The House Foreign Affairs Committee approved legislation on Wednesday authored by Congressman Steve Chabot (R-Westwood) to help federal and state trade agencies work together to better assist local exporters. Chabot's legislation, H.R. 1926, the State Trade Coordination Act, was approved by the Committee by voice vote.
Foreign markets represent a critical growth area for the American economy. In 2012, U.S. trade with foreign nations totaled $4.9 trillion. This flow of goods and services supported nearly 10 million American jobs. In greater Cincinnati, exports reached record levels, topping $20 billion. However, the vast majority of our small businesses, the engines of job creation, are sitting on the sidelines.
Due to the complex labyrinth of trade rules and regulations both foreign and domestic, only one percent of small businesses currently export their products. The goal of Chabot's legislation is to encourage cooperation between state and federal trade promotion agencies, so more small businesses have access to the tools they need to successfully navigate trade rules.
"We need to do everything possible to make the export process simple, straightforward, and accessible to all businesses," Chabot said. "By making it easier for small businesses to sell their products overseas, we can create an environment in which small businesses thrive, grow and expand. Quite simply, more exports mean more jobs."
There are over 20 federal trade agencies (and even more state trade agencies) in place to assist businesses through the export process. While these entities are well intentioned, they quickly add to the complexity of the export process. The lack of coordination between these groups creates inefficiencies that ultimately undermine small business participation in export markets.
H.R. 1926 addresses these challenges by fostering cooperation amongst the various trade promotion entities. First, the legislation requires that state trade agencies be represented on the Trade Promotion Coordinating Committee, the federal board primarily in charge of determining our nation's trade goals. H.R. 1926 will also direct the U.S. Secretary of Commerce to work with states to develop individual state trade strategies and incorporate those plans into the federal strategy.
State trade agency input and participation in national trade policy determinations would be highly beneficial, because state agencies have a much better understanding than federal agencies of the challenges facing businesses in their states. As a result, the interests of small businesses would be better represented if state agencies had a seat at the table when trade policies and goals are being set.
Further, state agencies are more accessible for small businesses than federal agencies. Therefore, by encouraging cooperation between state and federal agencies, H.R. 1926 will help to provide small businesses with one state agency where they can obtain clear, concise answers to most export questions, thereby removing one of the primary barriers to small business participation in foreign markets.