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94–652 2015

ACROSS TOWN, ACROSS OCEANS: EXPANDING 

THE ROLE OF SMALL BUSINESS IN GLOBAL 

COMMERCE 

HEARING 

BEFORE THE

COMMITTEE ON SMALL BUSINESS 

UNITED STATES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTEENTH CONGRESS 

FIRST SESSION 

HEARING HELD 

MAY 20, 2015 

Small Business Committee Document Number 114–012 

Available via the GPO Website: www.fdsys.gov 

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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 

TOM RICE, South Carolina 

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 

STEPHEN DENNIS, 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. Steve Chabot ................................................................................................... 1 

Hon. Nydia Vela ́zquez ............................................................................................. 2 

WITNESSES 

Mr. Brian Bieron, Executive Director, eBay Global Public Policy Lab, Washington, DC ............................................................................................................. 4 

Mr. Dyke Messinger, President, Power Curbers, Inc., Salisbury, NC ................. 6 

Mr. Michael Stanek, Vice President & Chief Financial Officer, Hunt Imaging, 

LLC, Berea, OH .................................................................................................... 7 

Mr. Timothy Brightbill, Partner, Wiley Rein, LLP, Washington, DC ................. 9 

APPENDIX 

Prepared Statements: 

Mr. Brian Bieron, Executive Director, eBay Global Public Policy Lab, 

Washington, DC ............................................................................................ 27 

Mr. Dyke Messinger, President, Power Curbers, Inc., Salisbury, NC ......... 50 

Mr. Michael Stanek, Vice President & Chief Financial Officer, Hunt 

Imaging, LLC, Berea, OH ............................................................................ 56 

Mr. Timothy Brightbill, Partner, Wiley Rein, LLP, Washington, DC .......... 67 

Questions for the Record: 

None. 

Answers for the Record: 

None. 

Additional Material for the Record: 

None. 

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SBREP-219 with DISTILLER

(1) 

ACROSS TOWN, ACROSS OCEANS: EXPANDING 

THE ROLE OF SMALL BUSINESS IN GLOBAL 

COMMERCE 

WEDNESDAY, MAY 20, 2015 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON SMALL BUSINESS, 

Washington, DC. 

The Committee met, pursuant to call, at 11:00 a.m., in Room 

2360, Rayburn House Office Building. Hon. Steve Chabot [chairman of the Committee] presiding. 

Present: Representatives Chabot, Luetkemeyer, Hanna, Rice, 

Radewagen, Knight, Curbelo, Hardy, Vela ́zquez, Clarke, Hahn, 

Meng, Lawrence, Adams, Moulton, and Takai. 

Chairman CHABOT. The Committee will come to order. 

I want to thank everyone for joining us today for this timely and 

important discussion on trade. Very often, this Committee discusses ways to grow the economy, increase the number of jobs 

being created, and sell more goods stamped ‘‘Made in the USA.’’ All 

of these goals would help the American workforce, and all of these 

goals are attainable with trade. Simply put, trade means opportunity for small business. After all, 96 percent of the world’s consumers live outside the borders of the United States, yet of the 28 

million small businesses in America, only 1 percent sell their goods 

internationally. If we tear down trade barriers, we can make it 

easier for small businesses to participate in the global marketplace 

and unleash our nation’s most powerful economic force. 

One of the barriers facing small businesses looking to export is 

confusion about how to even do it and a maze of federal resources 

only sometimes add to the confusion. This Committee recognizes 

that challenge and is working on legislative solutions to better coordinate federal resources so they are more efficient, streamlined, 

and better able to help business navigate the export process. 

Beyond that, we need better trade agreements. Currently, we 

only have one free trade agreement with 20 countries, so that is 

trade agreements with about 10 percent of the countries around 

this globe; yet, nearly half of the goods exported from the United 

States went to those countries that we had trade agreements with 

last year. Better trade agreements mean small businesses will be 

able to access new international customers and offer their products 

more easily and at a lower cost than ever before. It means that 

more products will be built and sold. When that happens, jobs are 

created, wages are lifted, and more opportunity is available to all. 

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2 

That is really what is on the table with this debate—more opportunity for all Americans. We cannot get stronger trade agreements, 

like TPP and TTIP without trade promotion authority or TPA. 

Without TPA, American workers will be competing under the same 

unfair rules they do today. It will be the status quo. With TPA, we 

can create trade agreements that will level the playing field. We 

can remove barriers put up by foreign nations that make it more 

difficult for American businesses to sell their products. Put an 

American worker against anyone in the world and I will take that 

bet every day of the week and twice on Sunday, but we cannot get 

there without trade. 

Trade is also an opportunity to spread American values of economic freedom and individual liberty, freedoms we understand as 

second nature. Without TPA, and subsequently TPP, other nations 

will dictate the rules of the new economy; nations that do not respect the rule of law or the rights of the individuals. Trade is not 

a choice or a luxury in our modern world; it is a necessity. It is 

a cornerstone of a strong 21st century economy. 

Today we will hear from small businesses who are directly impacted by whether we move forward on TPA and important trade 

agreements or whether we bury our heads in the sand while China 

shapes the contours of the global marketplace. 

I want to thank again our witnesses for being here, and I now 

yield to the ranking member for her opening remarks. 

Ms. VELA ́ ZQUEZ. Thank you, Mr. Chairman. 

Year after year, we are told that small businesses are the catalyst for U.S. economic growth, and rightly so as they create nearly 

two-thirds of net new jobs and are responsible for countless innovations. A critical subset of this group is small exporters. In fact, 

300,000 small businesses are sending their products across the 

world, and three in five nonexporting firms are now interested in 

following suit. 

Firms that export grow faster, generate more jobs, and pay higher wages than other businesses. Clearly, in order for our economy 

to continue gaining steam, it will increasingly depend on global 

commerce to fuel expansion. Despite the advantages of trade, it remains exceedingly difficult for small businesses to enter foreign 

markets. By some estimates, just 5 percent of small firms in this 

country export their goods overseas. Even though small and medium-size businesses account for 97 percent of American exporting 

companies, their exports account for only one third of all U.S. goods 

shipped overseas. 

And there are various challenges. It takes time to identify foreign 

markets, to target new customers, and to learn the ins and outs of 

the exporting process. In fact, nearly half of small exporters spent 

a minimum of a few months a year, as well as an average of 8.4 

percent of their annual operating revenue preparing to export. 

Small companies often have fewer resources to expand on developing a trade strategy or complying with complex regulations. As 

a result, they consistently enter fewer foreign markets than their 

larger counterparts, with nearly 60 percent only entering one, 

while more than half of large firm exports to five or four, or even 

more markets. 

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3 

These difficulties are something we must be mindful of as we 

consider legislation to fast-track approval of the Transpacific Partnership. Given that details of this agreement are difficult to come 

by, it is challenging to say if the agreement will help or hinder 

small businesses. In theory, balanced free trade agreements have 

the potential to be a significant driver of growth. By eliminating 

tariffs and other barriers to trade, they can help small firms expand sales globally and create jobs at home. 

In order for these benefits to be fully realized, however, we must 

hold our trading partners accountable for unfair trade practices 

and ensure that our small businesses receive the level playing field 

they were promised. 

Truth be told, small businesses often face challenges when it 

comes to competing with foreign imports produced in countries 

with lower label standards and nonexistent environmental protections. Time and again we are told about promising markets, but little discussion is given to the low priced goods that will still enter 

our domestic marketplace. 

Is this good for consumers? Maybe. Is it good for small businesses? Definitely not. This is something we must be mindful of as 

we consider legislation that will provide the president with trade 

promotion authority. This decision will occur against a complicated 

backdrop. International trade is more a conflict than ever before, 

dependent on dynamic global microeconomic trends, ever-changing 

trade policies, a variety of expert promotions and a mix of enforcement mechanisms. It is absolutely critical that small businesses 

are able to participate in this global marketplace, but achieving 

this goal should not require unfairly harming those entrepreneurs 

solely doing business here at home. 

I would like to thank our witnesses for their testimony and for 

being here today. I look forward to hearing your perspective on 

these very complex issues. 

Thank you. 

Chairman CHABOT. Thank you very much. 

And I would ask that Committee members, if they have an opening statement prepared, to submit them for the record, and I will 

just take a moment to explain our timing rules here. You get five 

minutes to testify. A yellow light will come on to let you know you 

have one minute to wrap up and a red light will come on and we 

would ask that you complete your testimony within that time if at 

all possible. We will give you a little of flexibility but not too much. 

And we will go ahead and introduce our witness panel here. Our 

first witness is Brian Bieron. He is the executive director for the 

Global Public Policy Lab at eBay, Inc. In this role, Mr. Bieron has 

covered public policy issues for eBay and PayPal in the European 

Union and Australia. Mr. Bieron has a bachelor of arts from St. Joseph University and a master’s from George Washington University, and we welcome you here this morning. 

Our second witness will be Dyke Messinger, who is the president 

and CEO of Power Curbers, Inc., in Salisbury, North Carolina, 

where he has been president and CEO since 1981. Mr. Messinger 

received his undergraduate degree from the University of North 

Carolina Chapel Hill and his master of business administration 

from Tulane, and we welcome you here as well. 

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Our third witness today is Michael E. Stanek, vice president and 

chief financial officer of Hunt Imaging LLC. Mr. Stanek serves on 

the Board of Trustees of the National Small Business Association 

and is testifying today on NSBA’s behalf. He received his undergraduate degree from Cleveland State University, and we thank 

you for your testimony as well. 

And I will now yield to Ms. Vela ́zquez to introduce our next witness. 

Ms. VELA ́ ZQUEZ. Thank you, Mr. Chairman. 

It is my pleasure to introduce Tim Brightbill. Mr. Brightbill is 

a partner in the international trade practice of Wiley Rein, where 

he represents guidance on all aspects of international trade law 

and policy, including trade remedies and export controls. As a 

former vice chair and current member of the Industry Trade Advisory Committee on Services and Finance Industries, he advises the 

U.S. government on free trade agreements and matters concerning 

the WTO. He is also an adjunct professor for the International 

Trade Law and Regulation at Georgetown University Law School. 

From 1994 to 1995, he served as counsel to the House Committee 

on Small Business. Welcome back. 

Thank you. 

Chairman CHABOT. Thank you very much. 

And we will now go to our panel. Mr. Bieron, you are recognized 

for five minutes. 

STATEMENTS OF BRIAN BIERON, EXECUTIVE DIRECTOR,EBAY 

GLOBAL PUBLIC POLICY LAB; DYKE MESSINGER, PRESIDENT, POWER CURBERS, INC.; MICHAEL STANEK, VICE 

PRESIDENT & CHIEF FINANCIAL OFFICER; TIMOTHY 

BRIGHTBILL, PARTNER, WILEY REIN, LLP 

STATEMENT OF BRIAN BIERON 

Mr. BIERON. Mr. Chairman, Ranking Member Vela ́zquez, and 

members of the Committee, thank you for inviting eBay to testify 

on how U.S. small businesses are using technology to reach international markets. Our company is a truly global platform with 

nearly 60 percent of our revenue generated outside the United 

States. We enable over 150 million users in over 200 countries. 

For the first time in history, nearly every entrepreneur and small 

business can use technology to reap the benefits of trade on a global scale, an opportunity traditionally open only to the largest, multinational corporations. We are literally entering an age of micro 

multinationals. Some small businesses have always been engaged 

in trade, often as a supplier to a very giant company, but today 

technology is creating a new model of direct global commerce by 

small businesses. We call it the global empowerment network, and 

it is based on the powerful combination of the Internet global commerce platforms like eBay, technology-enabled payment services 

like PayPal, modern shipping services, and the knowledge of e-commerce exporting opportunities. 

Let me provide some numbers from the eBay Public Policy Lab’s 

2015 U.S. Small Business Global Growth Report, a copy of which 

I would ask to submit to the Committee record. As I mentioned, 

U.S. small businesses have always been exporters, but according to 

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5 

government data, it is just around 1 to 2 percent of them. By contrast, on eBay, 95 percent of them export. The traditional small 

business exporters reach an average of two export markets a year. 

On eBay, over 190,000 U.S. small business each exported to consumers on at least four continents last year alone. That is truly 

global sales. 

These staggeringly different results boil down to some pretty 

simple data on exporters’ survivability. The World Bank has studied small business exporters in five upper-income European countries and found that 85 percent of small businesses that start exporting quit the effort by the end of the third year. That is just a 

15 percent success rate. 

Exporting is hard. On eBay, the success rate for U.S. small businesses was 74 percent from 2010 to 2014. That is 85 percent failure 

versus 74 percent success. The Internet trade landscape is also 

more open to newcomers. It is more inclusive. For example, the 

largest 5 percent of U.S. exporters account for 82 percent of U.S. 

trade, but on eBay, the largest 5 percent of exporters account for 

just 55 percent. 

I find this global trade data very exciting, but you all represent 

people, not numbers, and eBay is about empowering people. Let me 

tell you about two. 

Brian Robinson owns the Music Farm in Canton, Ohio. He and 

his 11 employees export more than 40 percent of the Music Farm’s 

inventory. Great Sky Gifts is owned by a woman named Colleen 

Rast. She employs four people in Kalispell, Montana. From there 

they have exported to 99 countries. You know better than anyone 

in Congress that small businesses face huge challenges. They take 

risks, they work incredibly hard, and they face intense competition. 

It is the same when they trade globally. 

At eBay, we are working to help address some of those challenges and reduce barriers. Take language. Among other innovations, our investment in machine translation technology has lowered language as a barrier to U.S. exporters by 66 percent since 

2004. 

