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98–246 2016

SBA’S OFFICE OF INTERNATIONAL TRADE: GOOD 

FOR BUSINESS? 

HEARING 

BEFORE THE

SUBCOMMITTEE ON AGRICULTURE, ENERGY AND 

TRADE 

OF THE

COMMITTEE ON SMALL BUSINESS 

UNITED STATES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTEENTH CONGRESS 

SECOND SESSION 

HEARING HELD 

JANUARY 11, 2016 

Small Business Committee Document Number 114–036 

Available via the GPO Website: www.fdsys.gov 

SBREP-219 with DISTILLER


Congress.#13
(II) 

HOUSE COMMITTEE ON SMALL BUSINESS 

STEVE CHABOT, Ohio, Chairman 

STEVE KING, Iowa 

BLAINE LUETKEMEYER, Missouri 

RICHARD HANNA, New York 

TIM HUELSKAMP, Kansas 

CHRIS GIBSON, New York 

DAVE BRAT, Virginia 

AUMUA AMATA COLEMAN RADEWAGEN, American Samoa 

STEVE KNIGHT, California 

CARLOS CURBELO, Florida 

MIKE BOST, Illinois 

CRESENT HARDY, Nevada 

NYDIA VELA ́ ZQUEZ, New York, Ranking Member 

YVETTE CLARK, New York 

JUDY CHU, California 

JANICE HAHN, California 

DONALD PAYNE, JR., New Jersey 

GRACE MENG, New York 

BRENDA LAWRENCE, Michigan 

ALMA ADAMS, North Carolina 

SETH MOULTON, Massachusetts 

MARK TAKAI, Hawaii 

KEVIN FITZPATRICK, Staff Director 

EMILY MURPHY, Deputy Staff Director for Policy 

JAN OLIVER, Deputy Staff Director for Operation 

BARRY PINELES, Chief Counsel 

MICHAEL DAY, Minority Staff Director 

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(III) 

C O N T E N T S 

OPENING STATEMENTS 

Page 

Hon. Carlos Curbelo ................................................................................................ 1 

Hon. Grace Meng ..................................................................................................... 2 

WITNESS 

Ms. Eileen Sanchez, Associate Administrator, Office of International Trade, 

United States Small Business Administration, Washington, DC .................... 3 

APPENDIX 

Prepared Statement: 

Ms. Eileen Sanchez, Associate Administrator, Office of International 

Trade, United States Small Business Administration, Washington, DC . 13 

Questions for the Record: 

None. 

Answers for the Record: 

None. 

Additional Material for the Record: 

None. 

SBREP-219 with DISTILLER

SBREP-219 with DISTILLER

(1) 

SBA’S OFFICE OF INTERNATIONAL TRADE: 

GOOD FOR BUSINESS? 

MONDAY, JANUARY 11, 2016 

HOUSE OF REPRESENTATIVES, COMMITTEE ON SMALL BUSINESS, SUBCOMMITTEE ON AGRICULTURE, ENERGY AND TRADE, Washington, DC. 

The Subcommittee met, pursuant to call, at 4:02 p.m., in Room 

2360, Rayburn House Office Building, Hon. Carlos Curbelo [chairman of the Subcommittee] presiding. 

Present: Representatives Curbelo, Luetkemeyer, Brat, and Meng. 

Chairman CURBELO. Good afternoon. I call this hearing to 

order. 

Thank you all for joining us today for this hearing on the Small 

Business Administration’s Office of International Trade, OIT. I 

hope through this hearing this Committee can identify some potential methods to strengthen our work with the SBA to better support small businesses seeking export opportunities. 

This Subcommittee has stressed time and time again the small 

business benefits of foreign markets. Ninety-five percent of all consumers live outside the borders of the United States, and yet, only 

1 percent of the United States small businesses actually export. 

Despite that low percentage, trade is still a vital way for small 

businesses to find new markets. In my home State of Florida, 96 

percent of our exports were from small firms. Those same small 

firms generated roughly two-thirds of our State’s export value. 

However, while this is a tremendous start, many small businesses 

still find exporting a costly, complicated, and confusing process. 

In 2010, this administration put forth the national export initiative, a strategy that prioritized small business exports. That same 

year, Congress directed the SBA to expand its role in export promotion. Specifically, the SBA was tasked with increasing coordination efforts between Federal agencies engaged in export promotion 

offering greater counseling and training to small businesses interested in expanding into foreign markets and broadening its export 

financing efforts. I understand the SBA has worked to strengthen 

these efforts through the colocation of staff at a network of U.S. export assistance centers, USEACs. And I am also aware that SBA 

operates through nonFederal partners like the Small Business Development Centers, SBDCs, resources that devote substantial time 

to the promotion of exports. 

