[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]


 
                       FULL COMMITTEE HEARING ON 
                     EVALUATING THE IMPACT OF SMALL 
                      BUSINESS TRADE POLICY ON JOB 
                      CREATION AND ECONOMIC GROWTH 

=======================================================================

                                HEARING

                               before the


                      COMMITTEE ON SMALL BUSINESS
                             UNITED STATES
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

                               __________

                              HEARING HELD
                             APRIL 28, 2010

                               __________

                    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
                               

            Small Business Committee Document Number 111-065
Available via the GPO Website: http://www.access.gpo.gov/congress/house

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                   HOUSE COMMITTEE ON SMALL BUSINESS

                NYDIA M. VELAZQUEZ, New York, Chairwoman

                          DENNIS MOORE, Kansas

                      HEATH SHULER, North Carolina

                     KATHY DAHLKEMPER, Pennsylvania

                         KURT SCHRADER, Oregon

                        ANN KIRKPATRICK, Arizona

                          GLENN NYE, Virginia

                         MICHAEL MICHAUD, Maine

                         MELISSA BEAN, Illinois

                         DAN LIPINSKI, Illinois

                      JASON ALTMIRE, Pennsylvania

                        YVETTE CLARKE, New York

                        BRAD ELLSWORTH, Indiana

                        JOE SESTAK, Pennsylvania

                         BOBBY BRIGHT, Alabama

                      DEBORAH HALVORSON, Illinois

                  SAM GRAVES, Missouri, Ranking Member

                      ROSCOE G. BARTLETT, Maryland

                         W. TODD AKIN, Missouri

                            STEVE KING, Iowa

                     LYNN A. WESTMORELAND, Georgia

                          LOUIE GOHMERT, Texas

                         MARY FALLIN, Oklahoma

                         VERN BUCHANAN, Florida

                      BLAINE LUETKEMEYER, Missouri

                         AARON SCHOCK, Illinois

                      GLENN THOMPSON, Pennsylvania

                         MIKE COFFMAN, Colorado

                  Michael Day, Majority Staff Director

                 Adam Minehardt, Deputy Staff Director

                      Tim Slattery, Chief Counsel

                  Karen Haas, Minority Staff Director

        .........................................................

                                  (ii)

  


                         STANDING SUBCOMMITTEES

                                 ______

               Subcommittee on Contracting and Technology

                     GLENN NYE, Virginia, Chairman


YVETTE CLARKE, New York              AARON SCHOCK, Illinois, Ranking
BRAD ELLSWORTH, Indiana              ROSCOE BARTLETT, Maryland
KURT SCHRADER, Oregon                W. TODD AKIN, Missouri
DEBORAH HALVORSON, Illinois          MARY FALLIN, Oklahoma
MELISSA BEAN, Illinois               GLENN THOMPSON, Pennsylvania
JOE SESTAK, Pennsylvania

                                 ______

                    Subcommittee on Finance and Tax

                    KURT SCHRADER, Oregon, Chairman


DENNIS MOORE, Kansas                 VERN BUCHANAN, Florida, Ranking
ANN KIRKPATRICK, Arizona             STEVE KING, Iowa
MELISSA BEAN, Illinois               W. TODD AKIN, Missouri
JOE SESTAK, Pennsylvania             BLAINE LUETKEMEYER, Missouri
DEBORAH HALVORSON, Illinois          MIKE COFFMAN, Colorado
GLENN NYE, Virginia
MICHAEL MICHAUD, Maine

                                 ______

              Subcommittee on Investigations and Oversight

                 JASON ALTMIRE, Pennsylvania, Chairman


HEATH SHULER, North Carolina         MARY FALLIN, Oklahoma, Ranking
BRAD ELLSWORTH, Indiana              LOUIE GOHMERT, Texas

                                 (iii)

  


               Subcommittee on Regulations and Healthcare

               KATHY DAHLKEMPER, Pennsylvania, Chairwoman


DAN LIPINSKI, Illinois               LYNN WESTMORELAND, Georgia, 
MELISSA BEAN, Illinois               Ranking
JASON ALTMIRE, Pennsylvania          STEVE KING, Iowa
JOE SESTAK, Pennsylvania             VERN BUCHANAN, Florida
BOBBY BRIGHT, Alabama                GLENN THOMPSON, Pennsylvania
                                     MIKE COFFMAN, Colorado

                                 ______

     Subcommittee on Rural Development, Entrepreneurship and Trade

                 HEATH SHULER, North Carolina, Chairman


MICHAEL MICHAUD, Maine               BLAINE LUETKEMEYER, Missouri, 
BOBBY BRIGHT, Alabama                Ranking
KATHY DAHLKEMPER, Pennsylvania       STEVE KING, Iowa
ANN KIRKPATRICK, Arizona             AARON SCHOCK, Illinois
YVETTE CLARKE, New York              GLENN THOMPSON, Pennsylvania

                                  (iv)

  



















                            C O N T E N T S

                              ----------                              

                           OPENING STATEMENTS

                                                                   Page

Velazquez, Hon. Nydia M..........................................     1
Graves, Hon. Sam.................................................     2

                               WITNESSES

Johnson, Mr. Roger, President, National Farmers Union............     3
Hufbauer, Dr. Gary Clyde, Reginald Jones Senior Fellow, The 
  Peterson Institute for International Economics.................     5
Bond, Mr. Phillip J., President & CEO, TechAmerica...............     6
Greenblatt, Mr. Drew, President, Marlin Steel Wire Products LLC, 
  Baltimore, MD. On behalf of the U.S. Chamber of Commerce.......     7

                                APPENDIX


Prepared Statements:
Velazquez, Hon. Nydia M..........................................    20
Graves, Hon. Sam.................................................    22
Johnson, Mr. Roger, President, National Farmers Union............    24
Hufbauer, Dr. Gary Clyde, Reginald Jones Senior Fellow, The 
  Peterson Institute for International Economics.................    31
Bond, Mr. Phillip J., President & CEO, TechAmerica...............    35
Greenblatt, Mr. Drew, President, Marlin Steel Wire Products LLC, 
  Baltimore, MD. On behalf of the U.S. Chamber of Commerce.......    44

Statements for the Record:
Michaud, Hon. Michael............................................    55
CompTIA..........................................................    56
CompTIA, Executive Summary: "Small and Medium Size Business 
  Export Insights and Opportunities." January 2010...............    59
Czinkota, Prof. Michael R., Georgetown University and University 
  of Birmingham: "How the Government Can Help Increase U.S. 
  Export Performance"............................................    68
Wilkingson, Prof. Timothy J., Montana State University Billings, 
  Billings, MT...................................................    78

                                  (v)

  


                       FULL COMMITTEE HEARING ON
                     EVALUATION THE IMPACT OF SMALL
                      BUSINESS TRADE POLICY ON JOB
                      CREATION AND ECONOMIC GROWTH