There are also things policymakers can do. EBay would propose 

three to you. First, raise the U.S. low value customs de minimis 

threshold, the level below which goods are exempted from import 

duties and paperwork and make raising other countries’ de minimis thresholds a top trade negotiating priority. Raising the de 

minimis threshold is basically a one-step free trade policy for small 

businesses. 

Second, modernize global postal systems across the world. Micro 

multinationals regularly utilize postal services because of their 

widespread networks. Those services are key to this global trade 

model. 

Finally, the U.S. Government has many excellent programs, as 

you have mentioned, Mr. Chairman, designed to help businesses 

export, but many of those programs were not developed with small 

e-commerce businesses in mind. I would urge the Committee to review existing government export promotion programs to be more 

supportive of these e-commerce micro multinationals. 

Small and mid-size businesses can contribute to their local economy and regularly service customers around the world. 

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6 

Globalization itself can be a better system. It can be more open and 

inclusive. I encourage you all to help achieve that future, and I 

look forward to answering any questions. 

Chairman CHABOT. Thank you very much. 

Mr. Messinger, you are recognized for five minutes. 

STATEMENT OF DYKE MESSINGER 

Mr. MESSINGER. Thank you, Mr. Chairman, Congresswoman 

Vela ́zquez, and my congressman, Congresswoman Adams. Good to 

see you. 

Thank you for the opportunity to testify today as the president 

of Power Curbers, Inc., a 62-year-old company that was founded in 

Salisbury, North Carolina. I am also appearing today on behalf of 

the National Association of Manufacturers, the largest industrial 

trade association in the United States, with over 14,000 members. 

Power Curbers was founded by two businessmen with a design 

for the world’s first automatic curb machine. This engineering 

breakthrough helped streamline the process of laying out highways, medians, and other road infrastructure projects. While we 

still produce machines using the same curbing technology, we have 

grown into one of the leading paving machinery manufacturers for 

both agriculture and infrastructure projects. 

Power Curbers’ success in the United States has been fueled in 

substantial part by our ability to sell overseas. Since the early 

1960s, we have been exporting our equipment and have exported 

now to over 90 countries throughout the world. By exporting, we 

are simultaneously helping create safer, more efficient infrastructure overseas and supporting good paying manufacturing jobs in 

North Carolina and Iowa. 

International sales and exports comprise 40 percent of our total 

revenue and are critical to our continued innovation and growth. 

More broadly, exports support 154,000 jobs in North Carolina, and 

81,000 jobs in Iowa, more than 20 percent of each state’s manufacturing employment. For example, on our order board today, we 

have machines of approximate value of $350,000 to $400,000 destined for Chile, Panama, Saudi Arabia, Japan, the Philippines, 

India, Uzbekistan, and Canada. More importantly, during the financial crisis, it was our international business that kept us going. 

Our international business was 70–80 percent of machine sales 

those five years. 

We do not just talk international business, we live it at Power 

Curbers. At our regular meetings with employees, we have a large 

world map of the world in our break room. Our employees know 

where every machine ships and we bring back pictures and job stories to share our success overseas. This ties them to the work done 

with our machinery that is far beyond our borders so they know 

their jobs are dependent on our international business success. 

Additionally, we have significant competition in our industry, 

and that makes us all better companies. But our company and our 

American competitors face real tariff competition, which is highlighted in my official testimony. To continue to thrive, manufacturers like Power Curbers need to see open markets and a more level 

playing field. 

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7 

I would like to focus on a few key trade issues on which Power 

Curbers and the NAM are focused to grow competitiveness and 

success of our manufacturers overseas. As was just stated, the U.S. 

has the most open market of any major economy with the lowest 

tariffs of any country in the G20. Indeed, more than two-thirds of 

all manufactured imports entered the U.S. duty-free in 2013, yet 

manufacturers in the U.S. face steeper trade barriers abroad than 

virtually any major country, including Mexico, China, and Europe, 

largely because those countries have entered into more market access agreements than the United States. Out of 138 countries 

measured by the World Economic Forum, the United States faces 

higher tariffs than all but eight countries. All but eight countries. 

That is ridiculous. 

Why are European Union tariffs so much lower than ours? Because they have entered into free trade agreements all over the 

world. Congress can and must do more to expand U.S. manufactured goods exports and open new markets if we are going to grow 

manufacturing and the jobs it supports in the United States. 

Passage of TPA, which lapsed in 2007, is critical to restore U.S. 

leadership on trade and help ensure the negotiation of strong market-opening agreements that foster new opportunities and a more 

level playing field for our nation’s manufacturers. The United 

States is now sitting on the sidelines as other countries move forward and more aggressively open markets, promote exports for 

their business at the expense of ours. 

By standing still, the U.S. is falling behind in the global economy. It is time to reverse that trend and move to enact and implement legislation and programs that will boost America’s global 

competitiveness. 

Thank you very much. 

Chairman CHABOT. Thank you. 

Mr. Stanek, you are recognized for five minutes. 

STATEMENT OF MICHAEL STANEK 

Mr. STANEK. Good morning, Chairman Chabot, Ranking Member Vela ́zquez, and Committee members. Thank you for the opportunity to testify before you on this timely and important topic. 

Hunt Imaging is a manufacturer of dry and liquid electrostatic 

toners and developers used primarily in high speed computer printers. I am proud to be representing not only Hunt Imaging but also 

the National Small Business Association and its international arm, 

the Small Business Exporters’ Association. 

Hunt was a spinoff from a Fortune 200 company 19 years ago 

and has operated as an independent company since. In addition to 

our headquarters in Berea, Ohio, we currently operate a branch in 

Belgium but are in the process of closing that facility due to a sustained downturn in European sales. As a company whose history 

emanates from a multinational organization, we were fortunate to 

have had a strong background in exporting, a background the vast 

majority of our small business brethren do not share. 

Even with our prior experience, however, we have learned that 

the opportunities to expand our international presence have declined since we became a standalone entity. Finding effective distribution partners is an essential component of small business 

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8 

entry into the export arena. In general, small businesses are challenged in having limited resources upon which to draw when entering international markets, and frankly, quite often have a fear factor in attempting to take that step. 

Possibly the biggest challenge for a small business, and certainly 

ours, is finding international opportunities to pursue. When we 

were part of a large corporation, we had a worldwide network of 

colleagues who could not only pinpoint opportunities for us, but 

also pursue them on our behalf. As a small, private organization, 

we are challenged to uncover potential sales opportunities and 

have struggled with identifying domestic resources to assist in that 

process. 

One suggestion to help small businesses in participating in the 

95 percent of the worldwide purchasing market that exists outside 

the U.S. is to offer a one stop shop. Ideally, within the Department 

of Commerce, and more specifically within the International Trade 

Administration, they would have a centralized staff dedicated to assisting small businesses in all aspects of exporting. A beginning to 

end focus for each company could tremendously ease the complications that seem to be inherent in this process. 

Free trade agreements are likewise extremely important as they 

lower foreign barriers and produce a more level playing field. Lowering the hassle factor of exporting greatly increases the 

attractiveness to small companies. Given the importance of small 

business to both the European and Asia-Pacific economies, it is 

vital that the TTIP and TPP negotiations address the specific needs 

of small business and all aspects of their agreements, and we support the passage of TPA to allow this to happen. 

If we desire American small business to export more, it is also 

important to reduce variable costs like tariffs. Many companies impose tariffs on U.S. exports that are substantially more than our 

own, and a web of nontariff barriers overseas often shuts out U.S. 

goods and services. These nontariff barriers can include items such 

as foreign patent and trademark costs, paperwork requirements, 

and performance bonds and licenses. 

Interpreting and comprehending regulations has also proven to 

be a challenge that exhausts a small firm’s resources and drains 

our wallets when we have to turn to outside professionals. NSBA 

supports the creation of a centralized website that is monitored and 

collects up-to-date information on regulations and policies for the 

most commonly traded goods and services. 

Having a strong commitment to intellectual property rights is 

vital to protect our innovative products and service. The creation 

of simplified methods for filing and renewing trademarks and copyrights will provide more timely enforcement of these rights, which 

are the result of the innovations of our small businesses. 

On a broader scale, we also need to get more community banks 

into export finance and educate them on available government 

lending programs so they can better advise their small business 

customers who are considering exporting. The U.S. financial sector 

seems to be less engaged in World Trade than are the financial sectors in Europe. 

While there is no doubt that some of America’s biggest companies 

can continue to increase their exports, the largest untapped reSBREP-219 with DISTILLER

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source for American exports is small and medium-sized companies. 

Just over 1 percent of these businesses currently export, and many 

believe it is too burdensome or risky or just do not know where to 

start. Federal agencies can play an important role in helping to reduce exporting barriers for small businesses and help these entrepreneurs tap into new markets and grow. 

Thank you for hearing my testimony, and I look forward to responding to any questions you may have. 

Chairman CHABOT. Thank you very much. 

Mr. Brightbill, you are recognized for five minutes. 

STATEMENT OF TIMOTHY BRIGHTBILL 

Mr. BRIGHTBILL. Chairman Chabot, Ranking Member 

Vela ́zquez, and members of the Committee, thank you for the opportunity to testify before you today on the important issue of expanding the role of small business and global commerce, and it is 

good to be back at the House Small Business Committee today. 

I have practiced international trade law for 20 years, and I have 

always focused on helping American companies, industries, and 

workers. I work with members of a wide variety of industries, from 

solar panels, to steel, to hand tools, to school notebooks. I also work 

with many U.S. companies who provide services here and abroad. 

My job is to help these companies grow, prevent unfair trade practices from harming them, and to help eliminate trade barriers overseas. 

As this Committee knows, small businesses face enormous challenges in the area of international trade. According to the president’s 2015 trade agenda, and as Chairman Chabot said earlier, 

there are 28 million businesses in the United States, but only 1 

percent of them export their merchandise to other countries. And 

of those small businesses that do export, most export to only one 

country—Canada or Mexico. This demonstrates how small businesses often struggle to overcome steep tariffs, trade barriers, paperwork, fees, and other significant obstacles. 

Now, the U.S. Government has taken steps towards removing 

these barriers but there is much more to be done. I would like to 

list just a few areas of priority for Congress and the administration 

that are particularly relevant to small businesses. 

First, on the Transpacific Partnership. The U.S. Government 

does have a potentially important opportunity to create jobs, expand trade, and manufacturing, and improve the global rules of 

international trade with the TPP free trade negotiations. If approved, TPP would be the largest U.S. free trade agreement involving 12 countries and more than 40 percent of global trade. And 

that agreement should help U.S. small businesses export, not just 

by eliminating jobs but by streamlining customs procedures, eliminating trade barriers, and developing more transparent regulatory 

procedures. 

There are other benefits, such as the eliminating of barriers to 

ecommerce and express delivery services, and also new disciplines 

on state-owned enterprises. When U.S. small businesses export, 

they should not have to compete with foreign governments. And 

while China is a notable example of the problem, SOEs play subSBREP-219 with DISTILLER

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stantial roles in the economies of TPP countries like Malaysia and 

Vietnam, as well as Russia, Brazil, India, and many others. 

At the same time, TPP poses potential threats to small businesses. First, the opening of the U.S. market to additional foreign 

competition could harm some smaller businesses and could head to 

some jobs being lost to lower wage positions in other TPP countries. 

Second, small business goals and objectives are less likely to be 

fully represented in these negotiations, and in fact, while the TPP 

contains a chapter on small and medium enterprises, the details of 

the agreement are not well known. 

Before it considers TPP, Congress must first take up trade promotion authority. The Senate is considering TPA legislation and 

amendments this week, and the House will do so shortly. And as 

this debate has progressed, the number one theme that we have 

heard over and over again is one of enforcement. Congress should 

not approve new trade agreements until it has better ways of enforcing our existing agreements, and there is an opportunity here. 

I think the best way to build support for TPA, among Republicans and Democrats, is to improve trade enforcement for all types 

of businesses, including small businesses. First, Congress should 

approve much-needed trade enforcement measures as part of TPA. 

U.S. industry has proposed a set of five trade law changes that it 

views as essential for domestic companies and their workers. These 

provisions were included in the Customs and Trade Bill that 

passed the Senate Finance Committee on a bipartisan basis. They 

should be included in TPA as well. 

Second, Congress should improve the ENFORCE Act legislation 

to guard against foreign companies who engage in trade fraud and 

evasion. Senator Wyden has championed this legislation for years, 

and again, it was included in the Customs and Trade Bill that 

passed the Senate Finance Committee on a bipartisan basis. 

Third, Congress should address the important issue of currency 

manipulation, and in particular, it should approve legislation directing the Commerce Department to investigate currency manipulation as an illegal subsidy. 

I am happy to address specific aspects of TPP, or the Trade and 

Services Agreement, or the Trans-Atlantic Trade and Investment 

Partnership, and there has been a very good ITC study done on 

that recently. But regardless of the agreement, the same challenges 

remain. Encouraging exports by U.S. small businesses is imperative to allowing American industry to expand and American workers to prosper. 

Thank you for addressing these issues today. I am happy to answer any questions. 

Chairman CHABOT. Thank you very much. 

And I want to especially thank all four of the panel members for 

keeping within our time limits almost to the word, so well done. 

And the testimony was good, too. 

And I will begin with recognizing myself for five minutes, and 

Mr. Bieron, I will begin with you, if I could. 

We are certainly aware that the statistics are there is only about 

1 to 2 percent of small businesses that actually trade internationally, yet eBay has been able to have, because of your platform, a 

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95 percent of those, and you mentioned four continents. Those are 

incredibly, I think, positive numbers. I would just like to hear if 

you wanted to expand upon that a bit, what successes they have 

had, why you think there is such a discrepancy between the overall 

small business community and those who operate through eBay. 