Frankly, it sounds like these resources could be invaluable to 

small businesses engaging in international trade. However, the 

OIT has only dedicated 19 trade specialists to the various USEACs 

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around the country, 11 short of the 30 required by the Small Business Jobs Act of 2010 and although the SBA has appointed district 

international trade officers to assist businesses seeking advice on 

exporting, the Government Accountability Office recently reported 

that those staff only spend about 15 percent of their time on export 

promotion. 

So here we are, 6 years after the Small Business Jobs Act, goals 

and objectives that have been pushed by the administration and 

statutorily mandated by the United States Congress are still incomplete. And I am concerned that the OIT may actually be serving a redundant purpose. If there are massive deficiencies in SBA’s 

efforts to better coordinate Federal trade promotion resources, if 

the OIT is offering trade counseling and training that is also being 

provided by SBDCs, the Department of Commerce, and other State, 

Federal, and private entities, if OIT is failing to follow through on 

the very legislative mandates established to hire more staff for the 

purpose of heightening the presence and functioning of OIT, then 

maybe it is time we in Congress give serious reconsideration to the 

long-term validity of the office of international trade altogether. 

Today, we will hear from OIT’s associate administrator, Eileen 

Sanchez, on how SBA plans to implement GAO’s recommendations 

as well as how they plan to assist more small businesses yearning 

to join the global marketplace. 

Thank you, again, for joining us, and I now yield to my distinguished colleague from New York, the ranking member, for her 

opening remarks. 

Ms. MENG. Thank you, Mr. Chairman. 

Expanding trade opportunities is a big deal for companies of all 

sizes, but especially for small business. More than 300,000 U.S. 

companies are exporters. Of this total, 97 percent are small and 

mid-sized companies. These smaller businesses exported more than 

$470 billion in 2013, over one-third of all U.S. exports. Those exports help support more than 11 million jobs across the country. 

In 2012, my home State of New York, ranked third in the value 

of exports by small businesses, with more than $79 billion, or 5 

percent, of all exports. 

With foreign trade on the rise and small business expansion into 

the global market increasing, the opportunities for small firms to 

grow and succeed are also increasing. Small firms that engage in 

global trade are 20 percent more productive, and produce 20 percent greater job growth when compared to nonexporting counterparts. They are also more resilient. Yet, for many of these companies, their success depends in part on their ability to access these 

international markets. 

Despite such impressive numbers, less than 4 percent of all 

American small businesses export. Small businesses face many 

challenges. It takes time to identify foreign markets, target new 

customers, and learn the nuances of the exporting process. In fact, 

nearly half of small exporters spend a few months a year and close 

to 10 percent of their annual operating budget preparing to export. 

Due to a lack of resources to develop a trade strategy, the majority of small exporters only enter one foreign market while more 

than half of large companies export to at least five foreign markets. 

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In order to help bridge this divide, there are several tools and resources available to small exporters. The primary tool for small 

firms is the Small Business Administration’s U.S. export assistance 

centers, which fill a void by providing access to technical trade specialists all over the country. By delivering foreign industry and 

market expertise as well as compliance assistance, small businesses are better able to navigate the complex terrain of the international marketplace. 

To address financing challenges for small exporters, the SBA and 

Export-Import Bank provide small business specific export financing products. In 2014, this program enlisted 513 lenders to provide 

$1.3 billion in export financing to almost 1,400 small exporters. 

However, there is still not enough financing, which is why I introduced the bill last year to increase Ex-Im Bank’s small business financing goals, and I hope to hear how else financing can be improved. 

International trade is inherently complex due to economic trends, 

country-specific policies, and customs and intellectual property 

laws. But with the resources available through SBA initiatives, 

small firms wishing to reach more global customers and those already exporting can better prepare themselves for navigating the 

international market. 

It is critical that small businesses are able to participate in this 

marketplace. Doing so gives them access to more customers, which 

in turn fuels their growth and employment and that of the U.S. 

economy overall. 

I would like to thank our witness for making herself available to 

testify today. 

Thank you, Mr. Chairman, and I yield back. 

Chairman CURBELO. I thank the ranking member for her opening statement. If Committee members have an opening statement 

prepared, I ask if they be submitted for the record. 

I would like to take a quick moment to explain the timing lights. 

You will have 5 minutes to deliver your testimony. The light will 

start out as green. When you have one minute remaining, the light 

turn yellow. Finally, at the end of your 5 minutes, it will turn red. 

I ask that you try to adhere to that time limit, but to the extent 

you need a little extra time, we will be happy to indulge you here. 

Our witness today is Ms. Eileen Sanchez, associate administrator 

for international trade at the Small Business Administration. I look 

forward to your testimony. 

You may begin. 

