Finally, only an official signing ceremony by stands between small businesses and their benefit from the new U.S.-Mexico-Canada Agreement (USMCA.) The agreement establishes fair trade rules between our North American neighbors and its expected implementation sets the future for trade progress for small businesses by simplifying customs and trade rules and reducing barriers and costs that small businesses have historically faced.
In my role with the SBA, I have encountered many businesses in trade relationships with Canada and Mexico and have heard how these markets helped to expand their businesses. Now, they will benefit as the USMCA:
• Cuts red tape at the border.
• Supports digital trade detail supporting internet-enabled small businesses.
• Promotes small-business participation in government procurement.
• Protects innovators’ intellectual property.
• Eliminates local presence requirements for cross-border service providers.
In SBA’s Region VII perhaps the state of Iowa will benefit the most from the agreement. Canada and Mexico are the top export markets at 47% total exports. Last year, Iowa exported $4.2 billion worth of goods to Canada alone –30% of the state’s total – and nearly $2.3 billion to Mexico, according to the U.S. Trade Representative. Out of the 12 million American jobs supported by trade with Canada and Mexico, nearly 130,000 currently exist in Iowa.
Missouri, Nebraska and Kansas will benefit greatly, too.
In Missouri, 56% and in Nebraska 42% of total exports are sent to Canada and Mexico. In Missouri this totals $7.8 billion worth of trade and Nebraska $3.1 billion worth of products. Kansas exported $2.5 billion of goods to Canada last year, with hundreds of millions from aviation and agriculture. As Kansas’ top two trading destinations, Canada and Mexico purchase more than one-third of Kansas’s total global manufacturing exports. One of four Kansas manufacturing firms exporting to the countries.
These companies will enjoy an ongoing trade regulation involvement because the USMCA establishes a small business trade committee. Government officials from each country will provide a forum where small businesses can share information about the impact of international business regulations. Keeping the communication lines open will empower small businesses.
The International Trade Commission says the USMCA could add up to $2.2 billion in new economic growth within five years and create 589,000 jobs. Two of three net new jobs will come from small businesses as they access the two-thirds of the world’s foreign purchasing power. Trade is an imperative strategy for small businesses to sustain and generate growth.
The SBA is ready to support new and existing exporting small businesses. In fiscal year 2019, the SBA backed $1 billion in financing to small businesses through our export loan programs and our State Trade and Export Promotion Program (STEP) program has provided $157 million to state governments with funds to support export assistance since 2011. SBA export assistance staff are located in 21 U.S. Export Assistance Centers, with St. Louis being our center.
The expansion of small business exports will add strength to an already historic resurgence in the American economy. The SBA is ready to help.
Tom Salisbury serves as the SBA’s Region VII administrator and is based in Kansas City. He oversees the agency’s programs and services in Kansas, Nebraska, Missouri and Iowa.