Velazquez on the National Export Strategy

WASHINGTON, July 27, 2011 /PRNewswire-USNewswire/ -- Rep. Nydia M. Velazquez (D-NY), the Ranking Member of the House Committee on Small Business, spoke today during a Committee hearing entitled, "Bureaucratic Obstacles to Small Exporters:  Is our National Export Strategy Working?"  Following are her remarks:

"Thank you Chairman Graves.   The resilience of American small businesses is unquestionable.  In the face of an economic downturn, they have adapted and come to utilize foreign trade as a tool for growth.   Even as domestic sales lagged, U.S. exports grew more than 17 percent and shrunk the trade deficit to levels not seen in over a decade.  Since 2003, America's small business exports have grown by about 80 percent.  They now account for nearly half a trillion dollars in annual export sales.

"Despite these figures, however, small exporters possess a significant source of untapped potential.  While small businesses account for nearly 97 percent of all export firms, they are responsible for only 30 percent of all export revenues.  Additionally, more than half of all small business exporters ship goods to just one foreign partner.  If we are to achieve the goal set forth in the National Export Initiative of doubling exports within the next five years and creating 2 million new jobs, it will be critical to increase both the number of small business exporters and the number of countries they ship to.

"The 2011 National Export Strategy was promulgated for precisely this purpose.  The NES sets forth a strategy to implement the NEI.  In the context of small exporters, this means improving coordination of trade promotion activities.  It means increasing access to export credit for small firms.  It also means updating antiquated regulations and reducing redundancies that discourage small firms from shipping abroad.

"While the issuance of the NES undoubtedly represents a step in the right direction, much more must be done to turn its rhetoric into results.  We often hear from small businesses that red tape and convoluted agency processes prevent them from accessing the very programs that are meant to help them.  Duplicative initiatives coupled with a lack of coordination between agencies can lead to conflicting messages about where to go for assistance.  Breaking down these barriers should be a priority in any agency that seeks to provide trade promotion assistance to small firms.

"Additionally, more must be done to provide small businesses with improved access to capital.  Many small firms have continued to find lending conditions extremely unfavorable.  This is particularly true in the context of export loans where banks are wary of financing products that will be shipped overseas.  Despite unprecedented efforts taken over the last three years to support and expand the SBA's credit programs, its Internal Trade Loans have actually fallen by more than half over the past five years.  They now provide $390 million less in loans to small exporters.

"At the same time, small businesses have found credit difficult to come by under programs operated by the Export-Import Bank.  While small businesses receive more than 85 percent of all Ex-Im backed loans, they receive only slightly more than 20 percent of the authorization dollars.  With so many small firms continuing to struggle to find credit, there simply is no excuse why these agencies should continue underperforming in this important mission.

"Today, almost nine out of ten consumers live outside the United States.  In order for small businesses to remain at the center of our recovery, they must be able to tap into those markets.  If implemented correctly, the NES has the potential to advance that goal, making our small businesses more dynamic, competitive, and robust -- while allowing them to focus on what they do best -- creating new jobs.  

"I would like to thank the witnesses in advance for their testimony and yield back."  

CONTACT: Alex Haurek
(202) 225-2361

SOURCE Representative Nydia M. Velazquez, Ranking Member, House Committee on Small Business