Mr. BIERON. Thank you, Mr. Chairman. 

Sure. One of our studies did, did, in fact, try to look at what are 

the kinds of barriers that are so much lower when a business is 

operating online than not. And to give some perspective, I think 

what we are talking about at eBay is the fact that you now have 

a completely different business model for very small businesses to 

try to go and engage in global markets. And it is literally a paradigm shift. And my colleagues at the table here, I mean, outstanding and inspiring export stories, but from businesses that I 

think are exporting in the way businesses have exported for years, 

at eBay, the idea that these microbusinesses are targeting specific 

countries, are investing, for example, in the kinds of expertise it 

takes to engage in Germany, or sell to France, or sell to Brazil, it 

is not like that on the Internet with really small businesses; instead, the platform itself that allows a small business to have their 

product be seen. So it is essentially global advertising. Or it replaces the need to have trust in an individual business with trust 

in the platform. Or, for example, on eBay, the feedback system that 

allows a consumer anywhere in the world to have trust in individual small business, maybe a five-person business, as I said, in 

Montana or in Ohio. These are transformative changes, and what 

it means is that it is almost harder, I would say, not to export than 

it is to export. We do have some small businesses that are operating in the U.S. and all around the world who literally choose not 

to export because they believe, for example, that maybe the complexities are too much. They do not want to deal with currency. 

They do not want to deal with some things. But instead, most 

choose to sell to whom they can sell, and that ends up being global 

trade. 

And so that does not mean that it is simple. Like I said, language is a huge challenge, and literally moving stuff across borders 

still is hard. So whether it is the shipping itself—I mentioned postal systems—or the complexity of customs duties, you know, when 

you are a five-person business and you are having to deal with customs and duties for 50 countries, that is harder than it ought to 

be. 

Chairman CHABOT. Thank you very much. I appreciate it. 

And Mr. Messinger, I will turn to you next if I can. 

You had mentioned, among other things, that you are in favor of 

TPA, and Mr. Brightbill mentioned some of the concerns about jobs 

and things like that and also mentioned that the Senate, we think, 

is going to be taking it up this week, I believe, and the House, 

probably sometime in the near future. And I happen to be a supporter and hope it passes. But I know some of my colleagues who 

are opposed to it are concerned about jobs being lost and companies 

taking their business overseas and setting shop up over there instead of in the U.S. And my belief is basically we create far more 

jobs than we lose. That is one of the reasons I am in favor of it. 

But could you comment on TPA and what it would mean to your 

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business in particular and what you think it would do relative to 

the hiring of more employees, or do you think you would end up 

letting employees go? What do you anticipate in your business? 

Mr. MESSINGER. Well, as it was said, TPP, which is kind of the 

hottest topic under TPA, is the most far-reaching agreement that 

we have ever encountered, and because Asia is such a rapidlygrowing part of the world, it is going to mean huge advantages to 

us because we have Chinese competitors. They are exporting today 

to those countries, and it is going to mean through that reduction 

in tariff, it is going to mean—we are very aggressive in the international market—job growth for us. But more importantly, if you 

look at the statistics for manufacturing jobs in this country, they 

have grown every year outside of the financial crisis, of course, but 

every year consistently since NAFTA. So manufacturing jobs are 

going to continue to grow, and I would predict rapidly with the approval of TPP. 

Chairman CHABOT. Okay. Thank you. 

My time is expired. The ranking member is recognized for five 

minutes. 

Ms. VELA ́ ZQUEZ. Thank you, Mr. Chairman. 

Mr. Brightbill, do you believe that the TPP will realistically expand the number of foreign markets that American small businesses enter? Or will the nontariff and logistical barriers remain 

too much for them to overcome? We know that, for the most part, 

our small businesses trade with Mexico and Canada. But will we 

achieve more than that? And if not, why? 

Mr. BRIGHTBILL. Ms. Vela ́zquez, it is very difficult to know. We 

know what some of the positives potentially are out there. Certainly having common tariffs or reduced tariffs could be a positive 

thing. You would have less of a spaghetti bowl of trade agreements 

that companies have to deal with. If you have harmonized standards, harmonized reduction of technical barriers to trade, harmonized assessment of products, that could be a positive. If you 

have harmonized customs procedures, again, as has been pointed 

out, getting goods through customs, the delays in the paperwork 

and the fees are often extraordinary. My concern is you have to 

have a way to enforce all of those things that are written on paper, 

and it is not clear to me that all the enforcement tools are there 

or readily accessible to small business. 

Ms. VELA ́ ZQUEZ. So let us talk about the Korea-U.S. Free 

Trade Agreement. It was sold to us as being able to support 70,000 

jobs and increase U.S. exports by $11 billion. However, since that 

agreement took effect in 2012, exports to Korea have increased by 

less than $1 billion. Meanwhile, Korean imports to the U.S. have 

surged more than $12 billion, resulting in a net loss of 75,000 

jobs—U.S. jobs. So why is that? 

Mr. BRIGHTBILL. Again, I think—— 

Ms. VELA ́ ZQUEZ. Is it lack of enforcement? 

Mr. BRIGHTBILL. I think lack of enforcement, and there are 

powerful incentives in these other countries, even after a free trade 

agreement is reached, to keep their trade barriers up and to keep 

their markets closed. We hear this around the country so that is 

the challenge that we face in negotiating a good agreement and one 

that gives us ways to enforce it after the ink is dry. 

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13 

Ms. VELA ́ ZQUEZ. So my question is, do you expect that we are 

similarly being sold a false bill of goods regarding the TPP? 

Mr. BRIGHTBILL. That is a good question. I do not know the 

answer to that. I think it is a large agreement. It involves many 

countries. In some, I think there is potential for improvement. In 

others, I think it will be very difficult to get rid of those barriers 

even over time. 

Ms. VELA ́ ZQUEZ. I agree with you. The lack of enforcement obviously is going to produce the results that we have seen with the 

U.S.-Korean agreement. 

I have another question, and this has been central to the whole 

debate, and that is, how does currency manipulation affect small 

businesses? 

Mr. BRIGHTBILL. Yes. Well, currency manipulation is a form of 

a subsidy. The Peterson Institute of International Economics, very 

well respected by Congress, and the administration called currency 

manipulation ‘‘the biggest subsidy of them all.’’ And the estimates 

over time as to, for example, how much China’s currency is undervalued, have ranged anywhere from 10 percent to 40 percent or 

more. So what we are seeking and what industry has sought in the 

legislation that is moving forward on the Senate side, is to say that 

the Commerce Department should look at currency manipulation 

as a subsidy, and if it finds it to be a subsidy, you impose a duty, 

like any other subsidy—a grant or a loan or a loan guarantee—to 

offset that unfair trade practice. 

Ms. VELA ́ ZQUEZ. Mr. Brightbill, for the record, should Congress 

require that free trade agreements, including the TPP, incorporate 

enforceable rules regarding currency manipulation? 

Mr. BRIGHTBILL. Yes, I think they should. 

Ms. VELA ́ ZQUEZ. Thank you. 

Mr. Bieron, as an intermediary operating in the U.S., eBay is not 

held liable for the unlawful actions of its users. Is this the case in 

foreign countries? 

Mr. BIERON. Internet liability law is different in different countries. We believe that it is clear, and I would like to be clear, that 

when eBay has knowledge of improper actions by our users anywhere, then there is liability. It is a case of the importance of when 

our users, unknowingly to us, are engaging in some kind of malfeasance—but it is different in different countries. We believe that actually U.S. law and Internet intermediary liability is the most progrowth and is something that we think can be promoted through 

trade agreements. 

Chairman CHABOT. The gentlelady’s time is expired but if she 

would like to follow up—— 

Ms. VELA ́ ZQUEZ. How has that affected eBay’s decision to enter 

countries that do not have such protections? 

Mr. BIERON. There is no question that we are able to operate 

more effectively in countries that have adequate Internet intermediary liability laws. It is just that they can be slightly different 

in different markets. We believe that promoting the standards and 

the balance that is in the DMCA and section 230 of the Communication Decency Act, the two cornerstone U.S. policies, these are 

important for our negotiators to achieve. 

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Ms. VELA ́ ZQUEZ. Yes or no answer—do you feel that this issue 

should be dealt with in this pending free trade agreement? 

Mr. BIERON. Yes. We think it is an important priority. 

Chairman CHABOT. The gentlelady’s time has expired. 

The gentleman from Missouri, the vice chairman of this Committee, Mr. Luetkemeyer is recognized for five minutes. 

Mr. LUETKEMEYER. Thank you, Mr. Chairman. And thank the 

members or the witnesses for being here today. 

I would like to follow up a little bit more on the currency manipulation question. The other three members or the witnesses of the 

panel, they did not get to answer the question, so Mr. Stanek, 

would you support something, a provision in the TPP on currency 

manipulation, or do you believe it is not something that needs to 

be addressed in the agreement? 

Mr. STANEK. Thank you, sir. It is not an issue that we have 

come up against directly, so I do not necessarily have a direct opinion on that. 

Mr. LUETKEMEYER. Mr. Messinger? 

Mr. MESSINGER. I would agree with that. I am not current on 

currency manipulation issues. It would be difficult for me. 

Mr. LUETKEMEYER. Mr. Bieron? 

Mr. BIERON. Small business trade over our platform is impacted 

by currency. Whether or not there should be a specific provision in 

the TPA on manipulation, I am really not comfortable making advice on that. 

Mr. LUETKEMEYER. It is interesting because I was talking to 

the president of one of the larger banks in the country, in fact, one 

that clears a lot of international transactions, and I asked him this 

question because I was leaning towards making sure there was 

something in the TPA and TPP to protect against currency manipulation. He said, ‘‘You know what? It goes on all the time. We do 

it ourselves.’’ So how are you going to keep currency manipulation 

from the Chinese and whoever against our own currency manipulation? I think it is a valid point and it points out the fact that this 

goes back and forth. I am not sure how you enforce that. Again, 

it gets back to Mr. Brightbill’s point. So I appreciate the comments. 

With regards to intellectual property, to me, this is a really important thing, especially for all the small businesses because that 

is where a lot of innovation is driven from, the small business people. They come up with the ideas and they are the entrepreneurs 

that come up and have an idea and they develop a business around 

it and off they go. Do you see protections being developed in the 

TPA that would be something you support or is it not an extensive 

enough bill or authority at this point? What is your thoughts so 

far? 

Mr. Bieron? And just go down the line. 

Mr. BIERON. We believe that intellectual property enforcement 

is very important. We think that the balance that exists in U.S. intellectual property law is very important to promote innovation. 

And lastly, we believe that we are more likely to get sound intellectual property law with our trade partners through trade agreements than not through trade agreements. 

Mr. LUETKEMEYER. Mr. Messinger? 

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Mr. MESSINGER. I would completely agree with that. We are 

not going to have an opportunity to get to those subjects until we 

have a trade agreement with these folks. 

Mr. LUETKEMEYER. But you believe it needs to be a part of 

the agreement? 

Mr. MESSINGER. Absolutely. 

Mr. LUETKEMEYER. Mr. Stanek? 

Mr. STANEK. Yes, sir. We believe very strongly that the intellectual property rights need to be protected in the trade agreements. 

Our small business members have enough challenges sometimes 

protecting their intellectual property domestically. They do not 

need to have the same types of issues on an international basis. 

Mr. LUETKEMEYER. Mr. Brightbill? 

Mr. BRIGHTBILL. Congressman, thanks for the question. We 

agree, and my clients agree, that intellectual property protection is 

a serious problem around the world and needs to be addressed. I 

do think my understanding is it is an area of emphasis in the TPP 

agreement, which is important. 

Mr. LUETKEMEYER. How do you enforce that? 

Mr. BRIGHTBILL. Sorry? 

Mr. LUETKEMEYER. How do you enforce patent infringement, 

intellectual rights? 

Mr. BRIGHTBILL. Well, patent infringement, there are various 

options. You can bring cases in district court. You can also bring 

a case at the International Trade Commission here in the United 

States, a section 337 action where if a foreign country is violating 

a patent or intellectual property, they can impose a barrier at the 

border to stop those counterfeit goods from coming in. 

Mr. LUETKEMEYER. Kind of interesting whenever the Chinese 

are over here swapping, trying to steal all of our intellectual secrets from a lot of our big manufacturers and we are worried about 

this. It is kind of ironic. 

Mr. BRIGHTBILL. Well, and Congressman, you are right. On 

trade secrets, there is more that could be done in our trade agreements there as well. 

Mr. LUETKEMEYER. Huge, huge problem. And I think the 

chairman needs to be congratulated on this because we have had 

a hearing on this before, so I thank him for this emphasis. 

Mr. Bieron, you talked about raising a threshold for minimum 

taxes on exports. Can you elaborate just a little bit? I have got 

about 30 seconds left and I have got one more question to ask before we get done. 

Mr. BIERON. I believe right now the de minimis, for example, 

in the U.S., is $200. The customs reauthorization proposes taking 

that to 800. Sellers on eBay, when they export and their product 

gets returned to them, they oftentimes find themselves paying import duties on their own return. Moving that up to 800 would reduce that burden for them. 

Mr. LUETKEMEYER. Okay. Very good. 

Very quickly, Ex-Im is a really big talking point around here. I 

think it is an important part of any export discussion. Do you support reauthorization or not, Mr. Bieron? 

Mr. BIERON. Ex-Im Bank is not something that our sellers, I 

think, are involved with. 

