U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

79–821 2013

SMALL BUSINESS TRADE AGENDA: OPPORTUNITIES 

IN THE 113TH CONGRESS 

HEARING 

BEFORE THE

SUBCOMMITTEE ON AGRICULTURE, ENERGY AND 

TRADE 

OF THE

COMMITTEE ON SMALL BUSINESS 

UNITED STATES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

FIRST SESSION 

HEARING HELD 

FEBRUARY 28, 2013 

Small Business Committee Document Number 113–004 

Available via the GPO Website: www.fdsys.gov 

SBREP-219 with DISTILLER


Congress.#13
(II) 

HOUSE COMMITTEE ON SMALL BUSINESS 

SAM GRAVES, Missouri, Chairman 

STEVE CHABOT, Ohio 

STEVE KING, Iowa 

MIKE COFFMAN, Colorado 

BLAINE LUETKEMER, Missour 

MICK MULVANEY, South Carolina 

SCOTT TIPTON, Colorado 

JAIME HERRERA BEUTLER, Washington 

RICHARD HANNA, New York 

TIM HUELSKAMP, Kansas 

DAVID SCHWEIKERT, Arizona 

KERRY BENTIVOLIO, Michigan 

CHRIS COLLINS, New York 

TOM RICE, South Carolina 

NYDIA VELA ́ ZQUEZ, New York, Ranking Member 

KURT SCHRADER, Oregon 

YVETTE CLARKE, New York 

JUDY CHU, California 

JANICE HAHN, California 

DONALD PAYNE, JR., New Jersey 

GRACE MENG, New York 

BRAD SCHNEIDER, Illinois 

RON BARBER, Arizona 

ANN McLANE KUSTER, New Hampshire 

PATRICK MURPHY, Florida 

LORI SALLEY, Staff Director 

PAUL SASS, Deputy Staff Director 

BARRY PINELES, Chief Counsel 

MICHAEL DAY, Minority Staff Director 

SBREP-219 with DISTILLER

(III) 

C O N T E N T S 

OPENING STATEMENTS 

Page 

Hon. Scott Tipton ..................................................................................................... 1 

Hon. Patrick Murphy ............................................................................................... 2 

WITNESSES 

Mr. Daniel Ogden, Esquire, Attorney at Law & International Trade Consultant, Carrollton, Texas, on behalf of the National District Export Council ..... 4 

Ms. Jennifer Fulton, Chief Pickle, CEO, Miss Jenny’s Pickles, Kernersville, 

North Carolina, on behalf of the U.S. Chamber of Commerce ......................... 6 

Mr. Michael Myhre, Associate State Director, Florida SBDC, University of 

West Florida, Pensacola, Florida ........................................................................ 8 

Mr. Raymond Arth, President and CEO, Phoenix Products, Inc., Avon Lake, 

Ohio, on behalf of the National Small Business Association, Small Business 

Exporters Association .......................................................................................... 10 

APPENDIX 

Prepared Statements: 

Mr. Daniel Ogden, Esquire, Attorney at Law & International Trade Consultant, Carrollton, Texas, on behalf of the National District Export 

Council ........................................................................................................... 27 

Ms. Jennifer Fulton, Chief Pickle, CEO, Miss Jenny’s Pickles, 

Kernersville, North Carolina, on behalf of the U.S. Chamber of Commerce .............................................................................................................. 55 

Mr. Michael Myhre, Associate State Director, Florida SBDC, University 

of West Florida, Pensacola, Florida ............................................................. 63 

Mr. Raymond Arth, President and CEO, Phoenix Products, Inc., Avon 

Lake, Ohio, on behalf of the National Small Business Association, 

Small Business Exporters Association ........................................................ 68 

Questions for the Record: 

None. 

Answers for the Record: 

None. 

Additional Materials for the Record: 

Hon. Grace Meng .............................................................................................. 78 

SBREP-219 with DISTILLER

SBREP-219 with DISTILLER

(1) 

Small Business Trade Agenda: Opportunities in 

the 113th Congress 

Thursday, February 28, 2013 

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

The Subcommittee met, pursuant to call, at 10:00 a.m., in Room 

2360, Rayburn House Office Building. Hon. Scott Tipton [chairman 

of the subcommittee] presiding. 

Present: Representatives Tipton, King, Luetkemeyer, Mulvaney, 

Huelskamp, Murphy, Schrader, and Meng. 

Chairman TIPTON. Well, good morning. I apologize for being 

late. Thank you for being prompt on this. 

We would like to go ahead and call our hearing to order, and I 

would like to be able to welcome our new and returning members 

to the Subcommittee, especially Ranking Member Murphy. Welcome to Congress. 

Mr. MURPHY. Thank you. 

Chairman TIPTON. I am glad to be able to work with you here 

on the Small Business Committee. 

I do look forward to working with all of our members in the 

113th Congress, and I want to be able to give special thanks to our 

witnesses here today, taking time away from your full-time jobs, I 

know, to be able to come here and make this trip to Washington, 

and to be able to tell us about some of the issues that are inhibiting our ability to be able to grow our economy and to be able to 

grow jobs and export markets. 

Today we will hear directly from small businesses about the obstacles and barriers that limit their ability to be able to compete 

in the global market. Given the right circumstances and tools, I 

know America’s small businesses can compete with any other company in the world. 

There is strong bipartisan support on the benefits of exporting. 

Exports are a major contributor to the nation’s GDP, totaling $2.2 

trillion in 2012. They provide new sales opportunities. And, most 

importantly, exporting creates and supports high paying American 

jobs. However, of the 28 million small businesses in the United 

States, only one percent currently export. Increasing the number of 

small business exporters is a key priority for me, as well as this 

Committee. Last year alone, I held three Export 101 events in my 

district so small businesses could learn how to be able to increase 

their exports and how to develop new relationships in key trading 

areas. 

Along with limited personnel, we know that small firms face a 

variety of trade barriers that constrain their participation in the 

SBREP-219 with DISTILLER

2 

global market. A few of the most obstructive hurdles include tariff 

and non-tariff barriers, anti-competitive technical standards, and 

complex foreign and domestic regulations. As a result, small businesses that do export rely heavily on negotiated Free Trade Agreements [FTA] that remove complex trade barriers, provide protection for their intellectual property, and help streamline the trade 

process. In 2010, 41 percent of the total U.S. exports went to FTA 

countries. 

FTAs are an important first step, but they are not the sole solution. We must also work to be able to reduce the domestic bureaucracy and make the overall process easier. The export process can 

be complicated and overwhelming, and many firms do not know 

where to start or go for the necessary information. Unlike large 

corporations, most small firms do not have the personnel and resources to navigate the technical trade barriers. 

As we begin, the 113th Congress, it is our Committee’s job to review the federal trade promotion agencies to ensure that they are 

working in a coordinated and an efficient manner to best serve 

small businesses. Moreover, we need to be able to support an aggressive trade strategy that opens up new foreign markets, streamlines the trade process, and strengthens our fight against unfair 

trade practices. I look forward to working with my colleagues to be 

able to identify common-sense and practical solutions that will better assist small business exporters. 

Again, I would like to be able to thank our witnesses for their 

participation and their insights, and I would now like to recognize 

our ranking member for his opening statement. 

Mr. MURPHY. Thank you, Mr. Chairman. And thank you all for 

being here. 

As the ranking member of the Subcommittee on Agriculture, Energy, and Trade, I am looking forward to working together to find 

common ground and bipartisan solutions. Having been a small 

business owner myself, I know the obstacles small businesses face, 

and I know how essential their success is in generating new jobs 

and driving our economic recovery. 

Earlier this week I sat down with the Distinguished Chairman 

to discuss the important challenges facing America’s small businesses. There is clearly much to be done, and as I said, I look forward to working with the Chairman over the next two years, and 

I feel confident in our ability to drive bipartisan solutions through 

this Subcommittee. 

Today, we hold our first Subcommittee hearing on small businesses, and their ability to participate in international trade, a 

realm in which big business continues to have a clear advantage, 

as the chairman said. We have before us four extremely knowledgeable witnesses, and I look forward to hearing their ideas on how 

Congress can help small businesses export their goods and be more 

competitive on the world stage. 

Right now, our economy is recovering gradually, and yet, unemployment is not expected to drop below 7-1⁄2 percent until 2015, 

which will make six straight years of unemployment above 7-1⁄2

percent. As a result, the number one priority for this Committee 

has to be job creation. And one way to boost jobs is to open new 

markets to small businesses, which account for 50 percent of all 

SBREP-219 with DISTILLER

3 

jobs in the United States. Right now, small businesses make up 97 

percent of all U.S. exporters, but only about 30 percent of the goods 

exported. I believe there are measures Congress can take to make 

international trade more accessible to small businesses and help 

even the playing field as demand for U.S. products on the global 

marketplace—which serves 95 percent of the world’s consumersgrows. 

Right now, the vast majority of our small businesses still do not 

market their products internationally. Of those that do, many only 

send their goods to our neighbors to the north and the south, and 

do not take advantage of markets in Europe and Asia. Clearly, 

there remains significant opportunity to expand the role of small 

business and international trade. 

To address this area of potential growth, the Small Business Administration, the Export-Import Bank, and the International Trade 

Administration each offer programs specifically tailored to provide 

education, networking, technical, and financial assistance to small 

firms engaging in international trade, and I am particularly interested in hearing about the experiences our witnesses had with 

these programs. This is one area I am particularly concerned could 

suffer from Congress’s inability to address the sequestration because it is vital these agencies have the resources they need to perform their essential work. 

SBA’s export programs generated $1.6 billion in sales in fiscal 

year 2010 alone. That translates to real jobs here at home. We 

need to amplify, and not reduce, these successful programs, while 

simultaneously cutting back on programs that have proven ineffective. Mandatory cuts across the board to SBA’s budget would not 

achieve this. 

Agricultural exports is one area that is poised for expansion. 

Small farms constitute more than 90 percent of the sector. In 2011, 

U.S. agriculture exports reached nearly $140 billion, outpacing the 

previous record set in 2008 by 20 percent. This growth shows that 

America’s farmers have the potential to help lead our economy forward, spurring development and employment gains across the 

country. 

This is especially true in my own district in Florida, which is recognized for its citrus and vegetable production. However, as we examine the best way to stimulate international trade amongst small 

businesses, we must recognize the double-edged nature of Free 

Trade Agreements. Lowering tariffs and other barriers clearly 

spurs commerce between countries, but at the same time we have 

seen new imports undercut hardworking U.S. businesses by introducing significantly cheaper goods into our market. For example, I 

recently visited Adams Ranch in Fort Pierce in my district where 

I heard from farmers concerned that cheap Mexican tomatoes may 

be disrupting the marketplace for our growers. Learning what 

works and what hurts our small businesses is essential for any future trade agreements. 

Issues like these will continue to challenge small exporters, but 

I look forward to small firms’ involvement in trade continuing to 

grow. Over the last decade, exports from smaller companies have 

doubled and are now valued at nearly $320 million per year. With 

three-quarters of world’s purchasing power outside the United 

SBREP-219 with DISTILLER

4 

States, access to foreign markets is no longer optional, but essential, for many businesses’ continued success. By helping more small 

firms export abroad, we can accelerate economic growth and create 

the jobs Americans so badly need. 

I thank the witnesses in advance for their testimony, and I yield 

back. 

Chairman TIPTON. Thank you, ranking member. And as our 

panel knows, you have five minutes to be able to deliver. I would 

like to be able to explain the timing lights in front of you. A little 

bit like traffic lights. When it is green, you are good to go. When 

it is yellow, speed up. When it gets red, stop. And we would appreciate that. And I do know we have several members that have some 

other commitments to be able to go to, so I will defer my questions 

for after your testimony. 

Our first witness is going to be Mr. Daniel Ogden. Dan is an attorney, licensed custom broker, and international trade consultant. 

He is also chairman of the National District Export Council, also 

known as DECs. DECs are local organizations comprised of international trade experts who volunteer their time to be able to provide counseling and best practices for small businesses interested 

in boosting their exports. Currently, there are 59 local DECs or 

about 1,800 members covering nearly every region in the United 

States. He is testifying on behalf of the National District Export 

Councils. 

Welcome, and we look forward to your testimony. 

STATEMENTS OF DANIEL OGDEN, ESQUIRE, ATTORNEY AT 

LAW AND INTERNATIONAL TRADE CONSULTANT, 

CARROLLTON, TEXAS, TESTIFYING ON BEHALF OF THE NATIONAL DISTRICT EXPORT COUNCIL; MS. JENNIFER FULTON, CHIEF PICKLE, MISS JENNY’S PICKLES, CEO, 

KERNERSVILLE, NORTH CAROLINA, TESTIFYING ON BEHALF 

OF THE THE U.S. CHAMBER OF COMMERCE; MICHAEL 

MYHRE, ASSOCIATE STATE DIRECTOR, FLORIDA SMALL 

BUSINESS DEVELOPMENT CENTERS, PENSACOLA, FLORIDA, 

RAYMOND ARTH, PRESIDENT AND CEO PHOENIX PRODUCTS, 

INC, AVON LAKE OHIO, TESTIFYING ON BEHALF OF THE NATIONAL SMALL BUSINESS ASSOCIATION, SMALL BUSINESS 

EXPORTERS ASSOCIATION. 

STATEMENT OF DANIEL OGDEN 

Mr. OGDEN. Thank you. Good morning, Chairman Tipton, 

Ranking Member Murphy. I would like to thank you for this opportunity to testify at the hearing and share my views. 

My testimony will cover the importance of trade to the well-being 

and wealth of the U.S. economy, to the health and profitability of 

small business, and to the creation of job growth in the United 

States. I will also discuss the challenges to success that small business exporters face from government laws and regulations, both 

foreign and domestic, and the role the federal government should 

play in advancing U.S. and international trade interests. 

Initially, it must be stressed that small business exporters are 

small businesses first. They face the same challenges to their profitability that all small businesses face, and some of the most sigSBREP-219 with DISTILLER

5 

nificant of these challenges arise from the U.S. domestic, regulatory, and legislative environment. In fact, small business exporters are unique in this regard as they face challenges to their profitability from both the foreign and domestic arenas. In seeking then 

to answer the question what can Congress do to assist small businesses increase their exports, one answer quite simply is to stop 

overregulating, overlegislating, overtaxing small business. 

