[Senate Hearing 112-494]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 112-494
 
     THE ROLE OF EXPORTS IN SMALL BUSINESS GROWTH AND JOB CREATION

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

                                HEARING

                               BEFORE THE

            COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP
                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                            AUGUST 11, 2011

                               __________

    Printed for the Committee on Small Business and Entrepreneurship


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            COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP

                      ONE HUNDRED TWELFTH CONGRESS

                              ----------                              
                   MARY L. LANDRIEU, Louisiana, Chair
                OLYMPIA J. SNOWE, Maine, Ranking Member
CARL LEVIN, Michigan                 DAVID VITTER, Louisiana
TOM HARKIN, Iowa                     JAMES E. RISCH, Idaho
JOHN F. KERRY, Massachusetts         MARCO RUBIO, Florida
JOSEPH I. LIEBERMAN, Connecticut     RAND PAUL, Kentucky
MARIA CANTWELL, Washington           KELLY AYOTTE, New Hampshire
MARK L. PRYOR, Arkansas              MICHAEL B. ENZI, Wyoming
BENJAMIN L. CARDIN, Maryland         SCOTT P. BROWN, Massachusetts
JEANNE SHAHEEN, New Hampshire        JERRY MORAN, Kansas
KAY R. HAGAN, North Carolina
  Donald R. Cravins, Jr., Democratic Staff Director and Chief Counsel
              Wallace K. Hsueh, Republican Staff Director


                            C O N T E N T S

                              ----------                              

                           Opening Statements

                                                                   Page

Shaheen, Hon, Jeanne, a United States Senator from New Hampshire.     1
Ayotte, Hon. Kelly, a United States Senator from New Hampshire...     7

                               Witnesses

Johns, Hon. Marie, Deputy Administrator, Office of the 
  Administrator, U.S. Small Business Administration..............    15
Felton, Wanda, First Vice President and Vice Chair, Board of 
  Directors, Export-Import Bank of the United States.............    21
Cox, James M., Regional Director, Northeast, Commercial Service, 
  United States Commerce Department..............................    32
Friedman, Richard L., President and Chief Executive Officer, 
  Carpenter and Company, Inc.....................................    38
Wivell, Dawn, Former Director, Office of International Commerce/
  International Trade Resource Center, State of New Hampshire....    56
Moulton, Thomas, President and Chief Executive Officer, Sleepnet 
  Corporation....................................................    64
Preston, Grace, International Sales Manager, Secure Care 
  Products, Inc..................................................    69

          Alphabetical Listing and Appendix Material Submitted

Ayotte, Hon. Kelly
    Testimony....................................................     7
    Prepared statement...........................................    10
Cox, James M.
    Testimony....................................................    32
    Prepared statement...........................................    34
Felton, Wanda
    Testimony....................................................    21
    Prepared statement...........................................    24
Friedman, Richard L.
    Testimony....................................................    38
    Prepared statement...........................................    42
Johns, Marie
    Testimony....................................................    15
    Prepared statement...........................................    17
Moulton, Thomas
    Testimony....................................................    64
    Prepared statement...........................................    66
President's Export Council
    Letter regarding Transportation Infrastructure...............    84
    Letter regarding Trade Facilitation Single Window............    87
    Letter regarding Ex-Im Financing.............................    90
    Letter regarding Business VISAs..............................    92
    Letter regarding 21st Century Trade..........................    94
    Letter regarding SME Trade Capacity Export Assistance........    99
    Letter regarding Benchmarking................................   107
    Letter regarding IPR.........................................   109
    Letter regarding Services Data...............................   113
    Letter regarding Russia......................................   115
    Letter regarding Export Control..............................   119
    Letter regarding FTAs........................................   121
    Letter regarding Travel and Tourism..........................   124
    Letter regarding Veterans Retraining.........................   126
Preston, Grace
    Testimony....................................................    69
    Prepared statement...........................................    71
Shaheen, Hon, Jeanne
    Testimony....................................................     1
     Prepared statement..........................................     4
Wivell, Dawn
    Testimony....................................................    56
    Prepared statement...........................................    60


     THE ROLE OF EXPORTS IN SMALL BUSINESS GROWTH AND JOB CREATION

                              ----------                              


                       THURSDAY, AUGUST 11, 2011

                      United States Senate,
                        Committee on Small Business
                                      and Entrepreneurship,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 2:05 p.m., in the 
Third Floor Auditorium, University of New Hampshire-Manchester, 
400 Commercial Street, Manchester, New Hampshire, Hon. Jeanne 
Shaheen, presiding.
    Present: Senators Shaheen and Ayotte.