                              ----------                              


                       Wednesday, April 28, 2010

                     U.S. House of Representatives,
                               Committee on Small Business,
                                                    Washington, DC.
    The Committee met, pursuant to call, at 1:00 p.m., in Room 
2360 Rayburn House Office Building, Hon. Nydia Velazquez 
[chairman of the Committee] presiding.
    Present: Representatives Velazquez, Altmire, Bright, Graves 
and Thompson.
    Chairwoman Velazquez. Good afternoon. This hearing is now 
called to order.
    In the last year, trade has emerged as the silver lining in 
an otherwise weak economy. Annual growth in exports has 
expanded by 18 percent, boosting the bottom lines of businesses 
in a wide range of industries, including many outside exporting 
traditional markets.
    As a recent article in The Economist reports, even 
architectural firms, not exactly the vanguard of American 
trade, are selling more of their services abroad. For an 
economy on the mend, an uptick in trade is a welcome bright 
spot for small firms facing a shortage of domestic customers. 
It is especially appealing.
    With trade on the rise, so are opportunities for small 
businesses. After all, they make up 97 percent of exporting 
companies and are by their very nature innovative and 
enterprising. But these virtues alone do not guarantee success 
abroad. Rather, it takes time to identify foreign markets, 
capital to target new customers, and training to learn the ins 
and outs of the exporting process. Some of these resources, 
however, are in short supply, particularly for small firms 
impacted by the recession.
    In today's hearing, we are going to examine the challenges 
facing small business exporters and look for ways to ensure 
U.S. trade policies are doing all it can to support those 
firms. When armed with the proper tools, small businesses can 
create anywhere from 60 to 80 percent of new jobs. It is 
critical that those resources be available today, especially 
with the unemployment rate at 9.7 percent. But unfortunately, 
job creation has become an increasingly heavy lift for small 
firms. Small exporters are no exception. These businesses face 
significant roadblocks in reaching new markets. Some of those, 
like the challenge of identifying foreign buyers, have been 
around forever. Others, such as difficulty accessing capital 
and increased red tape due to heightened security issues, have 
increased in recent years. We need to be sure small businesses 
are able to overcome these obstacles, because when a small 
company has the elements it needs to access customers abroad, 
it has the ability to create jobs here at home.
    Equally important is the basic understanding of the 
exporting process. Unlike the larger competitors, small 
businesses tend not to have massive marketing departments or 
business development teams. So when it comes to navigating 
foreign economies and reaching new customers, they are often on 
their own. Countless other businesses are unaware that 
exporting is an option at all. That is unfortunate because 
trade is not industry specific. For small firms in sectors 
ranging from IT to textile manufacturing, exporting opens the 
door to a diverse new customer base.
    At a time of sluggish consumer spending, it is important 
that all small businesses, regardless of industry, have the 
chance to leverage trade opportunities.
    As Americans, we often worry about shipping jobs overseas. 
Well, one of the best ways to keep that from happening is by 
sending our industry, the goods and services that we create, as 
a nation overseas instead. Already trade supports one in five 
manufacturing jobs and studies have shown firms that focus on 
exporting increase employment levels faster than those that do 
not. Now more than ever, our country needs policies that 
encourage trade and promote growth.By improving resources for 
small business exporters, we can achieve both those things and 
take another promising step down the road to recovery.
    I would like to take this opportunity to thank all the 
witnesses for taking time out of your busy schedule to be with 
us today and I look forward to hearing from you.
    With that, I will now yield to Ranking Member Graves for 
his opening statement.
    Mr. Graves. Thank you, Madam Chair, and thank you for 
holding his hearing on trade policy and its effect on small 
business exports.
    Small business has played an important role in our economy. 
Not only do they create the majority of new jobs in this 
country, but they also drive American innovation that's 
critical to meeting the challenges of any given industry.
    As our nation continues its quest for a full economic 
recovery, the success of our small businesses is paramount. One 
way we can help clear the path to success for small businesses 
is by improving trade opportunities. Trade is critical to 
America's prosperity and our trade industry supports roughly 10 
million jobs and contributes 12.7 percent to the U.S. Gross 
Domestic Product.
    In 2008 alone, the U.S. exported $1.8 trillion worth of 
goods. Unfortunately, small businesses only represent 30 
percent of the total value of goods exported from the United 
States. Additionally, small businesses that do export goods are 
typically only able to sell to one foreign market. With 95 
percent of the world's consumers living outside the United 
States, it is clear that expanding trade opportunities for 
small businesses could dramatically fuel development and 
increase revenue.
    Currently, tree trade agreements with Panama, Colombia, and 
South Korea are awaiting congressional action. Creating more 
market access for small businesses, through the passage of 
these trade agreements, is one of the best things Congress 
could do to help small businesses and improve the American 
economy.
    The passage of the Colombia Free Trade Agreement, for 
example, would eliminate duties on 80 percent of the U.S. 
exports of consumer and industrial products almost immediately. 
Passage of the Panama Free Trade Agreement would increase U.S. 
agriculture exports by more than a $195 million a year and 
eliminate all tariffs on U.S. ag. exports. The passage of the 
free trade agreement with South Korea would open up access to 
our seventh largest trading partner in the world and 
dramatically reduce tariffs.
    The benefits of opening market access are obvious and 
plentiful, but failure to expand trade opportunities in the 
near future could prove detrimental to our economy. The 
European Union and countries like Canada are eager to enter 
into free trade agreements and displace our market presence. 
The time is right now to get this done, I think, and I think 
it's very, very important.
    Again, thank you, Madam Chair, for having the hearing and I 
appreciate all the witnesses being here and taking time out of 
your busy schedule.
    Chairwoman Velazquez. Thank you. It's my pleasure to 
welcome Mr. Roger Johnson. He's the President of the National 
Farmers Union. He was elected president in 2009 and has 
previously served as the North Dakota Agriculture Commissioner. 
With 250,000 members, the Farmers Union addresses economic 
well-being and quality of life for family farmers and ranchers.
    Welcome, Mr. Johnson, you will have five minutes, to make 
your statement.