STATEMENT OF EILEEN SANCHEZ, ASSOCIATE ADMINISTRATOR, OFFICE OF INTERNATIONAL TRADE, UNITED 

STATES SMALL BUSINESS ADMINISTRATION, WASHINGTON, 

DC 

Ms. SANCHEZ. Thank you, Chairman Curbelo, Ranking Member 

Meng, and distinguished members of the Subcommittee. 

Thank you for the opportunity to testify about the U.S. Small 

Business Administration’s international trade programs and initiatives. 

Sounds like we are saying a lot of the same things. Small businesses are increasing, looking abroad for their next customer. 

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4 

International sales contribute to a strong middle class by fueling 

economic opportunity and creating jobs in communities across the 

United States. At the same time, foreign consumers that buy madein-America products, gain access to some of the world’s highest 

quality products and services. Today, 96 percent of all consumers 

and over two-thirds of the world’s purchasing power resides outside 

of the United States. Small businesses that can tap into this market have the potential for vast expansion and growth. 

In SBA’s Office of International Trade, we remain focused on our 

core mission of increasing the ability of small businesses to compete in international markets through our finance programs and 

through export development opportunities. I would like to share 

with you some of the important achievements we have made thus 

far. 

On my personal visits to small business exporters, they routinely 

express to me their need for access to finance. I am proud to say 

that in fiscal year 2015, in spite of an overall dip in total U.S. exports, we remain focused and participated with 514 lenders to 

guarantee a record $1.45 billion in SBA loans to 1,513 small business exporters. 

We have also ramped up our approach to targeting new export 

lenders so that they can more efficiently and effectively support 

small business exporters in their communities, and so that more liquidity can flow to the market. 

In fiscal year 2015, we also trained more than 4,300 bankers. We 

hosted several lender roundtables throughout the country; we provided webinars, and we carried out other outreach and training 

events. For example, we provided a webinar for members of the 

National Credit Union Administration. In fiscal year 2016, we intend to amplify these types of outreach. On the export development 

side, SBA collaborated with partners across the country to improve 

access and delivery of programs to small business exporters, and 

we will continue to ramp this up in 2016. 

One of the programs that we continue to be very excited about 

is the State Trade and Export Promotion program, also known as 

the STEP program. As you know, STEP awards Federal dollars to 

our States and territories to fund their eligible small business market development activities. These activities can include trade missions, foreign market sales trips, international marketing, and 

training. 

In our fiscal year 2015, we upgraded processes and implemented 

efficiencies as part of our STEP program improvement initiative. 

So far, the program has supported small business export development in 85 foreign markets as well as export activities attended by 

32,000 small businesses channeling over 1.1 billion in export sales 

for a return on taxpayer investment of over 19 to 1. In fiscal year 

2015, SBA awarded $17.4 million in STEP grants to 40 States. 

Today, based on funding provided for STEP in the recent 2016 

Consolidated Appropriations Act, SBA will announce a competitive 

process for additional STEP awards totaling $18 million this year. 

On the trade negotiations front, another key barrier that we 

hear, as you said, Ms. Meng, is market access. And many untapped 

opportunities exist outside the United States but small businesses 

just don’t have the resources and the personnel to leverage them. 

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This is why, likely unknowingly, small businesses must rely heavily on negotiated free trade agreements to truly access new markets and grow. And that is why trade agreements have the potential to significantly benefit small businesses, 

So in addition to the office’s core functions, for the first time 

ever, our office is engaged in creating market access opportunities 

for small businesses in key markets through trade negotiations. 

Last year, the SBA, along with USGR and other members of the 

Federal agencies, represented small business interests in ongoing 

U.S.-EU transatlantic trade investment partnership negotiation 

and in intercessional meetings, and we will continue to do this in 

2016. 

With regards to the recently concluded Trans-Pacific Partnership 

agreement, the TPP, the SBA is excited that the agreement includes the first ever small-medium enterprise chapter, as we believe many other provisions in the agreement will help small business exporters. We also believe TPP and its commitments will help 

to improve the environment for doing business overseas and help 

more small business exports make their made-in-America goods 

and services to Asia Pacific Rim customers. 

From the internal management perspective, we have prioritized 

program changes into more practical frameworks. We have also 

hired new enthusiastic, high-caliber, and innovative expertise in 

the field and at headquarters. We are now at 21. 

In conclusion, it is clear that in the 21st century, SBA’s Office 

of International Trade must be as global, innovative, and entrepreneurial as the small businesses we serve. We are more engaged on 

the international front than ever before by supporting expert development efforts through the STEP program, through guaranteed expert lending, as well as our active involvement in trade negotiations. Together, these efforts increase the ability of small business 

exporters to compete in international markets and help create expert supported jobs in the United States. 