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Mr. LUETKEMEYER. Okay. Mr. Messinger? 

Mr. MESSINGER. Absolutely. It is critical to small manufacturers. 

Mr. LUETKEMEYER. Mr. Stanek? 

Mr. STANEK. We support not only reauthorization but an increase to a 25 percent threshold. 

These are my personal views only. I do support Ex-Im reauthorization, but there are some troubling things that have happened at 

Ex-Im and those need to be looked at as well. China has recently 

formed an Asia Development Bank, so I think we do need a counterweight. China should not be the world’s financier. 

Mr. LUETKEMEYER. Thank you. And I thank the chairman. I 

think this is the second hearing we have had a group of small business people who have indicated unanimously either support for or 

a neutral position on Ex-Im. I think it is important to note that, 

Mr. Chairman, that Ex-Im is a really, really big part of supporting 

small business in this country, and with that, I yield back. 

Chairman CHABOT. Thank you. The gentleman’s time is expired. 

The gentlelady from New York, Ms. Adams, who is the ranking 

member of the Investigations, Oversight, and Regulations Subcommittee is recognized for five minutes. 

Ms. ADAMS. Thank you, Mr. Chair, North Carolina. Thank you, 

Mr. Chair. 

Chairman CHABOT. I apologize. North Carolina. 

Ms. ADAMS. That is all right. That is all right. 

Chairman CHABOT. I was wondering why you were smiling. 

Ms. ADAMS. I grew up in that area a little bit. 

Chairman CHABOT. Sorry about that. 

Ms. ADAMS. But yes, I claim North Carolina as home. 

Let me thank the ranking member as well, Member Vela ́zquez, 

and gentlemen, for your testimony. 

Mr. Messinger, thank you for being here. And thank you for representing some of the finest companies that we have in North 

Carolina, particularly in the 12th District, which I represent. And 

I am proud to highlight North Carolina’s best. 

But as we look to improve federal international trade programs 

to meet the needs of small business exports, can you offer any advice as to what sort of financial and counseling resources would 

better enable small business to begin exporting and help existing 

small business exporters grow internationally? 

Mr. MESSINGER. Thank you. 

As you know, the Department of Commerce has an outstanding 

export promotion office. In our early years we used them extensively. In addition, states have really good export offices, North 

Carolina in particular. I think there are adequate tools available if 

manufacturers will seek them out to help them promote exports. 

And I would further say that Ex-Im Bank is a tool that from time 

to time we have found critical in competing with our German competitor. And so I think reauthorization of Ex-Im would go a long 

way towards helping us compete. 

Ms. ADAMS. All right. Thank you. 

An ongoing discussion we have here on the Hill is whether or not 

to reauthorize the Export-Import Bank. And while many other 

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countries have similar government export financing institutions, 

many of my colleagues cannot agree on whether to reauthorize Export-Import, or under what condition to reauthorize it. So can you 

speak to the significance of having small businesses effectively 

compete within the international markets and the importance of 

federal guarantees in supporting our small businesses internationally? 

Mr. MESSINGER. Yeah. Further to Ex-Im, and I do not know 

the agency and its balance sheet financial statement, but as I understand it, they return a substantial amount of money to the U.S. 

Government through their loan guarantees. Ex-Im supports far, far 

more small businesses than they do larger manufacturers. I know 

that the total volume of Ex-Im guarantees cover larger manufacturers, but without Ex-Im reauthorization, a lot of smaller people like 

ourselves get cut off from opportunities overseas. 

Ms. ADAMS. Okay. My last question is for Mr. Messinger, for 

you as well as Mr. Stanek. 

As Congress analyzes the arguments for and against TPP, and 

in the very near future the Trans-Atlantic Trade and Investment 

Partnership, better known as TTIP, it might be useful to go beyond 

the broad point of the potential to increase market access for the 

U.S. exports and ask the question, ‘‘market access for who?’’ What 

are the potential share of trade benefits or challenges that could 

accrue to small and medium-sized business, and also, what about 

minority-owned businesses as well? 

Mr. MESSINGER. Well, I think the opportunities for all businesses exist with these agreements. I happen to believe that with 

free trade, open trade, relations improve between countries. I think 

we have seen that time and again. So I am fully supportive of that. 

Ms. ADAMS. Mr. Stanek? 

Mr. STANEK. Ms. Congresswoman, I believe that the greatest 

benefit that we receive from the trade agreements is the simplification of the process. Right now it is very complicated for a small 

business to attempt—particularly one who has not been in the export business previously—to engage in that with the various rules 

and regulations that exist around the world. And being able to simplify that whole process will open up the doors for exportation for 

so many more companies. 

Ms. ADAMS. Thank you, sir. 

Mr. Chairman, I yield back. 

Chairman CHABOT. Thank you. The gentlelady yields back. 

Since the chairman screwed up and identified the lady from 

North Carolina as being from New York, I probably should say that 

the next questioner is from New York and not New York, but I will 

not do that. 

The gentleman from New York, Mr. Hanna, who is the chairman 

of the Subcommittee on Contracting and Workforce is recognized 

for five minutes, and I apologize to the gentlelady. 

Mr. HANNA. Thank you, Mr. Chairman. 

I want to make a comment about the Import-Export Bank—I do 

support it. I know, for example, Boeing is talking about exporting 

some of their jobs for manufacturing, I believe, and what is true, 

and you said this yourself, Mr. Messinger, is that there are hunSBREP-219 with DISTILLER

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dreds and hundreds of small companies that depend on these larger companies to pull all this together and export their products. 

Mr. Brightbill, the assumption of enforcement is flying around 

the room here today, that it is actually doable. For example, currency manipulation in China, the numbers, as you said, go from 10 

percent to 20 percent to 30. Nobody really knows, and it is a fungible number anyway because it is something that can change in 

a heartbeat. 

Two things. What do you think the actual number, say, is from 

China in your opinion? And are the things that we assume are enforceable—we listen to Elizabeth Warren and it is fair that in my 

office we get a lot of very negative calls over this because people 

are afraid. They look at what Ms. Vela ́zquez says and they agree 

with her. So, but it is also clear we cannot wall ourselves off to a 

world of opportunity. So if the key to all this is telling people you 

are going to enforce things and make something change that you 

do not like, is it doable? And what have we seen that would lead 

us to believe that? We have not seen much. So how do you enforce—I mean, it is just a word if there are no teeth. So go ahead. 

Mr. BRIGHTBILL. Congressman, I think those are very good 

points. 

On currency manipulation, I do still believe that China is undervaluing its currency to favor its exports, and the history of that 

over the last five to 10 years is overwhelming. I mean, there are 

estimates that millions of American jobs have been lost and that 

has increased the U.S. trade deficit by $200 billion to $500 billion 

per year. So you ask how to enforce it, what lawmakers have proposed is that you treat currency manipulation as account available 

subsidy. You let the Commerce Department look at it like any 

other subsidy. So if there is a financial contribution, if there is a 

benefit to Chinese companies as a result, and if it is specific, or an 

export subsidy, then you impose a duty at the end. And I think 

that the IMF and the Commerce Department and other agencies 

are capable of figuring out the extent of currency manipulation. 

Mr. HANNA. Somehow is the core of this argument though that 

you cannot deal with any of this unless you have agreements, I 

mean, in the absence of agreements, we have what we have. So in 

the presence of agreements we have more opportunity. And let us 

face it. Our tariffs are low. The goal is to lower everyone else’s so 

that we can have more free movement. But if currency manipulation continues at some level then without enforcement. 

And the other thing that bothers me about this is the path to enforcement is impossible almost. I mean, you take a small company, 

and Mr. Messinger, I have actually used your equipment, thousands of pieces. You make good stuff. How do you respond to that? 

I mean, what do you—— 

Mr. MESSINGER. Well, first of all, some of the enforcement 

change would be changes to U.S. law. They would not necessarily 

be in the trade agreements. We are just taking advantage of this 

opportunity while we are passing TPA or TPP, make these small 

changes to U.S. law and regulations at the same time. So I think 

that is possible. 

Another issue that we talked about is state-owned enterprises 

and how you address that. My understanding is that the TPP does, 

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for the first time, address the problem of state-owned enterprises 

competing with U.S. companies around the world, and it would 

allow U.S. companies and the U.S. Government to get information. 

So if they see unfair competition in China or a third country, or 

even here in the United States, they can get information on that 

and they can raise it in dispute settlement in the trade agreement 

itself. So you have to make the dispute settlement process work in 

that trade agreement to be able to enforce it. 

Mr. HANNA. So you see that as a positive thing obviously because we do not have a good system now. 

Mr. MESSINGER. We do not have any system for addressing 

state-owned enterprises. 

Mr. HANNA. Right. I mean, and Boeing has Airbus subsidized 

company; right? 

Mr. MESSINGER. Exactly. Now, that we have tried to address 

at the World Trade Organization with mixed results. 

Mr. HANNA. Thank you for your time. 

Thank you, Chairman. 

Chairman CHABOT. Thank you. 

The gentleman yields back. 

And the chair would like to note the presence of some guests 

here this morning from American Samoa, some high school students, and I would like to defer to the gentlelady from Samoa, Ms. 

Radewagen, if she would like to say something. 

Ms. RADEWAGEN. Thank you, Mr. Chairman. 

Yes, I would like to welcome some of our future leaders of American Samoa. These students are here participating in the Close Up 

program. 

I have a couple questions for you, Mr. Messinger. 

Chairman CHABOT. If you do not mind, I have to go over to this 

side. 

Ms. RADEWAGEN. Okay. 

Chairman CHABOT. I will be back. 

Ms. RADEWAGEN. Thank you, Mr. Chairman. I yield back. 

Chairman CHABOT. Thank you very much. And we welcome our 

guests here this morning for being here. Thank you very much. 

And the gentlelady from California, Ms. Hahn, is recognized for 

five minutes. 

Ms. HAHN. Thank you, Mr. Chairman. A point of personal privilege, I would also like to welcome a guest. Trevana is here. A lot 

of us are wearing these blue ribbons. It is National Foster Care 

Week, and there are a lot of youth who have been in the foster care 

system who are shadowing a member of Congress today. So she is 

my shadow all day today. 

So thanks for holding this hearing. I think it is really appropriate as we are talking about TPA and TPP to listen to how it affects our small businesses. And Mr. Messinger, I was noting that 

in one of the papers up here, I think it was The Hill, talked about 

the American Association of Manufacturers is against TPP because 

they feel like it has lost manufacturing or it will lose manufacturing jobs. So I was just going to ask you what you think should 

specifically be in this deal that would protect small businesses, particularly those who are in the manufacturing area. What would you 

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like to see specifically in these deals for manufacturers that would 

make it a good deal? 

Mr. MESSINGER. Well, first of all, I am not familiar with that 

association and their work. As I testified earlier, the history of 

trade agreements and job growth in the manufacturing sector is 

very clear. We have continued to grow manufacturing jobs. Even in 

Korea, manufacturing jobs were increased. Part of the issue in 

Korea is that the economy collapsed. 

Ms. HAHN. So what would you specifically like for us to pay attention to in these deals that would protect small businesses? 

Mr. MESSINGER. It is hard to say. I am not a legislator. I have 

not seen the details of a bill. The main interest that we have is tariff reduction. And as I testified, we are facing—we open our markets to everybody seemingly and yet we are closed in so many opportunities overseas. So that is the most important issue to us. 

Ms. HAHN. Okay, thank you. 

You know, I represent the Port of Los Angeles, the largest— 

along with Long Beach is the largest port complex in this country, 

and they are very good about having programs for small businesses. It is called Trade Connect, and they attempt to reach out 

to small businesses and educate, even handhold, talk about access 

to capital to allow small businesses to understand what it would 

mean to connect to the international trade industry. But Mr. 

Bieron, I was wondering, listening to you and talking about eBay 

and ecommerce, is that a model that we could or should update to 

educate small businesses in the intricacies of ecommerce? It is a 

good model but maybe it needs updating. 

Mr. BIERON. I think, yes. I think that it is a way to get far more 

small businesses exporting. I think that it is not as complicated as 

traditional exporting, which is why the numbers are so vastly different, but one of the five points that we talk about with the Global 

Empowerment Network is, in fact, knowledge of how e-commerce 

can lead to exporting. And so we do think that there is a role to 

get that word out. 

Ms. HAHN. And what exactly have you done to maybe get that 

word out to some of these Trade Connect programs that currently 

exist here? 

Mr. BIERON. For example, eBay has a relationship with the Department of Commerce, and in fact, about a month ago we had a 

group of sellers, small business sellers, here in town meeting with 

some pretty senior officials over at the Department of Commerce 

to talk about how the existing trade promotion export support programs can be updated to reflect ecommerce small businesses, so we 

are just beginning that process. 

Ms. HAHN. Great. Thank you very much. 

I yield back. 

Chairman CHABOT. The gentlelady yields back. 

The gentlelady from American Samoa, Ms. Radewagen, who is 

the chairman of the Subcommittee on Health and Technology is 

now recognized for five minutes. 

Ms. RADEWAGEN. Thank you, Mr. Chairman. 

Again, I want to welcome our students who traveled 10,000 miles 

to be here with us today. We are all very proud of them. 

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Mr. Messinger, I have a couple of questions for you. We hear one 

of the largest barriers for exporting is understanding and complying with foreign regulations. Can you explain how you keep up 

with all the changing foreign regulations, including technical barriers and changes in tariffs? 

Mr. MESSINGER. We cannot keep up with all of that. You know, 

we are a small company. We do what is right. We build machinery 

that is compliant with European standards, all international standards, and support it with outstanding service, and that is really all 

we can do. 