                   STATEMENT OF ROGER JOHNSON

    Mr. Johnson. Madam Chair, Ranking Members and Members of 
the Committee, as you indicated, my name is Roger Johnson. I'm 
President of the National Farmers Union and I'm also a farmer 
in North Dakota.
    Trade policy isn't like flipping a coin with only two 
possible outcomes, heads or tails. It's more like rolling a 
six-sided dice in dealing with lots of issues, domestic 
producers, imports, exports, the WTO, jobs, markets, et cetera.
    Many of the small and medium-sized farmers in the U.S. 
depend on foreign markets for a portion of their income. 
Exports are very important to agriculture. Seventy-two percent 
of our cotton is exported; 63 percent of all almonds, for 
example; 40 percent of our food grains, and the list goes on.
    Increasing domestic market share can help insulate U.S. 
producers from the vagaries of foreign market which sometimes 
can be rather fickle. Another solution can be found in 
facilitating access to those foreign markets.
    Two programs in particular at USDA I'd like to visit about. 
The MAP program, Market Access Program, and the Foreign Market 
Development Program, or FMD, both of these programs are very 
important. They provide matching funds. They help us with 
opening markets, help in particular shipping a lot of specialty 
crops, fruits, vegetables, nuts, et cetera. The MAP program is 
used in many different ways.
    In my capacity as the Commissioner of Agriculture in North 
Dakota, I participated in one of the SRTGs. My testimony goes 
into some detail about this. The SRTGs have helped thousands of 
small businesses enter export markets in cooperation with USDA. 
Export readiness training is made available: international 
trade shows, direct financial support for advertising trade 
missions, labeling, promotion in foreign markets. 
Unfortunately, many producers are unaware of these programs.
    The Foreign Ag. Service also supports small businesses by 
organizing and hosting trade shows. And the identity for the 
U.S. is enhanced significantly through these U.S. pavilions at 
FAS-endorsed international trade shows.
    In 2008, only about $30 million of the $200 million budget 
for MAP was spent on small businesses. We would argue that a 
larger percent of that total should be spent on small 
businesses. We need to do even more to ensure available federal 
dollars are being maximized to help small producers and 
companies.
    We need to set aside a majority of the money for these 
kinds of producers. If the Federal Government does not 
recognize the importance of diversity of agricultural 
production scales, et cetera, we will be making a mistake. We 
must ensure that they are not inadvertently encouraging further 
concentration in agriculture through trade and export policies 
that might otherwise ignore the small producers and focus more 
on the very large companies.
    Past trade policies sometimes have failed to live up to 
their proponent's promises and have placed sometimes an undue 
burden on America's family farmers and ranchers. U.S. trade 
deficit today is over $400 billion. Current trade policies are 
often not adequate in addressing issues like currency 
manipulation, environmental standards, labor standards, food 
safety issues, and others.
    There are two pieces of very important legislation I would 
draw your attention to on page five of my testimony. HR 4645, 
sponsored by Chairman Peterson, would open up additional 
business opportunities to Cuba and also the Trade Act, which 
would largely help enforce existing trade agreements and help 
to bring some sense of coherence to the various foreign 
policies that we have in the country.
    National Farmers Union is a member of the International 
Federation of Ag. Producers. Some one hundred countries are 
members of the this. We believe, as does IFAP, that every 
nation has the right to food security and should be allowed the 
ability to provide it for themselves with domestic production 
and with reliable trading partners. We need to do a better job 
of aligning our humanitarian and economic development policies 
with our trade policies so they do not work at cross purposes.
    On page six of my testimony, I spend some time talking 
about jobs. And let me just conclude by saying that we need a 
more coherent trade agenda to develop, maintain, and advance 
jobs in this country. Our export markets and trading partners, 
even if they seem very stable, are often unreliable. The 
markets tend to be fickle. We sometimes lose them quickly 
through bogus science or food safety issues that simply are not 
true. And so we need to do what we can to try and focus on 
these issues. I provide a number of examples with respect to 
that.
    Finally, let me say that real growth in U.S. exports will 
come with the economic growth in other countries as they 
achieve the ability to pay for better diets. In many cases, 
that means allowing other countries to support their farmers 
and protect their markets from world dumping.
    Thank you.
    [The statement of Roger Johnson is included in the 
appendix.]

    Chairwoman Velazquez. Thank you, Mr. Johnson. Our next 
witness is Dr. Gary Clyde Hufbauer. He is Reginald Jones Senior 
Fellow with the Peterson Institute for International Economics.
    Dr. Hufbauer has written extensively on international 
trade, investment, and tax issues. The Peterson Institute is a 
research institution devoted to the study of international 
economic policy.
    Welcome.

              STATEMENT OF MR. GARY CLYDE HUFBAUER

    Mr. Hufbauer. Thank you very much, Chairwoman Velazquez and 
Ranking Member Graves.
    As you well know President Obama has committed his 
Administration to the goal of doubling U.S. exports in five 
years. Towards that end, among other things, he has promised an 
additional $2 billion of lending authority to the Export-Import 
Bank, and the Commerce Department has embarked on an outreach 
program. These are useful steps, but they are small steps. My 
remarks today concentrate on the very special problems facing 
small business exporters.
    As you know the fixed cost for a firm to engage seriously 
in exporting goods and services are formidable. And the very 
high fixed costs go a long way to explaining why an exceptional 
share of U.S. merchandise exports are shipped by large firms.
    Professor Brad Jensen of Georgetown University has 
assembled statistics on this aspect and in the year 2000, the 
top 1 percent of U.S. exporting firms--which is about 1,600 
firms, less than 1/10th of 1 percent of all U.S. firms--
accounted for 80 percent of U.S. merchandise exports. And 
there's absolutely no reason to think this picture has changed 
much in the last decade.
    Small business firms are conspicuously under represented in 
the U.S. export picture, largely because of the fixed cost 
obstacles I have mentioned. Bearing these obstacles in mind, 
let me offer three suggestions that are targeted at small 
business.
    My first suggestion is that the Congress should require the 
Administration to provide a quantitative annual report of past 
performance and future expectations of small business exports. 
Among the features of this report, it should specifically 
identify the expected contribution of each of the 
Administration's promotion measures.
    My second suggestion is to boost very substantially the 
availability of export finance to small business firms. This 
cannot be done by the Export-Import Bank, both because the 
Export-Import Bank financing is limited by an array of 
congressional mandates which are quite complicated, and because 
the lending process itself is very complex. A better approach 
is to create significant tax incentives for private banks to 
support the export financing needs of small business firms both 
on a pre-shipment basis and once goods and services are sold. 
Towards that end, I suggest--and I go into this in my 
testimony--that private banks be allowed to establish very 
large loan loss reserves for new export-related loans extended 
to small business firms.
    My third suggestion is to bolster the information and 
technical assistance programs offered to small business 
exporters by the Small Business Administration and the 
Department of Commerce. I concur with what was said about the 
Agricultural Department as well. In 2008, I was a guest of the 
Hong Kong Government and saw quite a few things there, but of 
particular note was an agency devoted to library resources for 
small business firms in Hong Kong. These are big exporters from 
that small city-state. The library was backed up by technical 
experts. The set up is very impressive and I do not know that 
the U.S. Government matches that level of expertise and an 
evaluation would be useful.
    The SBA and the Commerce Department are staffed by 
knowledgeable people, but I would suggest an external 
evaluation by a firm like McKinsey or Monitor, there are many 
others, as to improvements which might be done.
    And I would finally comment that small business export 
cannot be doubled on the back of a public relations campaign.
    Thank you.
    [The statement of Clyde Hufbauer is included in the 
appendix.]