 OPENING STATEMENT OF THE HON. JEANNE SHAHEEN, A UNITED STATES 
                   SENATOR FROM NEW HAMPSHIRE

    Senator Shaheen. Good afternoon, everyone. Senator Ayotte 
and I are delighted to be here with all of you. Thank you for 
coming out on such a beautiful afternoon to join with us in 
talking about the importance of exporting to small business.
    I thought I would begin by just telling you a little bit 
about how today's hearing will work, and then I will do an 
opening statement and Senator Ayotte will do an opening 
statement. We will then turn it over to our panelists. We have 
two panels today. As you can see, the first panel is seated 
already, so we will spend about an hour with them and then 
invite the second panel up to join us and we will then be able 
to question each of our witnesses after they have finished with 
their testimony and hopefully it will be an enlightening 
discussion for all of us.
    Let me also thank all of the witnesses who are here today, 
particularly those of you who have come from far away to join 
us on the panels. Of course, for those of you coming from 
Washington, you really ought to be paying us for getting you 
out of Washington and up to New Hampshire on such a beautiful 
day.
    [Laughter.]
    We are delighted to have you all here, and I will introduce 
the first panel and then Senator Ayotte and I will introduce 
the second panel before they appear.
    Let me also point out that this is an official hearing of 
the Small Business and Entrepreneurship Committee and we have 
members of the committee who are here with us who, again, work 
for the committee. We have Katie Elder, who is with Senator 
Landrieu, the Chair of the Small Business and Entrepreneurship 
Committee, and Matt Walker, who is with Ranking Member Olympia 
Snowe from Maine, and Monisha Smith, who is the Committee 
Hearing Clerk. So we are delighted to have each of you here 
today, and they will take very good notes and this will be part 
of the record of the Small Business Committee.
    While I am doing my thanks, I should thank the University 
of New Hampshire for hosting us this afternoon. We are 
delighted to be here in this very beautiful facility.
    So with that, let me begin my opening statement and then I 
will turn it over to Senator Ayotte.
    I am really pleased to be chairing this hearing on small 
business exporting with my colleague, Senator Ayotte. We both 
sit on the Senate Small Business Committee. I think it is not 
surprising that both of New Hampshire's Senators would be 
interested in sitting on the Small Business Committee because 
small businesses are so important to the economy of this state. 
Over 95 percent of our employers in the Granite State are small 
businesses and it is essential that we in the delegation focus 
on ways that we can support your companies to provide good jobs 
for the state's residents.
    Of course, we all know that the last few years have been 
particularly challenging for small businesses in New Hampshire 
and across the country, and while many have weathered the 
economic storm of the last few years, too many businesses 
continue to feel the effects of the recession. Today we are 
here to focus on one area that has really been a bright spot 
for the national economy and especially for New Hampshire's 
economy, and that is the opportunity to export.
    Last year, exports from American businesses increased by 21 
percent, contributing nearly half of the increase in our 
country's gross domestic product. In New Hampshire, exporting 
has become an increasingly important and promising part of our 
state's economy. Last year, New Hampshire companies set a state 
record for international sales and ranked first in the country 
in export growth. New Hampshire firms increased their exports 
by $1 billion last year alone. In a difficult economic climate, 
this new revenue has provided an important boost to many of our 
businesses. With 95 percent of the world's customers living 
overseas, there is tremendous room for growth in exporting. 
That is especially true for small businesses, because while 
over 40 percent of large businesses export, only one percent of 
small companies are engaged in exporting. So while New 
Hampshire is doing well, we have the potential to do even 
better.
    Accessing foreign markets remains a challenge for small 
businesses, but it is also a real opportunity. As I go around 
the state, many small businesses, small business people that I 
talk to tell me that trying to get into international markets 
can really be daunting, because unlike big companies, small 
firms simply do not have the resources that they need to 
navigate those new markets that often have complex rules and 
they are dealing with foreign cultures. Small businesses often 
also do not have the time or resources to identify the right 
global markets for their products, and many small businesses 
interested in exporting have a hard time getting the financing 
they need to make a deal happen.
    The services available at the state and federal level can 
play an important role in helping our small companies overcome 
these challenges. That is what we are here today to talk about. 
Federal and state programs that provide export assistance have 
helped thousands of small businesses sell their products 
overseas. I am looking forward to hearing more today about the 
value of these programs and looking at ways that we can improve 
the services that federal agencies provide to our small 
businesses.
    Of course, we also need to consider additional ways to 
increase small business exporting. One common sense approach is 
to make sure that the Federal Government is not unnecessarily 
putting regulations in the way. For example, our export control 
regime remains a complex set of regulations that were designed 
decades ago for a Cold War environment. As a member of the 
Armed Services and Foreign Relations Committees, I have pushed 
to enact thoughtful reforms to our export control regime which 
better allow our businesses to compete in a global trade 
environment, and I know that the panelists we are going to hear 
from today are also working toward that end.
    At today's hearing, we will take a look at these and other 
barriers to exporting that are faced by small businesses and 
examine new opportunities for helping them reach foreign 
markets. To help us do that today, as I said, we will hear from 
two panels. The first panel will discuss the resources that are 
available through the Federal Government and the ways that 
those programs might be improved and be available to the small 
businesses of New Hampshire. The second panel will provide a 
New Hampshire perspective. We will hear about the importance of 
exporting to the New Hampshire economy and about the 
experiences that our businesses have had as they have tried to 
work in international markets.
    As policy makers, our job is to focus on the areas of the 
economy that will help create jobs now and enhance our long-
term competitiveness. Helping small businesses export is a 
bipartisan, common sense way to help create jobs now and put 
the United States in a strong position in the global economy.
    I look forward to a lively discussion and to hearing from 
our panelists. I will ask Senator Ayotte if she would like to 
make an opening statement and then we will introduce the first 
panel. Senator Ayotte.
    [The prepared statement of Senator Shaheen follows:]

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  OPENING STATEMENT OF THE HON. KELLY AYOTTE, A UNITED STATES 
                   SENATOR FROM NEW HAMPSHIRE