Again, I want to thank all of you for your bipartisan commitment 

to small businesses. 

Mr. Chairman, happy to take your questions. 

Chairman CURBELO. Thank you very much for your testimony, 

Ms. Sanchez. I now would like to recognize myself for 5 minutes. 

And here is my first question: The Small Business Jobs Act of 

2010 directed SBA to increase its OIT export finance staff from 18 

to 30 by the end of September 2012; however, the GAO reported 

in January 2013 that SBA only filled two positions pointing to 

funding and recruiting challenges as an explanation. GAO recommended that SBA update its plan to hire additional OIT staff 

and include funding sources and timeframes. So it is now January 

2016, and I am curious what is the current number of OIT field 

staff today? 

Ms. SANCHEZ. Thank you very much, and thank you for the 

question. We are eager to raise our staff numbers as well. We are 

currently at 21. We have added staff, additional staff, in Florida, 

in Texas, in St. Louis, and in Seattle. And we are reshifting and 

realigning our staff to meet the gaps. We have conducted a gap 

analysis, and we have also added a new position, also part of the 

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6 

Small Business Jobs Act, a regional export development officer to 

fill a gap in markets on the West Coast. 

Chairman CURBELO. So is there an updated plan for meeting 

the requirements of the SBA? You have mentioned the number 21. 

That seems to me it is only an increase of three from a few years 

ago. Do you have an updated plan? And if you don’t, why don’t you 

have an updated plan? 

Ms. SANCHEZ. We do have an updated plan, and it includes a 

gap analysis so that we understand where the gaps lie within our 

talent. If there is some of them that—if the market requires extra, 

for example, outreach help versus finance help, then we want to 

make sure that we make a judicious and good use of taxpayer dollars an ensure that we are putting people in the right places. And 

that is where we are right now. 

Chairman CURBELO. You do understand that since you haven’t 

reached the 30 that you are required to reach, that raises many 

questions. And some people may say, well, perhaps there is not 

enough work for this agency to do. Perhaps this agency may not 

be necessary; it is redundant. Maybe this work is being done by 

other agencies. 

So it is my view, Ms. Sanchez, that we need a more convincing 

and a more definitive answer as to why it has taken so long, I 

mean, this is years, to increase the positions from 18 to 30. It has 

been years, and it has been very difficult to achieve that. So I don’t 

know if there is anything else you would like to add or if there is 

anything you can commitment to sharing with us with regards to 

your plans so that we can better understand why it is that this has 

been so challenging to the agency? 

Ms. SANCHEZ. Yes. Well, first, I have been with the agency for 

14 months, and I can tell you that Administrator Contreras-Sweet 

is committed to ensuring that we right size as soon as possible, and 

she continuously repeats that. And she wants to make sure that we 

are staffing up and supporting the market the way it needs to be 

supported. 

Chairman CURBELO. So do you think that the plan is something you would be able to share with this Committee—— 

Ms. SANCHEZ. Sure, definitely. 

Chairman CURBELO.—so we can better understand what it is 

you are experiencing, and perhaps if you need additional resources 

or if there is anything we can do to be helpful? 

Ms. SANCHEZ. That would be great. Thank you. 

Chairman CURBELO. Okay. Another question. I have about a 

minute and a half left. How does the U.S. global business services 

effort enhance SBA coordination with commerce and Ex-Im, if you 

can give me some concrete examples? 

Ms. SANCHEZ. Yes. Thank you very much. It is really important 

to take a business—and this is what SBA does very well, is take 

a business from its entire lifecycle and how it looks as it approaches finance and ensuring that we are structuring and looking 

at a business. And we counsel small businesses and want to make 

sure that they are getting the right services from other entities and 

agencies within the government as well, and that is what the U.S. 

global solution program does very well, and we market it everywhere we go. 

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7 

Chairman CURBELO. Okay. Thank you. I have some additional 

questions, but now I would like to recognize the ranking member 

for her questions. 

Ms. MENG. Ms. Sanchez, collaboration between government 

agencies, as you know, is the best way to assist small businesses 

nationwide. In 2013, the GAO found collaboration between the SBA 

and other agencies to be lacking particularly in efforts to expand 

exporting. What steps has your office taken to enhance cooperation 

with other agencies in meeting client demands for trade assistance? 

Ms. SANCHEZ. Thank you very much. 

Well, we are continuously meeting with other agencies ensuring 

that we are working with the Trade Promotion Coordinating Committee, seeing what exists out there. Again, one of the biggest barriers that small businesses tell us they face is information, trying 

to understand who does what and where, who can they call? How 

can they get started? And so we are ensuring that we proactively 

addressing that, whether it is from providing lead behinds, cheat 

sheets, or whatever, however we need to tackle the market in addition to our field that is constantly out there aligning all of this. 