Ms. RADEWAGEN. Thank you. 

To better assist with export coordination, what tools should policymakers strengthen or reexamine for inefficiencies to help small 

businesses’ efforts to start or increase trading opportunities? Mr. 

Messinger? 

Mr. MESSINGER. Well, as I said earlier, I think the Department 

of Commerce has outstanding resources. Many of the states have 

tremendous programs, and quite frankly, a lot of our international 

market intelligence just comes from the Internet. You just get on 

and start asking questions and looking around and it is amazing 

what you can find. 

Ms. RADEWAGEN. And lastly, this is your day today, Mr. 

Messinger, when you are looking to export to a new market, what 

is your biggest obstacle, either domestic or international? 

Mr. MESSINGER. Wow, that is a good question. 

For the most part if is the energy and the money that we might 

have available at any point in time to attack that market. We assess a market by its financial conditions. Do they have enough foreign exchange? Are they earning enough foreign exchange that the 

labor machine ratio favors machinery versus hand labor? If it does, 

then we are going to go out and see if we can scratch something 

in the dirt and make something happen. So it is probably not a limitation other than just the local economy. 

Ms. RADEWAGEN. Thank you, Mr. Chairman. I yield back. 

Chairman CHABOT. The gentlelady yields back. Thank you. 

And the gentleman from Nevada who is chairman of the Subcommittee on Investigations, Oversight, and Regulations is recognized for five minutes. 

Mr. HARDY. Thank you, Mr. Chairman. 

Most of you already spoke on currency manipulation and that 

you really do not have much familiarity, but Mr. Brightbill, the 

question I have for you is would currency manipulation be better 

off under the Treasury, handled under the Treasury rather than 

under the TPA? Just a question. 

Mr. BRIGHTBILL. Congressman, we are concerned that what 

the Treasury Department does currently is not enough. Every six 

months the Treasury Department is supposed to certify which 

countries are currency manipulators, and throughout the entire 

Obama administration it has refused to name China as a currency 

manipulator. So I do not think Treasury alone is the solution to 

this, which is why my clients support a procedure that would allow 

the Commerce Department to determine whether currency manipulation is a subsidy. In addition, there is also the TPA Amendment 

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able requirements for currency manipulation to be addressed in 

free trade agreements like TPP. 

Mr. HARDY. Thank you. 

This is kind of across the panel here. You have all had success 

in what you are doing trading overseas. What advice would you 

give small business to get them to maybe get more involved? What 

advice would you give them to help them have a little courage to 

step out there and start using the foreign markets? Does anybody 

care to start with that one? 

Mr. BIERON. I think the eBay marketplace is a little different. 

As we have heard from most small businesses, nearly all of our 

small businesses do export. Honestly, one of the things we have encouraged them to do is contact Capitol Hill about TPA because we 

believe new trade agreements are the only way we are going to get 

a focus on microbusinesses who export because this is a very new 

model for exporting by small businesses. 

Mr. MESSINGER. What I have found in talking with manufacturers that do not do a lot of exporting is that there is some times 

a fear of the unknown, yet there are opportunities for just about 

everyone overseas. Unless you have a desire to start really looking 

overseas, you certainly are not going to find it. But as I mentioned 

earlier, get on the Internet, pose some questions, look in your industry at what might be going on, and it is unbelievable what you 

can find. 

Mr. STANEK. Congressman, we have found our freight forwarded to be of immense help to us. The employees at the freight 

forwarder are able to help walk us through a lot of the regulations 

that we are personally challenged with, and I would recommend 

someone looking to get into the arena to speak with a good freight 

forwarder and help initiate that process. 

Mr. BRIGHTBILL. Congressman, I think I would focus on the 

trade barriers and some of the bigger problems. One of the biggest 

ones that we have not talked too much about is the lack of common 

standards and harmonization of standards. We are trying to negotiate a free trade agreement with the European Union right now 

but there has not been a lot of movement on the very different regulatory systems. I mean, if a product is safe and effective here, that 

should be suitable in the European Union as well and we just have 

not seen a lot of movement from the EU on that. So I think that 

is something that needs to be looked at as these trade agreements 

are negotiated. 

Mr. HARDY. Thank you. You just led into my next question, because I think some of those discussions—do you feel like you being 

involved in this trade TPA as businesses in the discussion of fair 

trade, balanced trade, do you feel like your voice is being heard? 

Because sometimes I feel like being new here, that we do not utilize the real experts, the real people who get harmed or benefit 

enough. Does everybody—go ahead. 

Mr. STANEK. I feel that we are being heard through our trade 

association. If not for the trade association, the National Small 

Business Association, I think individually we would have a difficult 

time being heard, but I believe our voice is heard via that route. 

Mr. HARDY. That is good to hear. 

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Mr. BRIGHTBILL. Well, the NAM for sure. They are vocal on 

these issues. 

Mr. BIERON. I think we are trying to be heard but the small 

businesses using the Internet to sell globally is such a new phenomenon that I feel like the trade infrastructure of Washington 

and really other major capitals, they are not really aware of how 

much of the small business trade is actually going on, so that is 

a real challenge. 

Mr. HARDY. Thank you. 

Mr. BRIGHTBILL. I would just agree. I think small businesses 

face a real challenge. I mean, the pharmaceutical industry, big 

manufacturers can get their voices hard. It is much tougher for 

small businesses to get their priorities out there and incorporate it 

into these agreements. 

Mr. HARDY. Thank you. 

Can I ask one more question, Mr. Chairman? 

Are there any ideas of how we can do a better job of bringing 

small business into that discussion better? 

Mr. Brightbill? 

Mr. BRIGHTBILL. It is difficult. As you know, the text of the 

TPP, for example, has not been released yet. There are chapter 

summaries that are available to cleared advisors. I am a cleared 

advisor, so I can go to a room and read those summaries. But it 

is hard to know if you do not know what the provisions are or 

where they stand. So that is a real challenge. I can give that some 

more thought, and if I have some other answers I would be happy 

to respond in writing after the hearing. 

Chairman CHABOT. The gentleman’s time is expired. 

The chair would just note for the record that one of the mechanisms for the small business community around the country to get 

to Congress what it is they think about TPP and other things is 

this committee and us holding hearings, and that is what we are 

doing today. And this panel has done a commendable job, and I 

think the attendance of the members here today has been good on 

both sides, too, so we are listening, and hopefully we will enter that 

into our ultimate decisions on how we vote on these things. So I 

would just note that for the record. 

And the gentleman from South Carolina, Mr. Rice, who is the 

chairman of the Subcommittee on Economic Growth, Tax, and Capital Access is recognized for five minutes. 

Mr. RICE. I want to ask each of you this. Where we do not have 

a trade agreement at all, would each of you agree that we face 

more barriers on exports than we place on imports? 

Mr. Brightbill? 

Mr. BRIGHTBILL. Where we do not have a trade agreement, you 

are saying are there more barriers on export than there are on imports? Certainly. We are the most open and transparent market in 

the world, and I agree with the statistics earlier as far as the immense challenges, ones that are in the laws as well as laws that 

we do not even know about in foreign countries. So I definitely 

agree. 

Mr. RICE. Mr. Stanek? 

Mr. STANEK. I would agree also. And all we are looking for is 

a balanced playing field. 

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Mr. RICE. Mr. Messinger? 

Mr. MESSINGER. Absolutely. As my testimony indicated, we are 

given our market and we are not getting that much in return at 

times. 

Mr. RICE. Mr. Bieron? 

Mr. BIERON. I would agree and just note that the amount of exporting being done by small businesses is pretty remarkable given 

the current playing field. 

Mr. RICE. Probably a lot because, as you said earlier, it is flying 

under the radar screen and the government has not stuck their 

hands into it yet; right? 

So what you are saying is that we are less competitive in the 

world when we do not have trade agreements. Would you agree 

with that? 

I know that Volkswagen, in the past five years or so, was looking 

to locate a facility in South Carolina where I am from, was on the 

list, and they ended up going to Mexico because we did not have 

a trade agreement. Arcelor Mittal in my district, a steel company 

in Georgetown, South Carolina, just announced they are closing in 

four months. They will lose about 300 jobs. And they cited as the 

primary reason unfair trade from China on steel. So I do think 

trade agreements are really important. I do not think they are a 

panacea. I do not think they solve all the problems. I do not think 

you can. There are too many ways in my opinion. 

Mr. Brightbill, could you define for me, what is currency manipulation? 

Mr. BRIGHTBILL. Sure. Currency manipulation, and it is defined more clearly in other studies and things, but I think it is generally defined as prolonged intervention by a government that 

leads to maintaining currency levels or pushing them in a specific 

direction for an extended period of time. 

Mr. RICE. I would ask the rest of you guys, Mr. Stanek, what 

do you think is currency manipulation? 

Mr. STANEK. I would suggest that it is a country unfairly moving its currency to impact itself favorably at the expense of other 

countries. 

Mr. RICE. I would ask the rest of you all this question but it is 

really probably not in your area of expertise. 

Mr. Brightbill, how do you manipulate currency? 

Mr. BRIGHTBILL. There are many ways that currency can be 

manipulated. All I would say is that the evidence of what has happened with China over the years and other countries makes it clear 

that there is a problem here, that it has harmed U.S. businesses, 

and that we do need to take action to address it, and I think we 

should take action in trade agreements and also under U.S. law. 

Mr. RICE. And I am going to ask you just very obvious questions, but so if a country, let us say, manipulates its interest rates 

to artificially low levels, does that have an effect on the value of 

its currency? 

Mr. BRIGHTBILL. You could look at that under using Commerce 

Department subsidy rules and decide is that an unfair subsidy that 

distorts the playing field, or is that something else? So I think 

there are ways of creating—— 

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Mr. RICE. I mean, there could be cogent arguments that the 

United States is manipulating its currency; right? 

Mr. BRIGHTBILL. I think that—— 

Mr. RICE. I am just asking if there is an argument. 

Mr. BRIGHTBILL. Sure. Arguments can be made against us 

around the world on any topic, but I think the evidence does not 

demonstrate that the United States is manipulating currency in 

the same way as China. 

Mr. RICE. And I understand that. I am not trying to be overly 

argumentative, but I think China might disagree with you on that. 

Now, with respect to prolonged deficit spending, does that have 

an effect on currency valuation? 

Mr. BRIGHTBILL. Well, I think you could evaluate all of these. 

I would say that companies like ArcelorMittal and others in the 

steel industry would argue that currency manipulation hurts their 

ability to export and to compete around the world. And I think they 

would like something—— 

Mr. RICE. And I agree with you. The point I am trying to make 

is that there are myriad ways to, I mean, from tax policy to income 

tax policy to government regulation to things that you would not 

consider as currency manipulation, to manipulate currency. And I 

do not know. The trade agreement is just going to be a framework, 

and we have to do the best we can to set up enforceable mechanisms. But we, honestly, I do not believe, can sit here and foresee 

all the potential ways that a country could manipulate trade, and 

we have to do the best we can with our framework to make us 

more competitive, because everybody sitting here in this panel, and 

I think everybody sitting here on this panel agree that where we 

are without a trade agreement is a bad place. I mean, we all know 

we are making ourselves less competitive by not doing what we can 

to strike down these barriers to our exports. 

And my time is over. Thank you very much. 

Chairman CHABOT. The gentleman’s time is expired. 

And the gentlelady, the ranking member is recognized. She wanted to ask a follow-up question. 

Ms. VELA ́ ZQUEZ. Thank you. 

Mr. Brightbill and Mr. Stanek, you mentioned before that we 

need to help, and Mr. Messenger, you also mentioned that at the 

beginning you got a lot of assistance from the Department of Commerce. And so some of those programs will help small businesses 

get the type of technical assistance that will help them take advantage of the overseas market. But when I meet with small business 

exporters, one area where it is challenging for them is to find affordable export financing. The Ex-Im Bank can fill the void that exists, but there is a debate going on here in terms of whether the 

Ex-Im Bank is providing the assistance that small businesses need. 

Here we are debating this massive free trade agreement that is 

supposed to open and provide more opportunities for small businesses, and yet when you look at the reauthorization language of 

the Ex-Im Bank, it does not increase the small business lending 

cap that was put in place years ago by 20 percent. 

So Mr. Brightbill, you said that there are some areas that need 

to be addressed within the Ex-Im Bank. Can you mention one or 

two? 

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Mr. BRIGHTBILL. Sure, Congresswoman. Great question. 

Like I said, I do support reauthorization, but there have been 

abuses of the system. There have been some concerns about how 

loan recipients are selected. I can tell you some of my clients also 

have concerns when loans are made abroad to companies that then 

manufacture or mine raw materials, for example, that then end up 

in foreign steel that comes back at dumped and subsidized prices. 

So there are concerns about who Ex-Im lends to, the procedures for 

lending, and also, as you say, small business concerns as well, and 

those should be looked at carefully as part of this debate. 

Ms. VELA ́ ZQUEZ. Thank you. 

Chairman CHABOT. Thank you. The gentlelady yields back. 

I would like to thank the witnesses for being here. Our panel, I 

think, has given us excellent testimony. Trade is clearly one of the 

more important issues that Congress is going to be facing in the 

upcoming weeks and months when one considers TPA, TPP, TTIP, 

and the Ex-Im Bank, and a range of other issues, and I think you 

made a great contribution, all of you, towards this Committee, and 

our colleagues understanding and grasping this issue, and hopefully doing the right thing. 

I ask unanimous consent that members have five legislative days 

to submit statements and supporting materials for the record. 

Without objection, so ordered. And if there is no further business 

to come before the Committee, we are adjourned. Thank you. 