    Senator Ayotte. Thank you so much, Senator Shaheen, for 
chairing this very important hearing today.
    I want to thank, of course, UNH for hosting us and I also 
want to thank each of our witnesses who have come here to 
testify today. We deeply appreciate your being here and taking 
the time, and all of you who have come. I see in this audience 
so many successful business people in our state, and we know 
how hard you work and your feedback means a tremendous amount 
to me and Senator Shaheen. We thank you all for being here 
today.
    With the Labor Department reporting last week that 9.1 
percent of Americans were unemployed in July, Washington must 
fully commit to helping create an environment that is conducive 
to job creation. It is imperative that we put the right 
policies in place to enable businesses to hire and grow, and 
that includes eliminating onerous regulations and mandates and 
opening markets around the world for American businesses, 
especially our small businesses which comprise over 96 percent 
of all New Hampshire businesses.
    The economic struggles our country is facing have put the 
issues of exporting and free trade on the front burner, and 
that is why this hearing hopefully will be enlightening for 
everyone here today. Our two panels, comprised of government 
officials and small business exporters, will testify about how 
trade policies and programs are impacting firms that are trying 
to expand into foreign markets, home to 95 percent of the 
world's customers.
    Our first panel includes representatives from three of 
roughly 20 Federal agencies that are involved directly or 
indirectly in promoting United States exports. I look forward 
to hearing about what the government is doing to increase small 
business exports, which in 2008 accounted for 31 percent of all 
U.S. export sales. I am especially eager to examine these 
programs' effectiveness and how the Administration is 
addressing barriers, like tariffs, regulatory challenges and 
intellectual property violations by other countries that make 
it difficult for small businesses to compete globally.
    While I am pleased that we have the representatives here 
from the Federal Government, I am also very eager to hear from 
the second panel, which includes New Hampshire businesses with 
real world experience in navigating the complexities of 
exporting. I look forward to garnering their input on Federal 
trade policies and programs and how we can be more effective in 
not only helping them to succeed, but in getting more small 
businesses to expand their operations into international 
markets. With less than one percent of all U.S. small 
businesses currently exporting, there is a tremendous 
opportunity for us to increase our efforts in this area.
    Last week when the Small Business Deputy Administrator 
Marie Johns, who we are so fortunate to have here with us 
today, stopped by my office in Washington, D.C., we discussed 
the government's role in helping small businesses increase 
exports. For instance, the Federal Government provides 
technical assistance, training, data, and information, 
financing in the way of export loans, matchmaking with sales 
opportunities abroad, and is responsible for enforcing our 
trade laws. I am interested to hear from both our panels, 
especially the small business exporters who have used these 
services, on the effectiveness of what we are doing right now 
in the Federal Government's assistance and how we can improve 
our efforts to increase our exports and job creation here in 
New Hampshire and across the country.
    I also want to say a few words about what Congress needs to 
do to enable our businesses to grow exports. When we return to 
Washington, D.C. after Labor Day, I am confident that we will 
be debating the Colombia, Panama, and South Korean Free Trade 
Agreements. By most accounts, the issue of temporary adjustment 
assistance will be worked out and we will finally be able to 
move forward and enact these crucial Free Trade Agreements, 
which will be significant and have a positive impact on New 
Hampshire's economy.
    The U.S. International Trade Commission estimates that 
passing the trade agreements will increase United States 
exports by $13 billion and create 75,000 jobs, all without one 
dime of new government spending. I am eager for the Senate to 
finally bring these agreements forward for us to debate them 
and to have votes on them.
    New Hampshire is well positioned to benefit from Free Trade 
Agreements. Our state exports to over 160 countries, and 
exports from New Hampshire were up 43 percent in 2010 over 
2009, as Senator Shaheen mentioned. This increase was number 
one in the nation. We are all proud of that. Of course, we want 
to do more. This should be a source of pride for all of us, and 
our pro-business tax policies and mindset have set us apart 
from other states in this region, and it is very important, of 
course, that we preserve the New Hampshire advantage.
    However, the economy is not even close, to those of you who 
I know are here who are working hard in your own businesses, to 
where we know it needs to be. I read an August 1 report that 
the manufacturing sector had its weakest growth in two years. 
It was also reported by the Department of Commerce that factory 
orders in June declined 0.8 percent. I am concerned that these 
are alarming signs that the economy could possibly weaken 
further over the next year.
    Jobs are not created in a vacuum, and we need private 
sector economic growth to create jobs. Increased export sales 
will aid both of those things, but it is not a cure to 
everything that we need to accomplish. Uncertainty is killing 
jobs as businesses are keeping their money on the sidelines, 
and I have heard it from so many businesses, large and small, 
both in Washington and here in New Hampshire. I came across a 
Harris Interactive poll commissioned in July stating that 85 
percent of small business owners believe that the economy is on 
the wrong track versus only eight percent who believe that we 
are on the right track. Furthermore, 49 percent of these small 
businesses claim that uncertainty is their top challenge to 
what they are trying to accomplish at the moment.
    When asked how reasonable Federal Government regulations 
are on small businesses, 9 percent said that government 
regulations were unreasonable, and 85 percent worried about the 
impact of Federal regulations and taxes on their ability to 
grow.
    However, I was encouraged to see statistics stating that, 
by a two-to-one ratio, small business owners project that 
America's best days lie ahead. I wholeheartedly share this 
feeling. We need that feeling of confidence to move forward, 
and now is the time for policy makers to provide small 
businesses the tools that they need to succeed, such as passage 
of the Free Trade Agreements and then to get out of the way and 
watch them thrive.
    Again, I want to thank Senator Shaheen, my colleague, for 
chairing this hearing and thank all of you for being here 
today.
    [The prepared statement of Senator Ayotte follows:]