Ms. MENG. Another question on minority-owned businesses who 

are more likely to export compared to nonminority-owned firms of 

all sizes. They are also five times more likely to conduct business 

in a language other than English. Foreign language capability, diaspora, and family ties are big advantages, for example, for Asian 

and minority-owned U.S. firms seeking to sell their products and 

services overseas. How is the SBA assisting these minority-owned 

businesses, and can Congress be more helpful? 

Ms. SANCHEZ. Thank you very much. Yes, we are currently targeting various people on the field as well that have a background. 

For example, we have colleagues in Los Angeles that work tremendously with the Asian-American market and through financial institutions, ensuring that various community lenders that focus to 

certain minorities have the resources that they need to provide the 

right financial instruction and development for small businesses. 

Ms. MENG. Thank you. I yield back. 

Chairman CURBELO. Thank you, Ms. Meng. 

I now would like to recognize the distinguished vice chairman of 

the Small Business Committee, Mr. Luetkemeyer. 

Mr. LUETKEMEYER. Thank you, Mr. Chairman. 

Ms. Sanchez, how are you this afternoon? 

Ms. SANCHEZ. Thank you very much. How are you? 

Mr. LUETKEMEYER. Well. I didn’t get a bio of you in my paperwork here. Can you just roughly tell me what your background is? 

Ms. SANCHEZ. Sure, no problem. 

Well, I began my career doing foreign exchange trading, actually, 

photocopying FX deals, and then I was promoted to stapling, eventually. I then now worked my way up into a trading room where 

I did FX for intellectual property law firms filing patents and 

trademarks throughout the United States. 

Mr. LUETKEMEYER. You are an attorney, then? 

Ms. SANCHEZ. I am not an attorney. 

Mr. LUETKEMEYER. Not an attorney. Okay. 

Ms. SANCHEZ. And then I moved to another area of a bank 

where I helped build their front office operations, realigned their 

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entire structures, opened foreign deposit books for clients. Eventually I built an export finance area for areas of the bank, and the 

bank asked me to do similar things for about nine other areas of 

the finance—of the banking institution. 

Mr. LUETKEMEYER. Very good. Question for you. The chairman alluded to this a minute ago. We have this Trade Promotion 

Coordinating Committee. I never heard of this group before. Can 

you tell me a little about that? 

Ms. SANCHEZ. Yes. The Trade Promotion Coordinating Committee is several agencies within the Federal Government that are 

in charge of trade promotion. 

Mr. LUETKEMEYER. You try and coordinate all the activities? 

Ms. SANCHEZ. They do, and there is—— 

Mr. LUETKEMEYER. Is Ex-Im Bank part of that trade promotion? 

Ms. SANCHEZ. Yes, sir. 

Mr. LUETKEMEYER. Is it? I know that Ex-Im last year did 

3,400 direct loans to small businesses. Do you coordinate with them 

at all? Do you guys work together on financing part; they finance 

part? What goes on? 

Ms. SANCHEZ. Yes, sir. We are colocated with Ex-Im Bank and 

commercial service and several of our U.S. export assistance centers. So on a daily basis our team on the field works together to 

ensure that the small business is getting the structure that they 

need. 

Mr. LUETKEMEYER. When you say ‘‘structure,’’ you are saying 

the—— 

Ms. SANCHEZ. Financial structure that they need. 

Mr. LUETKEMEYER. Right. I am a banker. I know what you 

are talking about. What you are saying is that SBA will take, perhaps, the less risky part and Ex-Im takes the more risky part? Is 

that what you are doing? 

Ms. SANCHEZ. Yes, in essence. So a credit deal—a credit guarantee underwrites the risk of a small business not paying the bank. 

There is also credit insurance which underwrites the risk of a foreign buyer not paying the small business. And so we work hand in 

hand with Ex-Im’s credit insurance on that to ensure that small 

businesses are being paid. 

Mr. LUETKEMEYER. Roughly, how many deals did you do last 

year with Ex-Im? 

Ms. SANCHEZ. I will get back to you on that. Thank you. 

Mr. LUETKEMEYER. Okay. Just out of curiosity, you said your 

portfolio was, what, $1.2, $1.3 billion? 

Ms. SANCHEZ. $1.45 billion. 

Mr. LUETKEMEYER. That you did last year? 

Ms. SANCHEZ. Yes, sir. 

Mr. LUETKEMEYER. Okay. What is your past due on the balance? What is your total portfolio size? 

Ms. SANCHEZ. $1.45 billion, past due is at—— 

Mr. LUETKEMEYER. And that is your total portfolio, or is that 

the number of loans you made last year? 

Ms. SANCHEZ. Total volume of loans. 

Mr. LUETKEMEYER. Okay. So that is not the number of loans 

you made last year? 