    Chairwoman Velazquez. Thank you, Mr. Hufbauer.
    Our next witness is Mr. Phillip Bond. He's the President 
and CEO of TechAmerica. Mr. Bond has held his role since 2006 
and previously served as an Undersecretary in the Department of 
Commerce. TechAmerica represents nearly 1,500 technology member 
companies of all sizes. Thank you for being here.

                   STATEMENT OF PHILLIP BOND



    Mr. Bond. Thank you, Chairwoman Velazquez and Ranking 
Member Graves.
    It's a privilege to appear before you. As was noted by the 
Chair, TechAmerica represents some 1500 companies across the 
entire scope of the technology industry. That industry relies 
on trade for investment, for innovation, for growth, for job 
creation.
    About 17 percent of U.S. exports are high tech exports. And 
of those high tech exporters, 94 percent are small business, 
but 1 out of 4 total small business exporters in the country, 1 
out of 4 of them are high tech small businesses.
    A couple of examples, if I can real quickly, that 
illustrate this. Authentech is a small, American high tech 
company in Florida. In 2008--they do sophisticated biometric 
sensor chips. They grew by about 13 percent in 2008 which was 
15 jobs for that company. Their primary customers, Samsung, 
Toshiba, Lenovo, Fujitsu, 97 percent of their sales go 
overseas.
    Another example, out of Illinois, PCTel is a small high 
tech company, very active exporter. It designs products and 
solutions for the wireless industry. Forty-five percent of 
PCTel's 2008 sales came from outside the United States. These 
examples, I hope illustrate why it's important that the U.S. 
facilitate business opportunities for small business in 
overseas markets and eliminate impediments.
    So TechAmerica supports an active, open market policy 
through bilateral, regional, and multilateral trade agreements. 
We believe these assist exports in several fundamental ways 
which my written testimony goes into more detail on, but 
certainly eliminating and reducing tariffs, just as important, 
non-tariff barriers, standards and other things that are often 
used by other countries to close a market. Improving 
intellectual property protection. Those are the crown jewels of 
these small companies. Streamlining trade facilitation and 
facilitating in this day and age, open Internet access and 
cyber security, because software services is really the fastest 
growing portion for high tech employment.
    Secondly, we need to look at U.S. policies that could help 
small businesses grow their exports. This would include 
reforming export controls. Small companies, generally, are not 
equipped to deal with the complexities of our export control 
regimes. We are encouraged by the steps being taken by the 
Administration in this regard.
    As the Chair noted in her opening statement, trade 
promotion is critically important and tough for small 
businesses. They have their hands full finding reliable 
business partners, navigating local laws and cultures, mining 
up financing, understanding the market. And we recognize while 
there are many programs designed to help them, the awareness 
and understanding of those leaves something to be desired. More 
could be done, better funding provided to try to help promote 
trade from small companies.
    Small business innovation and new firm formulation ensure 
U.S. products and services are meeting at the cutting edge. 
That is our only hope as a country. We don't want to compete on 
wage. We want to compete in innovation and new products. And so 
we hope that the Chair and the Members of the Committee would 
take some of these thoughts and the details of the written 
submission into consideration.
    Thank you.
    [The statement of Phillip Bond is included in the 
appendix.]

    Chairwoman Velazquez. Thank you, Mr. Bond.
    And last, but not least, Mr. Drew Greenblatt. He is the 
President of Marlin Steel Wire Products located in Baltimore, 
Maryland. Mr. Greenblatt is testifying on behalf of the U.S. 
Chamber of Commerce which represents the interests of more than 
three million businesses.Welcome.

                STATEMENT OF MR. DREW GREENBLATT

    Mr. Greenblatt. Thank you, Chairman Velazquez, Ranking 
Member Graves and distinguished Members of the House Small 
Business Committee.
    My name is Drew Greenblatt, and I'm the President of Marlin 
Steel Wire. We're based in Baltimore, Maryland and I'm 
testifying today on behalf of the U.S. Chamber of Commerce. 
This is the world's large business federation and it represents 
more than three million businesses all across America, all 
sectors, all regions.
    Five years ago today, I testified to this Committee in 
front of Ms. Velazquez on the need for simple regulation and 
tax policies to make it easier for small companies like mine to 
prosper and grow jobs.
    Today, I want to speak to you about the need for trade 
agreements and this will help all companies grow jobs. Marlin 
Steel Wire is a leading manufacturer of custom wire baskets, 
things like this, and wire precision sheet metal fabrication 
assemblies like this. We make all of this in Baltimore City and 
we cater to clients from pharmaceutical, medical, industrial, 
aerospace, and automotive industries.
    We have a full-time crew of engineers and industry-leading 
technology, all kinds of fancy robots at our factory at Marlin. 
We produce world-class products and here in Baltimore City, 
Maryland. We import nothing from China. We import nothing from 
anybody else. We make it all right here in America. We've been 
exporting for six years. We export now to more than 20 
countries. Over the years, Marlin Wire has grown its business 
and we've created jobs because of these exports. Today, we 
continue to look for new markets and we want to bring our 
products to customers all over the world.
    I'm pleased to be before you today to discuss the 
opportunity of small businesses and we'd like to see more 
growth in exports so we can grow more and we can hire more 
people. The bottom line is trade brings growth and prosperity 
to our country.
    What's unique about our company is that we're able to make 
a highly-customized product very quickly in very short order. 
This has made Marlin Wire stand out. We've been able to receive 
orders from countries like Australia, New Zealand, Taiwan, 
Ireland, Singapore, Brazil, Hungary, Poland, Canada, Mexico. 
Since we're shipping to over 20 countries around the world, we 
want to only do more of that, so we can grow more. America 
should use this strategy to grow its wages and grow its number 
of people hired, so we have less unemployed people.
    Think about it. Ninety-five percent of the world's 
consumers are not Americans. They're foreigners. This is really 
important because trade sustains millions of American jobs. 
More than 50 million American workers today are employed by 
firms that engage in international trade. That's 40 percent of 
all private workers. One in four factory jobs are dependent on 
exports, just like my company. One in three acres on the 
average American farm is planted for foreign consumption. It's 
for hungry customers overseas.
    Now as global demand for our products increase, we're going 
to have to hire more people which is good for America. We 
employ 28 people. Seven of them are due to all this export 
business. And studies show that it's not just my company. 
Companies that export typically grow faster. They hire more 
people and they pay better pages. This is a good thing for our 
country.
    Now as the president of the firm, I truly understand the 
importance of international trade and its impact on Marlin and 
small business in general. It's simple. I want to ship to more 
and more countries quick. It will make my company more safe and 
more stable.
    The problem is, and this is a big problem, we have a 
complex array of foreign barriers that are stopping us from 
shipping to more countries. These barriers are alive and well. 
And they pose a major competitive disadvantage to my company 
and to my fellow companies that want to export. It hurts 
American industry. It hurts American workers. It hurts American 
agriculture.
    I believe the number one and the U.S. Chamber believes the 
foremost goal of U.S. trade policy right now should be to tear 
down these barriers so companies like mine can really crank it 
up and start exporting and start hiring again. Free trade 
agreements have to be enacted quickly.
    There's a number of pending free trade agreements going on 
right now and they would boost exports. It's an efficient way 
to grow exports if we can get these things past for Colombia, 
Panama, and South Korea. They're pro-growth. They're pro-trade. 
And they will create good, American jobs. It will help our 
allies and it shows that we're not ready to cede global 
leadership in trade. We shouldn't delay approval of these. This 
inaction is hurting American jobs.
    The U.S. Chamber did a wonderful report called ``Trade 
Action or Inaction: the Cost to American Workers and 
Companies'' and it found that the United States would suffer a 
loss of 380,000 jobs and $40 billion in lost sales if we don't 
get these trade agreements past and fast.
    The problem is our competitors are surging past us and 
they're signing deals, like EU and Canada have moved ahead with 
Colombia and Korea. I don't want to lose any of my seven 
employees that owe their jobs to exports and I know other 
countries don't.
    In conclusion, if America stands still, we're going to fall 
behind because our competitors in Canada and Europe are moving 
forward. That's why I urge Congress to support the pending free 
trade agreements and seek a more effective trade policy that 
opens foreign markets, boosts our exports, and creates jobs 
here fast.
    In the end, U.S. business is capable of competing and 
beating our foreign competitors. We can beat anybody in the 
world. We just need a level playing field. These trade 
agreements can provide just that opening and that leveling. 
Once again, I greatly appreciate the opportunity to testify 
today on behalf of the U.S. Chamber of Commerce.
    Thank you very much.
    [The statement of Drew Greenblatt is included in the 
appendix.]

