Hearing: Cutting Our Trade Deficit: Can The U.S. Muster Its Diverse Trade Promotion Operations To Make An Impact?

Statement

Hearing: Cutting Our Trade Deficit: Can The U.S. Muster Its Diverse Trade Promotion Operations To Make An Impact?

Thank you, Mr. Chairman. Small business international trade prospects are on the rise. These firms represent 97 percent of all exporters and are experiencing growth at two times the rate of their larger counterparts. They generate 30 percent of the nation's total value of exports and dominate many of these industries.

The tremendous growth of the global market has allowed American small businesses to remain competitive and strong. Yet since 2002, the nation's trade deficit has been rising to unprecedented levels - with no end in sight. It is time to acknowledge that current economic policies are undermining the leadership position of our nation's industries in the global market.

Therefore, as we consider a new national promotion strategy, it is crucial to focus on trade policies that target those businesses with the ability to export successfully and accommodate this dynamic global economy. In my opinion, the answer to our trade deficit is through small businesses.

However, our nation's commitment to trade promotion is declining, as indicated by several factors - all of which impede the growth of our country's small exporters.

The Trade Promotion Coordinating Committee (TPCC) is vastly underfunded. The administration has provided fewer resources to its 19 member agencies for which to contribute to the export promotion objectives. Since FY1999, TPCC's budget has been cut by over 30 percent. Today, member agencies are contributing a mere $1.8 million to trade promotion goals.

This lack of adequate funding has left the Committee without the necessary resources and staffing it needs, as well as leverage over agencies to utilize their budget resources to fulfill its mandate. Small business programs have not been coordinated successfully within the TPCC, and many exporters claim the process to gain information and resources to facilitate trade transactions is unwieldy and confusing. Finally, as advisors to the U.S. Trade Representative, the TPCC has not adequately represented the needs of small business in trade agreement negotiations.

A 2002 GAO investigation corroborated these findings, and confirmed that the Committee has exhibited ineffective and inconsistent policies for coordinating federal agency export promotion efforts and supporting small business exporters. Given the dynamics of the global economy and the importance of international trade, this is simply unacceptable.

As the trade deficit continues to rise, one question remains - why would we choose to ignore these small businesses who are our strategic asset for spurring innovation and increasing our global market share?

The global economy only continues to grow with each passing year - yet trade deficits are growing and our national industries are losing their competitive edge. It is more important now, than ever, for our nation's small businesses to remain on the cutting edge of their industries. Instead of ignoring the tremendous potential of small exporters, TPCC needs to focus on recommitting and supporting the growth of these entrepreneurs well into the future.

In order to ensure that our nation's small business exporters are able to compete more efficiently and effectively in the global market, it is critical to invest adequate resources into making this happen. Our trade policies must be reflective of the important role these entrepreneurs play in the world economy. It is my hope to find a solution that truly supports their continued innovation and advancement.

I look forward to hearing the testimony of today's witnesses.