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Ms. SANCHEZ. Not number of loans, no. 

Mr. LUETKEMEYER. All right. So your total portfolio is $1.45? 

Ms. SANCHEZ. Yes, sir. 

Mr. LUETKEMEYER. What is your past due? 

Ms. SANCHEZ. There are no past due in—the bank is the one 

that monitors the past due, so we don’t have any deficiencies. The 

program is run at a zero subsidy. 

Mr. LUETKEMEYER. You don’t go to the bank and get reports 

from them to tell you what the past due ratio is of the loans that 

you are sitting there guaranteeing? 

Ms. SANCHEZ. I would have to get that information back to you, 

sir. 

Mr. LUETKEMEYER. Okay. One of the concerns that we have 

is the GAO report. You know, the Chairman talked a while ago 

about the number of people who were supposed to be doing this 

work of helping small businesses. You are authorized for 30, you 

had 19, now you are up to 21. And the GAO report said that sometimes it is as little as 15 percent of their time was actually dedicated to working with small businesses on trade. 

So it begs the question, number one, are these people necessary? 

And if they are, are they doing their job? And who came up with 

the number of 30 to begin with? Was that you? Was that Congress? 

Ms. SANCHEZ. It was Congress. 

Mr. LUETKEMEYER. So Congress pulled a number out of the 

air, then, right? 

Ms. SANCHEZ. I defer to you on that, sir. 

Mr. LUETKEMEYER. I have no idea. I am asking you. You are 

the administrator. You should know the history of your agency, the 

history of this program. You don’t know the history of your program? 

Ms. SANCHEZ. Sir, I believe that Congress was the one that 

came up with the number. 

Mr. LUETKEMEYER. Okay. You didn’t work in conjunction with 

Congress to come up with the number, and say, we think 30 people 

would be able to help us be able to do our job of helping small businesses access trade agreements—— 

Ms. SANCHEZ. Well, sir, to answer your first question, you said 

district international trade officers only do—that—our districts 

only have—they have a representative that is called district international trade officers. They are the ones that do—15 percent of 

their time is allocated to trade efforts. We have U.S. expert assistance center people that actually dedicate their time 100 percent to 

trade. 

Mr. LUETKEMEYER. Which one is the 19? 

Ms. SANCHEZ. The 19 is the U.S. export assistance center people. 

Mr. LUETKEMEYER. Okay. Because GAO was concerned that 

there was a disproportionate amount of time spent by these people 

on other activities other than what they were supposed to. 

So I see my time is up. I will yield back to the Chairman. Thank 

you. 

Chairman CURBELO. I thank the gentleman for yielding back. 

And now I would like to recognize the gentleman from Virginia, 

Mr. Brat. 

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Mr. BRAT. Thank you, Mr. Chairman. 

I just kind of have some general questions. I am kind of following 

the logic of what has just proceeded. 

I taught economics for the last 20 years at a small school down 

in Virginia. In general, I am a free trader. Small business, how can 

you not be, you know, empathetic toward helping the small guy. 

But since I have been up here, seeing how the politics works, I get 

skeptical about the size of the small business and the typical small 

business that we are helping. 

So the big folks up here, all that special interests and lobbyists, 

and they do well for themselves, Export-Import Bank is kind of our 

example. It depends on which side you are on. I am opposed. But 

when it comes to just trade in general, what is the best case you 

can make for me? So in economics, the price system is—the free 

market system or the price system, prices make the decisions for 

us, right? So we all want to buy cheap products, and the price system works. And any country that does not follow the price system 

with long run is no longer a nation. Right? So every nation in the 

history of nations is gone. 

We have followed the price system, and have done fairly well, but 

lately the government’s growing and growing and growing. So give 

me the best case you can as to why we need the Small Business 

Administration to make loans and help these small guys make 

loans, give them credit, and to facilitate trade? Because I do want 

to level the playing field toward the small guy. But on the other 

hand, I am getting equally skeptical that the government is just 

picking winners at all levels. So give me the best case you can for 

why the Small Business Administration should be helping out the 

small guy so I can go back home and tell them what we are doing 

for them. 

Ms. SANCHEZ. Thank you very much. That is interesting. 

You know, the core mission of the U.S. Small Business Administration is to help small businesses succeed and especially the Office 

of International Trade in the international marketplace and be able 

to compete effectively. And, you know, we have identified—we 

know that the three biggest issues that they have is information, 

access to capital, and market access. 

Without somebody representing them and being the voice for 

them on trade negotiations and all trade matters, and knowing 

that 96 percent of all of their potential future sales and current 

sales, you know, need somebody to support them. That is a pretty 

hefty case there of the tremendous need that they have for somebody to voice for them and represent them in anything related 

to—— 

Mr. BRAT. That is good. That is what I wanted to hear. Now, 

if I unpack it and dig down into the details, will I find out that the 

small businesses that are being helped are actually not the smallest ones, but they are the biggest ones in the small business category? 