[Whereupon, at 12:24 p.m., the Committee was adjourned.] 

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A P P E N D I X 

TESTIMONY OF 

Brian Bieron 

Executive Director, Global Public Policy Lab 

eBay Inc. 

BEFORE THE 

United States House of Representatives 

Committee on Small Business 

Across Town, Across Oceans: Expanding the Role of Small 

Business in Global Commerce 

PRESENTED 

Rayburn House Office Building, Room 2360 

May 20, 2015 

11:00 a.m. 

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Chairman Chabot, Ranking Member Velazquez, and members of 

the Committee, thank you for inviting eBay to testify on how small 

businesses are using technology to expand their economic opportunity by reaching international markets. Our company is a truly 

global business—with approximately 60% of our gross merchandise 

volume coming from activity outside the United States. We enable 

over 150 million users in over 200 countries to engage in technology-enabled commerce. 

eBay is a U.S.-based global technology company that enables 

hundreds of thousands of U.S. entrepreneurs, small businesses, as 

well as mid-size and large businesses, to reach customers around 

the world. Through our experience, we have found that technology 

is transforming trade by allowing Main Street businesses to directly take part in globalization, reaping the benefits of markets 

previously only open to the largest global companies. 

The prototypical model for trade by small businesses has involved plugging into the supply chain of a large multi-national 

company. This model continues to be the dominant model for trade, 

but there is an emerging model for trade by small businesses that 

is incredibly exciting because of its socio-economic impact. 

Our unique experience at eBay demonstrates how the Internet 

and mobile technology are now powering global trade by small and 

micro-businesses. These micro-multinationals include businesses 

like: The Music Farm in Canton, Ohio, which exports more than 

40% of its inventory to customers overseas and has 11 employees; 

and Great Sky Gifts in Kalispell, Montana, which exports to 99 

countries with only four employees. 

My team has spent the last four years conducting research on 

the growth of global trade by micro-multinationals. Most recently, 

we completed the, ‘‘2015 U.S. Small Business Global Growth Report’’. I would like to offer to submit a copy of the report for the 

Committee record. 

Our report shows that the Internet and platforms like eBay are 

revolutionizing global trade by opening it up to even the smallest 

enterprises. In the US, the Small Business Administration has 

found that between 1% and 2% of small businesses export. By contrast, on eBay, 95% export. The traditional small business exporters reach on average two markets a year. On eBay, 190,000 US 

small businesses reached 4 continents in 2014. Our data also shows 

that these micro-multinationals survive at a higher rate, meaning 

they continue to export while traditional businesses stop exporting 

because of the tremendous barriers to trade that they face. And 

newcomers capture a larger overall market share than traditional 

small businesses, meaning the online marketplace is more inclusive 

for small businesses. The global trade regime is changing before 

our eyes. 

This new ‘‘Inclusive Globalization’’ depends on four components 

that make up what we call the Global Empowerment Network: 1) 

access to the Internet; 2) access to global services that exist on top 

of the Internet; 3) an efficient small package shipments logistics 

network; and 4) an educational system for businesses to learn 

about online opportunities. 

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Unfortunately, these four tenants of the Global Empowerment 

Network are undermined by trade barriers. At eBay we have been 

working to tackle the barrier of language. As a result of our investment in machine translation technology, we have lowered language 

as a barrier to trade by 66% since 2004. But technology alone cannot solve all of the trade barriers that micro-multinationals face. 

I will offer three policy recommendations to improve the global 

ecosystem for micro-multinationals. First, raise the US low value 

customs ‘‘de minimis’’ threshold and de minimis thresholds around 

the world. The de minimis threshold is the level below which imports are exempt from duties and paperwork. Micro-multinationals 

trade in low-value shipments and raising the de minimis would 

allow products to reach global customers with less friction. The 

Customs Reauthorization Act here in the House would raise the US 

de minimis and I urge you to support that bill. 

Second, modernize the global postal service system. Micro-multinationals regularly utilize postal services because of their widespread networks. Modernizing postal services to meet the needs of 

micro-multinationals engaging in package trade directly with consumers could greatly help to grease the wheels of modern small 

business trade. 

Finally, the US government has many excellent programs designed to help US businesses, but many of these programs were not 

developed with small, global eCommerce businesses in mind. I urge 

the Committee to review existing government programs to be more 

inclusive of micro-multinationals. 

Today we are witnessing the dawn of a new era of globalization. 

Small and mid-sized businesses contribute to their local economy 

and regularly serve customers around the world. This is good economics because it means more growth and wealth, and it is good 

for society because it means a more inclusive form of globalization. 

I urge the Committee to keep micro-multinationals on top of mind 

as it seeks to protect and promote cross-border trade opportunities 

for small businesses. 

Thank you again for the opportunity to address the Committee 

on this important and timely topic. I look forward to answering 

your questions. 

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Good morning. I would like to thank Chairman Chabot, Ranking 

Member Velazquez and the members of the Committee on Small 

Business for inviting me to testify today on issues related to challenges facing small-business exporters and the impact U.S. trade 

policy has on small businesses. 

My name is Michael Stanek and I am the Vice President and 

Chief Financial Officer of Hunt Imaging LLC, a manufacturer of 

dry and liquid electrostatic toners and developers used primarily in 

high speed computer printers. Hunt Imaging is headquartered in 

Berea, Ohio just outside of Cleveland in a 100,000 square foot manufacturing facility we have occupied since 1974. We also have a 

12,000 square foot facility outside of Antwerp, Belgium but are currently in the process of shutting down that operation as sales 

throughout Europe have declined to a level that make it financially 

unfeasible to maintain it as an ongoing entity. 

Although more than 99 percent of all businesses in the U.S. and 

European Union (EU) are classified as small and medium-sized enterprises (SMEs), accounting for the vast majority of employment, 

and adding more than 14.3 million new jobs to the U.S. economy— 

we are still struggling to keep our European operations open due 

to both economies being mired in sluggish and uninspiring recoveries. 

I am proud to be here representing not only my company but also 

the National Small Business Association (NSBA)—the nation’s first 

small-business advocacy organization for whom I serve on the 

Board of Trustees, and its international arm, the Small Business 

Exporters Association (SBEA). I also serve as the First Vice Chair 

of the Board of Directors at an NSBA affiliate, the Council of 

Smaller Enterprises (COSE) in Cleveland, Ohio, the nation’s largest regional small business association. 

Hunt Imaging was founded in 1996 as a spinoff from a Fortune 

200 company with more than 90 years of imaging chemicals experience. With both dry and liquid capabilities, Hunt is able to service 

a broad array of needs in the imaging industry. Our current focus 

is on the high speed computer printer market with a particular 

niche in magnetic image character recognition (MICR) toners. We 

supply some of the largest printer manufacturers on an Original 

Equipment Manufacturer (OEM) basis and compete in the 

aftermarket as well with a Hunt labeled product. We currently employ thirty-five hard-working individuals between our two facilities 

and will maintain a workforce of thirty-one after our downsizing is 

complete. 

Challenges to Exporting 

The fact that Hunt Imaging is a Fortune 200 spinoff is very germane to the foreign trade topic as the background and experience 

many of our employees gained from being part of a large company 

gave us an advantage over most other companies our size when it 

came to exporting. Not only did we inherit an ongoing operation in 

Europe that made us very unique for a company our size, but our 

original employees brought with them the knowledge of how to deal 

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with freight forwarders, customs brokers, export/import documentation, and other items that are specific to the export arena. 

Without this innate knowledge, we would have been facing the 

same legal, administrative and regulatory barriers that so many of 

my colleagues face when they decide to enter into the global marketplace. The fact that nearly half of the exporters who responded 

to a 2013 NSBA and SBEA Exporting Survey citing they spend a 

few months or more preparing to export is a clear indicator of the 

complexity faced by new exporters and the need for improved, 

streamlined assistance. The average small-business exporter reported spending approximately 8.4 percent of their annual operating revenue on preparing to export. To put that in context, the 

average S-Corporation reports spending 11.1 percent of their annual operating revenue on salaries and wages, according to the 

most recent information available from the Internal Revenue Service. 

Clearly, for Hunt, having the foreign operation and an existing 

book of foreign customers when we spun off had us in the export 

business—with a clear advantage—from the very beginning of life 

as a stand-alone entity. We did not fully comprehend at the time 

how unique we were in comparison to the vast majority of companies our size which are at a loss when it comes to having that background, yet join us in the challenge of having limited resources 

upon which to draw when it comes to learning new practices and 

in keeping up with ever-changing rules and regulations. Developing 

foreign markets is a significant challenge, especially for a small 

firm with limited human and financial resources. There are cultural factors to learn, language barriers, legal snares and obstacles, 

and the complex array of logistical and governmental issues surrounding cross-border trade. 

Our history in exporting has been varied, with more recent sales 

being focused in the European footprint and Canada. We have also 

in the past year sold into Brazil but have done so via a customer 

in Miami, Florida who has handled the actual exportation. We have 

handled our recent Brazilian shipments in this fashion as the 

Miami company has a pre-existing relationship with the Brazilian 

customer and it also shields us from economic unrest in the Brazilian economy. 

Finding effective distribution partners has been essential for us 

in identifying new customers, in new countries and understanding 

the different regulatory requirements. Without them, we would 

have had to spend a considerable amount of time finding labeling, 

shipping, certification requirements and all of the other relevant 

rules that apply to doing business in Brazil. The time that we devote to an export transactions is time that we won’t be devoting to 

some other, equally important business operation. One often has to 

wonder if it is even worth trying to expand into new markets. 

Other destinations to which we have exported directly, although 

not recently, have included the Philippines, Egypt, and Pakistan. 

Service to our customers in Europe has been handled through 

our Belgian facility, a luxury which we will lose shortly due to the 

aforementioned economic decline. We have historically produced all 

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of our toner in our U.S. facility in Berea and would then export in 

bulk to our branch in Belgium where the toner would be packaged 

for sale to European customers. We are now in the process of 

changing the relationship with our largest European customer out 

of Germany and will both produce and package their product there 

in the U.S. and then export it directly to them. 

This change in shipping point has resulted in a number of challenges for us to face. We now have to look at numerous facets of 

our operation, from things as basic as now having to order, inventory and utilize Euro pallets for shipping to much larger challenges 

such as addressing the REACH (Registration, Evaluation, Authorization, and Restriction of Chemicals) issue and its attendant certifications. The REACH issue in particular has been challenging for 

a small business such as ours to, first, fully understand, and second, to meet the criteria. 

REACH is a regulation of the European Union (EU) which came 

into force in 2007 and addresses the production and use of chemical 

substances. The 849 pages of legislation have been described as the 

most complex legislation in the European Union’s history and affects industries throughout the world. 

REACH requires all companies manufacturing or importing 

chemical substances into the EU to register those substances with 

the newly established European Chemicals Agency (ECHA) in Helsinki, Finland. In our case this registration is necessary for every 

raw material contained in our toner formula. 

We were previously REACH compliant through our Belgian 

branch but with our new direct sales approach from the U.S. we 

are looked at as a new company and required to make new registrations. While our customer in Germany is technically responsible for the registration as the importer of the product they have 

insisted that we handle the registrations. Many European companies will not consider purchasing from outside the EU unless the 

exporter assumes all REACH registration responsibilities. 

The required registration can be handled by establishing a relationship was an organization within the EU termed an ‘‘Only Representative’’ (OR), OR consultancy companies exist outside the EU 

but it is not possible to register a substance if the OR is not based 

in the EU unless it is subcontracted to an EU-based registrant. The 

OR assumes responsibility and liability for fulfilling obligations of 

REACH for substances being brought into the EU by a non-EU 

manufacturer. However, the cost of engaging an OR can be in the 

tens of thousands of dollars, putting it well out of reach of a typical 

small-business exporter. 

As an alternative to engaging an OR ourselves, we have been 

forced to take another, though no less time-consuming, approach. 

Each of the suppliers of our raw materials are large companies and 

all are also non-EU manufacturers. In response to the REACH regulation they have each found it necessary to individually contract 

with an OR in the EU. As the products which they are supplying 

to us are fully registered through their ORs we have been able to 

negotiate agreements with each of them that are allowing us to 

‘piggyback’ on their registration by extending their OR appointSBREP-219 with DISTILLER

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ments to include the distribution of substances via Hunt Imaging 

to our customer. These negotiations and the subsequent paperwork 

to effect the relationships have consumed a significant amount of 

time and a fair amount of legal and consultancy expense. 

The REACH issue in Europe is only one of myriad challenges 

that need to be faced and addressed when a small business is looking to export. For a business without the internal resources to address these challenges it becomes a matter of finding outside assistance which in and of itself can become both time-consuming and 

cost-prohibitive. 

Possibly the biggest exporting challenge for a small business, and 

certainly ours, is finding international opportunities to pursue. 

When we were part of a large multinational corporation we had a 

worldwide network of colleagues who could not only pinpoint opportunities for us but also pursue them on our behalf. As a small 

stand-alone organization we are challenged to uncover potential 

sales opportunities and have struggled with identifying domestic 

resources to assist in that process. 

Participating in the trade show circuit, both as an exhibitor and 

as attendees, has proven to be of limited value to us. In addition 

to numerous domestic trade shows we also have been an exhibitor 

at Drupa, the largest printing exhibition in the world, held every 

four years in Dusseldorf, Germany. This show attracts nearly 2,000 

exhibitors and 300,000–400,000 visitors. Again, the results as far 

as new business have been disappointing. We’ve picked up a few 

small sales but never anything that has justified the cost of exhibiting nor any business that we can maintain once our doors are 

closed in Belgium. 

