News From the
Committee on Small Business
Nydia M. Velázquez, Ranking Democratic Member

For Immediate Release
April 26, 2006

CONTACT: Kate Davis, Allyson Ivins, (202) 225-4038

Small Firms Stifled by International Trade Policies
Democrats point to Bush administration's policies as unreflective of entrepreneurs' needs

WASHINGTON - Congresswoman Nydia M. Velázquez, Ranking Democrat on the House Small Business Committee, today highlighted the need for the Bush administration to step up its efforts in providing American small businesses - who account for 97 percent of all exporters - with the adequate resources and assistance they need to succeed in the global market.

"The world economy only continues to grow with each passing year, allowing small businesses to remain competitive and strong," Congresswoman Velázquez said. "Yet, rising trade deficits - which are reaching over $800 billion today - combined with poor economic policies have forced many small firms out of the international market. It is time for the Bush administration to acknowledge that its current economic policies are undermining the leadership position of our nation's entrepreneurs in the global market."

Growing at twice the rate of their larger counterparts, small business exporters currently generate 30 percent of the nation's total value of exports, and dominate many trading industries. Despite this involvement, entrepreneurs are faced with a struggling economy at home, a soaring trade deficit, importation of cheap foreign goods, outsourcing of critical jobs and industries, and a declining competitive edge in global markets - raising serious concern over the future of our nation's export promotion plans and resources. The Trade Promotion Coordinating Committee (TPCC) was established to direct the governmental policies of 19 federal agencies toward increasing U.S. exports - yet questions have arisen over the effectiveness of the Committee in carrying out this mandate.

Congresswoman Velázquez stated her concerns over our nation's declining commitment to trade promotion, as evidenced in the Bush administration's vast underfunding of TPCC. Since FY 1999, the Committee's budget has been cut by over 30 percent, and today, member agencies are contributing a mere $1.8 million to trade promotion goals. This lack of funding has left TPCC without the necessary resources and staffing to smoothly facilitate trade transactions, as well as poor leverage over agencies to utilize their budget resources wisely. In addition, the needs of small business exporters have not been addressed - as reported in a 2002 GAO investigation that found TPCC's policies toward export promotion to be ineffective, inconsistent, and lacking in adequate implementation measures. Velázquez said that, "given the dynamics of the global economy and the importance of international trade, this is simply unacceptable."

"Small businesses provide tremendous potential for boosting exports, yet many of these firms face significant obstacles in participating in the global market," Congresswoman Velázquez said. "Given the current volatile economic environment here in the U.S., it is essential for our nation's small firms to remain on the cutting edge of their industries in order to compete more efficiently and effectively in international trade. Rather than bypassing their tremendous potential, the Bush administration needs to recommit itself to the development of sound trade policies that will support the continued growth of these entreprenuers well into the future."

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