    Chairwoman Velazquez. Thank you, Mr. Greenblatt. I would 
like to address my first question, if I may, to Dr. Hufbauer.
    You highlighted that high fixed costs are one of the 
reasons that more large companies export. How can these costs 
be reduced to help small firms export?
    Mr. Hufbauer. Thank you, Chairwoman. I only addressed two 
aspects, the export finance aspect and the technical 
assistance. But of course, the costs go much further than that 
and as Mr. Greenblatt and Mr. Bond have emphasized, these trade 
barriers abroad are a big part of the cost.
    Suppose you want to ship as a small exporter to Indonesia. 
It takes quite a bit of learning to figure out how the Customs 
Service operates. It's sad to say that corruption is part of 
the problem and this takes a bit of learning as well. And if 
you're selling something that requires after maintenance, 
that's a problem too.
    So how much of this can the U.S. Government deal with? 
Well, as Mr. Greenblatt emphasized, trade agreements are an 
important part for dealing with foreign trade barriers and also 
the trade facilitation aspect which has a lot of dimensions 
that we don't have time to go into those. But trade agreements 
can do something.
    At the end of the day, I regret to say small business will 
be handicapped because the fixed costs are just high. But the 
handicaps can be lowered and the one I focused on or the two I 
focused on were technical assistance, information, a lot of 
hand holding, you could call it that, plus the finance which is 
terrifically difficult. I don't know if Mr. Bond's firm is 
having problems, but I've heard in this recession that small 
business firms are really hurting on the financing front across 
the board, but on export finance, the hurt is terrific. So 
those are just come measures where the government might do a 
little bit.
    Chairwoman Velazquez. Thank you. Mr. Bond, exporters have 
expanded access to information on new markets and can use that 
information to grow faster. How do companies in exporting 
industries benefit from this acquired knowledge?
    Mr. Bond. I think this relates to your last question in 
many ways. It's a scale advantage of large companies. They may 
be able to afford staff to look into all those things, know 
those things; small companies, much, much less so.
    One of our members, in fact, said to take advantage of many 
of the government programs I would have to retain a full-time 
person in Washington. I can't afford to do that. So the answer 
is making this information available, making it transparent, 
maybe online or through export assistance centers and other--I 
think Dr. Hufbauer called it hand holding, ways to take the 
information to the small companies. I think those are the kinds 
of things that we're looking for, and welcome some of the 
things that the Commerce Department and Secretary Lock have 
talked about in this regard, trying to increase some awareness 
there.
    Chairwoman Velazquez. Thank you. Mr. Greenblatt, small 
exporters increase employment faster and pay higher wages than 
their domestic-oriented counterparts. Why is this so and what 
can we do to encourage domestic-oriented firms to look abroad 
for opportunities?
    Mr. Greenblatt. I think that companies that are shipping, 
exporting things abroad are a little more sophisticated. 
They're willing to deal with a country that doesn't speak 
English, and they're a little more aggressive and they're 
probably more innovative, like Mr. Bond was saying, so that 
they can differentiate themselves from a domestic competitor.
    I think the best thing, the quickest way to help small 
business right now is to rip down trade barriers, because what 
will happen is it will make it a level playing field. We can go 
in there and we can fight in Colombia. We can go compete in 
Panama. And we can sell to South Korea. Right now, I sell to 
Japanese automotive clients and we do very well in that market, 
Toyota, Honda, et cetera. But we want to sell more to Hyundai 
and we want to sell more to them.
    Chairwoman Velazquez. Can you talk to me, I know that you 
have the knowledge know in terms of going into foreign 
countries and learning the processes that it will take in order 
to navigate their system.
    What would you suggest we should do to help facilitate 
small businesses navigating the processes in those foreign 
countries?
    Mr. Greenblatt. There's a number of programs out there 
right now where through the U.S. Commerce Department that are 
available to help go to trade shows and things of this nature 
that I think are beneficial and positive and we should continue 
doing and I don't think they hurt.
    But the big thing is ripping down taxes. Right now we have 
significant disadvantages. There's barriers where we pay duties 
when we ship to their countries, and they don't pay duties when 
they ship to our country. This is true in Panama and Colombia, 
et cetera. That's one quick way you help us.
    Chairwoman Velazquez. Okay. Mr. Johnson, according to USDA, 
the U.S. will have a $22.5 billion trade surplus for 
agricultural products and that sounds like good news for 
farmers and ranchers and to help them remain profitable in hard 
economic times.
    How can we maintain this surplus and how important are 
small farmers and ranchers to that equation?
    Mr. Johnson. I think maintaining it, if you focus on the 
two programs that I talked about at USDA, one is run through 
the Foreign Ag. Service, the other one through the Agricultural 
Marketing Service. There's a lot of technical assistance that's 
provided there.
    I led trade teams to lots of different countries as the Ag. 
Commissioner in North Dakota and I will say that far and away, 
the biggest benefit that we got from that was having Foreign 
Ag. Service people located in those countries who knew the 
customs, knew the people, who knew the marketplace and could 
help match up those characteristics with the companies that we 
brought along.
    And so we did a lot of that work in advance of going over 
to try and figure out how do you put the right company into the 
right kind of marketplace and then putting those meetings 
together. If you don't have that, you're just at sea. And so 
those kinds of things, and I think that's a lot of what Dr. 
Hufbauer was talking about with technical assistance. That's 
really important to small companies.
    So I would--unfortunately, a lot of them don't know about 
that assistance. A lot of them, they're just busy doing what 
they're doing and they're struggling. So if we can get this 
information in front of them. If we can do more of that hand 
holding along the way, more of that marketplace discovery and 
information and put it in front of them, I think that would be 
very helpful.
    Chairwoman Velazquez. Thank you. Dr. Hufbauer, while the 
U.S. trade balance was declining over the past year, the last 
few months reversed course, increasing by 13 percent. As the 
global economy recovers, do you believe that we are now on a 
path toward higher trade deficits?
    Mr. Hufbauer. Yes. A lot of things have to be done to 
reverse that course, but the Administration has to back up its 
declared goal of doubling exports which I endorse fully, with 
much stronger policies than have been announced so far.
    Chairwoman Velazquez. Okay, thank you. Mr. Graves?
    Mr. Graves. Thank you, Madam Chair. And this is a question 
