SBEA: The Year in Review
2011 has been a very busy year for the Small Business Exporters Association. Two key issues have been at the forefront of our advocacy efforts: enactment of the Free Trade Agreements (FTAs) and reauthorizing the Export-Import Bank of the U.S. (Ex-Im Bank) to include strong small-business language. In addition to SBEA’s advocacy efforts, we have held two high-level teleconferences for a wide variety of small-business owners and had four of our members featured in high-profile media reports.
SBEA leadership has been tapped to testify before the U.S. House of Representatives and Senate on small-business exporting and Ex-Im Bank. Underscoring SBEA’s influence on small-business trade issues, leadership of the National Small Business Association (NSBA)—which serves as SBEA’s umbrella group—were invited to serve on two separate Presidential Advisory Committees, the President’s Export Council Subcommittee on Export Administration (PECSEA) and the President’s Advisory Committee on Trade Policy and Negotiations.
Free Trade Agreements Signed
On Oct. 21, President Barack Obama signed the three FTAs between the U.S. and South Korea, Colombia and Panama. The deals were first negotiated during the George W. Bush administration and were revised by the Obama administration. The agreements are expected to boost U.S. exports by around $13 billion annually, which the administration estimates will create or maintain about 70,000 jobs.
The key hurdle to passing the three FTAs was renewal of the Trade Adjustment Assistance (TAA) that helps workers who have been hurt by increased global competition. The TAA renewal was enacted alongside the FTAs.
The signing culminated a burst of bipartisanship, as congressional Republicans supplied the majority of the votes earlier in the month to get the long-stalled agreements to the president. Many Democrats had been far more skeptical of the trade pacts. In order to get more Democrats on board with the three deals: South Korea agreed to new terms that would give U.S. exporters more access to their auto and beef markets; Columbia agreed to work to satisfy complaints about its labor environment and Panama agreed to new financial regulations and transparency.
U.S. officials have said the deals—the biggest since the North American Free Trade Agreement in 1993—will reduce prices for American consumers and increase foreign sales of U.S. goods and services, providing a much-needed jolt to the sluggish U.S. economy.
When the charter authorizing Ex-Im Bank expired on Sept. 30, lawmakers approved a temporary extension for the program to operate as-is through Dec. 16. During those months, SBEA worked tirelessly toward a more long-term reauthorization and an increase in its lending cap. It had appeared a deal was brokered that would have reauthorized Ex-Im Bank for four years and increase its lending authority from $100 billion to $135 billion.
Unfortunately, there was a small handful of lawmakers who pushed against this widely-supported compromise and instead supported a very short-term—6 month extension—with no increase in the credit levels. This compromise was eventually included in the Omnibus Appropriations bill for Fiscal Year 2012, which was approved just last week.
SBEA will now focus its efforts on the months ahead and work toward ensuring a thriving, small-business friendly Ex-Im Bank for years to come.
Please click here for more on Ex-Im reauthorization.
SBEA in the News
On Nov. 25, the Washington Post On Small Business page published four commentaries from SBEA members. A new offering from the Washington Post, each week On Small Business poses a question to five small-business owners and gets their input, generally representing five different perspectives. The topic for the Nov. 25 commentaries was how the European debt crisis is impacting small U.S. exporters.
The SBEA members offered who penned insightful commentaries were: Mr. David Ickert who warned of the impact austerity measures could have on business; Mr. Paul Sabbah who underscored the importance of having a detailed risk-management strategy; Mr. Roy Paulson who outlined some of the new business opportunities arising in Europe; and Ms. Musya Tumanyan who discussed the challenges for exporters who have weathered the U.S. economic downturn and now are facing the European downturn.
On March 10, SBEA Past Chair David Ickert of Air Tractor, Inc. testified before the House Financial Services Subcommittee on International Monetary Policy and Trade. The hearing, “The Role of the Export-Import Bank (Ex-Im Bank) in the U.S. Competitiveness and Job Creation” highlighted how various companies of differing sizes have benefited from Ex-Im Bank’s programs.
The only small business represented on the panel, Ickert described how his company has benefitted from lending and insurance programs through Ex-Im Bank.
Ickert went on to describe Air Tractor’s initial application process with Ex-Im Bank back in 1995 as difficult and bureaucratic. Since that time, however, Ickert has said both his understanding of the process, and the process itself has improved. He stated that Ex-Im Bank could further ease the process by identifying first-time applicants and giving them personalized guidance during their first application process, and by seeking constructive feedback from these first-time applicants following the conclusion of the process.
