With the U.S. Senate passing the U.S.-Mexico-Canada Agreement (USMCA) last week, Alaska small businesses are one step closer to benefiting from the trade agreement.
Considering Canada and Mexico are the U.S.’s largest trading partners combined with our state’s proximity to Canada, the impact of the USMCA is substantial to small firms in Alaska.
Consider this: 73% of companies that export goods from Alaska are small firms. In 2018, $680 million in exports from Alaska went to Canada and Mexico alone. From minerals, ores, petroleum and coal products to our coveted fish and marine products, Alaska small businesses are selling what our trade partners in Canada and Mexico want to buy.
Plus, the International Trade Commission says that within five years, the USMCA could add up to $235 billion in new economic growth and 589,000 jobs to the American economy. And since small businesses create two out of every three net new jobs, small businesses and their local communities stand to benefit the most from the anticipated job growth.
In my role at the U.S. Small Business Administration, or SBA, I’ve had the opportunity to meet with small-business owners across Alaska. I’ve learned how beneficial business relationships with Canada and Mexico are to the expansion of their businesses. I’ve also listened to the barriers that get in the way of their vision and the frustration of feeling like a small fish in a large ocean when it comes to having your voice heard.
That is why the Small and Medium Enterprise chapter in the USMCA is so important. For the first time in any U.S. trade agreement, it establishes a committee on small-business issues composed of government officials from each country. This committee empowers our state’s entrepreneurs by providing them a voice to be heard and a forum to advocate for small-business interests on an international scale.
The USMCA also simplifies customs and trade rules and reduces barriers and costs that small businesses have historically faced. Some specific provisions that directly benefit Alaska small-businesses include:
America is more prosperous today than ever before. The unemployment rate is at a 50-year low with 110 months of consecutive positive job growth; wages have increased 3.1% during the past 12 months; and, there are 30.7 million small businesses in the U.S., nearly 4 million more than a decade ago. The last thing we want to do is hinder small businesses during a flourishing economy.
Because two-thirds of the world’s purchasing power is in foreign countries, expanding through international trade is an imperative strategy for small businesses to sustain and generate growth. The USMCA opens doors so small businesses can succeed with our North American partners.
In conjunction with the USMCA, the SBA empowers small business expansion through exporting with export loan programs that backed $1 billion in financing to small businesses in fiscal year 2019, a State Trade Expansion Program (STEP) that provides direct export assistance to small firms, and a network of partners that walk small businesses through every step of the exporting process.
It's all part of a bright and economically prosperous future for the small businesses of Alaska.
Jeremy Field is the Regional Administrator for the U.S. Small Business Administration Pacific Northwest Region, which serves Washington, Oregon, Idaho and Alaska. The SBA empowers entrepreneurs and small businesses with resources to start, grow, expand or recover.
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