for each of you.
    Do you worry about, when we have free trade agreements 
sitting out there like the Columbian and the Panamanian, South 
Korea and they're sitting there and nothing is being done, 
losing that market share. I mean for instance and I use 
agriculture in the example. As we sit doing nothing on that 
Colombian free trade agreement, we've lost about 40 percent of 
that market share to Argentine. I mean they're coming in and 
they're just scooping it up just as fast as they can get their 
hands on it because they see an opportunity there.
    Now do we lose--what are the chances we're going to lose 
that market forever? When you have countries that step in and 
fill that void and do it immediately, that's one of the things 
I worry about and that's just an agriculture example. There are 
examples out there probably for everything. And I would just 
like each of you to comment.
    Mr. Greenblatt?
    Mr. Greenblatt. That's a great point. That's a big concern. 
I mean right now Panama is embarking on a huge project, the 
biggest project since the Three River Gorge project out in--
Three Gorges Dam out in China, to redo the Panama Canal, rework 
the Panama Canal. And there's a lot of wire baskets you need in 
Panama over the next couple of years to make that.
    So we want this trade agreement done right away, so we can 
sell wire baskets, sheet metal components to Panama as they go 
on this massive infrastructure binge. We want to be front and 
center when that all happens. And if America doesn't sign off 
on these trade agreements, we're going to be late to the party 
and we're going to miss that opportunity. And what that means 
is less people in America are going to have jobs. It's silly 
for us to give that up.
    Mr. Graves. Mr. Bond?
    Mr. Bond. Sure. I think that our industry is foursquare, 
one hundred percent behind open markets and free trade. We 
depend upon it. As I said in my testimony, it drives our 
efficiency. It drives our productivity. It drives innovation. 
So yes, we're concerned about markets. We're concerned about 
supply chains because we're also relying on these countries in 
many cases for supply chains and that ultimately adds up to our 
competitiveness.
    I'm also happy to be here today because in the meantime we 
should also move ahead on trade promotion.
    Mr. Graves. Dr. Hufbauer?
    Mr. Hufbauer. Well, the Obama Administration has many 
priorities, but trade policy is not amongst them. And the U.S. 
has basically retired from the trade agenda in the last couple 
of years, I realize there are other priorities.
    Slow progress on trade agreements is like termites in the 
basement. I just saw some statistics this morning on--and I 
didn't bring them today. I can send them along, but U.S. 
agricultural sales in Colombia were going down and in a number 
of agricultural products they were way down. Now whether that's 
because of the trade agreement not being ratified, I can't say, 
but the picture is not good.
    The Chamber of Commerce has a report on job losses from not 
ratifying pending trade agreements has been cited. The big 
picture ahead is Asia. Asia is, of course, a very rapid growth 
area of the world and Asian countries are negotiating among 
themselves, and reducing barriers. We're not part of that 
picture now.
    The goal of doubling exports, amongst other things, means 
that the United States has to get back into the game.
    Mr. Graves. Mr. Johnson?
    Mr. Johnson. My expertise is more in the area of 
agriculture and food, so maybe if I could address it from that 
perspective. I would say that there's another element of this 
that we should pay attention to and that is making sure that 
trade agreements that we have are enforced.
    There are a lot of folks in our industry who are really 
concerned, for example, about even the Chinese market right 
now, given what you have with the exchange rates being so far 
out of whack. They basically have a very strong export centered 
policy which makes imports much more expensive and we need to 
figure out a way to bring some sort of balance to even those 
countries where we do have agreements, whether it's through the 
WTO or through its series of bilaterals or multilaterals, et 
cetera.
    The other thing I would say is that as I indicated in my 
testimony, I think it's very important for us to have some sort 
of coherence among all of our foreign policies. We have very 
well meaning, very important foreign policy goals of making 
sure that hungry people are fed, of making sure that very poor 
countries develop economically, but at the same time, most of 
these countries begin to develop economically by developing 
their agriculture and so we sometimes are working at cross 
purposes where we want the lowest possible price in terms of in 
their marketplace for the very food products that they're 
raising and we end up hurting their ability to grow 
economically.
    So I think it's really important that we get a broader 
perspective and try to get all of our different foreign policy 
goals sort of in a line, if you will.
    Mr. Graves. Do you worry about losing those markets?
    Mr. Johnson. Sure. We worry about losing markets all over 
the world, for all of the reasons that I mentioned.
    Mr. Graves. Chairwoman.
    Chairwoman Velazquez. Mr. Altmire.
    Mr. Altmire. Mr. Bond, the technology industry cluster in 
Southwestern Pennsylvania where I'm from is a key economic 
driver for the region and relies on exports in key fields such 
as information and environmental technologies as well as 
advanced manufacturing. I was wondering if you could illustrate 
how trade promotion programs like clusters can help clusters 
like this one gain better access to international markets.
    Mr. Bond. Sure, Mr. Altmire. Thank you for the question and 
I would just observe real quickly a review shows that in 
Pennsylvania there are about 2,750 tech firms who are exporting 
today; 2,250 of those are smaller firms.
    So it's a very vibrant part of the economy there and I 
think that the notion of innovation clusters, both for the 
development of the companies, but also development of awareness 
of that cluster globally has been a strategy and tactic that 
has worked so buyers, policymakers in other countries are aware 
of emerging innovation clusters in the U.S., most famous of 
which of course is Silicon Valley, but they track and are very 
aware of these other clusters.
    So having visited other countries in official and 
nonofficial capacities I am abundantly aware that they track 
this and are aware of it, so I think this is probably a very 
smart tactic for the region.
    Mr. Altmire. Thank you. Dr. Hufbauer, small firms compete 
in a global market where some foreign companies exports are 
subsidized as you and the Chairwoman were discussing earlier.
    What resources and strategies have you seen other countries 
utilize to support their export industries that you might 
recommend that we explore in this Congress?
    Mr. Hufbauer. Thank you. Well, perhaps the biggest steps 
have been taken in the European Union which, of course, has 
removed barriers right across the 27 countries, I sound like a 
broken record, but the fixed costs of exporting are very high 
and that has been observed in the European Union as well. But 
the reduction of barriers which means that you can send a truck 
