Small Business, Big Opportunity
I recently had the pleasure of participating in the Atlantic Council’s panel discussion on the 2015 Trade Agenda and the Trans-Pacific Partnership (TPP). While there are still obstacles to be addressed, it is clear that successful negotiation of TPP has the potential to unlock untold opportunities for the U.S. and our Pacific Rim trading partners.
The countries participating in the TPP – including trading partners like Canada and Mexico along with other countries in Asia such as Japan, Malaysia and Vietnam, as well as Australia and New Zealand, represent 40 percent of global GDP and about a third of all global trade. Many of these countries will be important new centers of economic development during the continued global recovery.
The internet and e-commerce have significantly transformed the landscape for trade agreements. Dramatic improvements in telecommunications and transportation have virtually eliminated time and distance for consumers, opening up enormous opportunities for business – especially small businesses – to participate in the global economy.
A just-released Forrester study commissioned by FedEx shows that the people who are poised to benefit from today’s trade negotiations are the owners and employees of small and medium-sized enterprises. (SMEs).
According to the study, which was conducted with 9,000 participants across 17 global markets, including TPP countries of Australia, Canada, Mexico, Japan, Singapore and the U.S., 82 percent of global respondents reported making an online purchase of a physical item from a merchant outside of their home country. That means online consumers in all corners of the world are shopping cross-border for physical goods. Furthermore, 51 percent of Americans and 34 percent of global respondents cited the availability of ‘specialty/hard to find items’ as a reason for shopping outside of their own borders. This is an important strength of smaller businesses.
Recent Atlantic Council research shows that U.S. small businesses who sell beyond their borders experience significant revenue growth and tend to pay their employees more, grow faster, create more jobs and last longer. On the other hand, non-exporters saw their revenue contract during the five-year study period. With the U.S. ranked high in the Forrester research as the market from which global cross-border shoppers are predominantly purchasing, SMEs have a significant opportunity to expand their markets and grow their revenues through international commerce.
E-commerce buying in 2014 represented over $1 trillion in sales and is forecasted to nearly double within four years. Forrester research clearly shows that simplifying regulations just by harmonizing the duty free thresholds across the globe could result in an even greater increase in cross-border trade benefitting consumers, businesses and energizing the global economy.
At FedEx, making global trade easier, faster and more reliable is our business. We see the great potential that exists for small businesses to export and we support trade agreements, like TPP and the WTO Trade Facilitation Agreement. that will help make the experience of cross-border e-commerce easier and more transparent for small businesses that want to become larger players in the global marketplace.