One specific area that does affect small business exporters is 

U.S. Export Controls Law. While export controls are important to 

our national security and economic vitality, this does not necessitate that they be so complex and cumbersome that they discourage companies from exporting. The ongoing effort to reform U.S. 

export controls by simplifying both their administration and ease 

of compliance will increase the likelihood that U.S. exporters will 

increase their exports. 

I would also like to make a comment about U.S. trade policy in 

general. International trade contributes greatly to the wealth creation of an economy which should be the goal of any economic policy. Trade is a two-way street. While exports are always praised, 

imports are not a bad thing. Being able to freely source imports 

and means of production is critical to the profitability of many 

small businesses. In spite of this fact, trade protection is a temptation and a disease that is bipartisan in nature. Protectionism is not 

a creator of wealth, but rather it is a creator of poverty. Avoidance 

of a protectionist trade policy used either as a strategy or a tactic 

should be at the core of the U.S. trade policy. 

This temptation to engage in protectionist trade policies is not, 

of course, unique to the United States. Protectionist trade policies 

in foreign countries are a fact of life that small business exporters 

have to deal with on a daily basis, and this fact makes trade agreements an essential component of the U.S. trade policy. The major 

focus of trade agreements in the past has been on tariff reduction 

or elimination. This has resulted in foreign nontariff trade barriers 

becoming the protectionist tool of choice. These barriers are especially damaging to our small business exporters. It is imperative, 

therefore, that ongoing and future negotiations on trade agreements stress nontariff barrier reduction and elimination. 

There is one thing that Congress can do immediately, which is 

to renew trade promotion authority. This renewal is crucial for several reasons. Perhaps most important is the fact that the U.S. has 

fallen behind other nations and entering into trade agreements, 

thereby putting our exporters at a competitive disadvantage. The 

TPA renewal will help to ensure that loss to U.S. export sales from 

belated passage of trade agreements does not happen again. 

I would also like to briefly discuss U.S. export assistance. Why 

do U.S. exporters need this assistance? The answer is simple and 

can be stated in one word—competition. In an ideal world, American exporters would not have this need. We do not live in that 

world, however, as other countries provide assistance through exporters. The federal government therefore has a critical role to play 

in ensuring that exporters have a level playing field in which to 

globally compete by providing export assistance. One important 

feature of this assist is that U.S. export assistance centers are in 

SBREP-219 with DISTILLER

6 

place locally to interface directly with exporters, which are, of 

course, part of the U.S. and Foreign and Commercial Service. 

Despite the call over the years to eliminate the domestic commercial service, and particularly the USFCS, their continued existence 

is vital and irreplaceable. The ability of USFCS to directly interface 

with foreign commercial officers is also critical. It is imperative, 

therefore, that the U.S. and Foreign and Commercial Service remains the unified agency with both foreign and domestic operations 

under one roof. 

An important feature of export assistance also is that there 

should be just one federal agency where exporters go for services 

such as trade counseling. At present, while the U.S. and Foreign 

and Commercial Service plays this primary role, the SBA also engages in trade counseling. This duplication is unnecessary, wasteful, and confusing. Only one federal agency should be involved in 

international trade counseling, and that is the U.S. and Foreign 

and Commercial Service. 

Further, the amount budgeted for export assistance should also 

be increased. Part of this issue can be resolved by transferring to 

the International Trade Administration from the SBA funds that 

were used by the SBA for the International Trade Counseling programs. And I would just say also that taxpayer dollars spent on export assistance is money well spent. 

One final issue is the Commerce Department’s plan to reorganize 

the International Trade Administration. While one positive feature 

of this plan is the integration of certain export services that will 

both help exporters find new markets and customers and actually 

get their hands into those markets or the goods into those markets 

and the hands of those customers, it is also important to ensure 

that under this plan that the operations of the U.S. and Foreign 

Commercial Service continue to be customer and field focused. 

In summary, I am out of time. I would refer you to my written 

testimony as to my specific recommendations. Thank you. 

Chairman TIPTON. Thank you, Mr. Ogden. 

Our next witness is Ms. Jenny Fulton, Chief Pickle and CEO of 

Miss Jenny’s Pickles. After being laid off from her financial industry job, Jenny Fulton and co-founder Ashlee Furr, used Jenny’s 

grandmother’s recipes to start making pickles. Founded in 2009, 

Miss Jenny’s Pickles is becoming a household name. Their products 

are sold in over 800 stores and the company exports pickles all over 

the world. They were also featured in a segment on CBS’s 60 Minutes last October. She is testifying on behalf of the U.S. Chamber 

of Commerce. 

Jenny, thank you for being here, and we look forward to your 

testimony. 

STATEMENT OF JENNY FULTON 

Ms. FULTON. Thank you. Thank you, Chairman Tipton, and 

Ranking Member Murphy, and Distinguished Members of the U.S. 

House, Committee of Small Business, Subcommittee on Agriculture, Energy, and Trade. 

I am Jenny Fulton, and I am the chief pickle at Old Orchard 

Foods, doing business as Miss Jenny’s Pickles. Our pickle world 

headquarters is in Kernersville, North Carolina. 

SBREP-219 with DISTILLER

7 

I am extremely honored and grateful for this opportunity to 

share our story with each of you. I am testifying on behalf of the 

U.S. Chamber of Commerce. 

Miss Jenny’s Pickles was born out of the financial recession. 

Ashlee Furr was laid off in June of 2009, and my layoff followed 

in January of 2010. Ashlee and I confirmed after spending 16 years 

in the financial industry we were both burned out and we decided 

to take a true leap of faith and start our own pickle company. 

Knowing that 95 percent of the world’s population lives outside the 

United States, we decided that exporting would be crucial to our 

success. In May of 2011, the North Carolina Department of Agriculture’s Export Department and the Southern United States 

Trade Association [SUSTA] organized an inbound trade mission for 

Chinese buyers to meet with North Carolina businesses, in which 

we decided to participate. 

Wow. What an adventure. I met Mr. Shen there, and he is our 

Chinese business partner. After hours of reading Chinese e-mails 

translated by Google, talking via Skype with a 12-hour time difference, and 32 pages of documents later, we finally exported our 

first five pallets of pickles to China. Last year, the North Carolina 

Export Department and SUSTA took a trade mission to Shanghai 

for a food show. I went along there and it was then that I had the 

opportunity to visit the stores that carry Miss Jenny’s Pickles. I 

must be honest. I was extremely amazed, humbled, and proud to 

be standing next to our pickles on the shelf in China. It was rewarding to know that I was representing the United States of 

America, which has world recognized food safety regulations. 

Last year, I also participated in a trade mission to Canada arranged by these same good people. It was there that we hired a Canadian food broker, and this year I will be going to Hong Kong and 

Germany. And during the early stages of working in the international marketplace, we attended a forum in Charlotte called 

Small Business Global Access hosted by Senator Kay Hagan, along 

with chairman and president of the Export-Import Bank, Fred 

Hochberg. I was so impressed with Fred’s remarks on Ex-Im’s efforts to help small business exports that I ran out to his car after 

the forum and I handed a jar of pickles to his driver and I said, 

‘‘Tell Fred to eat these pickles because we want to export this 

year.’’ And today, we partner with the Ex-Im Bank so that we can 

offer terms to our foreign buyers which increases our sales by having this option. Without the Ex-Im Bank, our small business would 

never have been able to offer terms outside the United States. And 

without my out-of-the-jar thinking and pure determination to export, I am not sure that our young company would have had such 

great success. 

Now, if more U.S. small businesses were able to seize export opportunities, the gains could be immense. I have seen firsthand for 

the government to improve communications regarding U.S. export 

programs. After our company was featured on 0 Minutes, we received hundreds of e-mails and phone calls from Americans all 

across the country. They want to start their own company, too. 

Well, small business needs help paving the way to new markets. 

We are left on our own to find the doors and knock on them. The 

services, expertise, and dedication of the state and federal export 

SBREP-219 with DISTILLER

8 

promotion programs are world-class, but I know there are many 

companies not aware of the government services that are available 

to help them break into new markets. This is not the fault of America’s small business owners. 

There are many successful state programs out there that I believe could be replicated in other states. For example, in North 

Carolina, the Department of Agriculture is aggressively helping 

North Carolina companies export. These good people encourage 

companies like mine to consult with trade specialists, to learn more 

about trade through workshops, seminars, to participate in trade 

missions, and to meet with international buying delegations. They 

have even opened an office in Beijing. Without their help we would 

not have found the international market opportunities. 

On the federal level, the government accountability has determined that 17 federal agencies with export promotion programs 

could be made more effective through better coordination. As the 

president of a small company, I truly understand the importance 

of international trade and the impact it can have on small business. It is simple. We want to ship to more countries, we want to 

grow our client base, and we want to create more jobs. 

Congress can do one big thing that will make a really big difference for small businesses today, and that is by creating one 

website with all the resources, all the links available to export. You 

can do it in one click. It is going to be that simple because it is 

really hard out there. And we need to make it easy for small business to succeed and not fail in our global marketplace. By communicating effectively to small business, you will generate billions of 

dollars in new American exports. There are many seasoned exporters among American small business, but there are many that have 

never even considered exporting. I know that exporting can be 

challenging and overwhelming, especially for small business, but in 

the end it is all worth it. 

In closing, I challenge each one of you to better promote the 

trade resources that are available to small businesses. Thank you 

for the privilege and opportunity to appear before you today. It has 

been my honor. 

Chairman TIPTON. Thank you, Ms. Fulton. It is easy to see why 

you sell pickles well. 

I would now like to yield to Ranking Member Murphy to be able 

to introduce our next witness. 

Mr. MURPHY. Thank you. Thank you, Mr. Chairman. 

I would like to introduce Michael Myhre, the interim State Director of the Florida Small Business Development Center Network. 

Mr. Myhre has over 22 years of experience in small business development. Prior to his current role, he was state director for the Minnesota Office of Entrepreneurship and Small Business Development, responsible for entrepreneurial and small business policy development and support services. Mr. Myhre is a graduate of the 

Carlson School of Management at the University of Minnesota and 

is also a certified public accountant. Welcome. 

STATEMENT OF MICHAEL MYHRE 

Mr. MYHRE. This is why we do what we do. 

SBREP-219 with DISTILLER

9 

Chairman Tipton, Ranking Member Murphy, and Members of 

the Subcommittee, thank you for this opportunity to testify. 

My name is Mike Myhre, and I serve as the interim state director for the Florida Small Business Development Center Network. 

The Florida SBDC is part of America’s SBDC network providing 

the knowledge resources small businesses need to start, grow, and 

succeed. I have prepared a written statement and will give you a 

summary of those remarks. 

In the context of my testimony, I ask you to keep a few key statistics in mind on why it is essential to support trade policy and 

investment in the SBDC program for the benefit of small businesses. Research shows that companies that export grow 15 to 20 

percent faster, pay 15 percent higher wages, and are 15 percent 

more profitable than their domestic market-only counterparts. 

The mission of the SBDC program is simple—to help small businesses grow and compete. With a national network of nearly 1,000 

centers and 5,000 professionals, America’s SBDCs offer a wide variety of programs and no-cost services to assist and encourage their 

small business clients to expand. In that effort, SBDCs retain specialized professional business consultants who are driven to help 

their clients research and develop specific strategies to expand into 

international markets and grow revenues. And we know with more 

revenues comes more production and with more production comes 

more jobs. 

Now, not all small businesses are ready to export and many 

should not. At SBDCs around the country, we strive to identify 

those that are or are close to being export-ready. We provide every 

small business client with an honest and accurate assessment of 

the state of their firm and their state of readiness to participate in 

the global marketplace. We help to examine the exportability of 

their products and services, research and identify markets and buyers, develop market-entry strategies, establish necessary shipping 

and distribution networks, determine appropriate payment methods, and identify export financing and insurance needs. 

A key competitive advantage large businesses have over small 

businesses, access and affordability to business and trade data and 

the means to use it. SBDCs equal the playing field through our 

educational and partners organizations. Our professionals have access to a wealth of information on export markets, ranging from 

general country information to specialized information on markets 

to specific industries and products and countries worldwide. In 

some cases, SBDCs can also conduct primary research for small 

business clients needing specific information unavailable through 

secondary resources. Further, we employ through our professionals 

the power to interpret and use that data. 

SBDCs also help balance the playing field by offering guidance 

and expertise in the realm of regulations that govern international 

trade. In recent years, the federal government has tightened export 

regulations in response to growing threats to national security. By 

working in partnership with the Census Bureau and other agencies, SBDCs help small businesses get their documentation right 

the first time, ensuring compliance and mitigating the threat of 

loss and business. Helping small businesses attract and handle financing has always been a cornerstone strength of the SBDC netSBREP-219 with DISTILLER

10 

work. Navigating what resources are most applicable can be confusing without the proper guidance. In international trade, SBDCs 

work closely with SBA’s Export Loan Program, the Export-Import 

Bank, and conventional financial institutions to help small businesses identify and apply for appropriate funding to support their 

international trade activities. Without these funds, many businesses would face uncertainty and potentially unnecessary risk and 

loss. 

In conclusion, 90 percent of the world market exists outside the 

borders of the United States. Nonetheless, only one percent of our 

small businesses export their goods and services. 

The biggest barrier to going international a small business owner 

faces is fear. And fear is a result of lack of knowledge. As you 

know, international trade assistance is incredibly specialized and 

complex. SBDCs offer a wide range of international trade services, 

including helping assess a firm’s readiness to export, navigating 

the regulatory maze, and identifying and applying for appropriate 

funding. But these services are extremely resource-intensive. What 

small businesses need to exceed in their further expansion in the 

world marketplace and the advantages that come with it are Free 

Trade Agreements that are clear and focused on small business interests, tariff and export controls that are uniform, clear, and specific, but above all else, they need the confidence that comes with 

the knowledge they get from their SBDC professional that exporting is the right investment for them. Thank you. 

Chairman TIPTON. Thank you for your testimony. 

And our final witness is Mr. Raymond Arth. He is the president 

and CEO of Phoenix Products, Inc., based in Avon Lake, Ohio. He 

started his company with his brothers back in 1977. Phoenix Products is a small manufacturer that produces a line of faucets that 

are primarily used in recreational vehicles and residential homes. 

Their products are distributed throughout the United States and 

Canada, and they are currently working to expand into Mexico and 

Latin America. He is testifying on behalf of the Small Business Exporters Association. 

Welcome, and Mr. Arth, you have your five minutes for your testimony. 