Once new customers are identified and a sales agreement is 

reached the next step is, of course, exporting the product to the 

customer. After 19 years as an independent organization our 

knowledge base from previously being part of a multinational corporation was waned. We now rely very heavily on our freight forwarder to advise us of rules and regulations and have, in fact, 

passed along power of attorney on export related issues to our 

freight forwarder. 

Large companies in the U.S. are, for all practical purposes, fully 

globalized. They have a good sense of where their export markets 

are and what is needed to sell in those markets. They know where 

to go to finance their foreign sales and have the resources to handle common types of foreign trade barriers to U.S. exports. The situation among small and mid-sized companies in our country is dramatically different. 

Large companies in the U.S. are, for all practical purposes, fully 

globalized. They have a good sense of where their export markets 

are and what is needed to sell in those markets. They know where 

to go to finance their foreign sales and have the resources to handle common types of foreign trade barriers to U.S. exports. The situation among small and mid-sized companies in our country is dramatically different. 

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The economic difficulties over the past few years, coupled with 

ongoing outsourcing, have put small businesses at a distinct disadvantage in the global economy. NSBA and SBEA have been urging for years—decades, even—that more must be done to emphasize the needs of small business within the scope of U.S. trade in 

order to enhance exporting opportunities for small U.S. companies. 

I have been pleased to see in the past few years, there has been 

a concerted effort by the administration, Congress and regulators 

to improve and enhance exporting opportunities for small businesses. 

What Can Be Done 

It should come as no surprise that the results from the NSBA/ 

SBEA Exporting Survey shows that fifty-five percent of SME’s export to less than five countries. Foreign laws and regulations can 

change daily, making it increasingly difficult for a small business 

to stay up-to-date on when and how to comply with these regulations, and it acts as a deterrent to explore new markets. Additionally, the survey highlights that forty-seven percent of small-business owners are the ones handling the bulk of their exporting activities; this is on top of running the day-to-day operations of the 

business, and oftentimes serving as the accountant, benefits coordinator, attorney and personnel administrator. 

One-Stop-Shop 

It is critical for policymakers to understand that, for a small 

business, more information isn’t always a better information. With 

more than twenty federal departments and agencies playing some 

role in international trade, it is important that SMEs have a place 

to turn. Many of these agencies overlap and offer duplicative services. I would recommend the creation of a One-Stop Shop—ideally 

within the Department of Commerce and more specifically the 

International Trade Administration (ITA)—that would have a centralized staff dedicated to field small business ‘‘how to’’ calls on exporting and to assist small businesses in transferring their exporting thoughts and ideas into reality. It would be beneficial to develop a ‘‘beginning-to-end’’ focus on each company—staying with a 

company from initial inquiry through the completion of the transaction and any necessary follow-up. 

Increased coordination between agencies will help more small 

businesses access the tools they need to export; enhanced export 

training and technical assistance are key. Especially for small companies that are new to exporting and those with specialty products 

for exotic markets, there are undeniable fear factors, knowing exactly where to go and who to call could alleviate some of this anxiety which serves as a major barrier to entry into global trade. 

Cross-agency outreach guides and learning materials on the intended foreign markets with virtual marketplace and virtual trade 

missions would make it easier and less expensive for small businesses to reach foreign partners. 

Trade Agreements 

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Trade agreements are a vital part of the effort to increase country and customer range, as well as the value of small-business exports. Free trade agreements are extremely important as they 

lower foreign barriers to our exports and produce a more level playing field. Lowering the ‘‘hassle factor’’ of exporting to specific countries helps to increase the attractiveness of those countries to 

smaller companies. And when trade agreements succeed in lowering exporting costs, they broaden the range of export profitability 

for American companies and American products. 

For successful negotiations, it is critical the president have the 

authority to negotiate trade agreements through Trade Promotion 

Authority (TPA). TPA, which expired in 2007, is crucial to the passage of trade deals through Congress because it allows the agreements to advance under ‘‘fast track’’ rules with no amendments. 

Without TPA, the U.S. is relegated to the sidelines as other nations 

negotiate trade agreements without us—putting American workers 

and companies—especially small ones—at a competitive disadvantage. New and expanded market access through trade agreements 

has been an important catalyst for increased small business exports. I am pleased to see that Congress has begun consideration 

on TPA, and am hopeful both chambers will have constructive debate and pass this important legislation as soon as possible. 

At Hunt, we consider selling into Canada to be a routine matter; 

the paperwork is simple and the logistics network is just an extension of our normal domestic carriers. It has been shown that following the implementation of the North American Free Trade 

Agreement (NAFTA), American SME exports to Canada and Mexico skyrocketed. Small businesses represent over 95 percent of all 

U.S. exporters to the NAFTA market. This same type of success is 

achievable with other trade deals. 

Currently, the administration is negotiating two broad trade 

agreements: the Transatlantic Trade and Investment Partnership 

(T-TIP), with members of the EU and the Trans-Pacific Partnership (TPP) with countries in the Asia-Pacific region. These two 

agreements would cover 60 percent of American exports and 84 

percent of foreign direct investment, both expanding some existing 

trade agreements and creating opportunities for free trade with 

more countries. 

Given the importance of small businesses to both the European 

and Asia-Pacific economies, it is vital that these negotiators not 

only get the details right when crafting the SME-specific chapter, 

but also ensure that they address the specific needs of small business throughout the entire agreement. 

NSBA and SBEA are pleased that trade negotiators have finally 

realized the need for including a chapter dedicated to small exporter issues in these agreements. It is critical for their long-term 

usefulness, however, to establish a small-business committee or advisory panel that would engage with the SME community and provide resources and information on understanding the full scope of 

these agreements and how they can benefit small businesses. 

TPP and T-TIP are excellent opportunities for these countries 

and the U.S. to coordinate approaches and facilitate cross-border 

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trade and investment opportunities for American SMEs. By removing tariffs, making the regulatory process easier to understand, and 

ensuring companies have access to the information they need to 

start exporting, these agreements can make a real difference to the 

increased number of small firms who have expressed interest in exporting, per the NSBA/SBEA survey: from just 43 percent in 2010 

to 63 percent in 2013. 

Ease Tariffs 

If we want American SMEs to export more, it is important to reduce variable costs like tariffs. Many countries impose tariffs on 

U.S. exports that are ten or twenty times as high as our own, and 

a web of non-tariff barriers overseas often shuts out U.S. goods and 

services. At Hunt we have found that our products can often times 

be classified numerous ways by a single country. Without combing 

through a maze of product descriptions and classifications we risk 

having our material placed in a much higher tariff class than necessary. 

Also, we need to pay close attention to fixed or ‘‘inflexible’’ costs 

because those costs can impose disproportionate burdens on SMEs. 

When it costs $10,000 in legal fees to comply with at trading rule 

it is a nuisance for a large company, but it is a potential show-stopper for a small company. 

A lot of non-tariff barriers can generate such disproportionate 

costs. Non-tariff barriers include such items as foreign patent and 

trademark costs, ‘‘physical presence’’ requirements, paperwork requirements and performance bonds and licenses. Sometimes these 

disproportionate costs are subtle, such as when a country requires 

foreign companies to be structured in a certain way to do business 

there. But even small increases in a company or product’s cost due 

to tariffs can mean the difference between making and losing a sale 

for SMEs. NSBA/SBEA supports the elimination of all tariffs across 

all industries and product lines. Though the tariffs between the 

U.S. and EU economies are already relatively low, eliminating 

them would boost bilateral trade by more than $120 billion in five 

years, according to a report from the Centre for Economic Policy 

Research. 

Transparency of Rules and Regulations 

Interpreting and comprehending regulations has proven to be a 

challenge that exhausts a small firm’s human resources and even 

drains our wallets when we have to turn to outside professionals. 

The easier it is to understand and comply with a country’s rules 

without having to hire attorneys, the cheaper it is to get into that 

market. While we have relied very heavily on our freight forwarder 

to keep us informed of and in compliance with all necessary rules, 

it would be much more comforting for us to have a clear way to 

confirm our own compliance. 

New rules and regulations should only occur after notices have 

been posted online in an easily-accessible format for the public and 

American companies to provide comments on the impact the new 

rules would have on their business. Also, all issues raised by U.S. 

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companies should receive written responses with justifications for 

all new rules. The creation of an SME committee that would analyze and examine the impact of new rules on smaller companies 

would also be beneficial. 

NSBA/SBEA also supports the creation of a centralized website 

that is monitored and collects up-to-date information on regulation 

policies and practices pertaining to requirements for shipping, labeling, testing, certifications, and customs clearance for the most 

commonly traded goods and services. It should be presented in a 

clear and easy-to-read format, to serve as a resource for businesses 

looking to navigate the process and enter a new market. 

Customs Simplification 

Reducing administrative burdens associated with customs procedures, raising the de Minimis threshold, eliminating unnecessary 

double customs controls and simplifying rules of origin could benefit small exporters—especially as a way of reducing red tape and 

delays at borders. Improving predictability, simplicity and uniformity in border procedures will make it easier for SMEs to participate in trade. 

The current de Minimis value for goods entering the U.S. is $200, while the current personal exemption for goods carried into 

the country is $800. Duties and taxes are assessed only if the value 

exceeds $800. If consumers ship their purchases back to the U.S. 

that same duty-free limit falls to $200. This difference arbitrarily 

penalizes companies—such as mine—that ship products necessary 

for the production and manufacturing of our goods in the U.S. 

Streamlining this customs process and matching the $800 exemption will help American businesses grow their export volume and 

enter new markets. NSBA/SBEA support the bipartisan efforts in 

Congress to increase this threshold, which will lower costs for 

American exporters. 

Strong Intellectual Property Protection 

Small businesses are the leaders in innovation and creativity 

that drive job creation and economic growth. Having a strong commitment to intellectual property rights (IPR) is vital in order to 

protect our innovative products and services, especially because 

small exporters are highly vulnerable to infringements of our IPR. 

U.S. small businesses are at a particular disadvantage, because 

they may lack the knowledge, expertise or resources necessary to 

prevent the theft of their ideas and products. In fact, research conducted by the United States Patent and Trademark Office found 

that only 15 percent of small businesses that conduct business 

overseas know that they need to file for IP protection abroad. 

Many small businesses also may not have personnel and operations overseas, so they lack the ‘‘eyes and ears’’ needed to be vigilant globally and the theft of their IP can often go undetected. In 

addition, small businesses generally do not have the level of access 

or the resources, such as specialized legal counsel, that may be 

available to larger companies. NSBA/SBEA endorses the creation of 

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rights to decrease the amount of time and paperwork normally required which in turn will provide more timely enforcement of IPR. 

Expand and Improve Export Finance 

On a more broad scale, we need to get more community banks 

into export finance and educate them on available government 

lending programs so they can better advise their small-business 

customers who are considering exporting. This can be achieved by 

streamlining paperwork, externalizing some of the banks’ administrative costs for smaller export finance deals, providing export finance training, enhancing outreach to banks on the benefits of 

trade finance and improving bank recruitment practices. 

Hunt just negotiated a new line of credit with a regional bank 

that allows us to borrow up to 80 percent of outstanding accounts 

receivable. However, we were unsuccessful in attempting to address the issue of foreign accounts receivable and are unable to borrow any money against receivables that are to be collected from 

companies outside U.S. borders. This naturally makes it much 

more difficult for us to financially support new export opportunities 

that may arise. 

The U.S. financial sector is far less engaged in world trade than 

the financial sectors in Europe, Asia and other parts of the world, 

where banks themselves encourage business customers with promising products to export. To truly set up American exports, our 

banks must do more. 

While Hunt does not use the Export-Import Bank of the United 

States (Ex-Im), it is also an important part of the U.S. export strategy for so many small exporters. The Ex-Im Bank is self-supporting 

and actually has generated excess revenues of nearly $7 billion dollars since 1992. I cannot understand why the reauthorization of its 

lending authority has been so controversial. It is crucial the Bank 

maintain its congressionally approved lending authority allowing 

the Bank to operate without restrictions, so companies have the 

certainty and predictability we need to level the playing field and 

compete in the international marketplace. Interestingly enough, 

NSBA’s members find this program valuable enough that reauthorization of Ex-Im Bank was voted among our top 10 priorities for 

the 114th Congress. 

These are just some of the recommendations that, if accomplished, could alleviate many of the barriers affecting SMEs and 

yield significant gains for us and the overall U.S. economy. 

Conclusion 

While there is no doubt that some of America’s biggest companies 

can continue to increase their exports, the largest untapped resource for American exports is small and medium-size companies. 

SMEs struggle with real and perceived challenges to exporting. 

Just over one percent, or 287,000, of the approximately 27.9 million 

small businesses in the U.S. currently export. With 95 percent of 

the purchasing market outside of the U.S., small businesses understand the importance of opening new markets and competing in the 

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global marketplace. Although the number of small exporters has 

been steadily growing their share of overall U.S. exports—34 percent in 2010, up from 27 percent in 2002—exporting is still not as 

much a part of the business culture in the U.S. as it is worldwide. 

Many SME’s think exporting is too burdensome or too risky, or 

they just do not know where to start. As highlighted throughout 

my testimony, some of the top barriers for small exporters are: (1) 

problems identifying foreign business opportunities and federal export assistance resources, (2) limited information on how to analyze 

foreign regulations and contact potential foreign customers, and (3) 

the need for external financing in order to undertake an export 

transaction. Federal and state agencies play an important role in 

helping to reduce these types of exporting barriers for small businesses. Lowering more of these barriers will help small exporters 

tap into new markets and grow. 

