US aims to boost export-led jobs in SMEs

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US Trade Representative Ron Kirk welcomed a new report on Tuesday (19 January) he said showed the potential to create well-paying American jobs by encouraging more small and medium-sized US companies to export, eyeing the EU model.

The US International Trade Commission, in the first of three reports Kirk has requested on the subject, said that 97% of American companies that sell goods in foreign markets have fewer than 500 employees. 

Those 250,000 companies account for about 30% of total US goods exports and about half of US economic growth outside the farm sector, the report said. “All of us here at USTR want America’s small- and medium-sized businesses to be able to export more around the world and to hire more people here at home,” Kirk said. 

“The information in this ITC report will be combined with the real-world stories that we get from small- and medium-sized enterprises, and with the existing trade policy expertise at USTR, to shape trade policy in ways that better serve these businesses,” Kirk said. 

Kirk’s office is holding a conference in Washington, D.C., on Thursday (21 January) to delve further into the topic. 

As the United States recovers from its worst recession since the 1930s, President Barack Obama has stressed the need to “rebalance” global economic growth away from its heavy reliance on US consumer demand. 

At the same time, many members of the Democratic-controlled Congress are wary of trade agreements that big US companies see as key to expanding America’s exports. 

US trade officials hope getting more small and medium-sized businesses involved in exporting will increase political support in Congress for trade. 

They also see it as an economic growth engine since such companies have created about 65% of new US jobs over the past two decades. They also tend to pay higher wages and add jobs more rapidly than non-exporting companies in the same industry, the ITC said. 

One US trade official said the Obama administration is focused on expanding what he called “the three ones”. That is, only 1% of all US small- and medium-sized businesses are exporters and they tend to export just one product to one foreign market, he said. 

For many US companies the single market is either Canada or Mexico, the trade official said. US companies may have been slower than European or Asian competitors to “learn the habit” of exporting because they have long been able to sell in a growing domestic market, he said. 

But “we’ve reached a moment where the future path of the US is that exports will play an even larger role in the total national economy,” the trade official said.

(EURACTIV with Reuters.)

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