Small Businesses Need to Understand FTAs to Grow

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Small Businesses Need to Understand FTAs to Grow

According to the 2016 Small Business Exporting Survey, there is a significant knowledge gap among small and medium sized businesses in relation to understanding how current and future free trade agreements (FTAs) can benefit them and help them grow. The survey, conducted online in early 2016, was answered by 530 U.S. small-business owners.

The survey, conducted by the U.S. National Small Business Association in partnership with Livingston International, demonstrates that exporters understand the benefits they collect from FTAs such as accessing foreign markets and creating opportunities to grow their businesses by exporting goods and services. But on the other hand, slightly over 37 percent of businesses that aren’t exporting currently mentioned that the main reason they weren’t taking advantage of FTAs was because they simply didn’t know enough about and how to start off.

There are a variety of programs throughout the different government agencies and departments that aim to help businesses better understand FTAs and how to take advantage of them and clearly, the survey results indicate that many are not taking up these opportunities. The survey also indicates that a majority of small and mid-sized businesses would be more likely to enter a new market if it is covered under an FTA with the U.S. Half of exporters surveyed also mentioned that they were also in the dark when it came to current FTAs that are presently under consideration by authorities such as the Transatlantic Trade and Investment Partnership and the Trans-Pacific Partnership (TPP).

trans-pacific-partnership

When asked what type of support from the government could help them take better advantage of FTAs, small business respondents answered that export tax incentives where the way to go. A competitive U.S. dollar exchange rate and enhanced technical assistance were also among the top answers.

“We encourage these small-business exporters to utilize the multitude of resources available to them, including learning more about how they stand to benefit from FTAs. Exporting can be difficult, but it doesn’t always have to be” stated Todd McCRacken, NBSA President and CEO.

Although the processes can seem heavy and daunting at times, small businesses have a multitude of tools and resources to help them navigate through it all. Third-party experts such as brokerage firms are always willing to take on much of the work, allowing businesses to concentrate on their growth and developing new opportunities.

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