Small and Medium-Sized Companies in the Focus of Exporting News

Small and medium-sized exporting companies had several reasons for good spirit in the last couple of weeks – especially Trans-Pacific Partnership and Export-Import Bank supporters.

The final agreement on Trans-Pacific Partnership (TPP) got a substantial coverage across the news, as it is the largest regional trade accord in history. As covered a few weeks ago, it encompasses USA together with 11 Pacific Rim nations and addresses many complex issues – from reducing tariffs and quotas, to imposing rigorous environmental, labor and intellectual property standards on partners, easing cross-border data flows, establishing an investor-state dispute settlement mechanism, to free trade in services, and imposing competitive neutrality on state-operated businesses.

There is one particularly important area, which deserves a separate attention – focus of TPP on small and medium-sized enterprises (SMEs).

Last week, National Small Business Association hosted a webinar where Andrew Quin, Deputy Assistant U.S. Trade Representative for Southeast Asia and the Pacific, among other described new chapter of the TPP deal focused on SMEs. The chapter aims to tide together all different elements that benefit SMEs and he highlighted 2 major areas:

  1. Creation of dedicated website for SME exporters by every member country. The websites should pull out all provisions which are particularly relevant to SMEs such as customs, taxation or intellectual property protection topics to make it better understandable and easier to follow in day-to-day exporting trade deals.
  1. Creation of SME committee to continue consultations with SMEs and collect feedback on what works, if benefits are being generated, and on how to continue maximizing benefits to SMEs. The committee will consist of government representatives, however promises to take inputs from SMEs on private sector provisions.

All of the above claims to suggest that TPP is more beneficial to SMEs than any previous trade agreement. Mr. Quin also reassured that TPP will not have any impact on Minority-Owned Small Businesses set aside programs (including the one WOSB program for women).

Another topic that came out after few weeks is the reauthorization of Export-Import Bank (EXIM). As Mr. Quin stated, it is a separate initiative but important piece to allow a full benefit of TPP. EXIM is providing loans, guarantees, and insurance to U.S. exporters and has made SMEs exports the top category supported last year (source) when $10.7 billion of total $27.5 billion worth of U.S. exports went to U.S. small businesses.

EXIM

Many SMEs publicly supported EXIM reauthorization, and they all have now a hope that it might be successful after all. A rare procedural move brought EXIM to the House floor and got a surprising support in the 313-118 vote to renew, including from 127 Republicans.

However, now the supporters will have to secure passage in the Senate but they seem to have a chance through its attachment to another vehicle, such as legislation to renew highway funding (source).

Overall, current news seem to suggest that it is a good time to be an exporter and according to the latest annual report Profile of U.S. Importing and Exporting Companies released by Census Bureau, many SMEs have already realized that as they accounted for 98 percent of the number of U.S. exporters in 2013 and $471 billion in known value of goods exports.

The Trans-Pacific Partnership Trade Deal

TPPOctober 5, 2015 will be remembered as a day when the United States and other 11 Pacific Rim nations reached final agreement on the largest regional trade accord in history – the conclusion of the Trans-Pacific Partnership (TPP.) The countries form a group with an annual gross domestic product of nearly $28 trillion that represents roughly 40 percent of global G.D.P. and one-third of world trade, which reflects enormity of the deal.

TPP addresses many complex issues from reducing tariffs and quotas, to imposing rigorous Environmental, Labor and Intellectual Property Standards on partners, easing cross-border data flows, establishing an investor-state dispute settlement mechanism, to free trade in services, and imposing competitive neutrality on state-operated businesses.

Together with the U.S. members are Australia, Canada, Japan, Malaysia, Mexico, Peru, Vietnam, Chile, Brunei, Singapore, and New Zealand. Geography would suggest for China to be member as well but though it has expressed interest in talks, it is not among founding countries (causing different speculations and interpretations).

The deal now needs the approval of lawmakers in member countries, including the U.S. Congress where it is expected to be under thorough scrutiny. Public debate is also weighting all pros and cons. Supporters say it will unlock opportunities for exporters but opponents see the partnership as a continuous way of sending manufacturing jobs to low-wage nations.

Similarly to congressional battle in 1993 for NAFTA partnership passage (234 to 200 votes in the House, and 61 to 38 in the Senate), president Obama is expected to face challenges while making it one of his final goals in the office. Similar difficulties are expected in Canada while the process should be straightforward in Japan or Singapore.

TPP is written to ease adoption by additional Asian nations (South Korea is already pressing for swift acceptance), and to provide a potential template to other initiatives underway, like the Transatlantic Trade and Investment Partnership (source NY Times).

Tune to our special webinar with International Trade Administration on December 17 to find out more about the TPP and how it is targeting small businesses.

For additional information on TPP, continue here.