STATMENET OF RAYMOND ARTH 

Mr. ARTH. Well, good morning. And thank you, Chairman Tipton, Ranking Member Murphy, and the Members of the Small 

Business Subcommittee on Agriculture, Trade, and Energy. I appreciate the opportunity to be here to testify today. 

As you heard, Phoenix Products is a manufacturer of plumbing 

faucets, and I am here to represent that company. And I am also 

here on behalf of the Small Business Exporters Association, the 

country’s oldest and largest nonprofit organization devoted to promoting small business and medium-sized export activities. It is an 

international arm of the National Small Business Association. 

Phoenix Products is the last stand-alone company that makes 

our product category—low cost, primarily plastic faucets. And as 

you heard, recreational vehicles and factory-built HUD code homes. 

Think Winnebago motor homes or double-wide mobile homes as the 

target market. 

SBREP-219 with DISTILLER

11 

This is a market that has a lot of demand, but unfortunately, 

over the last 10 years it has come to be dominated by suppliers 

from China and Taiwan who are able to offer products at much 

lower prices than we can meet. So today we are faced with the unpleasant reality of diminishing market shares in our core markets, 

and we have had to turn to foreign partners to provide some lowend and high-end products. So we are having faucets manufactured 

for us in addition to what we make in our own factory. 

I am pleased to report that in 2012, 70 percent of our faucet 

sales revenues were derived from the faucets we make in our factory from domestic components. But in 2008, 85 percent of our faucet sales were from domestic products, so our share is diminishing, 

and we are at-risk of losing the critical mass we need to sustain 

our manufacturing operation. We need a certain level of activity to 

make it all make sense. And so we have identified export sales as 

the important element that will determine whether or not we continue to be a manufacturer of products or evolve into more of a 

braded distributor of imported products. 

In 2009, I spoke with folk at the Small Business Exporters Association, and they suggested we get in touch with the U.S. Export 

Assistance Centers [USEAC] as a resource to help us make our efforts. And we had selected Mexico for a number of reasons. We contacted the USEAC in March of 2009, and four years later I am 

sorry to report that we have yet to make our first sale in Mexico, 

our target market. We have learned a lot. We have had a lot of— 

we have taken a lot of important first steps, but we are still not 

able to close that last little gap. So I have a couple observations 

I would like to share based on our failure so far to crack into this 

market and how it might affect what you are thinking about as we 

go forward. 

As you have heard, it is very hard for a small business to negotiate and enter into new international markets. There is a knowledge problem finding out who the prospects are, where to go. We 

have got all the compliance issues dealing with U.S. law and regulations and the laws and regulations of our target country. So the 

efforts to consolidate technical assistance and coordinating all the 

providers is an important step that you folk can take. Overall, I 

will give the USEAC fairly good grades, but the service has been 

uneven, and the Cleveland office has worked very hard for us, but 

the commercial officers in Mexico City have not been able to provide the same level of support as the domestic offices. 

Related to information, Chairman Tipton, I do want to recognize 

the transparent rules allowing direct export of trade act for small 

business and jobs that you introduced in the last session and then 

suggest that you consider reintroducing it in this section. 

A second important factor is that Free Trade Agreements do 

matter. We have selected Mexico as our first target market because 

our goods cross the border duty-free, while Chinese and Taiwanese 

imports face substantial tariffs at the border. This makes our products more competitive vis-&-vis the foreign competition and improves our chances for success in Mexico. In other countries where 

we have Free Trade Agreements, I think the same rules apply. And 

Canada, with whom we have had the longest running relationship, 

SBREP-219 with DISTILLER

12 

we do not even consider to be an export sale. Sometimes we worry 

more about selling to California than Canada. 

Finally, the Ex-Im Bank you have heard is very important and 

getting paid is the end of the whole cycle. And there is no way for 

a company like ours to really have entered the market internationally, been able to offer credit terms, identifying credit worthy accounts in the first place, and then the loan guarantees and other 

programs that Ex-Im Bank can bring to support our efforts will be 

a key element when we finally make that final step and secure customers outside the United States. Should we prove to be successful 

beyond our wildest dreams, they may even then serve the role of 

providing some working capital financing to help us support the 

growth. We are confident we can support everything in our plans. 

So in the time allowed, those are my summary comments today, 

and you can find more in the written testimony. Thank you very 

much. 

Chairman TIPTON. Thank you, Mr. Arth. And I appreciate the 

pitch for our bill. We will be introducing that transparency bill 

again. 

We will now begin the questioning portion of our Committee 

hearing, and I would like to begin with Mr. Mulvaney. 

Mr. MULVANEY. Thank you, Mr. Chairman. 

Questions for a couple different folks. 

Mr. Arth, we will pick up right where you left off, which is you 

are saying that you are having—you have identified Mexico as a 

potential export market. You did that because your goods cross the 

border relatively easily, but then you said you had compliance 

issues. I thought we had a Free Trade Agreement with Mexico that 

would make it easier to trade down there. Has that not been your 

experience? Aside from getting the things across the border, what 

has NAFTA done for you? 

Mr. ARTH. Well, the biggest thing NAFTA has done for us is the 

fact that our products do cross duty-free, which helps level the 

playing field with Chinese and Taiwanese imports. There is one 

compliance issue that is different with respect to plumbing standards. The United States and Canada have a harmonized standard 

so that if * 

Mr. MULVANEY. Have or have not? 

Mr. ARTH. Have. 

Mr. MULVANEY. Okay. 

Mr. ARTH. A harmonized standard, so if I design and build my 

faucets to the standard of the United States, it is the same as the 

standard in Canada. 

Mexico has a whole different certification process. It is a NOM 

certification, and I am told that the exact certification is somewhat 

dependent upon the classification that is assigned at the border. 

And apparently, it is not as clear cut as some might think. So we 

are trying to find what we would like as a Mexican agent, a sales 

rep, or trading company, or some partner in Mexico that we can 

work with who can actually take the product across the border so 

we can make that final determination on which standard we need 

to get to and complete that regulatory hoop. 

Mr. MULVANEY. Gotcha. Now, you talked a little bit as well 

about competing with China and Taiwan, saying you are having 

SBREP-219 with DISTILLER

13 

some difficulty competing with them at certain price points. Where 

is their competitive advantage coming from? Is it all labor? Is it 

also regulatory environment in China and Taiwan? Do you get a 

feel for where their advantages lie? 

Mr. ARTH. I think there are some structural advantages that 

they do have, and it probably is more regulatory and compliance 

issues at our end than—or they have fewer of them. 

Mr. MULVANEY. Can you give me an example? 

Mr. ARTH. Well, I can tell you that the material costs that we 

are paying are probably all pretty much global material costs. 

Mr. MULVANEY. Okay. 

Mr. ARTH. My cost for a product at the very end of my assembly 

line is not that far different if I take just direct labor and material 

from the invoice price for a product I am importing from China. 

Now, I have got a whole lot of factory overhead that has to be 

added into that, and then I have got my own administrative staff 

and the cost of people that we have. 

A quick example. My father sold his company in 1971. He had 

135 employees. I can kind of go through all the capacities they had. 

They did not have a human resource manager—135 employees. 

They did their payroll in-house because you took hours worked 

time s the rate, you paid people, and once a month or once a quarter you sent in your payroll taxes. 

I have got 31 people on my payroll. I have a college-educated, 

part-time HR manager who works for us 20 hours a week. I have 

my payroll processed by an outside agency because I have got eight 

payroll deposit periods a month. I mean, all of these things add 

onto the cost of just running the essential functions of a business 

here in the United States today. 

Mr. MULVANEY. Gotcha. A couple quick questions for both you 

and Ms. Fulton regarding the Export-Import Bank. Would you tell 

me specifically, Ms. Fulton, what they did for you? How you used 

the Export-Import Bank as a small business? 

Ms. FULTON. Well, we actually are their number 500 customer 

on their express insurance, so I will be meeting with Mr. Shen on 

Tuesday. And he was our first importer of Miss Jenny’s Pickles in 

China. 

Mr. MULVANEY. Right. 

Ms. FULTON. So I am going to be able to give him terms, which 

is going to also allow him to buy more pickles from me. So the ExIm Bank, without the insurance, I could not afford to take that risk 

because, you know, normally we would have made them pay upfront. Well, if they pay 100 percent upfront, they reduce their sale 

order. 

Mr. MULVANEY. So it is a bridge loan essentially? 

Ms. FULTON. Basically, it is insurance. And their guaranteeing 

the invoice or the purchase order that Mr. Shen gives me up to 97 

percent, 96 percent. And I can afford to take a 4 percent risk. I 

cannot afford to take 100 percent risk. 

Mr. MULVANEY. Mr. Arth, same question to you. How do you 

all use the Export-Import Bank? 

Mr. ARTH. It is pretty much exactly what you have heard here. 

The first step would be we need to be able to offer credit terms to 

buyers in other countries, and the Ex-Im Bank, number one, does 

SBREP-219 with DISTILLER

14 

have knowledge, information resources to help us qualify creditworthy buyers. And then the second piece is this credit insurance 

that they offer so that if we are not paid after a 60- or 90-day period—I forget exactly—the Ex-Im Bank will step up, basically buy 

the debt from us at better than 90 percent of its face, and then 

they will take steps to collect the money. 

Mr. MULVANEY. And last question for you, Mr. Myhre. You 

mentioned very briefly that you wish the Free Trade Agreements 

that we have and that we are negotiating now would be more focused on small business. Give me two or three examples of how we 

can do that as we go through these negotiations. 

Mr. MYHRE. Well, we know that Free Trade Agreements tend 

to provide preferential treatment to larger businesses. And small 

businesses tend to be an afterthought in the Free Trade Agreements that currently exist. 

Mr. MULVANEY. But give me specifics as we sit down at the 

table and say this is what we need for small business. 

Mr. MYHRE. I could not probably isolate two or three examples. 

I can get those for you and provide those to you at a later time. 

Mr. MULVANEY. That would be great. 

Thank you, Mr. Chairman. 

Chairman TIPTON. Thank you. I would now like to recognize 

Ranking Member Murphy for his questions. 

Do we have anybody else? He will defer here as well. 

Kindly, the ranking member is willing to defer his time. 

Mr. Huelskamp. 

Mr. HUELSKAMP. Thank you, Mr. Chairman. I thought this 

was in violation of the rules. Two republicans in a row. Is that permitted here? I guess so. I apologize. 

Thank you for joining us today, and I appreciate the testimony, 

especially folks from the real world and Jennifer and Mr. Arth. 

I had a follow-up question first though for Ms. Fulton. I appreciate your testimony. I am fairly new to exporting. Could you give 

a little more insight on what you think the biggest barrier to expanding your sales in the future, whether it is in China or are you 

looking at other countries as well? 

Ms. FULTON. Thank you. It has just been a wonderful opportunity. 

You know, I knew that 95 percent of the world lived outside the 

United States being in the financial background. So if I decided to 

keep our sales just to the United States, I am missing a huge opportunity of clients. What would help us is resources, like I am getting ready to export to Canada. Well, that is a bilingual label that 

has got to go on there. Well, I have had to contact five different 

people to figure out how to get that done. Fortunately, the North 

Carolina Ag Department Export has been essential and crucial and 

SUSTA. But, you know, I am not saying everybody has got to put 

everything together, but if we could have a nice umbrella for people 

to get to to where, okay, if I want to export to Germany because 

I am going to Germany and that is one of my goals for 2013, I 

would like to know a little bit of steps in advance on what I have 

got to do to get my product over there without having to contact 

20 different places. So to me, we have got the technology. We have 

SBREP-219 with DISTILLER

15 

got the resources. Let us put it all together and help us because 

that is time and money. That is important in our world. 

Mr. HUELSKAMP. Thank you, Ms. Fulton. 

Mr. Ogden, I had a question. I have got a small company in my 

district called Vortex Valves that specifically cited tariffs as a real 

barrier around the world. What markets do you see that present 

the biggest opportunity for us to open up markets, particularly for 

small businesses if we are able to reduce tariffs? What should be 

our next targeted place that would be most small business friendly? 

Mr. OGDEN. Well, of course, we have ongoing talks, Trans-Pacific Partnership, and there are a lot of markets in Asia that small 

businesses are able to go to. The perspective trade agreement with 

the European Union is essentially—and let me just follow up a little bit on what some others have said. Some of these barriers specifically that really affect small businesses, one of them is standards. One of my fellow North Texas District Export council members, and I mentioned in my written testimony, the International 

Chem-Crete Corporation, they make construction materials used 

all over the world. And they comply with the, I think it is the 

ASTM standards, which are internationally recognized for construction materials but what happens is in many of these other 

countries that they have to deal with will have different standards. 

And Mr. Arth talked about this as well, what he is facing. 

So what happens is you have to go—to get your product into that 

country, you have to modify it in some respect, perhaps even 

change the nature of that product. That adds up to your costs and 

that puts you at a competitive disadvantage against local producers 

in that market. And so standards are a big deal. Intellectual property protection trade circuits is a huge deal. I know the Deputy 

Under Secretary Blank just came out with a new strategy that the 

Commerce Department has in trade secrets. 

So these are just two examples of these barriers. But in terms 

of specific markets, you know, Asia is very much a growing region 

right now. I think another area where we need to pay attention to 

is Latin America. You know, it is always South America. It is always kind of the backwater, so to speak, but I think there are opportunities there. There are frankly opportunities all over the 

world. We just need to make sure that we have really good commercial diplomacy, really good trade agreements in effect, and that 

we are very forward thinking in that respect. 

Mr. HUELSKAMP. Thank you, Mr. Ogden. 

Last question for Mr. Arth. And I also have a constituent that 

is having difficulties exporting to Mexico, and concerned, we have 

NAFTA. Why are those happening? Could you describe, I mean, 

something more general you are seeing outside your particular industry that you say small businesses are trying to export to Mexico. What are some barriers that perhaps we could reduce with our 

efforts up here? 

Mr. ARTH. Well, the problem that I have had really relates to 

finding a partner in Mexico to work with. The commercial services 

did a great job. They had a wonderful forum in Mexico City that 

the Trade Winds Forum on Mexico and the Americas—it was 

underpriced. Let me make a point that you did not charge enough 

SBREP-219 with DISTILLER

16 

for that, and so if they had charged more there might have been 

more resources available at the point people came back. 