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    Senator Shaheen. Thank you very much, Senator Ayotte.
    Now, I would like to introduce our first panel of 
witnesses. As I said, most of them have come from outside of 
the state today, so we are really delighted that each of you 
are here.
    First, I am very glad to welcome the Honorable Marie Johns, 
the Deputy Administrator of the Small Business Administration, 
to New Hampshire. As I mentioned, New Hampshire is a small 
business state, something I know you already know, and the 
services that the SBA provides here are critical. Ms. Johns has 
been serving as Deputy Administrator of this important agency 
since June of 2010, when she was unanimously confirmed by the 
Senate, and that says something about her and her background. 
Previously, she served as President of Verizon Washington. 
Recently, Ms. Johns has been focused on the implementation of 
the Small Business Jobs Act, including the SBA's trade and 
export program, so thank you very much for being here. I will 
just introduce the rest of the panelists and then ask Ms. Johns 
if she would give her testimony.
    I would also like to welcome Wanda Felton, who is the First 
Vice President and Vice Chair of the Export-Import Bank of the 
United States, the Ex-Im Bank. The Ex-Im Bank is the lead 
agency for providing financing and insurance for non-
agricultural exports. Nominated by President Obama and again 
quickly confirmed by the Senate, Ms. Felton has served over 20 
years--has 20 years of investment and banking experience--
sorry--and alternative investment advisory experience, 
something very important these days.
    Next, I would like to welcome Jim Cox, the Northeast 
Regional Director for the Department of Commerce's Commercial 
Service. Jim has over 20 years' experience helping businesses 
sell their products overseas and has been the Northeast 
Regional Director since 2005. You can tell by all of these 
introductions that we have a wealth of experience here at the 
table. The Commercial Service is the lead agency providing 
assistance services for U.S. non-agricultural businesses, and 
just to show you how widespread they are, they have trade 
specialists in 107 United States cities and in more than 80 
countries, and their specialists work with U.S. companies to 
help them get started in exporting. Today, Jim will provide us 
with more information about the services available through the 
Commercial Service.
    And finally, it is my distinct pleasure to introduce 
Richard Friedman. Dick Friedman is a very successful 
businessman and entrepreneur who is based in Boston. He has 
developed many hotels, including the Charles Hotel and the 
Liberty Hotel, for those of us who know Boston here. He is also 
working on a project here in New Hampshire, helping redevelop 
the Hanover Inn. And in his spare time, what little he has of 
it, Mr. Friedman serves on the President's Export Council, 
which advises President Obama on ways to increase American 
exports, especially among our small and mid-size companies. He 
is the Vice Chairman of the subcommittee of that group that 
focuses on manufacturing services and agriculture and serves on 
the subcommittee focused on small- and medium-sized 
enterprises.
    So I look forward to hearing your testimony, Dick, and it 
is very nice to welcome you to New Hampshire. Dick and I have 
been friends for a long time.
    Now, I would like to ask Marie Johns if she would begin her 
opening testimony. We have asked each of our panelists to try 
and keep their testimony to about five minutes, so we hope that 
everybody can stay relatively, reasonably within that time 
frame. Thank you very much, and I am delighted to have you 
begin.

STATEMENT OF HON. MARIE JOHNS, DEPUTY ADMINISTRATOR, OFFICE OF 
     THE ADMINISTRATOR, U.S. SMALL BUSINESS ADMINISTRATION

    Ms. Johns. Thank you, Senator Shaheen, Senator Ayotte. I am 
honored to be here to testify this afternoon at this very 
important hearing.
    I am especially pleased to be in New Hampshire to talk 
about exporting because your state truly is leading the way 
with regard to international trade. As has already been 
mentioned, exports increased 40 percent in New Hampshire last 
year, which is the largest Statewide increase in the country.
    SBA plays an important role in supporting New Hampshire 
small businesses. Already in fiscal year 2011, our resource 
partners have assisted over 4,000 small businesses through 
loans and counseling here in your State.
    I want to acknowledge, Senator Shaheen, the fact that you 
have been such a strong leader on international trade issues, 
starting with your time as Governor, and certainly in your 
leadership on the Small Business Committee, and we thank you 
for your support of the Small Business Jobs Act.
    Senator Ayotte, it has been a pleasure to meet you and to 
learn of your important work and your leadership roles on the 
Small Business Committee in the Senate as well as the Commerce 
Committee, and we know that small businesses are well poised 
for continued growth through exporting here in your state and 
the SBA has an important role to play.
    With growth in technology and global connectivity, new 
markets are continually opening for small businesses. In fact, 
since 2003, America's small business exports have grown about 
80 percent. They now account for nearly $500 billion in annual 
sales. However, small businesses still only represent about 30 
percent of the country's exporting in our country, and of those 
small businesses who are exporting, the vast majority only 
export to one country. So that is why at the SBA our goal is to 
increase both the number of companies exporting as well as the 
number of countries to which they export.
    SBA has a variety of tools to support small business 
exporting. We have loan programs specifically designed for 
exporters and we have staff co-located with the Department of 
Commerce and the U.S. Trade Representative at 20 U.S. Export 
Assistance Centers, or USEACs, around the country. Meanwhile, 
as the agency that serves America's small businesses, we 
support small business exporters through our traditional loan 
and counseling programs.
    The Small Business Jobs Act gave the agency new tools to 
increase our support for exporting. It elevated our Office of 
International Trade, increased the size of our international 
trade loans, and provided funding for export counseling through 
our resource partners. The Jobs Act also gave the SBA $30 
million a year for two years to award State Trade Export 
Promotion Grants, or STEP Grants, and we expect to have those 
dollars in the hands of states in September.
    In his first State of the Union Address, President Obama 
announced the National Export Initiative and his goal of 
doubling U.S. exports in five years. This is a very important 
goal. Increasing exports will strengthen our economy, both 
through our global competitiveness and create good jobs. In 
support of the NEI, SBA is working with our partners in the 
Trade Promotion Coordinating Committee, or the TPCC, to connect 
Federal resources and make them more accessible to small 
businesses. Our plan has four components: identify, prepare, 
connect, and support.
    The first step is identifying small businesses that are 
ready to export. SBA and our partner agencies have done 
extensive outreach to identify and motivate small business 
exporters. For example, the Department of Commerce and SBA have 
worked closely together to identify and refer new clients to 
the most appropriate resources.
    The second step in our plan is preparing these small 
businesses with counseling and technical assistance. To that 
end, Federal agencies have collaborated to, quote, ``train the 
trainers,'' unquote, offering export training for SBA resource 
partners.
    The third step is connecting small businesses with export 
opportunities. For example, in September of 2010, we launched a 
series of export matchmaking events, which have been very well 
received.
    Finally, the fourth step is continued support for these 
small business exporters with loans and counseling. This 
includes an increased presence at international trade shows, 
coordination of marketing materials, and ongoing outreach to 
lenders to encourage their participation in export financing 
programs.
    These efforts are having a real effect on the ground in 
states like New Hampshire. Peter Kermond, for example, owns 
Burnham Boat Slings in Hanover. They make uniforms for crew 
teams, boat covers, and other accessories. And last year, the 
company used two SBA Export Express loans to support a number 
of foreign orders. Thanks to the Small Business Jobs Act, those 
loans carried a 90 percent guarantee, and the new orders are 
helping employ four full-time employees, three part-time 
workers, and Peter plans to bring on two more workers in the 
near future. Stories like that make me confident of our 
progress.
    Total U.S. exports increased 17 percent from 2009 to 2010 
and we are looking forward to building on that success, and I 
would like to thank you both for your support, for hosting this 
important hearing, and I am happy to answer your questions.
    [The prepared statement of Ms. Johns follows:]

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    Senator Shaheen. Thank you very much.
    Ms. Felton.

