minimis values for express and postal shipments that are exempt from customs duties and taxes and from certain entry documentation requirements, as appropriate."

We encourage you to make small businesses a priority in trade negotiations by following through on Congressional intent and seeking de minimis parity with our trading partners. Doing so would cut red tape on American small businesses and enable them to fulfill their exporting potential by leveling the playing field with foreign competition. In particular, increased de minimis thresholds in Canada and Mexico would bring direct benefits to American small businesses who count these countries as top trading partners. Notably, the de minimis threshold for Canada was set more than 30 years ago and ranks as the lowest in the industrialized world. Raising Canada's $20 CAD de minimis threshold on low-value, low-risk shipments would improve the ability of American small businesses operating online to serve Canadian consumers.

Small businesses are the backbone of our economy, representing 99 percent of employers and creating two out of every three jobs in the United States. Although 95 percent of the world's customers live in foreign countries, only one percent of small- and medium-sized enterprises export their goods and services in foreign markets. Ecommerce, which now represents $2.2 trillion or approximately 12 percent of the global goods trade, has the potential to fuel small business growth by unleashing this untapped potential. We urge you to keep the interests of small businesses in mind and seek to relieve them of exporting barriers in the form of low de minimis thresholds.

Sincerely,

Jeanne Shaheen

U.S. Senator

Rob Portman

U.S. Senator