I had four Gold Key meetings, which were very productive identifying prospective customers. I was ready to go, and I did not expect 

the Commercial Services staff to work those accounts on my behalf. 

I need to find a partner in Mexico to work with me. 

And where in Cleveland the ICX seems to have connections to 

local governmental and private sector organizations that are involved in trade, the Commercial Services in Mexico City were not 

really equipped to connect me to people or even identify a trade rep 

organization or industry councils or those kinds of folks where I 

might go to find those people who could assist us. 

Mr. HUELSKAMP. I appreciate the comments, and I yield back 

my time, Mr. Chairman. 

Chairman TIPTON. Thank you, Mr. Huelskamp. And now I 

would like to recognize Ranking Member Murphy for his questions. 

Mr. MURPHY. Thank you, Mr. Chairman. 

Mr. Myhre, thank you for your testimony and for the Small Business Development Centers’ invaluable work assisting small businesses grow domestically and overseas. It is heartening to know 

that the SBDCs help provide some clarity in the maze of U.S.-foreign government regulation and trade. 

You noted in your testimony that we need clear, Free Trade 

Agreements and uniform tariffs and export controls to help make 

90 percent of the world’s markets accessible to our small businesses. Can you provide more specifics on what measures would be 

most helpful for small businesses to expand internationally? 

Mr. MYHRE. Well, I cannot specifically answer. I would go back 

to our national association to get that specific information and recommendations. But what I can tell you is that SBDCs are really 

working with the agencies to help those businesses navigate the 

regulatory requirements to making sure that they meet the compliance requirements necessary to do business in international markets. 

Mr. MURPHY. That leads to my follow-up. In Mr. Ogden’s testimony he stated that SBA’s trade counseling program should be 

eliminated and funding transferred to the U.S. and Foreign Commercial Service. What is your view of that? 

Mr. MYHRE. I would not agree with Mr. Ogden’s opinion. You 

know, the SBDC program has been working and doing trade assistance and trade consulting with small businesses for more than 35 

years. And we know that the mission of SBA is to help small businesses in all aspects. And as an SBA Economic Development Program, SBDCs are instrumental to that process. It sounds nice to 

put it underneath a single umbrella with a single focus, but we 

know that small businesses need more than just simply trade assistance when they are expanding into international markets. It 

changes their business model in a lot of ways and in SBDC assistance, the broader assistance that we provide is necessary. 

Mr. MURPHY. Do any of the other witnesses have any comments 

on that? 

Mr. OGDEN. Yes, Ranking Member Murphy. 

My position is that the SBA does a great job when someone 

comes in and says, ‘‘Hey, I want to start a business. How do I get 

SBREP-219 with DISTILLER

17 

started? How do I, you know, develop a business plan? How do I 

maybe get some access to start-up capital?’’ Everything that you 

would call the pre-export phase. And they do a great job in that, 

and that is really what they were created to do. 

But I think when a company is in the position where they have 

got some domestic sales, they have got themselves organized, then 

there needs to be one place they go for export counseling in all respects. And I am not talking about the SBA Export and Loan Program. That is a completely separate thing. In fact, the USEACs 

work very much with the SBA. What I am talking about is the 

trade counseling. And this is not just coming from me. This is coming from numerous exporters. In fact, every single District Export 

Council member I have talked to agrees with me on this, that the 

expertise that is in the U.S. and Foreign Commercial Service, they 

should be the place where export assistance and trade counseling 

is done. And Ms. Fulton talked about some of this, you know, 

where do I go for assistance? Well, if there is one federal agency 

providing that assistance, it is going to make it much easier to exporters to go. 

And so the point is I think that there is a duplication of effort 

and the U.S. Foreign Commercial Service has the resources to have 

the orientation. All they do is provide—they are involved in exports. Export assistance. And trade counseling. And that is their 

mission. That is their focus. And I just do not think the SBA 

should be involved in that part. They are certainly great in helping 

companies get started but when it comes to exporting, that function 

should go to the U.S. and Foreign Commercial Service. 

Mr. MURPHY. As we sit here on the Small Business Committee, 

I would like to hear your thoughts on if it was all under one umbrella, how many small businesses, how Ms. Fulton, for example, 

would compete with the Microsofts of the world; and how those 

huge corporations, they would probably deserve and probably get 

a lot more attention than Ms. Fulton, for example. 

Mr. OGDEN. Well, actually, that is a real good question. And the 

simple answer is that the Microsofts really do not need the U.S. export assistance centers. They have got the internal resources and 

the staff to do a lot of things. The biggest consumer of the Gold Key 

Programs, for example, which is a crucial component of the Foreign 

Commercial Service, are small businesses. Small businesses are the 

ones that go to the Export Assistance Centers. That is really where 

their focus is. In fact, the District Export Councils, even though we 

have large companies that have members on the DECs, our focus 

is the SME market. And that is the same focus the Foreign Commercial Service has. 

And the idea that a small business is going to be at a disadvantage from a larger company to go and to use that just is not—that 

is just factually incorrect and it is just the opposite. So that is just 

not a concern that I have. 

Mr. MURPHY. I am sure you are familiar with Boeing and their 

use of it. 

Mr. OGDEN. Export-Import Bank, right. 

Well, first of all, this idea that the Ex-Im Bank is Boeing’s bank, 

that is a ridiculous idea. The Ex-Im Bank is the bank for people 

like Ms. Fulton. Most of their—for example, if you talk about the 

SBREP-219 with DISTILLER

18 

export credit insurance programs, most of the consumers of those 

programs are small businesses. Again, large companies, they have 

the internal resources and the staff. They do not need a lot of the 

services provided by the USEACs. And of course, the USEACs are 

separate from the Ex-Im Bank anyway. It is a completely different 

agency. 

So the fact that eliminating the SBA’s trade counseling program 

would in no way inhibit small businesses from going either to the 

SBA or the Ex-Im Bank for the export financing needs. Again, we 

are not talking about—I am not advocating at all the SBA get all 

the export financing aspect. That should remain. Okay? So I want 

to make that clear. But the fact that the SBA is involved in trade 

counseling is not going to affect small business in my opinion. In 

fact, it will help the situation. 

Mr. MURPHY. Ms. Fulton. 

Ms. FULTON. Well, being the small business person, all I am 

asking—I do not care who is doing what—is to put it up on the 

website and say here is what you need to do. Because this is crazy. 

I am just telling you. All you want to know is, hey, if I want to 

export here, then I contact the U.S. Export Department or the U.S. 

Commerce, or the North C Carolina—it is a mess. You cannot find 

it easy. We have got to grow jobs. You talked about 7-1⁄2 percent 

unemployment. I take a phone call every day from somebody who 

wants to start their own business and they do not know what to 

do. They call me. That is not—I mean, I do not mind but then I 

cannot do my business. We need just an overall website that says 

if you want to start your business, start with Small Business. Start 

with SCORE. You do not know how many people I have told go see 

SCORE. You know, or go here to Export. 

So I am just saying you all got to fix this. 

Mr. MURPHY. Thank you. And I think that is part of our job 

here, is to push the President on some of his initiatives that he has 

laid out to centralize everything into one website, because like you 

said, we do have the technology. Let us put it to use. So I think 

that is something that we could probably do in a bipartisan manner here, is to urge the president to do this in a timely fashion. 

Ms. FULTON. Thank you so much. 

Mr. MURPHY. Did you have a follow-up? 

Mr. MYHRE. I do. Just a response to Mr. Ogden’s comment. If 

SBA’s mission was to only help pre-venture individuals start businesses then I would completely agree with him. But the reality is 

that SBDCs help and primarily dedicate their resources, their consulting resources to the small- and medium-sized enterprises that 

offer the greatest potential to add jobs to our economy. 

So in Florida, I can speak specifically that 75 percent of the consulting that we do, the hours that we dedicate in human resource 

professional consultant time goes to small- and medium-sized enterprises. And a big part of that is helping them develop market 

expansion strategies and international trade assistance is an important part of that. In Florida and in the national SBDC network, 

I know our SBDCs are working in partnership with the USEACs 

and have a very cooperative working relationship with them. We 

also have in Florida a step program. We help businesses develop 

export marketing plans where we sit and research and develop 

SBREP-219 with DISTILLER

19 

those specific strategies and then pass them on to the Gold Key 

service as part of a program that we have specifically for those 

small- and medium-sized enterprises. 

Mr. MURPHY. Thank you. 

Mr. Arth, you point out that the NAFTA created an opportunity 

for your company by ensuring that products sold to Mexico are 

duty-free. What are your views on the more recently enacted trade 

agreements with Korea, Panama, Colombia? And do you feel these 

agreements will create similar results? 

Mr. ARTH. When I was at the Trade Winds Forum in Mexico 

City I also met with the senior commercial officers from a number 

of Latin American countries. You mentioned Colombia. The senior 

commercial officer from Colombia was very enthusiastic about my 

product and in that time, before we had a Free Trade Agreement, 

it looked like a good opportunity for me. I have tried to move slowly and not bit off more than I could chew. Mexico could be a huge 

market for us so I focused all my attention there. But it seemed 

as though there was a good opportunity for us there potentially before the Free Trade Agreement came into effect, and I would imagine now it could be an even better opportunity for us. I wish I had 

the resources in-house to understand. I do this when I am not visiting Winnebago or working with an RV dealer or doing all the 

other things I have to do as company president. 

So I do believe that these will create opportunities. For me, I am 

not so sure Korea is a great market. Calls to Newcastle kind of situation. But I do think in the Western Hemisphere clearly and perhaps the Trans-Atlantic Trade Agreements that are being discussed with the European Union could be worthwhile for a company like mine. 

Mr. MURPHY. Thank you. 

You noted the important role that Ohio—the state—that they 

play in your efforts to export. And Ms. Fulton, you praised the 

state of North Carolina in your trade initiatives. Have you found 

that the states are filling a void that in some areas should be filled 

by the federal government? And if so, what are some recommendations you have? 

Ms. FULTON. Thank you. 

I would say in North Carolina they absolutely are filling some 

voids. And the fact that they are holding our hand, they are bringing qualified buyers in to North Carolina for North Carolina products. So I think a lot of other states can take note because I worry, 

when I walked in that room and Mr. Shen said I want to buy Miss 

Jenny’s Pickles, I knew it was okay. Where, you know, maybe that 

is something we do at a federal level. I do not mind the state doing 

it. I am just telling you it was really hard and there is, I know, 

a lot of information out there that I still do not know that I probably need to know. But being only three years old and exporting 

is our new focus and one of them, it would just make everything 

easier to help out. And I do think, you know, everybody is busy. 

I mean, you are busy. I am busy. We have just got to make it simpler. And the state of North Carolina has done a fantastic job. 

Mr. MURPHY. Mr. Arth. 

Mr. ARTH. I am not sure there is that big a void right now as 

much as the coordination of all the efforts. As you may be aware, 

SBREP-219 with DISTILLER

20 

Ohio used to maintain their own international trade offices in a 

half dozen or more countries around the globe. They had a trade 

office in Mexico City, and I was working with the folks in Colombia, as well as the USEAC as I was going forward. When things 

kind of ground to a halt with the USEAC, I was disappointed that 

Ohio had closed their trade office, but that was really a duplicative 

function that if it was being doing well once in Mexico City, we 

should not need them both doing it. 

So this whole notion of making, you know, a central point of information and trying to coordinate all these resources, in four years 

working with the USEAC, I thought I had identified all the good 

resources and had either gone to work with them or determined 

that they did not apply quite yet. Yet, this morning, talking with 

Mr. Myhre and Mr. Ogden, I have discovered that both the SBDC 

and the DECs have some support features that may well serve 

what we are going to do going forward. And so I have got a couple 

more phone calls and contacts to make as we try to cross the border into Mexico. 

Mr. MURPHY. Great. I yield my time back. 

Chairman TIPTON. Thank you, ranking member. 

I would now like to recognize Mr. Luetkemeyer. 

Mr. LUETKEMEYER. Ms. Fulton, thank you for your testimony 

today. It is great to see an entrepreneur, somebody who made—you 

had a difficult situation. You made lemonade out of lemons or pickles out of cucumbers, whichever one you want to talk about. 

Ms. FULTON. Thank you so much. 

Mr. LUETKEMEYER. But it is nice to see that the American 

dream is still alive. 

Ms. FULTON. Thank you. 

Mr. LUETKEMEYER. You are an example of that; that hard 

work, initiative, entrepreneurial spirit can make it all work. I know 

it is difficult to work yourself through the maze of all of the different rules and regulations, programs, policies, and all the other 

things, but you have done a good job and need to be congratulated 

for that. 

Ms. FULTON. Thank you so much. 

Mr. LUETKEMEYER. Whenever you said you all fix it, be careful what you wish for. 

Ms. FULTON. I understand. 

Mr. LUETKEMEYER. You know, part of the medical creed is 

first you do no harm. So according to the federal government, 

maybe that is what we need to do, too, first do no harm. 

You have experienced some things obviously that are important 

from the standpoint of seeing how the system works, what can actually be done and what cannot be done. Just a quick question with 

regards to do you have an SBA loan by any chance? 

Ms. FULTON. I do not. 

Mr. LUETKEMEYER. Okay. 

Ms. FULTON. I do have a line of credit but I could not get that 

line of credit until last year when we had been in business right 

at three years. We did talk to the SBA about a loan in the beginning, and because, remember, I was a financial advisor, not a pickle maker, I had no experience so there was no opportunity for me 

to get funding. 

SBREP-219 with DISTILLER

21 

Mr. LUETKEMEYER. Okay. Very good. Well, I was just curious 

about it. 

What percentage of your business comes from foreign trade right 

now? 

Ms. FULTON. Five percent, and I want to take it to 25 percent. 

Mr. LUETKEMEYER. Twenty-five percent? 

Ms. FULTON. Yes, sir. That is my goal. 

Mr. LUETKEMEYER. Have you had any problems with, at this 

point, with currency manipulation, currency valuations between 

the countries that you are dealing with? Is that a problem for you 

at all? 

Ms. FULTON. Well, I will tell you, a little bit. And that is a 

great point. One thing that we learned is, on our label—and again, 

these are going to be left for you all to have later—is by putting 

that America flag on there—— 

What I was going to say is when people outside the United 

States see that American flag on our label, they know it is a premium product. They know there are food safety regulations that 

have produced this product, and they are willing to pay a premium. 

So in the beginning, you know, our price point in China was a little 

high. The good news is we have got that American flag on there. 

