Shaheen and Portman to Trump Trade Rep: Cut Red Tape, Level Playing Field for Small Businesses Selling Overseas

July 17, 2017

**Antiquated trade laws, duties and taxes stand in the way of full small business participation in $2.2 trillion global e-commerce market** 

**Small businesses must be top administration priority in trade negotiations**

(Washington, DC) – Citing the opportunity for American small businesses to better participate in the $2.2 trillion global e-commerce market, Senator Jeanne Shaheen (D-NH), the lead Democrat on the Senate Committee on Small Business and Entrepreneurship, and Senator Rob Portman (R-OH) led a bipartisan group of 28 senators urging America’s top trade official to make small businesses that export a priority in future trade negotiations.

In a letter to the U.S. Trade Representative, Ambassador Robert Lighthizer, Shaheen and Portman cited so-called de minimis thresholds that facilitate the flow of low-value goods across borders.  When set low by trading partners, these thresholds impose excessive red tape, customs duties and taxes that stand in the way of small businesses reaching their full exporting potential.

Exporting and e-commerce represent a tremendous opportunity for small businesses to sell to the 95 percent of the world’s customers who live abroad,” said Shaheen.  “That is why we need to make cutting red tape and leveling the playing field for American small businesses a top priority in our trade negotiations.”

“One of the amazing things about the internet is that – for the first time in history – small businesses have access to customers around the globe,” said Senator Portman.  “This letter calls attention to one of the key impediments to trade that make it harder for small businesses to compete.  I hope that the USTR makes addressing the barrier posed by these thresholds a priority in NAFTA and future trade negotiations.”

The senators wrote: “When a foreign trading partner has a low de minimis threshold, American small businesses face additional government red tape at the border.  For small businesses with limited time and resources, these burdens can be excessive and discourage them from exporting altogether.  We urge you to keep the interests of small businesses in mind and seek to relieve them of exporting barriers in the form of low de minimis thresholds.”

Ninety-five percent of the world’s customers live in foreign countries, but only one percent of small- and medium-sized enterprises export goods and services to foreign markets. 

The bipartisan letter to Ambassador Lighthizer is below and here.

___________

July 14, 2017

The Honorable Robert Lighthizer                                          

Ambassador                                                                           

United States Trade Representative   

600 17th Street NW                                                                

Washington, D.C. 20006                                                       

 

Dear Ambassador Lighthizer:

E-commerce has been a tremendous boon to American small businesses, especially when it comes to exporting.  Online tools have enabled many small businesses to reach new customers and break down traditional barriers to selling overseas, like communicating in a foreign languages and conducting market research.  Despite these positive trends, however, antiquated and complex trade laws stand in the way of small businesses reaching their full exporting potential.  We write today to call your attention to one such barrier – excessively low de minimis thresholds – and urge you to work to cut red tape for American small businesses selling online.

As you know, countries establish de minimis thresholds to facilitate the flow of low-value goods across borders.  When small American e-commerce businesses make sales to foreign buyers above the destination country’s de minimis threshold, their packages are subject to heightened clearance processes, duties and taxes. As a result, when a foreign trading partner has a low de minimis threshold, American small businesses face additional government red tape at the border.  For small businesses with limited time and resources, these burdens can be excessive and discourage them from exporting altogether.

Congress recognized the need to update antiquated de minimis thresholds in the Trade Facilitation and Enforcement Act of 2016 (PL 114-125).  Through that law, Congress both raised the U.S. de minimis threshold on imported goods to $800 USD and urged the United States Trade Representative to “encourage other countries, through bilateral, regional, and multilateral fora, to establish commercially meaningful de minimis values for express and postal shipments that are exempt from customs duties and taxes and from certain entry documentation requirements, as appropriate.”

We encourage you to make small businesses a priority in trade negotiations by following through on Congressional intent and seeking de minimis parity with our trading partners.  Doing so would cut red tape on American small businesses and enable them to fulfill their exporting potential by leveling the playing field with foreign competition.  In particular, increased de minimis thresholds in Canada and Mexico would bring direct benefits to American small businesses who count these countries as top trading partners.  Notably, the de minimis threshold for Canada was set more than 30 years ago and ranks as the lowest in the industrialized world.  Raising Canada’s $20 CAD de minimis threshold on low-value, low-risk shipments would improve the ability of American small businesses operating online to serve Canadian consumers. 

Small businesses are the backbone of our economy, representing 99 percent of employers and creating two out of every three jobs in the United States.  Although 95 percent of the world’s customers live in foreign countries, only one percent of small- and medium-sized enterprises export their goods and services in foreign markets.  Ecommerce, which now represents $2.2 trillion or approximately 12 percent of the global goods trade, has the potential to fuel small business growth by unleashing this untapped potential.  We urge you to keep the interests of small businesses in mind and seek to relieve them of exporting barriers in the form of low de minimis thresholds.

Sincerely,

Jeanne Shaheen                                                          Rob Portman

U.S. Senator                                                                U.S. Senator

 

CC:       The Honorable Wilbur Ross

             Secretary

             U.S. Department of Commerce

 

             The Honorable Linda McMahon

             Administrator

             U.S. Small Business Administration