The Trans-Pacific Partnership (TPP) trade agreement has been on the radar of both small-business leaders and politicians in recent months. Earlier this month, three small-business owners joined President Barack Obama on a national teleconference to tout the benefits of the 12-nation trade accord.
According to the President, the Trans-Pacific Partnership will help small- and medium-sized American companies by reducing or eliminating more than 18,000 taxes on American exporters with U.S. trading partners in the Asia-Pacific region. “It's critical that Congress get TPP done, and we need to get it done this year,” Obama said during the teleconference. “Because, as we speak, China is negotiating a trade deal with some of these same countries that would carve up some of the fastest growing markets in the world at our expense.”
If the Trans-Pacific Partnership trade agreement is not approved this year, it faces an uphill battle. Presidential hopefuls Hillary Clinton and Donald Trump both oppose the agreement. But business groups and small-business owners throughout the United States are largely in favor of the TPP. I spoke with the three small-business owners who were on the call with President Obama to learn why they believe the Trans-Pacific Partnership can help small businesses.
Intellectual Property Protection
Russ Monk, co-founder of Tigard, Oregon-based High Impact Technology, LLC (HIT), a manufacturer of armor and fuel cell products for military use, believes that the TPP will help improve intellectual property protection for his company’s products.
One of the things the U.S. learned from NAFTA, says Monk, was that IP protection is a critical component in any trade agreement. “NAFTA could have been better,” he adds, “but TPP includes IP rules that all the participating countries have to live by.”
—Russ Monk, co-founder, High Impact Technology, LLC
While HIT has exported to nine countries, the company has proprietary technology to protect. HIT is registered with the U.S. Department of State, and maintains an International Traffic in Arms Regulation (ITAR) license, and an export compliance program. The company, which invented a self-healing technology to protect fuel tanks on military vehicles, received the President’s E-Award for exporting in May.
“Many of the countries we’re talking about, we’re cautious to go into because we are afraid that our technologies will be stolen,” he says. “Our long-term success depends on innovation and protection of our intellectual property.”
Reduced Tariffs
Maryalice StClair, vice president of business development at Halosil International Inc., a specialty chemical manufacturer in New Castle, Delaware, expects the TPP to reduce or eliminate tariffs that she believes are making her company’s products uncompetitive in some of the TPP-member countries.
“When we export our disinfectants overseas, we face high tariffs that make it more expensive than similar products people can buy locally,” StClair says. “This prices us out of the market, despite the fact that we could sell our products at a competitive price without the extra tax.”
StClair says she supports TPP because she thinks it will make her products more competitive in countries that are part of the TPP. Halosil already exports its disinfectant and biocide formulas to China, the Philippines and a number of other countries worldwide.
Increased Tourism
April Ellerbe, director of sales for the Durham Convention & Visitors Bureau in North Carolina, thinks the TPP’s economic policies will benefit tourism-related industries. In fact, Ellerbe says she is optimistic that trade agreements like the TPP will help attract more international business and vacation travelers to Durham.
“The more visitors we have in Durham,” she says, “the more people who [will] stay in our hotels, eat in our restaurants and shop in our stores. That drives economic success, enhances the quality of life and supports local jobs.”
Trans-Pacific Partnership: Good for Business?
According to the President, the TPP is important for U.S. exporters. “Not all trade deals over the last … 30 years were well-structured to protect American workers against some of the effects of globalization, but that's not this deal,” Obama said during the May teleconference. “The big challenge for us is: Who is going to write the rules that nations play by when it comes to trade and commerce? Is it the United States or is it going to be our biggest competitor going forward, which is China?”
While there are critics of the Trans-Pacific Partnership agreement, U.S. small-business organizations overwhelmingly support the agreement. In a survey conducted by the National Small Business Association, 56 percent of exporters surveyed said they would be "more inclined to enter a new market” if the U.S. has a free trade agreement in place with the partner country.
The full text of the proposed Trans-Pacific Partnership agreement, including a list of all of the participating countries, is available on the U.S. Trade Representative’s website.
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