You know, not every Chinese person speaks English, so we came 

up with the international sign. If you want to know how to communicate, it is a thumbs up. And that is what they gave me when they 

tried Miss Jenny’s pickles in Shanghai. And we have also reduced 

our price. But it was a problem in the beginning. But the flag on 

the label made a big difference. I will just tell you that. 

Mr. LUETKEMEYER. Okay. So you deal with China. 

Mr. Arth, you deal with mostly the Latin American countries at 

this point; is that right? 

Mr. ARTH. Actually, we do buy materials from China and Taiwan. 

Mr. LUETKEMEYER. Okay. Okay. Have you found a problem 

with currency valuations between the countries at all? 

Mr. ARTH. Are you talking about fair valuation? 

Mr. LUETKEMEYER. Yeah. Right. Because I know the Chinese 

are trying to manipulate the currency a little bit and it kind of 

causes some problems for some of our manufacturers who buy 

products. 

Mr. ARTH. You know, it is very difficult for us to be able to point 

to that and say with any certainty that they are manipulating the 

currency. It has been relatively stable. I mean, our contracts for 

purchasing materials always have a set exchange rate. And that is 

true with the Taiwan dollar as well as the R&B. 

Mr. LUETKEMEYER. Okay. You are in a business where you 

compete probably against a lot—I think you made the comment 

with regards to other products from other countries, especially with 

a metal product. I know that there is a lot of dumping that goes 

on, especially from the Chinese, Taiwanese, Philippines, that area 

of the world, the Asian-Pacific Rim. I have some companies in my 

own area that have problems with that. Have you experienced that 

at all with those countries dumping stuff here that compete against 

your products and need some trade protection perhaps? 

SBREP-219 with DISTILLER

22 

Mr. ARTH. I am not sure that dumping is going on today with 

respect to our core products, which would be the plastic faucets. 

Metal faucets are going through a whole new adventure right now 

because of the pending lead law that is going to take effect in January of next year. There may be dumping going on now just to get 

rid of old inventory while it is still saleable. 

With respect to the plastic faucet commodity, I do not think there 

is a great deal of manipulation or games being played in other 

countries to promote that product. When they first came into this 

country there were some prices that looked pretty strange, below 

material cost almost. But today I think things have normalized. 

Mr. LUETKEMEYER. I have just got a few seconds left. One 

quick question for you. You represent the Small Business Export 

Association. What percent of small businesses export their products 

out of this country? 

Mr. ARTH. Oh, geez. It is in my testimony, and I do not remember the number off the top of my head. I believe it is less than one 

percent. Or just over one percent. Two hundred eighty seven thousand small businesses out of the 27.9 million, so a little over one 

percent are actively exporting. 

Mr. LUETKEMEYER. Okay. Do you have an idea, just very 

quickly, the number of businesses that actually sell a part or a 

product to another country that export that product then? 

Mr. ARTH. That I do not have a clue but I am confident that my 

faithful staff can provide a response to that. 

Mr. LUETKEMEYER. I am just curious because it all ties together with regards to, even though you may not import or export 

directly, if you are having problems with—if the country that you 

sell your product to has problems, then that means you have problems as well. 

Mr. ARTH. Correct. 

Mr. LUETKEMEYER. Thank you for our testimony. I am out of 

time. 

Mr. Chairman, I yield back. 

Chairman TIPTON. Thank you, Mr. King for your questions. 

Mr. KING. Thank you, Mr. Chairman. And I thank the witnesses 

for your testimony. 

As I am listening to this I am starting to think, I remember back 

in 1975 when I started a business my biggest fear was government 

regulation and how many different hurdles did I have to leap over 

that I did not know existed. And I would find them usually at my 

peril. So the burden of even domestically starting a small business 

that many years ago has to be multiple times greater today. And 

once you jump through all those hoops it would seem to me that 

you would be acclimated to get through a few more in foreign countries. However, different hoops in each country, and that can be the 

barrier. 

I am curious, and I go first to Mr. Arth, how many countries do 

you do business in? Export to? 

Mr. ARTH. Today we sell—we have distributers in Canada that 

we sell to, and then also U.S. distributors who take our products 

across the border into Canada. We do very small export sales to 

Australia, to Colombia. We used to do Panama. I am not sure if 

SBREP-219 with DISTILLER

23 

that is still current. I did list the countries in my testimony. There 

are a handful. But we are not yet selling anything into Mexico. 

Mr. KING. And the reason I ask that question is how many of 

those countries, just to get a general understanding, I do not need 

to pry into your business practices, but a general understanding of 

how many of those countries you travel to before you can open up 

a market in order to build a network that you can work with? 

Mr. ARTH. To tell you the truth, I have never been to Australia 

or any of the other countries with the exception of Canada, which 

if you live in Cleveland, Ohio, is right across the lake. So they are 

our next door neighbor. Travel to that country has not been—to 

those countries has not been a crucial element. But in all of those 

cases we may have kind of fallen into—those were accidental export markets as opposed to deliberate accomplishments where we 

can say we are selling products into Colombia. 

Mr. KING. But generally speaking, you had accidental markets, 

but when you decide you want to sell into a country do you make 

a commitment that you travel there and build a network? 

Mr. ARTH. At this point I am not working on those other incidental markets. Canada I visit and I do work some shows in Canada on a regular basis. 

Mr. KING. Thank you. 

Mr. ARTH. But the others are small pieces right now. 

Mr. KING. Ms. Fulton, I know that you have some ambitious export plans, so I am curious as to how that networking has worked 

for you in the past and what countries you are shipping to now and 

how that is going to work for you to build your network in the future. 

Ms. FULTON. Well, thank you. We export to China. I did go to 

the country and Canada last year and meet with buyers to build 

that market. And we hired a Canadian broker. And so we should 

be exporting to Canada hopefully within the next 60 to 90 days. I 

have also met with buyers from Mongolia. We also have buyers in 

Europe that I have met with, but I do not have a presence in Hong 

Kong. I do not have a presence in Germany. So I am going over 

there to pave the way to get our product over there. 

Mr. KING. I brought that up because that is my suggestion. It 

is just my belief that this world runs on networks and if you are 

looking people in the eye and taking the measure of them you can 

be a lot more effective than if you are transferring things electronically these days. It still comes down to people, and it comes down 

to trust and professionalism and efficiency. So, and you mentioned 

Germany. How do you intend to crack into that market? 

Ms. FULTON. I forgot to mention, so thanks for coming back to 

me, as a small business though, without SUSTA, the Southern 

United States Trade Association, I would have never been able to 

go to Germany or Hong Kong. And so what we are doing is we get 

subsidized once we go over there. We get reimbursed for part of our 

airplane and our hotels. And they also set up one-on-one buyer 

meetings for me so that I am not wasting my time because, again, 

I have never been to Germany. I am going to have to figure it out. 

But by having SUSTA and North Carolina Export with me, holding 

my hand a little bit, even though they will not knock on the door 

SBREP-219 with DISTILLER

24 

and they know I will, but they are going over there with me, and 

that makes a big difference. 

Mr. KING. I think as Mr. Myhre said, the biggest barrier is fear 

of the unknown. Absolutely. 

Do you run into any sanitary or phytosanitary issues trying to 

market into Europe? 

Ms. FULTON. I have not got that far yet but I will get back to 

you on that. 

Mr. KING. I will be looking forward to that. 

We are in the process of opening up our negotiations with the 

Trans-Atlantic Trade Agreement. I do not know if that was mentioned here before I arrived, but those issues have been huge barriers, especially from the agriculture and the food side. And one of 

those things is an issue that I see is trade protectionism on how 

we process chickens that are not allowed into Europe right now. I 

actually just came back from some fairly intense negotiations over 

there on this, and I am not at this point optimistic we are going 

to get something done because trade protectionism is often masked 

in those kind of issues, like sanitary, phytosanitary issues, GMO 

issues, et cetera. But I am going to take it those are natural-born 

cucumbers turned into pickles at your place. 

Ms. FULTON. Yes, sir. 

Mr. KING. And I appreciate the chairman for holding this hearing and all of the witnesses. It is a breath of fresh air for me, as 

Blaine said, to hear from real people doing real work. I think that 

was you, Blaine, but maybe not. But I know that is what you believe. 

Thanks. I yield back. 

Chairman TIPTON. Thank you, Mr. King. And we are going to 

have votes called in just a couple of minutes. 

I had a couple of questions but I would like to yield to Ranking 

Member Murphy. You had a couple of follow-up questions you 

wanted to ask. 

Mr. MURPHY. Just one more and then I yield back. 

Mr. Myhre, as you highlighted in your testimony, regulations on 

exports have been an increasingly significant part of what is happening nowadays. In addressing national security concerns though, 

these rules place a high degree of scrutiny on products, but they 

also demand more resources from firms to navigate the complex 

and time-consuming process. Do you believe there can be a more 

balanced approach between security and commercial interests and 

implementation of these export controls? 

Mr. MYHRE. Certainly. I do not have any specific recommendations. I have to go back to my area experts to find out what those 

are but there certainly has to be a balance we understand and understand the challenges which you have to balance national security with the red tape in which, you know, small businesses have 

to navigate. What we try to do is make sure that we mitigate that 

by staying attune to what that red tape is and then working with 

those small businesses to work through those. 

Mr. MURPHY. Do these more stringent controls compel foreign 

companies to avoid U.S. products or to retaliate against their 

American competitors? 

SBREP-219 with DISTILLER

25 

Mr. MYHRE. I have not heard that there is any resistance 

against it. 

Mr. MURPHY. Okay. All right. Thank you. 

Chairman TIPTON. Great. Just to be able to follow up on that 

just a little bit, can, maybe very briefly because they have now 

called votes for us to go over, can you give us a month, two months, 

about how long does it take you to be able to get all of the information you need together, you know, for the foreign transactions to 

actually take place? 

Ms. FULTON. Well, I will just answer real quickly because I met 

Mr. Shen in May, and we did not export until October. And it took 

actually seven weeks to get my product from the boat all the way 

over there. So again, met in May and then it left my dock on October. 

Chairman TIPTON. Okay. 

Mr. MYHRE. That is the fast track. I would say that the normal 

experience for most of our small business clients, we work intensively with them. It takes anywhere from 80 to 100 consulting 

hours to research, to develop, and then identify specific market 

strategies. But then they have to go to, as the congressman highlighted, to the country to develop the networks, find the buyers, et 

cetera. We find that it takes anywhere from 6 to 12 months at a 

minimum. 

Chairman TIPTON. You know, I am a small businessman and 

that has always been our experience. And time investment and 

capital investment to be able to create those markets to tell the 

field, if you will, and then to be able to ultimately get there and 

then have 60–90 days before you get that first check coming back 

after you have established the market is always a real cost that we 

have got to understand. 

I believe our panel almost unanimously has stated that some of 

the largest barriers to exporting is understanding and complying 

with those foreign regulations. Can you explain, and again, if you 

keep it brief—I apologize for our time constraints on our end 

here—how you keep up with those foreign regulations, including 

technical barriers and changes to the tariffs. 

Ms. FULTON. What I would say to that, Chairman, I keep different folders for each different country, and I print off everything 

that is supposed to go to China, everything that is going to Canada, 

and keep it totally separate and keep a large file on it. But again, 

I am sure there is information out there I need to know that I do 

not. 

Chairman TIPTON. All right. 

Mr. MYHRE. From our professional expertise, all of our people 

are certified in their area of expertise, so they are required to continue to have professional development training to stay attune to 

their area of expertise. 

Chairman TIPTON. Okay. 

Mr. ARTH. We do anticipate when we finally get going in Mexico 

that we will actually retain counsel in Mexico to keep us appraised 

of the situation in that country and then working with domestic resources, USEAC, and others to stay up on U.S. trade regulations. 

Chairman TIPTON. Believe me, I have a lot of great empathy for 

the idea of having one-stop shopping to be able to get that informaSBREP-219 with DISTILLER

26 

tion. I think having a myriad of different websites to be able to go 

to when we are starting out and all we want to do is make pickles 

or to be able to sell faucets, that is our real business. And the better position I think from the federal end of the world, and we have 

some great examples in North Carolina and in my home state of 

Colorado as well, being able to work with people wanting to be able 

to export going out. I think simplification and consolidation of that 

information is going to be really critical for us. 

I guess just for me to be able to close here, just real quickly if 

I could get maybe Ms. Fulton and Mr. Arth to be able to explain, 

if you just had one bit of quick advice to be able to give other businesses that wanted to be able to export, what would that be? 

Ms. FULTON. Take the risk. Do it. It is worth it in the end. 

Chairman TIPTON. Great. 

Mr. ARTH. You know, call USEAC was the best advice I got. It 

has not been complete and totally satisfactory, but they have done 

a good job and I think I would make the same recommendation to 

someone who asked me. 

Chairman TIPTON. Great. Well, thank you all so much for taking the time to be able to come in for this I believe important Committee hearing. This is about jobs. I believe Ms. Fulton this is probably your family if I am seeing the same eyes sitting behind you. 

Ms. FULTON. Yes, sir. Very proud. 

Chairman TIPTON. It is about these kids. It is about their future and it is about American entrepreneurialism to be able to get 

this country moving and to be able to get our people back to work. 

And small business can help lead the way. And when we have only 

got one percent of small businesses having that opportunity to be 

able to really get in right now there is a big market for us to be 

able to capture and to be able to put that American flag on our 

products. No country in the world does it better than the workers 

and the entrepreneurialism of this country. 

Thank you again. First meeting together with our new ranking 

member here as well. This Committee will continue to closely follow the barriers and issues faced by small business exporters, and 

I look forward to working with you and my colleagues in Washington on new solutions to be able to make overall trade practices 

and processes easier for small businesses. 

I ask unanimous consent that the members have five legislative 

days to submit statements and supporting materials for the record. 

Without objection, so ordered. This hearing is now adjourned. 

Again, thank you. 

[Whereupon, at 11:21 a.m., the Subcommittee was adjourned.] 