STATEMENT OF WANDA FELTON, FIRST VICE PRESIDENT AND VICE CHAIR, 
  BOARD OF DIRECTORS, EXPORT-IMPORT BANK OF THE UNITED STATES

    Ms. Felton. Thank you. Senator Shaheen and Senator Ayotte, 
thank you for inviting me here to testify in Manchester about 
how the Export-Import Bank is supporting small business 
exporters. We are very grateful to have this opportunity to 
come here and get the word out about how we can help more small 
businesses grow their exports and create jobs.
    I am honored to be here and would like to acknowledge each 
of you for your support of small businesses. The fact that you 
are hosting this event is evidence of your commitment to 
helping small businesses and your awareness of the role exports 
can and must play in job creation.
    Both Senators and Ms. Johns commented on New Hampshire's 
export growth in 2010, so I will confine my time to talk about 
what Ex-Im Bank is doing to help small businesses across the 
country and how we are directly impacting small businesses in 
New Hampshire.
    In 2010, Ex-Im Bank supported $126 million in exports from 
New Hampshire. Of this amount, 89 percent directly supported 
small businesses. The amount authorized for companies in New 
Hampshire increased dramatically, from roughly $5.5 million in 
2009 to over $65 million in 2010. While these numbers are 
impressive, we are making every effort to do more. We are a 
small agency, but we pack a big punch, and we do it at no cost 
to taxpayers. We are financially self-sustaining. In fact, we 
have returned more than $3.4 billion of surplus to the U.S. 
Treasury in the last five years.
    With two months left in the fiscal year, we are on track to 
achieve a third straight year of record growth in our support 
for U.S. exporters. So far in fiscal year 2011, Ex-Im Bank has 
supported more than $31.5 billion of export sales and 213,000 
American jobs in communities across the country. These numbers 
include more than 2,500 transactions that went to finance small 
business exports.
    Ex-Im Bank support for small businesses has increased 58 
percent, from $3.2 billion in 2008 to a record $5.1 billion in 
2010, and I would like to point out that it is important to 
recognize that these numbers do not capture indirect support 
for small businesses. We estimate that Ex-Im Bank provided an 
additional $1.7 billion in 2010 to small businesses that acted 
as suppliers to larger companies which were exporting. Our 
support for these hidden exporters is not captured because the 
larger company is the exporter of record.
    We have a Congressional mandate to allocate at least 20 
percent of our authorizations to small businesses. We have met 
this mandate in the past couple of years. While 20 percent of 
our dollars go to small businesses, small businesses account 
for more than 80 percent--85 percent, I am sorry--of our 
transactions.
    We work hard to reach out to small businesses. I said 
earlier that we punch above our weight. We have been able to do 
this with new initiatives designed to increase the awareness of 
our programs through more proactive outreach, speed up our 
response time, and make sure we are offering products that 
really meet the needs of small companies.
    Without getting into detail, because we have packages 
available that will provide the specifics, Ex-Im Bank offers 
three basic products to help small businesses finance their 
exports. Direct loans, or buyer financing, will lend directly 
to foreign buyers to help U.S. businesses compete more 
effectively for sales. Working capital guarantees--we provide 
guarantees to banks so small business exporters can fulfill 
orders. And export credit insurance--this program allows small 
companies to extend credit terms to their customers by 
protecting them against the risk of nonpayment. Our insurance 
covers default for both political and commercial reasons. The 
ability to offer credit terms can help a small business become 
much more competitive in winning sales.
    These are our core products, but we have introduced many 
new products, again, to speed up turnaround time and to be more 
responsive to small companies' real needs. We have introduced, 
for example, Export Express Insurance. Express Insurance 
streamlines the application process for export credit insurance 
and makes it easier for small businesses to finance their 
short-term receivables. Supply chain financing is targeted at 
those hidden exporters I spoke of earlier, small companies that 
need working capital to finance receivables that are due from 
larger companies that are exporting. Finally, Renewable Express 
is a streamlined process to finance exports involving renewable 
energy projects.
    With that overview, I would like to share a few examples of 
how Ex-Im Bank has helped small businesses in New Hampshire. In 
2010, we launched Global Access for Small Business. These are 
forums that we hold all over the U.S. to improve our outreach. 
We have held 20 so far. Senator Shaheen, I believe you attended 
our first one, which was held here in New Hampshire last 
January. We do these in cooperation with other city and state 
partners. Here in New Hampshire, we have worked closely with 
the New Hampshire Office of International Commerce.
    As I mentioned, we kicked off our first event in 
Portsmouth, New Hampshire, and that forum, I think, really does 
illustrate what we can accomplish. Bill Skelley of Skelley 
Medical here in Hollis, New Hampshire, stood up at this event 
and said his company could double his exports by offering open 
account terms. We processed his application in two weeks and 
approved $250,000 in Export Credit Insurance. Since then, we 
have increased the policy to more than $1 million and he is 
able to sell to India and Mexico.
    Land and Sea, Inc., in Concord manufactures dynometers, 
which is engine testing equipment that tests the horsepower of 
cars, bikes, airplanes, and the like. Land and Sea has used our 
working capital guarantee for two years. That company is 
exporting to Taiwan and Malaysia and the U.K. Exports now 
comprise almost 50 percent of its sales, and that is up from 17 
percent two years ago.
    Just this week, and you will excuse me, please, if I 
butcher this, Monadnock Paper Mills----
    Senator Shaheen. Very good.
    [Laughter.]
    Ms. Felton [continuing]. In Burlington was awarded a policy 
through our Express Insurance Program. The company manufactures 
specialty paper and paper products and has been in business 
since 1819. It employs 325 people. It has three customers in 
China and Hong Kong, but has never extended credit before to 
its customers. Now it is able to meet the competition by 
offering credit terms in order to increase its sales.
    And finally, I will mention GT Solar of Merrimack. This 
company manufactures materials and equipment to produce the raw 
material for solar cells and other industrial uses. GT Solar 
exports to Asia, mostly China, and is a real success story 
because when the company first began using our products, it was 
a small business. Now, thanks in part to its growth in exports, 
GT Solar has graduated and no longer qualifies as a small 
business. That is the kind of impact we are looking to have, 
and I would like to just thank you again for having us here.
    [The prepared statement of Ms. Felton follows:]

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    Senator Shaheen. Thank you very much.
    Mr. Cox.