Given the specter of a jobless economic recovery and lagging consumer spending, exporting holds many opportunities for small businesses during the domestic economic malaise, and supports longterm domestic growth and job development. Though small business 

exports represent less than five percent of the GDP, with aggressive support from the U.S. Government this contribution could be 

significantly increased. 

Again, I would like to thank Chairman Chabot and the members 

of the committee for the opportunity to speak today. I would be 

happy to answer any questions you may have. 

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1Office of the U.S. Trade Representatives, The President’s Trade Agenda: Made in America, 

at 19 (Mar. 2015). 

House Committee on Small Business 

‘‘Across Town, Across Oceans: Expanding the Role of Small 

Business in Global Commerce’’ 

Testimony of Timothy C. Brightbill 

Partner, Wiley Rein LLP, Washington DC 

Adjunct Professor, Georgetown University Law Center 

May 20, 2015 

Chairman Chabot, Ranking Member Velazquez, and Members of 

the Committee. I am Tim Brightbill, a partner at Wiley Rein LLP 

and adjunct professor at Georgetown University Law Center. 

Thank you for the opportunity to testify here today on the important issue of expanding the role of small business in global commerce. (These views are my own, not those of my firm or my clients.) 

I have practiced international trade law for 20 years, and my 

practice has always focused on helping American companies, American industries, and American workers. I work with members of a 

wide variety of industries—including manufacturers of everything 

from solar panels to steel to school notebooks to heavy forged hand 

tools. I also work with many companies that provide products and 

services both here and abroad. My job is to help these companies 

grow, to prevent unfair trade practices from harming these companies, and to help eliminate trade barriers overseas. 

As this committee is aware, small businesses face enormous challenges in the area of international trade. According to the President’s 2015 Trade Agenda, of the 28 million small businesses in the 

United States, only about 1 percent, or approximately 300,000 of 

these small businesses export their merchandise to other countries.1 Equally striking is the fact that of those small businesses 

that do export, more than half export to only one country—either 

Canada or Mexico. This demonstrates how small businesses often 

struggle to overcome steep tariffs, complicated paperwork, fees, and 

the often significant delays that they face in exporting to other 

countries. These trade barriers disproportionately affect small businesses that often cannot meet the high costs of compliance. 

In the last several years, the U.S. government has taken several 

steps towards easing such barriers, but there is more to be done. 

Encouraging and facilitating exports by U.S. small businesses is 

imperative to allowing American industry to expand and American 

workers to prosper. I’d like to list just a few areas of priority for 

this Congress and Administration that are particularly relevant to 

small businesses: 

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2Office of the United States Trade Representative, Overview of the Trans Pacific Partnership, 

https://ustr.gov/tpp/overview-of-the-TPP. 

1) Trans-Pacific Partnership - The U.S. government has a potentially important opportunity to create jobs, expand trade and 

manufacturing, and improve the global rules of international trade 

in the Trans-Pacific Partnership free-trade negotiations. If approved, the TPP would be the largest U.S. free trade agreement, 

involving 12 countries and more than 40 percent of global trade.2

The TPP specifically seeks to promote measures that improve U.S. 

small businesses’ ability to export, such as streamlining customs 

procedures, eliminating tariff and non-tariff barriers, promoting 

digital and e-commerce, and developing more transparent regulatory procedures. The TPP provisions are similar to the types of 

improvements included in the World Trade Organization’s recent 

Agreement on Trade Facilitation. As discussed below, the TFA is 

intended to make the movement of goods between countries faster, 

less expensive, and more reliable, as in the TPP. 

Two other features of the TPP that could benefit small businesses are the implementation of common tariffs (prior to tariff 

elimination) across countries and the chapter on express delivery 

services. A serious challenge to the effectiveness of international 

trade rules is what some have called the ‘‘spaghetti bowl’’ of free 

trade agreements, each of which has its own rules. This creates uncertainty in the system when different tariffs are imposed on the 

same products by different countries. Some small businesses don’t 

even bother to claim duty free treatment for their goods due to the 

complexity of the process. Standard tariffs across TPP countries 

should reduce this burden. 

The TPP will also, for the first time, impose disciplines and requirements on state-owned enterprises, which will greatly assist 

U.S. companies, both large and small, by reducing the need to compete with foreign-government backed entities. While China is a notable example of this problem, SOEs play substantial roles in the 

economies of TPP countries like Malaysia and Vietnam—as well as 

Russia, Brazil, India, and many others. When U.S. small businesses export, they should not have to compete with foreign governments, which is why these SOE provisions are potentially so important. 

Similarly, many small businesses use express delivery services 

for their exports, and the TPP includes provisions that should allow 

greater use of these services. The TPP specifically seeks to enhance 

such services through expedited procedures that help small businesses gain quick and efficient access to global markets and supply 

chains. 

But, before it can pass the TPP, Congress and the Administration must first pass Trade Promotion Authority, which defines 

U.S. negotiating objectives and priorities for trade agreement negotiations. As you know, the Senate is currently considering TPA legislation as well as potential amendments, and the House will also 

do so shortly. And as this debate has taken place in recent weeks, 

the theme we have heard over and over again is one of enforcement. Specifically, Congress should not approve new trade agreeSBREP-219 with DISTILLER

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3See, e.g., David Autor, David Dorn & Gordon H. Hanson, Why Obama’s key trade deal with 

Asia would actually be good for American workers, Wash Post (Mar. 12, 2015). 

ments until we have better ways of enforcing our existing agreements. Several TPA amendments would go a long way toward improving enforcement for all types of businesses, including small and 

medium sized enterprises. 

First, Congress should approve much-needed trade enforcement 

measures as part of TPA. U.S. industry has proposed a set of five 

trade law changes that it views as essential to strengthening the 

U.S. government’s enforcement and administration of the U.S. 

trade laws, and to ensuring that U.S. trade laws remain an effective tool for domestic companies and their workers to respond to 

unfair trade practices. These provisions would: • Enhance the Commerce Department’s ability to address 

non-cooperative foreign parties in trade remedy cases; 

• Clarify the injury standard in trade remedy cases; 

• Enhance the ability of the Commerce Department to calculate a trade remedy when foreign prices or costs are distorted; and 

• Clarify the Commerce Department’s authority regarding 

the selection of which foreign companies to investigate in a 

trade case. 

These changes would benefit all companies who bring trade cases 

against dumped and subsidized imports, including large and small 

business alike. They were included in the Customs and Trade bill 

passed by the Senate Finance Committee. They should be included 

in TPA as well. 

Second, Congress should approve the ENFORCE Act legislation 

to guard against foreign companies who use fraud and evasion to 

avoid paying trade case duties. Senator Wyden has championed 

this legislation for years, and again it was included in the Customs 

and Trade bill passed by the Senate Finance Committee. The ENFORCE Act is preferable to the PROTECT Act, which has also 

been proposed in the House. 

Although the TPA would prove beneficial to small businesses in 

many respects, there are potential drawbacks as well. First, the 

opening of the U.S. market to additional foreign competition could 

harm smaller businesses that are less able to compete than larger 

or multinational companies. This could also lead to jobs being lost 

to lower-wage positions in other TPP countries. However, the extent of such harm, if any, is not known, and some experts have 

stated that because many TPP countries are already free trade 

partners of the United States, the actual increase in competition 

may be limited.3

Second, opponents of the TPP argue that the agreement, largely 

negotiated behind closed doors, reflects powerful corporate interests, rather than the interests of small businesses who are less able 

to influence U.S. trade policy. In fact, while the TPP will contain 

a separate chapter on small- and medium-enterprises, little is 

known about the contents of that chapter. The United States Trade 

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4Office of the United States Trade Representative, Trans-Pacific Partnership: Summary of 

U.S. Objectives, https://ustr.gov/tpp/Summary-of-US-objectives. 

5See, id. 

6See, e.g., Elizabeth Warren, The Trans-Pacific Partnership clause everyone should oppose, 

N.Y. Times (Feb. 25, 2015). 7Office of the United States Trade Representative, European Union, https://ustr.gov/countriesregions/europe-middle-east/europe/european-union. 

8 U.S. International Trade Commission, U.S. International Trade Commission Releases Report 

on How T-TIP Will Benefit Small Businesses (Mar. 28, 2014); U.S. International Trade Commission, Trade Barriers that U.S. Small and Medium-sized Enterprises Perceive as Affecting Exports 

to the European Union, Inv. No. 332–541, USITC Pub. 4455, at 2-2–2-7 (Mar. 2014). 

tional challenges that small businesses have previously raised with 

regard to the difficulty of actually utilizing free trade agreements, 

but the specifics remain unknown.4 And while the Administration 

is seeking to include a provision for regular reviews of how the TPP 

is working for small businesses, it is not clear if and/or how the 

outcome of such reviews will be used to the benefit of these companies.5

Third, and perhaps most controversial,6 are the TPP’s InvestorState Dispute Settlement provisions. Under these provisions, U.S. 

businesses could challenge foreign government policies or actions 

before independent arbitrators with the authority to order compensation to the companies, if so warranted. Critics of ISDSD 

argue that it could allow the rollback of U.S. health, safety, and environmental regulations. My personal view is that these concerns 

are overstated, and there are many ways that ISDS could be beneficial to small- and medium-sized enterprises who invest abroad. 

These arbitration proceedings are often a cost-effective way for 

companies to protect their investments abroad from hostile government actions. 

2) Transatlantic Trade and Investment Partnership 

(TTIP): The Transatlantic Trade and Investment Partnership 

is another trade agreement that has the potential to bring substantial benefits to U.S. small businesses. The United States and the 

European Union have one of the most complex trade and investment relationships, with U.S. goods and private services trade with 

Europe totaling more than $1 trillion in 2013.7 Nearly 95,000 U.S. 

small businesses export to the European Union, but the growth in 

such exports is hampered by the need to comply with European 

standards, technical regulations, and conformity assessments.8

Such requirements, coupled with high tariffs and shipping costs, 

are often prohibitive for small businesses. The TTIP negotiations 

seek to address these barriers by reducing or eliminating tariffs, 

promoting duty-free treatment of digital products, promoting compatible regulatory requirements and assessments, and reducing 

border costs and delays. The TTIP negotiations are in their early 

stages, so it is still too soon to assess their potential. 

3) Trade in Services Agreement: The Trade in Services Agreement, being negotiated among 24 countries, seeks to expand global 

trade opportunities for service industries like telecommunications, 

financial services, healthcare, and distribution and delivery services. 

Today, barriers to trade in services are often greater than those 

facing manufactured goods, so TISA could provide small businesses 

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9See C. Fred Bergsten, Addressing Currency Manipulation Through Trade Agreements, Peterson Institute for International Economics (Jan. 2014). 10See Bonnie Cao & Ye Xie, IMF Official Says Yuan Nearing Point Where No Longer Undervalued, Bloomberg Business (Apr. 17, 2015). 11 C. Fred Bergsten & Joseph E. Gagnon, Currency Manipulation, the U.S. Economy, and the 

Global Economic Order, Peterson Institute of International Economics (Dec. 2012). 

with greater and more affordable access to global markets. Because 

the United States already runs a large trade surplus on trade in 

services, TISA should further strengthen U.S. services firms that 

are looking to expand abroad. 

4) Currency Manipulation - Currency manipulation continues 

to be a serious problem that harms all U.S. exporting businesses, 

large and small. Currently manipulation has resulted in the loss of 

thousands, if not millions, of U.S. jobs by making imports of certain 

goods into the United States artificially cheap and by giving foreign-manufactured products an unfair advantage over U.S. products in export markets. The Petersen Institute for International Economics, one of the most respected think tanks in Washington, has 

previously called currency manipulation ‘‘the biggest subsidy of 

them all,’’ 9 and despite recent International Monetary Fund statements,10 many estimates suggest that China’s currency is still undervalued by 25% or more. In addition to the millions of lost American jobs, such currency actions by China and more than 20 other 

countries are estimated to have increased the U.S. trade deficit by 

$200 billion to $500 billion per year.11 Yet, the Commerce Department has repeatedly refused to investigate whether currency manipulation is a countervailable subsidy under U.S. trade laws. 

U.S. free trade agreements currently do not address this serious 

issue, to the detriment of American companies and workers. Congress now has the opportunity to take two important steps towards 

stemming this ongoing problem. First, Congress should direct the 

Commerce Department to investigate currency manipulation as an 

illegal subsidy. Second, Congress could establish, as a negotiating 

objective, that the Administration seek enforceable rules against 

currency manipulation in all future trade agreements, including 

the TPP. 

5) World Trade Organization’s Agreement on Trade Facilitation - This agreement has not yet entered into force, but could 

benefit many U.S. small businesses by making the movement of 

goods between countries faster, less expensive, and more reliable. 

Exporting goods to some countries can be particularly difficult, 

with delays at the border, substantial paperwork, and steep fees. 

Under the TFA, WTO members must adopt procedures that (1) 

allow exporters to submit import documentation even before the arrival of their goods at the port; (2) allow for the release of merchandise even before the final customs duties and fees are determined; 

(3) allow for expedited procedures for operators with demonstrated 

records of customs compliance; (4) provide a mechanism for expedited release of merchandise; (5) implement procedures to reduce 

documentation requirements, and allow for the rapid release and 

clearance of goods, particularly perishable items; and (6) allow for 

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cess to expedited shipping channels, increasing access to global 

supply chains and allowing for more cost-efficient shipping and logistics. Such measures would allow U.S. small businesses increased 

opportunities and destinations for their products, and the U.S. 

should urge WTO members to ratify the agreement as quickly as 

possible. 

Thank you for addressing these important issues today, and I 

would be happy to answer any questions. 

Æ 

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