across Europe, it doesn't even stop at the border. This is 
hugely important to small firms.
    We have the same situation, to a very large extent between 
the U.S., Canada, and Mexico, not entirely because we have much 
heavier security controls at our borders than within Europe. 
But in any event, we have made some progress.
    Now beyond that, I go to those examples that I mentioned in 
Asia and I can also mention examples in Chile. Let me just take 
Chile so I don't sound just Asia, Asia, Asia. When the free 
trade agreement with the United States was ratified with Chile, 
Chile set up a whole network in this country of offices to help 
their exporting firms get into the markets.
    And if you go to Whole Foods or any other grocery store, 
you'll find a lot of Chilean goods. In a wine market, Chilean 
wines are now a big thing which they were not 15 years ago. And 
across a lot of manufactured products which probably aren't so 
noticed, like fabricated brass, coming out of the copper 
industry, the same thing happens.
    So there is a whole network of offices which is very much 
more extensive for a country of Chile's size than the U.S. 
network is abroad whether you talk Asia, Europe, or whatever, 
the network helps your firm export.
    Now Taiwan does the same. Taiwan is terrific for small 
business, high tech firms, helping them along. So it comes back 
to that assistance point which we've already discussed. Thank 
you.
    Mr. Altmire. Thank you. Very quickly, Mr. Greenblatt. You 
talked about Panama and the project they have with expanding 
the canal. What are some of the other industries, if you could 
go into a little more detail, that would benefit American 
industries that specific to Panama could look forward to 
increased access with that trade agreement?
    Mr. Greenblatt. Caterpillar. They make bulldozers. They 
need a lot of bulldozers when you expand the Panama Canal. All 
kinds of trucks and vehicles need to be made. Machinery to help 
make the canal. I mean there's a company in Iowa called 
Vermeer. They make construction equipment.
    So I think there are many, many companies out there that 
could help make--we made it the first time. We might as well 
help make it the second time.
    Mr. Altmire. And if we don't do it this time, we're not in 
that market. Which of our competitors are going to--
    Mr. Greenblatt. The EU is going to eat our lunch. And why 
give it to them? We should have it.
    Mr. Altmire. Thank you.
    Chairwoman Velazquez. Mr. Thompson.
    Mr. Thompson. Thank you, Madam Chairwoman, Ranking Member, 
thanks to the panel for being here and really an important 
topic in terms of trade. A week or so ago I was with the 
Pennsylvania Secretary of Agriculture who laid out, I thought, 
in rather unique terms the opportunities within trade when he 
said ``America is a country of 303 million stomachs and the 
world has 7 billion.'' That made sense to me.
    My question, first of all, is traditionally we have 
miscellaneous tariff bills, MTBs as it's referred to around the 
Hill, are introduced in each session of Congress and these 
bills usually request certain imports into the United States to 
be given duty free or reduced duty status. MTBs tend to be 
really noncontroversial. Everybody signs off on them.
    In the 110th Congress, there was no MTB and in the 111th, 
we've yet to see for consideration. I recently was told by 
representatives of the National Association of Manufacturers 
that the MTB is critical on the wish list for things to get 
done during the remainder of the 111th Congress.
    My question is where would you place this on your 
membership's collective radar and I'll open it to anyone that 
may have an opinion.
    Mr. Greenblatt?
    Mr. Greenblatt. As a manufacturer, this is a very big topic 
for us and we need to get these things passed. It helps 
American jobs. It helps America grow and thrive.
    Mr. Thompson. Thank you.
    Mr. Bond. On behalf of the tech community, we have enjoyed 
past agreements like the Information Technology Agreement and 
others which are designed to do exactly this. They can be 
beneficial for U.S. technology because we still are the envy of 
the world in that regard, but also because our supply chains 
extend to these different countries and different customs or 
tariff reductions, as I mentioned in my testimony, can then be 
expressed in a more competitive price buyer small companies 
exporting back.
    Mr. Hufbauer. It seems me, in following this, that the MTBs 
unfortunately got caught under the general cloud of earmarks, 
which I think is very unfortunate. I think the MTBs--I don't 
know all the details--basically reduce the cost of inputs, 
often to a firm which is exporting. I really don't think they 
should be bagged together with the other earmark issues.
    Mr. Thompson. Thank you. Mr. Johnson?
    Mr. Johnson. I'm not aware that it's an issue in food 
products. It might be.
    Mr. Thompson. Thank you. Mr. Bond, following up on the 
technology, how does engaging the global marketplace spur 
cutting edge innovative ideas?
    Mr. Bond. Sure. That's where companies can have success 
initially as they start up a new product. I'm quoting a former 
Commerce Secretary who after hearing about all these small 
companies were starting in garages, said ``Well, America needs 
more garages.''
    We need more small innovative companies. They often find 
success in a particular niche. They may make a product like Mr. 
Greenblatt's overseas because they're embedded in the 
production process or something. There are numerous ways. But 
it's the innovation, the lion's share of innovation comes from 
the small companies and they're finding unique opportunities 
all around the world. So I think it does have to be central to 
U.S. policy, how are we going to help small businesses. They 
drive innovation which then reverberates throughout the entire 
economy.
    Mr. Thompson. Just kind of a follow up, can you elaborate 
on the connection between increased exports and job creation?
    Mr. Bond. Sure. We continue to see growth in software 
services and other very high value add portions of our economy. 
Those are as my testimony tried to point out, 
disproportionately relying on overseas sales and those are--
those small companies are where the cutting edge innovation is 
coming from. So I think the two are inextricably linked and 
that's why I'm so happy to be appear today.
    Mr. Thompson. Thank you. Mr. Johnson, most of my farmers 
are fairly small farmers. Our dairy herds are about 86 head in 
most of Pennsylvania and certainly in my congressional 
district.
    How significant is the export trade in your opinion to 
smaller farmers?
    Mr. Johnson. Well, all of what farmers produce in most 
cases is aggregated and then those commodities are sold. And as 
has already been said, depending on the commodity, it may be 
well over half. It may be a third of a commodity that finds a 
home in an export market.
    You mentioned dairy. It's interesting. In my testimony I 
talked about some of the issues we've faced with being frozen 
out of markets relative to poultry, to pork, to BSE issue with 
beef is another really good example. We're still out of many 
countries without any real scientific basis for it.
    Just this week, I believe China has put in place barriers 
to dairy products. And if you think of the irony there, it was 