SBREP-219 with DISTILLER

27 

A P P E N D I X 

SBREP-219 with DISTILLER


Insert offset folio 27 here 79821.001
28 

SBREP-219 with DISTILLER


Insert offset folio 28 here 79821.002
29 

SBREP-219 with DISTILLER


Insert offset folio 29 here 79821.003
30 

SBREP-219 with DISTILLER


Insert offset folio 30 here 79821.004
31 

SBREP-219 with DISTILLER


Insert offset folio 31 here 79821.005
32 

SBREP-219 with DISTILLER


Insert offset folio 32 here 79821.006
33 

SBREP-219 with DISTILLER


Insert offset folio 33 here 79821.007
34 

SBREP-219 with DISTILLER


Insert offset folio 34 here 79821.008
35 

SBREP-219 with DISTILLER


Insert offset folio 35 here 79821.009
36 

SBREP-219 with DISTILLER


Insert offset folio 36 here 79821.010
37 

SBREP-219 with DISTILLER


Insert offset folio 37 here 79821.011
38 

SBREP-219 with DISTILLER


Insert offset folio 38 here 79821.012
39 

SBREP-219 with DISTILLER


Insert offset folio 39 here 79821.013
40 

SBREP-219 with DISTILLER


Insert offset folio 40 here 79821.014
41 

SBREP-219 with DISTILLER


Insert offset folio 41 here 79821.015
42 

SBREP-219 with DISTILLER


Insert offset folio 42 here 79821.016
43 

SBREP-219 with DISTILLER


Insert offset folio 43 here 79821.017
44 

SBREP-219 with DISTILLER


Insert offset folio 44 here 79821.018
45 

SBREP-219 with DISTILLER


Insert offset folio 45 here 79821.019
46 

SBREP-219 with DISTILLER


Insert offset folio 46 here 79821.020
47 

SBREP-219 with DISTILLER


Insert offset folio 47 here 79821.021
48 

SBREP-219 with DISTILLER


Insert offset folio 48 here 79821.022
49 

SBREP-219 with DISTILLER


Insert offset folio 49 here 79821.023
50 

SBREP-219 with DISTILLER


Insert offset folio 50 here 79821.024
51 

SBREP-219 with DISTILLER


Insert offset folio 51 here 79821.025
52 

SBREP-219 with DISTILLER


Insert offset folio 52 here 79821.026
53 

SBREP-219 with DISTILLER


Insert offset folio 53 here 79821.027
54 

SBREP-219 with DISTILLER


Insert offset folio 54 here 79821.028
55 

SBREP-219 with DISTILLER


Insert offset folio 55 here 79821.029
56 

The U.S. Chamber of Commerce is the world’s largest business 

federation representing the interests of more than 3 million businesses of all sizes, sectors, and regions, as well as state and local 

chambers and industry associations. 

More than 96% of Chamber member companies have fewer than 

100 employees, and many of the nation’s largest companies are also 

active members. We are therefore cognizant not only of the challenges facing smaller businesses, but also those facing the business 

community at large. 

Besides representing a cross-section of the American business 

community with respect to the number of employees, major classifications of American business—e.g., manufacturing, retailing, services, construction, wholesalers, and finance—are represented. The 

Chamber has membership in all 50 states. 

The Chamber’s international reach is substantial as well. We believe that global interdependence provides opportunities, not 

threats. In addition to the American Chambers of Commerce 

abroad, an increasing number of our members engage in the export 

and import of both goods and services and have ongoing investment 

activities. The Chamber favors strengthened international competitiveness and opposes artificial U.S. and foreign barriers to international business. 

Positions on issues are developed by Chamber members serving 

on committees, subcommittees, councils, and task forces. Nearly 

1,900 businesspeople participate in this process. 

SBREP-219 with DISTILLER

57 

Thank you Chairman Graves, Ranking Member Velazquez, and 

distinguished members of the U.S. House of Representatives Committee on Small Business Subcommittee on Agriculture, Energy 

and Trade. My name is Jenny Fulton, and I serve as the Chief 

Pickle Officer/Chief Executive Officer of Old Orchard Foods, LLC or 

Miss Jenny’s Pickles. Our pickle world headquarters is located in 

Kernersville, North Carolina. I am extremely honored and grateful 

for this opportunity to share our story with each of you today. I am 

testifying today on behalf of the U.S. Chamber of Commerce, which 

is the world’s largest business federation representing more than 

three million businesses and organizations of every size, sector, and 

region, as well as state and local chambers and industry associations. 

Starting Miss Jenny’s Pickles 

Miss Jenny’s Pickles (www.missjennypickles.com) was born out of 

the recession. Ashlee Furr, my business pickle partner, was laid off 

in June 2009, and my layoff followed in January 2010. Ashlee and 

I confirmed that we were both burned out with the financial industry and decided to take a true leap of faith—like many during the 

hard economic times—and start our own company. 

Coming from financial backgrounds, we had very little knowledge 

in the food industry, but using a family recipe we decided to start 

our very own pickle company. We began by researching other small 

food businesses, but we needed help. The first resource we turned 

to was Service Corps of Retired Executives (SCORE) in Greensboro, 

NC. After they stopped laughing at us, they began to point us in 

the right direction and were instrumental in helping us start a 

small business. However, we faced another hurdle. We needed a 

certification to manufacture food products for mass markets. Ashlee 

& I attended NC State University for three days of chemistry in 

food science and looked to the North Carolina Department of Agriculture for guidance. 

For the first two years we grew our own cucumbers and jarred 

every jar. We formed a partnership with a local YMCA to use its 

kitchen which saved us thousands of dollars by not having to build 

a commercial kitchen to produce our product. We still use the 

YMCA kitchen today for some of our products but a co-packer 

makes the majority of Miss Jenny’s Pickles. This allowed us to expand our market and brand. 

In the beginning, we knocked on doors of local independent 

stores to carry our product and attended local food shows to meet 

buyers from grocery stores. Once we were approved by the stores 

we had to deliver inventory which consisted of very early morning 

deliveries to stores, then returning home to get our children to 

school, then returning to the field to pick cucumbers, and then taking them to the YMCA for processing. We did this day in and day 

out. By the end of 2010, we had our pickles in 50 stores. By the 

end of 2011 we had pickles in 200 stores, and by the end of 2012 

we were carried in over 800 stores. 

In our short three years, Miss Jenny’s Pickles has grown its business to five full-time employees and a part-time CFO, Barry Safrit 

who is wonderful with our planning and financials. We have creSBREP-219 with DISTILLER

58 

ated jobs through the growth of exports. We have been exporting 

for two years now, with pickles going to China, and soon to Canada, Hong Kong and Germany. Today, we continue to look for new 

markets, bringing our products to customers all over the world. I 

am pleased to be before you today to discuss the opportunities that 

small businesses would like to see made more available, so we can 

grow even more. 

Breaking into the International Market 

Knowing that 95% of the world’s population lives outside the 

United States, we decided that exporting would be crucial to our 

success. In May 2011, the North Carolina Department of Agriculture’s Export Department (www.ncagr.gov/markets/international) and the Southern United States Trade Association 

(SUSTA) (www.susta.org) organized an in-bound trade mission for 

Chinese buyers/distributors to meet with North Carolina businesses, in which we decided to participate. Wow, what an adventure! It was there that we met our business partner in China, Mr. 

Shen. After hours of reading e-mails translated using Goggle 

Translate, talking via Skype with a twelve-hour time difference, 

and 32 pages of documents, we finally received our first order from 

China. The North Carolina Export Department was wonderful to 

work with. They stuck by us through the good times and the bad. 

Miss Jenny’s Pickles sent off its first five pallets of pickles to 

China, and from there started to receive more inquires about our 

products and expanding our exports. 

Last year, the North Carolina Export Department and the 

SUSTA took a trade mission to Shanghai for the SIAL (www.sialgroup.com) food show. SIAL is the global marketplace for those involved in the food industry. I went along, and it was then that I 

had the opportunity to visit the stores that carry Miss Jenny’s 

Pickles. I must be honest; I was extremely amazed, humbled, and 

proud to be standing next to our pickles on the shelf in China. It 

was rewarding to know that I was representing the United States 

of America, which has world-recognized food safety regulations, and 

a product ‘‘Made in the USA’’ with the American flag on the label, 

for which people in China are willing to pay a premium. This 

March, Mr. Shen is returning to the United States, and I will be 

visiting and hosting him and his team while they are here to build 

on our relationship and increase our exports to China. 

Last year I also participated in a trade mission to Canada, arranged by the same two organizations. It was there we hired a food 

broker in Canada. This year, with the help of NC Export Department & SUSTA, I will be attending food shows in Hong Kong and 

Germany to build our international brand as we look for more markets to do business in. 

During the early stages of working in the international marketplace, we attended a forum in Charlotte, NC, called Small Business 

Global Access hosted by U.S. Senator Kay Hagan along with Chairman and President of the Export-Import Bank Fred Hochberg. I 

was so impressed with Mr. Hochberg’s remarks on Ex-Im’s efforts 

to help small businesses export that I ran out to his car after the 

forum and handed a jar of pickles to his driver. I said to the driver, 

SBREP-219 with DISTILLER

59 

‘‘Please make sure Mr. Hochberg tries our pickles because I want 

to export this year!’’ Today, we partner with Ex-Im so that we can 

offer terms to our foreign buyers which increase our sales by having this option available. Without the Ex-Im Bank our small business would never have been able to offer terms outside the United 

States. The trade and export promotion programs funded by the 

International Affairs Budget are essential to expanding U.S. activity in new and emerging markets. They will play a vital role in our 

international sales going forward. 

Without my ‘‘out of the jar’’ thinking, and pure determination to 

export, I am not sure that our young company would have had 

such great export success. As a result, we are creating jobs, increasing revenue, and exporting our pickles around the world. 

Improve U.S. Trade Promotion Programs to Help Small 

Businesses Export 

International trade plays a central role in creating American jobs 

and boosting economic growth at home. More than 38 million 

American jobs already depend on trade, and over 97% of the 

275,000 U.S. companies that export are small and medium-sized 

enterprises (SMEs). However, this figure represents just one of 

every 100 U.S. SMEs, underscoring how difficult it is for smaller 

firms to enter export markets. 

If more U.S. small businesses were able to seize export opportunities, the gains could be immense. I have seen firsthand the need 

for the government to improve U.S. export promotion programs. 

After our company was on 60 Minutes, we received hundreds of 

emails and phone calls from Americans that want to start their 

own company just like us and tap into the resources available. 

However, they don’t know where to begin. People flew all the way 

from Seattle to Kernersville to meet with us and ask for help. I 

can’t tell you the number of hours that we spend helping other 

companies. We need to put a central resource in place to help 

American entrepreneurs to succeed in the global marketplace. 

Small businesses need help in paving the way to new markets. 

We are left on our own to find the doors and knock on them. Many 

doors are not open to us. The services, expertise, and dedication of 

the state and federal export promotion programs are world class, 

but I know that many U.S. companies are not aware of the government services that are available to help them break into new markets. This isn’t the fault of America’s small business owners. The 

assistance offered by the state and federal government needs to be 

promoted more effectively. Small businesses need a roadmap for export success. 

There are many successful state programs that I believe should 

be replicated in other states and ideally on a federal level. In North 

Carolina, the Department of Agriculture is aggressively helping 

North Carolina companies export. These good people encourage 

companies like mine to consult with trade specialists, to learn more 

about trade through workshops and seminars, to participate in 

trade missions, and to meet with international buying delegations. 

Without their help, we would not have found many of the international opportunities we’ve identified. 

SBREP-219 with DISTILLER

60 

On the federal level, the Government Accountability Office 

(GAO) has determined that the 17 federal agencies with export promotion programs could be made more effective through better coordination, elimination of duplicative activities, and better allocation of resources. In particular, GAO found that strengthening the 

interagency Trade Promotion Coordinating Committee would improve the effectiveness of U.S. export promotion programs. GAO 

also found that effective export promotion programs can provide 

significant benefits to SMEs in the competitive global economy. I 

am a member of the White House Business Council and have the 

opportunity to participate in calls that discuss trade promotion programs among other small business issues. 

There are also private companies and organizations such as the 

SUSTA that engage in export promotion. Other export-minded organizations that I am a part of include the National Association for 

the Specialty Food Trade (NASFT), which is dedicated to helping 

specialty food companies thrive and promoting the specialty food 

industry on an international scale. We are also members of Pickle 

Packers International (PPI), which has served the pickled vegetable industry for over 119 years by sponsoring research, representing industry before government agencies, producing educational materials, and providing networking opportunities to its 

members. Membership of PPI represents 87 percent of the cucumber tonnage grown for pickle-use in North America, valued at more 

than $1.5 billion. I also sit on the Board of Directors for the North 

Carolina Specialty Foods Association which has been a great help 

to our business. 

There are many seasoned exporters among America’s small businesses, but there are many others that have never even considered 

exporting. I know that exporting can be challenging and overwhelming at times, especially for small businesses. Each country is 

different, and each culture is unique. Introducing U.S. products is 

always time consuming, challenging, and expensive. But in the 

end, it is all worthwhile. 

Trade Policies That Bring Growth and Prosperity 

As the president of a small company, I truly understand the importance of international trade and the impact it can have on small 

business. It’s simple: we want to ship to more countries, grow our 

client base, and create more jobs. The more we diversify our client 

base, the more stable we will be. 

Standing in the way, however, is a complex array of foreign barriers to American exports. Those barriers are alive and well, and 

they pose a major competitive challenge to U.S. industry and agriculture and the millions of U.S. workers whose jobs depend on exports. 

From a business perspective, the foremost goal of U.S. trade policy should be to tear down those barriers so companies like mine 

can start exporting to new markets. Free trade agreements have 

helped us accomplish this in the past and will help our business 

grow in the future. 

SBREP-219 with DISTILLER

61 

American workers and businesses are facing one of the harshest 

economic storms we’ve seen in years. Over eight million Americans 

have lost their jobs since the recession began, and we need to put 

Americans back to work. Recognizing that 95% of the world’s consumers live overseas, I applaud President Obama’s goal to double 

U.S. exports. An efficient way to promote U.S. exports is for Congress to support trade policies that will generate billions of dollars 

in new American exports. These include: 

• Restoring the president’s traditional authority to negotiate 

trade agreements; 

• Concluding a comprehensive, high-standard, and commercially 

meaningful Trans-Pacific Partnership trade agreement; and 

• Launching negotiations for a comprehensive Trans-Atlantic 

Trade and Investment Partnership that will eliminate tariffs and 

non-tariff barriers to trade, ensure compatible regulatory regimes, 

and liberalize investment, services, and procurement. 

Let me touch a bit further on a few of these priorities. 

