Global Economy
October 16, 2015

Open for Business

By Andrea Durkin

Open for business

 

Many of America’s largest firms and associations have weighed in this week praising the completion of negotiations on the Trans-Pacific Partnership (TPP).  TPP is a significant accomplishment representing six years of intense professional work and personal sacrifice by teams of negotiators across the12 participating nations.

Analysis and judgments await public release of the full text, which will take those of us who haven’t been involved in the six years of negotiations some time to digest.

That large companies see the deal as a benefit is important since they employ millions of Americans, create dynamic supply chains, and drive two-thirds of the value of U.S. exports.

Many of the companies that are now household names have some kind of creation myth or compelling backstory of its origin. William Hewlett and David Packard gave birth to Silicon Valley in the late 1930s tinkering with electronics in a garage on 367 Addison Avenue in Palo Alto, California.  Henry Ford completed his first gasoline-powered motor car in 1896 in a coal shed behind his house on 58 Bagley Avenue in Detroit, Michigan.

We value these stories because they inspire and fuel the American entrepreneurial spirit.  Anyone with a great idea who works hard can create and grow their business.  We believe it, and we believe that’s what makes America great.

That’s why, among the many accolades this week, the one with the simplest of headlines grabbed our attention at ProgressiveEconomy: “TPP Deal is Good for Small Business.”

98% of American exporters are small- and medium-sized businesses.  They account for about a third of the value of US exports.

The headline came from a press release from the National Small Business Association, a nonpartisan group, 75 years old, and dedicated solely to American entrepreneurs.  They have 65,000 members in every state and they are associated with the Small Business Exporters Association (SBEA) representing small- and mid-size exporters.

In their 2013 Small Business Exporting Survey, SBEA found the percentage of firms that export had grown from 52% in 2010 to 64% in 2013.  35% of small business export volume went to Canada and Mexico in 2013, according to the survey.

Half of those surveyed were either manufacturers or small businesses offering professional services.  They reported the top benefits of exporting are increased profits and ability to diversify and expand their customer base.

Negotiators included a chapter in the TPP dedicated to helping small businesses benefit from economic opportunities created by the agreement.  According to SBEA, 46% of survey respondents said accessing information about export requirements and their commercial rights in foreign markets were the main barriers to increasing exports.

USTR says the Small- and Medium-Sized Enterprise chapter of TPP includes commitments by each TPP Party to provide a multitude of such information on easy-to-access websites serving small businesses.  The TPP Parties will also establish a committee to meet regularly and discuss ways to ensure the agreement’s benefits are enjoyed by small businesses.

When the TPP agreement becomes fully public, there will be much discussion over specific provisions that big businesses care deeply about.

But for the small business owner, the TPP is less about the shiny new provisions and more about the traditional nuts and bolts of the trade agreement.  The core provisions provide the horsepower behind reducing the cost and complexity for small businesses selling to and receiving product from the TPP markets.  And when small businesses grow their sales, the American economy hums.