not that long ago when we were all reading on the front page of 
the papers about melamine in infant formula. And it wasn't in 
this country that folks were doing that kind of thing. So 
that's an example of the kinds of things that I've tried to 
talk about, making sure that we, even after we sign these 
agreements, we've got to go back and make sure that we hold 
their feet to the fire.
    Mr. Thompson. Thank you. Thank you, Madam Chairwoman.
    Chairwoman Velazquez. Mr. Bright.
    Mr. Bright. Thank you, Madam Chair. Let me thank each one 
of you for being here and for your very valuable, informative 
testimony, quite frankly. It's very heartening to see you and 
hear you say the things you've said today.
    Mr. Bond, I'm not sure if it was your testimony or Mr. 
Greenblatt, but did I hear, understand you to say that a small 
business that has exports grow at a three times rate of small 
business that does not exports? Is that correct? Was that one 
of you?
    The present economic status of our country right now, would 
that deter some of those small businesses from being attracted 
to the export market, in your opinion?
    Mr. Greenblatt. It's the opposite. I mean you want to sell, 
sell, sell right now. You want--you've got factories that are 
not running at full capacity. You have employees that are 
working 32 hours a week and you want to get them back to 40 
hours a week and heck, you want to get them on to overtime and 
then hire more.
    Mr. Bright. I know that would be the goal and that's what 
we would hope, but do you see whether or not it would have a 
deterring effect on small business with today's economic 
climate out there?
    Mr. Greenblatt. No, because there's so many more of them 
over there. There's--as you said, there are 7 billion stomachs 
over there we should be selling to right now and we shouldn't 
focus on the 300 million here. We should try to sell, sell, 
sell overseas like crazy.
    Mr. Bright. I understand. Mr. Bond, you want to add to 
that?
    Mr. Bond. Yes, real quickly. I think what it might do, the 
current economic circumstance might exacerbate the problem of 
small companies taking advantage of some of the government 
programs and assistance that are out there because they've had 
to tighten their belt a little bit more to get through the 
tough times, and I noted one of my member's company said look, 
I'd have to have a full-time person in Washington to understand 
all that stuff. I can't afford that. Even perhaps a little less 
so, when times are tight, but certainly they are more compelled 
than ever to look for other markets.
    Mr. Bright. Sure, you need to out of necessity, but having 
the resources to do so is another factor.
    Madam Chairman, thank you very much. That's all the 
questions. Once again, let me thank you, gentlemen, for being 
here. It's very valuable information for us to hear.
    Chairwoman Velazquez. Mr. Johnson, I have one more 
question. The National Farmers Union has stated that market 
access does not equal market share. What is the single most 
important element needed to turn to access into revenue?
    Mr. Johnson. Perhaps it's enforcement. Perhaps it's--you 
know all these issues that I've talked about trying to figure 
out if there isn't a better system for holding other countries 
accountable. As I've been sitting here listening to the 
testimony, knowing that we have this enormous trade deficit in 
the country, but also knowing that agriculture historically has 
had a substantial trade surplus, it probably helps to explain 
why the kinds of issues we face in agriculture are rather than 
different than the kinds of issues that you've been hearing 
from the other three panelists here.
    Perhaps it's because other countries are looking and saying 
well, you guys already have a surplus. We're going to try and 
push that back. I think it's much more complicated than that 
because food is such a basic, fundamental product that everyone 
absolutely needs. It's not one of those discretionary kinds of 
things.
    And I think countries all look at food security kind of 
like we do. We want to make sure that we've got it. We want to 
do what we can to make sure that when everything else is bad, 
at least we can feed our people. And so I think you have just a 
whole bunch of different dynamics at play here and as a 
consequence I would say that we have to be very attentive to 
holding everyone accountable in this system.
    Chairwoman Velazquez. Mr. Greenblatt?
    Mr. Greenblatt. Where we have foreign trade agreements, we 
have trade surpluses, so when we cut those deals, we get--we 
ship more to them than they do to us. So these deals really 
work out in our benefit.
    Chairwoman Velazquez. Okay, well, Mr. Johnson, it looks 
like he has some concerns about enforcement being part of it. 
So it's not only to have the trade agreements, it's just to 
have in place an effective trade strategy that involves trade 
agreements, enforcement, technical assistance, to help those 
small firms, because the reality is 97 percent of all exporters 
are small businesses, yet the revenues, the share is much, 
much, much lower than it should be.
    Mr. Bond, do you have a--yes, go ahead.
    Mr. Bond. I was only going to respond in terms of your 
earlier question. I think that if you had full-blown access 
which I'm taking to include enforcement, then I think the 
single most important element is going to be the value you're 
delivering and that's where we could be very optimistic when it 
comes to food, when it comes certainly to technology, we're the 
envy of the world in those regards. So getting that access, 
getting streamlined, getting compliance, getting those things 
done which is the policy that we're talking about, then I think 
Americans can compete with just about anybody.
    Chairwoman Velazquez. Let me ask you, Mr. Bond, the fastest 
growing large export market for U.S. tech exports between 2007 
and 2008 was in developing countries, particularly in South and 
Central America. What makes U.S. tech exports so uniquely 
desirable in developing countries and the same is true today 
compared to 2007, 2008?
    Mr. Bond. I don't have the latest data in front of me but I 
don't doubt that that is true. Just listen to Microsoft's Chief 
Strategy Officer last night talking about this phenomena a 
little bit, that because of the applications and technologies 
that have been developed here applying it then to developing 
countries and low-cost markets in new ways is a big growth 
opportunity because American technology is generally regarded 
as the best the world has to offer. It's in demand.
    There are companies there setting up who want to build off 
those products, leverage off those products to give them a 
local flavor or taste and add some value. So it makes sense 
that we grow there and we have other more developed countries 
where they have very aggressive trade policies that are 
designed to perhaps slow the competition down a little bit.
    Chairwoman Velazquez. So thank you again for being here 
today and providing such insightful information and for the 
discussion. I ask unanimous consent that Members will have five 
days to submit a statement and supporting materials for the 
record. Without objection, so ordered. This hearing is now 
adjourned.
    [Whereupon, at 2:05 p.m., the hearing was concluded.]

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