Trade Promotion Authority 

First, the president needs the authority to negotiate trade agreements—Trade Promotion Authority (TPA). Congress has granted 

every president from Franklin D. Roosevelt to George W. Bush the 

authority to negotiate market-opening trade agreements in consultation with the Congress. 

The U.S. Constitution gives the Congress authority to regulate 

international commerce, but it gives the president authority to negotiate with foreign governments. TPA rests upon this constitutional partnership: It permits the executive branch to negotiate 

agreements in consultation with the Congress; when an agreement 

is reached, Congress may approve or reject it, but not amend it. 

TPA lapsed in 2007. That’s unacceptable; every American president needs TPA, and every president should have it. Potential partners won’t negotiate seriously if they know agreements could be 

picked apart by Congress. The Obama Administration and Congress should begin discussions on new negotiating authority as 

soon as possible. 

Trans-Pacific Partnership 

Once TPA is renewed, how should the President and Congress 

use it? Clearly, the United States needs to engage in the Asia-Pacific region as never before. The region accounts for half of the 

world’s population and boasts many of its fastest growing economies. 

The U.S. may be falling behind in the world’s most dynamic region. Over the past decade, the growth in U.S. exports to Asia has 

lagged behind our overall export growth. As the think tank Third 

Way has pointed out, the U.S. share of the import market of 12 key 

Asia-Pacific economies actually fell by 43% between 2000 and 2010. 

In short, Asian nations are designing a new architecture for trade 

in the global economy’s most dynamic region—threatening to draw 

‘‘a line down the middle of the Pacific.’’ 

SBREP-219 with DISTILLER

62 

This is the case for the Trans-Pacific Partnership (TPP), which 

is the one trade agreement under negotiation today in which the 

United States actually has a seat at the table. The TPP is our 

chance to ensure the United States is in the game in Asia. The 

American business community needs the TPP to succeed so we can 

be competitive in Asia-Pacific markets. With Canada and Mexico 

joining the negotiations in 2012, the TPP today embraces 11 countries. 

Trans-Atlantic Partnership 

As we consider new trade accords with our biggest commercial 

partners, Europe calls out for attention. Together, the United 

States and the European Union generate half of global GDP. More 

than $1.5 trillion in goods, services, and income receipts flow between the United States and the EU annually. U.S. firms have direct investments of nearly $2 trillion in the EU—20 times what 

they have invested in China. These European investments generate 

some $3 trillion in annual revenues for American companies that 

have invested in the European Union to sell their wares to its more 

500 million citizens. The numbers are similar for European firms’ 

investments in the United States. Our economies are so closely integrated that about 40% of U.S.-EU trade is intra-firm. 

In his State of the Union address earlier this month, President 

Obama issued the long-awaited announcement that the United 

States and the European Union will negotiate a Trans-Atlantic 

Trade and Investment Partnership. The U.S. business community 

strongly supports this initiative. For too long, the United States 

has ignored the untapped potential of its ties to the world’s other 

economic colossus. For the sake of jobs and growth, it’s time to turn 

that around. 

Conclusion 

In closing, I challenge each of you to expand upon and better promote the trade resources that are available to small businesses. Investing in the export potential of America’s small and mediumsized businesses could bring dramatic gains and stimulate the 

economy. If America fails to look abroad, our workers and businesses will miss out on huge opportunities. 

Thank you for the privilege and opportunity to appear before you 

today. I greatly appreciate the opportunity to testify today on behalf the U.S. Chamber of Commerce and Miss Jenny’s Pickles. 

Thank you very much. 

SBREP-219 with DISTILLER

63 

SBREP-219 with DISTILLER


Insert offset folio 63 here 79821.030
64 

Chairman Tipton, Ranking Member Murphy, Members of the 

subcommittee, thank you for the opportunity to submit testimony 

on strategies to improve small business participation in international trade. I have prepared a written statement for the record 

and will give you a summary of my remarks. 

Over 90 percent of the world market exists outside the boards of 

the United States. Nonetheless, only one percent of small businesses export their goods and services. The single biggest reason 

small businesses don’t export is their simple lack of knowledge of 

the opportunities that exist and their simple readiness to navigate 

the process. This loss opportunity severely inhibits, or at least limits, both their individual growth and overall national economic 

growth. 

The mission of Small Business Development Centers is simple— 

to help small businesses grow and compete. In that effort, SBDCs 

retain specialized professional business consultants who are driven 

to help their small business customers research and develop specific strategies to expand markets and grow revenues. Through the 

growth of revenues businesses are able to hire more workers and 

contribute to the expansion of our economy. In the Florida SBDC 

Network we brand these specialize consultants as our Growth Acceleration Professionals, or GAP experts. 

With a national network of nearly 1,000 centers, America’s Small 

Business Development Centers offer a wide variety of programs 

and services to assist and encourage small businesses in their efforts to access international market opportunities. By accessing 

these specialized growth and international market consultants, we 

strive to identify those firms that are or are close to being ‘‘export 

ready’’ and assist them with developing the tools and strategies 

they need to succeed beyond our domestic boarders. What we consistently find is that small businesses, including our smallest small 

businesses with fewer than 20 employees, are at a competitive disadvantage to their large business counterparts in their readiness to 

export due in large part to the daunting complexity of trade regulations and the potential uncertainty of international business transactions. 

Export Readiness 

At SBDCs around the country small businesses receive honest 

and accurate assessment on the state of their firm and their state 

of readiness to participate in the global marketplace. Unlike other 

programs or resources, our network of SBDC specialists assists 

small business owners in reaching, developing and, most importantly, executing international trade strategies. Through one-onone consulting, training, customized research, and access to a network of trade professionals and partners, the SBDC provides its 

customers with the tools and strategies to successfully and profitably navigate the expanding world of international trade. Meeting 

with small businesses, SBDC consultants help determine the 

exportability of their products or services, identify appropriate markets and buyers, develop market entry strategies, establish shipping and distribution networks, determine appropriate payment 

methods and identify export financing and insurance needs. 

SBREP-219 with DISTILLER

65 

Trade Research 

Another key disparity between large and small business is access 

and affordability to business data. To aid in the process of getting 

a small business export ready our SBDC export specialist provide 

strategic international market research to help its small business 

customers make informed decisions on the best international market opportunities for their product or service. Our SBDCs have access to a wealth of information on export markets, ranging from 

general country information to specialized information on markets 

for specific industries and products in countries worldwide. In some 

cases, our SBDCs can also conduct primary research for small business clients needing specific information unavailable through secondary sources. Examples of research SBDCs provide include: 

• General information on doing business in different countries 

• Demographic, economic, political and cultural information on different countries 

• Information on specific industries/products in export 

markets, including: 

- market size, characteristics and trends 

- competitive environment 

- trade barriers and regulatory environment 

- pricing infrastructure 

- sales & distribution channels 

- key contacts (manufacturers, distributors, end-users, 

trade associations and journals, government offices, etc.) 

- trade shows 

• Detailed statistical information on U.S. exports by state, 

product and country 

Compliance Assistance Programs 

Another major hurdle small businesses face is the various export 

control regulations that govern international trade. Our SBDCs export specialists offer Export Compliance Assistance Programs. 

Through these programs, they educate small businesses on export 

regulations and practices that can be implemented to ensure compliance. 

In recent years, the federal government has significantly tightened export regulations in response to growing threats to national 

security. Government export enforcement officials are actively pursuing companies whose export operations are not compliant with 

U.S. regulations. Lack of export regulatory awareness on the part 

of an exporter can lead to audits and a whole host of penalties, including fines, revocation of export privileges and debarment from 

contracting that could threaten the very going concern of small 

business firm. 

Many small businesses mistakenly believe that they are not affected by export regulations because they produce products or sell 

only to ‘‘friendly’’ countries. Whether they know it or not, all exporters operate under U.S. export control laws, which are broad 

and far-reaching. Even with the help of a freight forwarder, small 

businesses can unknowingly violate these laws. The exporter is ulSBREP-219 with DISTILLER

66 

timately responsible to have a thorough understanding of export 

regulations and to establish operating procedures aimed at preventing violations. 

At SBDCs export compliance assistance is a free service offering: 

• Counseling and technical assistance on the full range of 

U.S. export regulations 

• ECCN classification guidance 

• Export license determination assistance 

• Assistance in establishing an Export Management System 

• In-house training on the Export Administration Regulations, documentation and procedures 

• Targeted referrals to government authorities responsible 

for export controls 

• Low cost seminars on export compliance issues 

• Onsite assistance available through the network of offices 

SBDCs also regularly collaborate with the US Census Bureau’s 

Foreign Trade Division to host seminars on the Foreign Trade Regulations (FTR) and the Automated Export System (AES). These 

seminars provide two days of training on changes to the FTR, common mistakes and how to avoid them, Export Controls and Enforcement and Commodity Classification. In addition, the seminars 

help familiarize small businesses with the Census bureau’s extensive trade statistics system. 

By work with the Census Bureau and other agencies SBDCs help 

small businesses get their documentation done right the first time 

and develop the skills they need to handle exports on their own. 

Export Financing 

Helping small businesses attract and handle financing has always been a cornerstone strength of the SBDC network. Navigating what resources are most applicable can be confusing without 

the proper guidance. In international trade SBDCs work closely 

with SBA’s Export Loan program, the Export-Import Bank and 

conventional financial institutions to help small businesses identify 

and apply for appropriate funding to support their international 

trade activities. Without these funds many small business would 

face uncertainty and potentially unnecessary risk and losses. 

Conclusion 

As you can see, international trade assistance is incredibly specialized and complex. SBDCs offer a wide range of international 

trade services, but these services are extremely resource intensive. 

SBDCs do an outstanding to assist small business whenever and 

wherever they have opportunity to do business. We help navigate 

the regulatory maze but efforts to streamline and coordinate export 

services are necessary and we welcome the committee’s focus on 

unraveling some of this complication and bringing a small business 

focus to the national effort to increase trade to our country’s trade 

partners. 

SBREP-219 with DISTILLER

67 

The complexity and the cross-agency jurisdictions are not the 

fault of the Obama Administration, the Bush Administration or 

Congress. Rather they are a product of years of changing economic 

realities and the many responses to those issues. However, it isn’t 

just assistance and guidance that is necessary. We need Free Trade 

Agreements that are clear and focus on small business interests, 

and we need tariff and export controls that are uniform, clear and 

specific. We appreciate the efforts of the Trade Promotion Coordinating Committee, they are a great help in our efforts to educate 

small business on trade. Likewise, the US Trade Representative 

has been a solid advocate for small business concerns and a solid 

supporter of SBDC expansion worldwide. Those efforts are vital but 

to truly make our small businesses competitive in the global marketplace there is much more work to be done. 

Thank you. 

SBREP-219 with DISTILLER

68 

SBREP-219 with DISTILLER


Insert offset folio 68 here 79821.031
69 

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

Member Murphy and the members of the Small Business Subcommittee on Agriculture, Energy and Trade for inviting me to testify today. I am Raymond Arth, co-founder and President of Phoenix Products, Inc. a manufacturer located in Avon Lake, near 

Cleveland, Ohio. Our company produces faucets and also imports 

finished faucets, hand showers and other accessories that are sold 

under our company brand names. Our products are sold throughout 

the U.S. and Canada, from the Rio Grande to the Arctic Circle. In 

addition we have very modest export sales to Australia, Costa Rica, 

Guam and Panama with ambitions for robust exports in the near 

future. 

About Phoenix Products, Inc. 

Phoenix is a small company; we have thirty-one employees, several of whom work part-time. As demand requires, we supplement 

our factory staff with up to 10 temporary employees. Like many 

small manufacturing companies our labor force is primarily comprised of workers skilled in a specific trade—meaning we have very 

limited in-house resources when it comes to pursuing new market 

opportunities such as exporting. 

To the best of my knowledge, Phoenix is the last, stand-alone 

company that still manufactures low cost plastic faucets in the U.S. 

Since our founding in 1977 we have sold our products primarily to 

the Recreational Vehicle (RV) and Manufactured Housing (HUD 

Code) industries. For the first 25 years or so we were able to withstand foreign competition and stemmed the tide of low cost imports 

into our market segments. Unfortunately, we have been forced to 

supplement our product line with Chinese-produced faucets in 

order to remain competitive in an industry which has continually 

been undercut over the last 10 years by Chinese and Taiwanese 

product price points that are impossible to match here in the U.S. 

I am pleased to report that today we still produce and sell more 

faucets in our factory than we import. But our customers are increasingly more interested in lower prices and the trend is toward 

the imported products. In 2008 sales of imported faucets represented only 15 percent of our total faucet sales. Today imports 

account for 30 percent of the faucet sales category with growth 

coming from both the low-cost and high-end designs. 

Exporting Phoenix Products 

The long-term survival of our factory depends on developing foreign markets for the products we produce in the U.S. Undoubtedly, 

we can adjust our business model in other ways, but at the end of 

the day, as the share of imports grows and our domestic production 

shrinks we lose our economies of scale and the savings associated 

with high volume purchases. Eventually we could lose the critical 

mass that makes it possible to sustain our manufacturing capability. Equally important, we are overdue for a design face-lift that 

I cannot justify given the uncertain long-term viability of our manufacturing function. I have made plans for Phoenix to survive as 

a distributor of branded imports. But I am a manufacturer from a 

SBREP-219 with DISTILLER

70 

family of manufacturers. The Arth family has been pouring metal 

and/or building faucets in Cleveland since 1894. It is what we know 

and I would hate to see it end. 

Our original core market, the factory-built HUD Code home industry collapsed at the turn of the century and we made our first 

attempt to develop export sales to Mexico in partnership with another domestic supplier and a partner in Mexico. That effort failed 

and we shelved the project until after the Great Recession. For the 

last four years we have made a more concerted effort to sell our 

products to the social housing market in Mexico and as any exporter will tell you—starting out is something short of trial by fire. 

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

also the Small Business Exporters Association (SBEA)—the largest 

and oldest nonprofit association in the country dedicated exclusively to small and mid-size exporters, and is the international 

trade arm of the National Small Business Association (NSBA). I 

was familiar with SBEA and asked for their advice on initiating an 

export sales effort. They suggested that I first consult the U.S. Export Assistance Center (USEAC) for assistance. 

In March 2009, I contacted the Cleveland USEAC office. It took 

two months before we managed to arrange a meeting with a Commercial Officer at our facility. We exchanged frequent emails and 

phone calls but did not accomplish much for over a year. In Sept. 