On June 30, Mr. Ickert testified again, this time before the Senate Banking, Housing and Urban Affairs Subcommittee on Security and International Trade and Finance. The focus of his testimony was on the importance of the Export-Import Bank of the U.S. (Ex-Im Bank) and he praised Ex-Im Bank Chairman Fred P. Hochberg for his efforts to maintain focus on, and craft a long-term commitment to small business.
Ickert stated that such a focus on small business has not always been the case, and urged Congress to continue to institutionalize the Ex-Im small-business commitment. Specifically, any Ex-Im Bank reauthorizing language ought to expressly state that not less than 20 percent of Ex-Im’s direct financing authority shall be used specifically for small business.
Other small-business provisions Ickert highlighted as critical for inclusion in Ex-Im reauthorization legislation include: a mandate that the Advisory Committee includes at least three small-business representatives; a requirement that Ex-Im Bank officials shall report to Congress if the small-business financing minimum isn’t met; an appointment of the Senior Vice President for Small Business to Ex-Im Bank’s credit committee; and the approval of adequate administrative dollars to address the growing need for Ex-Im products and assistance.
On Thursday, Jan. 27, SBEA hosted a teleconference call to discuss the Department of Commerce’s proposed rules related to the administration’s effort to reform the export control system. The small-and mid-size exporters in attendance heard from Kevin Kurland, Director of Office of Technology Evaluation (OTE) at the Department of Commerce Bureau of Industry and Security (BIS).
In late-2009, the President directed a broad-based interagency review of the U.S. export control system, with the goal of strengthening national security and the competitiveness of key U.S. manufacturing and technology sectors by focusing on current threats, as well as adapting to the changing economic and technological landscape.
As a result, the administration initiated an Export Control Reform Initiative (ECR Initiative), which is tasked with fundamentally reforming the complex and cumbersome export control system. As part of that initiative, Director Kurland discussed two proposed regulations during the call which would reform the U.S. Munitions List (USML) and Commerce Control List (CCL), in accordance with the ECR Initiative.
On May 18, SBEA board members were invited to participate in a teleconference discussion with Meridith Webster and the team from the President’s Government Reform for Competitiveness Innovation Initiative. The discussion was to come up with ideas to improve efficiency and effectiveness in various government programs focused on trade, exports and economic competitiveness.
On Thursday, Oct. 27, SBEA held an issue briefing teleconference on exporting, “Exporting 101.” With nearly 100 people dialing-in to the call, the expert speakers on the line discussed the challenges they have faced as well as provided various recommendations to new and growing exporters. In addition to four SBEA members with great expertise in exporting, David Ickert, who spearheaded the call, Don Williams. Peter Bowe and Phil Jeske, Dr. Tomas Hult of the International Business Center (IBC) at Michigan State University and the Academy of International Business also served as an expert speaker.
Following the prepared remarks of the experts, callers were invited to ask questions which spurred discussion on real-world experiences and recommendations. Although the speakers attempted to address all the questions, there were too many to be covered in the allotted time, so SBEA provided awritten follow-up answering the remaining questions.
Additionally, NSBA and SBEA have provided podcasts of past teleconferences which can be accessed here.
SBEA Leadership Involvement
In February, President Barack Obama nominated NSBA President and CEO Todd McCracken to the Advisory Committee on Trade Policy and Negotiations. The Advisory Committee is tasked with providing policy advice on trade matters to the U.S. Trade Representative.
Having served as NSBA president for 13 years, McCracken will continue to helm NSBA throughout his tenure on the Advisory Committee. McCracken will be representing the members of NSBA and SBEA as the committee continues to explore ways to bolster small- and mid-sized exporting.
In March, U.S. Department of Commerce Secretary Gary Locke announced the appointment of NSBA board member Dr. Leslie “Les” Bowen to President’s Export Council Subcommittee on Export Administration (PECSEA). This committee will advise the Commerce Department on the administration’s export control reform initiative.
Les Bowen has been active on export issues with NSBA and the Smaller Business Association of New England for many years, and has been very involved in efforts to reform the U.S. export control system.
More recently, SBEA member company Air Tractor, Inc. was recognized with a profile on the White House Web site and recently was recognized by SBA’s OIT and VISA for their entry in the export video contest which was aimed at promoting the advantages of exporting. All five awardees were recognized during the National District Export Council Conference