Patents, Trademarks, Copyrights … Protect Your Intellectual Property

A spark of an idea is often the start for building a business. Next steps that come to mind to most people are preparing a business plan, sales and distribution model, marketing strategy, plan for building customer base, etc. However one area that is not always as straightforward is protection of the business idea, business name, or an invention from competitors. Or actually protection of everything that is encompassed by one powerful term – Intellectual Property (IP).

We all know the term but what exactly does it incorporates? According to the World Intellectual Property Organization, “IP refers to creations of the mind, such as inventions, literary and artistic works, symbols, names, images, and designs used in commerce.” Globally IP is divided into 2 main groups – Industrial Property (patents, trademarks, industrial designs, and geographical indications) and Copyright that covers literary and artistic works such as novels, films, music, architectural designs and web pages.

USA accounts for the largest share of filed patents and trademarks applications worldwide with 28,7% and 13,8% respectively as reported by the World Intellectual Property Organization.

Screen Shot 2015-09-11 at 11.58.47 AMHowever due to complexity of IP processes small businesses account for only small proportion of the numbers. They are usually not properly protected and thus are more vulnerable to piracy, counterfeiting, and the theft of their intellectual property. Small business owners often simply don’t have access to the IP protection know-how that larger corporations do.

And according to statistics of Small Business Administration this is even truer for small businesses, which are exporting their products overseas. Only 15 percent of exporters realize that a U.S. patent only provides protection in the U.S.

Below are the basics to be followed for protecting IP overseas:

  • Overseas Patents – Almost every country has its own patent law with specific patent application process, which needs to be followed. More information about filing for an overseas patent can be found here .
  • International Trademarks – in certain countries (defined by the Madrid Protocol) trademark registration can be filed via a single application, if you are already a qualified owner of a trademark application pending before the U.S. Patent Office. If you want to protect your trademark overseas you’ll need to file for international trademark protection. More information is available here

And why is it so important to protect ones business intangibles?

Intellectual Property protection is a critical part of small business success and its current or future growth. According to the U.S. Patent and Trademark Office’s stopfakes.gov web site, companies that protect their intellectual property drive more economic growth in the U.S. than any other single sector. In general, IP rights reward creativity, that fuels progress, innovation, spurs economical growth and creates jobs in return.

There are many different resources, to help you gather information on where and how to protect your intellectual property, sba.gov or export.gov are a good start.

We have also a unique opportunity for you to learn more about it during our free webinar on September 21st, which will be led by expert in the IP field, Partner at Holland & Knight law firm, Thomas W. Brooke. Registration is free and open.

Explore New Growth Opportunities with Export NOW

If you were hesitating on whether or not to export – here’s the business case for you: U.S. metropolitan areas in 2014 set export highs for the fifth year in a row exceeding $1.44 trillion in goods exports!

As highlighted by U.S. Commerce department: “Today, U.S. businesses are increasingly taking advantage of export opportunities. The data makes it clear. Companies based in the United States that sell their world-class goods to the 96 percent of potential customers who live outside our borders are critical to both the local and national economy. This is evident in today’s release of the 2014 Metropolitan Area Export Overview. The report highlights data on goods exported from U.S. metropolitan areas in 2014. Some of the nation’s most prominent cities are leading in trade and setting new export records.

We will guide you through the process of joining them with an exciting growth opportunity for your Business -> WIPP’s National Export Expansion Education Program. This step-by-step program will lead participants (both current and new exporters) through the steps to enter this growing market, or to expand their export reach.

You don’t have to be big to export – We will help you take a bite of the Export cake
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And Why Export? It’s a big world …

  • 95% of consumers live outside of the U.S.
  • 80% of world economic growth forecasted to occur outside the U.S.
  • $2.3T of U.S. goods and services exported in 2013

… and great Growth Opportunity

  • U.S. exports are in high demand although only 300,000 U.S. companies export – it’s a competitive market
  • Average revenue per firm was $23 M in 2013
  • Exporters report nearly 4 times total revenue per firm
  • Digital technologies enable entrepreneurs to be “micro-multinationals” that sell and source products, services ad ideas across boarders (McKenzie)

In WIPP’s Annual Survey, 38% of all respondents showed interest in our Export NOW program, so here are ours first webinars for entry-level exporters. Stay tuned for our advanced series! Register for first free webinars:

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The program is in partnership with the U.S. Department of Commerce’s International Trade Administration (ITA) and with the Clinton Global Initiative to make Export NOW an official CGI Commitment to Action.

For more information check out our step by step curriculum and get started today.

Help is on the way!

Export NOWIf you are the owner of a small business interested in the potential exporting opportunity, it’s not easy! There is no central point of entry, much less an easy step-by-step process to follow.   We hear over and over that it is overwhelming with trade development resources and guides often disbursed throughout several agencies and their departments.

Help is on the way for you with the Export NOW program developed by WIPP.   Whether you are considering export, or looking to expand your markets, we have the experts to guide you.   For more information check out our step by step curriculum and get started today.