2010 a new Commercial Officer named Jay Biggs was assigned to 

our case. I mention Mr. Biggs by name because he did a great job 

for us during him time in Cleveland and in my mind deserves commendation. He succeeded in getting useful information from the 

Commercial Specialist in the U.S. Embassy in Mexico City. He also 

suggested that I attend a trade conference sponsored by the Department of Commerce. 

The Trade Winds Forum on Mexico & the Americas was held in 

Mexico City in April 2011. It was an excellent program that included a number of very informative workshops and seminars. The 

networking events provided contacts that may prove valuable in 

the future. As part of the program, I also had four Gold Key appointments, one-on-one meetings with prospective foreign customers that had been arranged by the embassy staff. The Commerce Department’s Gold Key program accomplishes many of the 

factors that SBEA believes are important—it cuts transaction and 

opportunity costs, it helps minimize fear factors and it aids in assessing upside potential. The companies appeared to be solid prospects and I left the conference encouraged that we could finally 

begin to establish a market in Mexico. Unfortunately, after the conference it was difficult to get ongoing support from the Commercial 

Services staff in Mexico City and in June, a couple of months after 

the conference, Mr. Biggs was transferred to Guangzhou—leaving 

us without our primary stateside resource. 

I should also mention that during the Trade Winds Forum, I met 

with the Senior Commercial Officers (SCO) from Argentina, Chile, 

Columbia, Costa Rica, Dominican Republic and Panama. Several of 

the SCOs were enthusiastic about our market opportunities in 

their countries. Due to our limited resources, however, I chose to 

focus our attention on the Mexican market so that we can offer 

SBREP-219 with DISTILLER

71 

complete service and support when the time comes. Perhaps we 

would be further along with sales in Columbia or elsewhere had I 

elected to pursue multiple markets at once. 

In order to pursue sales in Mexico, we asked Commercial Services for assistance in identifying a sales representative in that 

country, who we would pay for their services in selling our products 

on our behalf. In July 2012, over one year later, we did receive one 

referral but it was not a practical option, as the sales organization 

wanted significant up-front payments for investigation and development that we deemed impractical. So now we are working with 

U.S. industry contacts to identify prospective Mexican sales agents. 

Determined not to give up, eventually the Cleveland USEAC and 

U.S. Small Business Administration (SBA) arranged a meeting 

with the Export-Import Bank of the United States (Ex-Im Bank) 

that provided critical insight and information about establishing 

our terms of sale and how to ensure we get paid. They also connected us to Global Target, an educational program offered by the 

Global Business Center at the Monte Ahuja College of Business at 

Cleveland State University. This program broadened our knowledge and helped us identify further resources to assist us. 

The State of Ohio also provided assistance. The Ohio Department 

of Development has a robust International Trade Division. We have 

received a great deal of support from the International Trade Advancement Center (ITAC) especially with respect to NAFTA compliance, county of origin training and so forth. 

The bottom line is that—despite receiving some valuable assistance and training—two years after my initial trip to Mexico we are 

still trying to make that critical connection that will make the next 

steps possible. 

Challenges of Exporting for Small Businesses 

I have never been one to complain—I’m too busy running my 

business, but in looking to craft policy to bolster exporting from 

small- and mid-sized enterprises (SMEs), it is critical to understand the vast differences between large and small companies and 

the inherent competitive disadvantages small firms face when looking to go global. 

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. 

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. 

According to the SBEA’s 2010 Small Business Exporting Survey, 

among those small-business respondents not currently exporting, 

SBREP-219 with DISTILLER

72 

the largest barrier is information. Thirty-eight percent of non-exporters said they don’t know enough about exporting and aren’t 

sure where to start. Twenty-eight percent cited concerns over getting paid from a foreign costumer. When asked whether they would 

be interested in exporting if some of these concerns were addressed, 43 percent said they would. Interestingly, those small 

businesses currently exporting named the same top two challenges, 

but in reverse order. 

For a new product or a new market, the learning curve can be 

pretty steep especially when most smaller companies, such as 

Phoenix Products, have only a few key people working on export 

transactions. According to the SBEA’s Exporting Survey, an overwhelming majority, 96 percent, of small exporters handle exporting 

operations within the company—only four percent use an export 

management company. The time that we devote to an export transaction is time that we won’t be devoting to some other, equally important business operation. You have to wonder—especially in my 

case, after two years of no results, is it even worth it? 

So while we have learned a great deal, I have yet to make our 

first sale in Mexico. Despite persisting steadily we remain frustrated by the lack of progress. I anticipate making the necessary 

connections this year, but I will be relying on contacts made 

through industry associates and not any of the governmental support organizations. 

So Phoenix Products is the poster child for ‘‘Disappointed and 

Disillusioned Exporters.’’ 

What insights or suggestions can be derived from our experience? 

Improve Technical Assistance and Coordination 

Let me begin with the obvious: developing foreign markets is a 

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. We have 

had to learn a great deal about Mexican labor laws and their VAT, 

about NAFTA and international logistics. We are still trying to 

identify a sales representative or other partner in Mexico that will 

present and promote our products to our target customers. 

We could not have made any progress without expertise and 

training. The Cleveland USEAC was very helpful in linking us to 

educational resources, the Ex-Im Bank and the Trade Winds 

Forum. 

In our dealings with the Department of Commerce we have seen 

very uneven levels of responsiveness and support. The Cleveland 

USEAC was initially ineffectual, then actively promoting our efforts and now responsive to us when asked but unable to help us 

make that critical connection with a Mexican entity to promote our 

products. 

The Trade Winds Forum on Mexico & the Americas was a great 

success. It was under-priced; actually it turned out to be free. The 

fee was only $1,650 for the conference and four Gold Key meetings 

complete with a driver and translator. At that price it was a steal. 

SBREP-219 with DISTILLER

73 

But then, First Energy, our local electric utility, subsidized the full 

amount. 

My advice is do not give away valuable support services; charge 

a fair price at the front end so you can afford to provide sufficient 

support to move us along if there is an opportunity. I think it is 

a mistake at any time, but especially now, to charge too little as 

was the case with this conference. I wonder if part of my problem 

getting follow-up on support was an overload created by a program 

that was under-priced. Developing export markets is expensive and 

the Department of Commerce might be able to offer better support 

if they set the bar higher at the front end and had fewer, but more 

committed clients. 

There are many resources available at the federal, state and local 

level but it is extremely hard to figure them all out. We have dealt 

with: 

• The U.S. Commerce Department: USEAC and Foreign 

Commercial Services 

• SBA with respect to the Ex-Im Bank 

• Ohio Department of Development—International Trade 

Division 

• The Northeast Ohio Trade & Economic Consortium 

(NEOTEC) and its affiliate International Trade Assistance 

Center (ITAC) 

• Global Target Business Center at Cleveland State University 

The good news is that these organizations seem to work together 

well. USEAC brought in the SBA and Ex-IM Bank on my behalf. 

They directed me to Trade Winds Forum on Mexico & the Americas. In the Global Target program all the named organizations 

were participants and collaborators. Equally important is that 

these public entities included and embraced private sector providers and advisors. 

Theoretically, most of the local organizations are overlapping 

with the Department of Commerce. But as a practical matter they 

have proven better able to provide more in depth service and support. Although I have not felt that I had too many choices for the 

same service, it is more a case of having various providers for different services. Knowing who to call for what is the trick. 

It is important to realize that most small exporting companies 

will not be interacting with agency officials in Washington; they 

will be dealing with lower-level government officials in federal offices across the country. These officials must be fully invested partners in the President’s National Export Initiative: well-recruited, 

well-trained, and well-incentivized to think broadly about exporting 

and helping local exporters succeed. Accountability for successes 

and failures must reach down to the local level. 

With more than twenty federal departments and agencies playing some role in international trade, it is important that SME’s 

have a place to turn. Many of these agencies overlap and offer duplicative services. I would recommend a One-Stop Shop—ideally 

the Department of Commerce and more specifically the International Trade Administration (ITA)—create a centralized staff 

SBREP-219 with DISTILLER

74 

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. 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. 

Interpreting and comprehending government regulations has 

proven to be another challenge that exhausts a small firm’s human 

resources and even drains our wallets when we have to turn to outside professionals. It should come as no surprise that the results 

from the SBEA Exporting Survey shows that fifty-four percent of 

SME’s export to less than 5 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. Currently, I am having problems identifying the applicable plumbing 

standard accrediting bodies in Mexico for a product as simple as a 

kitchen faucet. 

SBEA and I encourage you, Mr. Chairman, to reintroduce your 

legislation from the 112th Congress, H.R. 5513, the Transparent 

Rules Allow Direct Exporting (TRADE) for Small Businesses and 

Jobs Act. As you know, the measure would direct the pertinent 

agencies to monitor and collect up-to-date information on tariff and 

non-tariff laws, regulations, and practices. It will then be presented 

in a clear and easy-to-read format, and will serve as a resource for 

businesses looking to enter a new market. I would recommend that 

this information is then published on one centralized website. 

Promote Free Trade Agreements 

Free trade agreements are extremely important as they lower 

foreign barriers to our exports and produce a more level playing 

field. It is critical the president has the authority to negotiate trade 

agreements through Trade Promotion Authority (TPA). TPA, which 

expired in 2007, is critical to the passage of trade deals through 

Congress because it allows the agreements to advance under ‘‘fast 

track’’ rules with no amendments. New and expanded market access through trade agreements has been an important catalyst for 

increased small business exports. 

At Phoenix 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. Canada is not a huge 

market for our products, but we have national distribution through 

Canadian and U.S. wholesalers. 

SBREP-219 with DISTILLER

75 

NAFTA is the critical factor that makes it possible for us to seriously pursue business in Mexico. We will face competition from 

Asian suppliers in Mexico but their products are subject to significant import duties. The fact that our products are duty free under 

NAFTA makes our products cost competitive and improves our 

prospect for success. 

Expand and Improve Export Finance 

The Ex-Im Bank is also an important part of our export strategy. 

To be competitive we need to offer credit terms to prospective customers. Until I met with the Ex-Im Bank I didn’t know how we 

could prudently extend credit. With their support, I am confident 

we can offer competitive terms to qualified buyers and be assured 

of collection in the long-term. 

Phoenix Products has adequate financial resources to support our 

expected growth through export sales. But should we achieve success beyond our wildest dreams, the working capital loans available 

through the Ex-Im Bank could also proved to be an essential contributor to our success. 

The Ex-Im Bank is self-supporting and actually has generated 

excess revenues of nearly $2 billion dollars over the last 5 years. 

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, such as Phoenix Products, have the certainty and predictability we need to level the 

playing field and compete in the international marketplace. 

Additionally, more focus needs to be on Ex-Im meeting and maintaining the 20 percent mandate of financing dollars going directly 

for small business. Congress should not allow the percentage to 

drop below 20 percent or re-definitions of Ex-Im ‘‘financing’’ that 

are indirect (i.e. via suppliers). New formulas that turn the 20 percent into a goal rather than a mandate, or allow Ex-Im to avoid 

the mandate—as it has in the last couple of years—should not be 

an option. 

Stepping back a little, we need to realize that Ex-Im is the ‘‘bank 

of last resort’’ or even ‘‘bank of only resort’’ because relatively few 

U.S. commercial banks finance exports and most of those that do 

prefer to deal with larger companies. 

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. 

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 step up American exports, our 

banks must do more. 

SBREP-219 with DISTILLER

76 

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. 

SME’s 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. 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 market 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 would be 

significantly increased. 

Let me conclude with several key points: • Developing viable export markets for our products improves our long-term ability to manufacture products in 

Ohio. 

• Free trade agreements, especially NAFTA and others 

with Latin American countries, promote exports and jobs 

here in the U.S. by increasing emerging economies’ ability 

to purchase U.S. goods and services. 

• The Ex-Im Bank is a self-supporting entity that promotes foreign trade through its credit and loan guarantees 

and working capital support. It is crucial the Bank maintain its congressionally approved lending authority allowing the Bank to operate without restrictions. 

• Charge a fair price for the services provided so there can 

be adequate resources to support your customers. 

• The USEAC has provided advice and connected us to 

education and training. So far the Department of Commerce has not been able to provide the level of support we 

needed to establish a presence in Mexico. They have taken 

us most of the way, we still need that final connection to 

a Mexican based sales representative or distributor to get 

it started. 

• Increased coordination between agencies—including a 

One-Stop Shop—will help more small businesses access 

SBREP-219 with DISTILLER

77 

the tools they need to export. Enhanced export training 

and technical assistance are key. 

Again, I would like to thank Chairman Tipton and the members 

of the Subcommittee for the opportunity to speak today. I would be 

happy to answer any questions you may have. 

SBREP-219 with DISTILLER

78 

STATEMENT OF CONGRESSWOMAN GRACE MENG

Over the last few decades, our world has become increasingly 

connected. Businesses that are unable to adapt to the new and future economy will find it difficult to keep up. Globalization has realigned the way in which our nation, and the world, does its business. The increased access to world markets has provided a great 

opportunity for businesses in our country, yet only 1 percent of 

small businesses currently export their products. I agree with the 

many Members and our witnesses who spoke before me, that we 

must improve, and break down, barriers to export for U.S. small 

businesses. We need to cut away the red tape, and educate our 

communities on the benefits to becoming involved in, or at least 

considering, the export of their goods. 

For companies with the resources to enter it, the international 

market has proved to be very beneficial. But that first step is the 

most difficult; and I believe there are ways for us in Congress to 

improve the ExportImport Bank and the Small Business Administration’s ability to educate and reach out to small businesses. This 

type of proactive outreach will only serve to improve small businesses’ opportunities in the global marketplace. 

When entering the world market, a small business owner must 

make that decision carefully; doing so may not be the right decision 

for every small business owner; and is not a decision that should 

be made haphazardly. But, if a small business decides exporting is 

in its best interest, we should make sure that the resources exist 

for them to succeed. The benefits of U.S. businesses that decide to 

export are clear—small businesses that exported averaged a 37 

percent revenue growth from 2005 to 2009, compared to a 7 percent 

decline for small businesses that did not. 

As I’ve said many times before, small businesses are absolutely 

essential to the recovery of our economy and the strength of our nation’s workforce. Let us ensure that America’s small businesses 

have the resources they need to compete in a global environment, 

and that the federal government can be an ally in their success, not 

a hindrance. 

Æ 

SBREP-219 with DISTILLER