Ms. SANCHEZ. You know, I would love to dig deeper with you, 

because we also do know that exports—that the opportunities are 

with new entrants in exports. 

Mr. BRAT. Yep. 

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Ms. SANCHEZ. And I firmly believe that is where the opportunity exists as well. 

Mr. BRAT. That is good. And, then, I am just playing devil’s advocate. But I am just interested, in free markets, the nice thing 

about a free market, it is neutral. Right? Everyone is absolutely 

equal when the price system is in charge and you don’t have access, special access, to some trillions of dollars up here. 

So if I dig into the small business firms as well, would there be 

any particular concentration in just certain industries that are get 

overwhelming support and subsidies and counsel? Because everyone knows it is good, right? I mean, you are getting free services, 

and someone helping you to do your services and subsidizing capital and making your loans easier, that is a good thing. No one’s 

against that. 

But if I dug down to get—would it be—is it just certain industries, or is it fair in terms of across the board? 

Ms. SANCHEZ. I would be actually very curious and interested 

to engage on a study like that as well with you. 

Mr. BRAT. Good. 

Mr. Chairman, I yield back. Thank you very much for—— 

Chairman CURBELO. I thank the gentleman. 

I have a couple additional questions, Ms. Sanchez. SBDCs and 

the commercial service both provide export counseling to small 

businesses; however SBA and Commerce have yet to clearly designate the responsibilities of field staff in this regard. What effort 

has been made to improve collaboration and cooperation between 

SBC and commercial service export counselors, and what is being 

done to simplify the process when a small business should be referred to a different agency based on their export readiness? 

Ms. SANCHEZ. Thank you. With all honestly, I think there is a 

lot of work left to be done there still. And there is a lot that we 

can be doing to require more of SBDCs, potentially, hopefully, with 

your help and ensure that SBDCs are incorporating into all of the 

curriculum and what they do, international training. 

Even though some of them are certified, there is a lot of work 

left to be done to ensure that SBDCs are actively communicating 

in international trade and everything they do. 

Chairman CURBELO. So you recognize there is a lot of room for 

improvement in this area? 

Ms. SANCHEZ. Absolutely. 

Chairman CURBELO. Then let me ask you, because I think this 

is what it all boils down for me. It appears that much of what OIT 

does is actually duplicative of a number of other agencies. How 

does the administration—I want to give you the opportunity to 

make your case for OIT. Why it is unique? Why it is different? Why 

it justifies an investment from the American people? 

Because based on a lot of what we have learned here today thus 

far, I think it is pretty clear that there is a lot of overlap with different agencies, and there are at least questions with regards to 

OIT’s mission and whether or not that mission is being fulfilled. 

I want to give you the opportunity to make the case for why OIT 

is necessary, despite the fact that other agencies are also operating 

in this area. 

Ms. SANCHEZ. Yes. Thank you. 

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12 

Once again, we know that the issues that small businesses are 

facing are related to information, to financing, and to market access. And one entity that ensures that on all horizontal levels 

across the Federal agency, what every Federal agency is doing is 

ensuring that they are including small business in the everyday of 

what they do. 

That is what the Office of International Trade has been actively 

ensuring and doing, at least since my arrival, is ensuring that 

every Federal agency, including this, and that is critical for small 

businesses. They need that voice for small business, and for somebody who is fighting for them on international markets and to ensure that they have the right market access. 

Chairman CURBELO. Well, I thank you. And I would just like 

you to take the message back, I think, obviously, everyone on this 

Committee wants the SBA to work, to be functional, to help small 

businesses. We really believe that we can do a lot to give small 

business owners access to new markets. Small businesses are very 

important for all of our communities, because they are the ones 

that employ the people that don’t have access to the big firms, 

maybe the kid that dropped out of college or the new immigrant 

family that just arrived. These are the jobs that these types of individuals have access to. 

So we want to promote small business, but there are legitimate 

questions, I think many of them have been asked here today, with 

regards to OIT, with regards to whether or not it is absolutely necessary. And we are living at a time, of course, of limited resources 

for the government. You know that; we certainly know that. 

I think it is very important, it is critical, for SBA to demonstrate 

that this agency is necessary and that it is operating to assist our 

small businesses export products. That is your mission. So we need 

proof, essentially, that your mission is being fulfilled. 

Does anyone else seek recognition? 

Okay. I want to thank you, Ms. Sanchez, for your time, for coming to answer our questions and to share your testimony. 

I ask unanimous consent that members have 5 legislative days 

to submit statements and supporting materials for the record. 