   STATEMENT OF JAMES M. COX, REGIONAL DIRECTOR, NORTHEAST, 
     COMMERCIAL SERVICE, UNITED STATES COMMERCE DEPARTMENT

    Mr. Cox. Thank you, Senator. Thank you, Senator Shaheen and 
Senator Ayotte, for the opportunity to testify today on the 
role of the International Trade Administration's U.S. and 
Foreign Commercial Service and supporting the efforts to 
increase U.S. exports, assist in small business growth and 
creating jobs.
    The Obama Administration, in March 2010, announced the 
National Export Initiative, which sets as a goal to double 
exports by the end of 2014. We are on pace to reach that goal. 
Overall, in the first five months of 2011, exports of goods and 
services are up over 16 percent from last year. U.S. goods and 
services in 2010 comprised nearly 13 percent of our national 
Gross Domestic Product, GDP, an increase from 11.4 percent the 
previous year.
    New Hampshire in particular highlights this success. The 
total value of goods and services exported from New Hampshire, 
as you mentioned, increased 43 percent in 2010, over 2009, to a 
record $4.4 billion. New Hampshire led the nation in export 
growth in 2010. Through the first five months of 2011, New 
Hampshire merchandise exports were 12 percent higher than the 
same period in 2010.
    As the key export promotion agency, the U.S. and Foreign 
Commercial Service fosters economic prosperity, enhances jobs, 
and strengthens national security through a global network of 
our outstanding trade professionals. Our international network 
of about 1,450 trade specialists provides comprehensive export-
focused business counseling and supports the small- and medium-
sized businesses, SMEs, throughout the United States. We are 
located in over 100 U.S.-based USEACs, U.S. Export Assistance 
Centers, and in 129 countries--excuse me, 129 embassies and 
consulates in nearly 80 countries. Last year, we assisted 5,600 
companies in exporting for the first time, of which 85 percent 
were small- and medium-sized enterprises.
    I am very proud that we have here locally in New Hampshire 
Director Justin Oslowski and International Trade Specialist 
Taylor Little of our New Hampshire USEAC, located at UNH-
Durham, to counsel local exporters on a range of issues 
focusing on promoting their products internationally, sales, 
and market development. This team works in close collaboration 
with the state and state agencies, such as the New Hampshire 
Office of International Commerce and other local organizations 
to deliver seamless and complementary services to small- and 
medium-sized businesses.
    One example of a company that successfully used our 
services is Sky-Skan, a Nashua, New Hampshire-based 
manufacturer. Sky-Skan focuses heavily on export opportunities 
for planetarium theater systems. The company learned of a large 
public tender and installation of a new theater system at the 
Copernicus Science Center in Warsaw, Poland. By participating 
in the Commercial Service Trade Winds Trade Mission Program to 
Poland in 2009, Sky-Skan benefitted from the customized 
matchmaking appointments arranged by our New Hampshire and 
Warsaw offices using the Gold Key Program. The meetings 
included visits with officials from the Copernicus Science 
Center and other contacts in the industry. With innovative 
products and the Federal assistance provided, Sky-Skan won the 
bid and signed a contract for the installation of a new theater 
system in December of 2010. This single success resulted in a 
sale worth more than $750,000.
    In addition to companies like Sky-Skan, the USEAC in New 
Hampshire has worked with more than 1,500 exporters. In the 
last ten months, the office provided more than 300 individual 
counseling sessions for New Hampshire exporters, 100 of which 
have been in partnership with the state's Office of 
International Commerce.
    The New Hampshire USEAC and its partners host regular 
events attracting both local and national audiences. Two 
locally held programs include the standing room only U.S. 
Export Controls training session. This event was so successful 
that the office will again hold a session in April of 2012. The 
second is a recently offered Value-Added Tax webinar focusing 
on the European Union. More than 90 companies were trained on 
international pricing and tax policies.
    As we look for more opportunities to increase the 
competitiveness of U.S. businesses, the Obama Administration 
has made passage of the pending agreements with Korea, 
Colombia, and Panama a priority, as Senator Ayotte mentioned. 
USEACs work with companies and partners in the communities to 
help them realize the benefits of existing trade missions and 
trade agreements. The New Hampshire USEAC guides local 
companies through the international documentation process. This 
counseling provides especially important guidance on issues 
such as the NAFTA Certificates of Origin. These are 
requirements for New Hampshire exporters to our two largest 
trading partners, Mexico and Canada.
    To increase the economic competitiveness of our businesses, 
the U.S. Foreign and Commercial Service is working diligently 
each day to connect those SMEs with the 95 percent of consumers 
living outside the United States. New Hampshire businesses have 
the full support of the U.S. Government in conducting and 
contacting potential exporters to global partners and markets.
    Again, I thank you very much for the opportunity to appear 
before you and I look forward to your questions. Thank you.
    [The prepared statement of Mr. Cox follows:]

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    Senator Shaheen. Thanks very much.
    Mr. Friedman.

STATEMENT OF RICHARD L. FRIEDMAN, PRESIDENT AND CHIEF EXECUTIVE 
              OFFICER, CARPENTER AND COMPANY, INC.