Without objection, so ordered. 

Chairman CURBELO. This hearing is now adjourned. 

Ms. SANCHEZ. Thank you very much. 

[Whereupon, at 4:39 p.m., the Subcommittee was adjourned.] 

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A P P E N D I X 

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Insert offset folio 13 here 98246.001
14 

Chairman Curbelo, Ranking Member Meng, and distinguished 

members of the Subcommittee, thank you for this opportunity to 

testify about SBA’s international trade programs and initiatives. 

Small businesses are increasingly looking abroad for their next 

customer. Export sales contribute to a strong middle class by fueling economic opportunity and creating export-supported jobs in 

communities across the United States, while the foreign consumers 

that buy Made in America products gain access to some of the 

world’s highest quality products and services. Today, 95% of all 

consumers and over two-thirds of the world’s purchasing power reside outside the United States. Small businesses that can tap into 

this global market have the potential for vast expansion and 

growth, with small and mid-sized businesses now comprising 34% 

of total export sales. In SBA’s Office of International Trade, we remain focused on our core mission of increasing the ability of small 

businesses to compete in international markets through access to 

finance and export development opportunities. 

I want to share the important achievements SBA’s Office of 

International Trade has made to increase the number of small 

business exports. 

I am proud to say that in FY 2015 we guaranteed a record $1.45 

billion in SBA loans to small business exporters—5.2% of all SBA 

guaranteed lending went to small business exporters. The Agency 

participated with 514 lenders to provide financing to 1,513 small 

business exporters, exceeding the goal we set of financing 1,480 

small businesses. On my personal visits to small business exporters, their owners routinely express to me the importance of having 

access to financing. 

We continue to target new lenders to support small business exporters in their communities so that more liquidity can flow to the 

market. Last year we trained more than 4,300 lenders, hosted the 

eighth Annual SBA Export Lenders Roundtable in Washington, 

D.C. and the second Annual West Coast SBA Export Lenders 

Roundtable in Los Angeles. We also provided a webinar for members of the National Credit Union Administration, as well other 

outreach and training events. 

Recognizing that U.S. small business exporters are key to the nation’s economic future, SBA’s Office of International Trade will continue to collaborate with partners across the country to improve access and delivery of programs to small business exporters. One of 

the programs we continue to be excited about is the State Trade 

and Export Promotion, or STEP program. The STEP program helps 

small businesses tap global markets through cooperative agreement awards with state governments. STEP awards federal dollars 

to states and territories to fund eligible small business market development activities, including participation in trade missions and 

foreign market sales trips, trade shows, international marketing efforts, and training. Since the establishment of the program, we 

have supported international market development efforts across 

the states, and they have reported, great success from the first two 

rounds of awards. 

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In FY 2015, SBA awarded $17.4 million in STEP grants to 40 

states. Using the funding provided for STEP in the 2016 Consolidated Appropriations Act, SBA will announce a competitive process 

for additional STEP awards totaling $18 million this year. SBA is 

dedicated to running a competitive grant process ensuring these 

funds will support those projects with the greatest returns, while 

not duplicating the efforts of any other federal trade promotion activities. 

Many untapped opportunities exist outside the United States, 

but small firms often do not have the resources and personnel to 

leverage them, and rely heavily on negotiated free trade agreements to reduce tariff and non-tariff barriers for their products or 

services. That is why free trade agreements have the potential to 

significantly benefit small businesses. In addition to the office’s 

core functions, we are also increasingly engaged in creating market 

access opportunities for small businesses is key markets through 

trade negotiations. 

Last year the SBA, along with USTR, represented small business 

interests in ongoing U.S.-EU Transatlantic Trade and Investment 

Partnership (T-TIP) negotiations and intercessional meetings, and 

will continue to do so in 2016. With regards to the recently concluded Trans-Pacific Partnership (TPP) Agreement, the SBA is excited that the agreement includes the first-ever small-medium enterprise chapter, as well as many other provisions that will help 

small business exporters. We believe TPP and its strong commitments will help to improve the environment for doing business 

overseas, and help more small businesses export Made In America 

goods and services to Asia Pacific customers, thereby fostering 

greater economic opportunity for U.S. companies and entrepreneurs. 

In the 21st century, SBA’s Office of International Trade must be 

as global, innovative and entrepreneurial as the small businesses 

we serve. We are more engaged on the international front than 

ever before by supporting export development efforts through the 

STEP program and guaranteed export lending, as well as through 

our active involvement in trade negotiations. Together these efforts 

increase the ability of small business exporters to compete in international markets and help create export-supported jobs in the 

United States. 

Again, I want to thank all of you for your bipartisan commitment 

to small businesses. 

Mr. Chairman, I would be happy to take your questions. 

Æ 

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