    Mr. Friedman. Thank you, Senator Shaheen and Senator Ayotte 
and members of the committee, for inviting me here today. My 
name is Richard Friedman, and I am President of a Boston-based 
hotel development firm working on a national level on a variety 
of hotel types. We have many hotels in Boston and some across 
the country, including the Charles Hotel and the Liberty Hotel, 
and right here in New Hampshire, we are now redeveloping the 
Hanover and the Dartmouth, my alma mater.
    I was appointed by President Obama as a member of the 
President's Export Council. On that council, I am Vice Chairman 
of the Subcommittee on Manufacturing, Services, and 
Agriculture, which includes tourism policy. The President's 
Export Council has some 18 private sector unpaid members, many 
from large businesses--the chairman of Boeing, the chairman of 
Xerox, Ford Motor Company, UPS, Met Life--and a few small 
people like me, and the PEC also has eight members of Congress, 
five Senators and three House members, and some Cabinet 
Secretaries, as well, and we meet periodically.
    The PEC advises the President on increasing United States 
exports and competitiveness on an advisory basis. In his 
National Export Initiative, the President asked the council to 
explore methods to double exports over the next five years, or 
actually four to go. We have made great progress to this goal, 
and in 2010, exports increased 17 percent. One-point-eight 
trillion dollars of exports of goods and services represents 
the second highest annual total on record, and in May of this 
year, exports of services are up again 14.9 percent to $505 
billion.
    As a PEC member and hotelier, I have made it my personal 
goal to try to help our country's tourism, hospitality, and air 
transit industries. Most importantly, as a small business 
owner, I have tried to help these businesses as a member of the 
PEC Small- and Medium-Sized Business Engagement Subcommittee. 
Increasing the export capacity of these enterprises is 
essential if we are to double exports. Small- and medium-sized 
exporters, SMEs, are typically credited with creating three out 
of every four jobs in the United States, and some SME exporters 
currently account for four million U.S. jobs, and they tend to 
grow significantly faster and larger than non-exporting 
businesses.
    We are making great strides in helping our SMEs to export. 
In 2010, almost 5,600 companies exported for the first time, 
and their exports--and increased their exports abroad. Eighty-
five percent of those companies were SMEs. But we have a huge 
room for improvement. Only one percent of exporters are small- 
and medium-sized businesses.
    In the last year, the PEC has adopted 15 letters and sent 
to the President in the areas of export controls, FTAs, terms 
of promotion, veterans' retraining, benchmarking export 
promotion, lots of other things, as well. If these 
recommendations were to be adopted, we estimate we could 
increase U.S. exports by $630 billion.
    In particular, I would like to talk for a moment about the 
tourism sector of exports. Nationally, one in nine jobs is 
related to tourism or travel. In New Hampshire, I estimate that 
it is probably substantially more than that as a ratio. It may 
sound odd, but when a foreign traveler comes to the United 
States, it is an export because they are bringing money here, 
spending it on all kinds of goods and services--hotels, travel, 
meals, shopping, et cetera. Northern New England is a very 
attractive international tourist destination. In the post-9/11 
years, our national tourism performance has suffered very 
dramatically and we have lost 68 million visitors and $500 
million in lost spending plus 400,000 lost jobs and $32 billion 
in lost tax revenues.
    The President's Export Council is working closely with the 
President and the Administration in an attempt to reverse these 
trends. There are two primary methods by which this is 
occurring. One is, for the first time ever, is to advertise 
America as a destination, and the other is to shorten visa 
waiting times at our embassies and train our Border Patrol 
people and others in being more customer friendly.
    In the early years of the Obama Administration, the 
President signed the Travel Promotion Act--thank you, Senator 
Shaheen, for your support of that--which is a public-private 
partnership now just getting underway, yet to run their first 
ad, to promote travel to the United States. It is a very 
promising effort.
    Secondly, efforts are underway with the Department of State 
to reduce wait times to obtain visas at our embassies and in 
some cases to expand the locations at which travelers can 
obtain visas.
    Increased tourism has the potential to have dramatic impact 
on Northern New England in many regards. Hotel and travel 
destinations in Northern New England are well equipped to 
receive foreign visitors. For example, there is a great 
potential for people to come--foreigners to come here and watch 
the New Hampshire Presidential primary and see our democracy at 
work.
    Senator Shaheen. We like that.
    Senator Ayotte. We love that, yes.
    [Laughter.]
    Mr. Friedman. Well, the hoteliers like it, too. On a 
national basis, if we just doubled the arrivals from the 36 
visa-waivered countries, over $200 billion in spending would be 
generated. Tourism would be helped dramatically in New 
Hampshire.
    The United States is in a great position to increase our 
exports and foreign travel business. Currently, each Euro is 
worth $1.40, which makes our goods and services a true bargain 
for foreigners. Worldwide, people want to buy American, and now 
with our currency conversion levels, our trade policy makes us 
well positioned for export growth.
    Small- and medium-sized enterprises face unique barriers to 
exporting that require targeted action. The PEC's SME Business 
Engagement Subcommittee has held roundtables around the country 
with small businesses to explore obstacles to exporting. The 
recommendations we came up with, adopted by the full PEC in 
March, fall into three categories: education, access to 
capital, and regulatory and cost burden issues.
    Hundreds of state and local organizations and agencies are 
engaged in export outreach, but the findings by the SME 
Subcommittee indicate prominent and persistent education gaps 
and confusion among small businesses on a broad range of export 
issues. We recommend that the Federal Government provide 
catalyst grants to foster regional export development strategic 
planning among identified chambers, economic development 
centers, academia, state and local governments, et cetera.
    The second challenge that we face is lack of access to 
information. We recommend the development of new and maximizing 
of existing public-private partnerships and acceleration of 
expansion of on-demand educational resources on export trade 
channels such as trade.gov, YouTube, YouTube videos, 
export.gov, USTR, et cetera.
    The third challenge we face is a continuing misperception 
about the Free Trade Agreements, as the Senators have 
discussed, and there is significant disconnect in which the 
people do not understand what these Free Trade Agreements 
actually mean. We recommend continuing to work with all the 
International Association of Manufacturers and other people to 
get these bills passed.
    We also face a persistent lack of access to capital for 
small businesses. The current loan initiation process lacks 
transparency and takes too long. We recommend expediting the 
increase in delegated lending authority to existing trade 
finance lenders, as noted in the Small Business Act of 2010, 
conducting finance trade training to community banks to include 
receptivity to working with small exporters and working more 
closely with small businesses in training them to prepare 
documents for international transactions before going to their 
financial institutions.
    There is also a lack of support for young small businesses. 
We recommend establishing formal incubator programs at the 
Federal Government level that specialize in working with young 
SMEs to fund their working capital and export finance needs 
during the start-up process. It is equally important to develop 
these young businesses, and we have encouraged additional 
support of the Young Entrepreneurship Programs at community 
colleges.
    On the regulatory side, we have overcome cumbersome export 
compliance regulations, procedures, and policies. The 
President's Export Control and Regulatory Reform Initiatives 
are a step in the right direction, but we need to create one-
stop shops where small businesses would be able to find 
guidance on all matters related to exporting, including 
international trade regulations.
    We also need to address the prohibitive cost of 
intellectual property rights protection, which are inordinately 
high for small businesses. We recommend working within the 
World Trade Organization to improve the simplicity, speed, and 
cost of registering and maintaining international intellectual 
property.
    A final challenge deals with the rules of origin, which are 
complex and inconsistent, and it is difficult for small 
businesses to be export compliant or take advantage of the Free 
Trade Agreements. SMEs just do not have the staff to manage or 
the market power to leverage suppliers to gain proper origin 
information from their supply chains. We recommend that the 
Administration bring this to the attention of the World Trade 
Organization and other bodies to standardize their rules of 
origin.
    As you can tell from these recommendations, small 
businesses are unique in their needs and ability. They often 
lack the resources available to large businesses, and, 
therefore, it is critical that specific programs are rolled out 
under the NEI with special consideration given to easing the 
burden on small businesses so they can unlock their full 
potential.
    The long and short is that America must learn to think of 
itself as an exporter, just like Germany, China, and Japan. We 
are uniquely positioned in the world to make this happen. We 
can be rightly optimistic about our trade and export potential, 
and the President's goal of doubling exports in five years is 
worthwhile and realistic.
    Thank you very much.
    [The prepared statement of Mr. Friedman follows:]

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    Senator Shaheen. Thank you, Mr. Friedman, and thank you, 
each of you, for your testimony.
    Now, if we were in Washington, the way this would work is 
we would have a little timer and each of us would get about 
five or seven minutes of time to ask questions before we would 
turn. I would get that, and then I would turn to Senator Ayotte 
and she would also get that amount of time. But since we are 
not there, we thought it might work better here if we would 
just alternate questions, and so that is what we are going to 
do, so I will ask the first question and then turn it over to 
Senator Ayotte.
    Mr. Friedman talked about the President's Export Council 
and some of the recommendations and the challenges that it 
identified, one of which is the bureaucracy as a hurdle to 
small businesses taking advantage of resources at the Federal 
level. Can I ask each of you if there are ways in which you all 
cooperate as agencies and if there are other ways in which you 
think you could better cooperate as you look at how we improve 
exports and access for businesses to exports? I will just ask, 
I do not know who wants to go first. Ms. Johns, would you like 
to go first.
    Ms. Johns. Certainly, Senator Shaheen. I was listening with 
great interest to Mr. Friedman's testimony, which I think was 
very well done. What was particularly of interest were some of 
the issues that he outlined, and I was thinking about how the 
resources in the Small Business Jobs Act has actually given us 
more bandwidth to address some of those very issues, and I will 
certainly be happy to talk in greater detail about those.
    But the issue of coordination is a very important concern 
that I know you both have, and what I want to assure you is 
that the SBA works very closely with the Department of 
Commerce, with Ex-Im Bank, and we look at ourselves as part of 
a system that the Federal Government has in terms of resources 
to support small businesses in exporting.
    We--the business community is not monolithic. We are not 
focused on the Raytheons or the Lockheeds, who exporting is 
important to them, but we are focused on the Burnham Boat 
Slings, those companies, and they need different resources than 
do larger companies, and that is why the SBA's participation in 
this important support for small businesses is so critical. And 
again, we thank you for the support of the Small Business Jobs 
Act because that allowed us not only to improve and give 
greater heft to our loan programs, it also gave us 
opportunities to expand our counseling and technical assistance 
programs and to create a stronger, independent Office of 
International Trade at the agency.
    I will give you an example of how we are coordinating 
through the Trade Promotion Coordinating Committee. There is a 
Small Business Working Group which Karen Mills, the SBA 
Administrator, chairs, and it is through that mechanism that we 
are working closely with Ex-Im Bank, with the Department of 
Commerce, with the U.S. Trade Representative. We coordinate our 
efforts to make sure that we are providing that continuum of 
service for businesses, whether they are small, and as was 
mentioned, businesses who grow into larger businesses and then 
may appropriately be more in the domain of the Department of 
Commerce.
    Mr. Friedman mentioned about the Rules of Origin and some 
of the difficulties that small businesses have in terms of 
getting the information they need. We have worked closely with 
our Federal partners on developing tools to address just that. 
The Free Trade--there is a Free Trade Agreement Tariff Tool 
that was unveiled in May of this year. We worked with the 
Department of Commerce and with the U.S. Trade Representative 
to develop that tool, and what it is, it is an online tool for 
small businesses to actually allow them to calculate what the 
tariff would be for their particular good or service that they 
would want to export, depending on which country they were 
planning to export. It gives information about rules of origin 
and addresses what is a big issue with getting more small 
businesses involved in exporting, and that is to demystify the 
process, to make sure that we have information at their 
disposal.
    We have a planning tool on our Web site, the SBA's Web 
site, that is a workbook of sorts where small businesses can 
get access to a variety of pieces of information. They can 
store information and return to it, continue to update it.
    Those are examples of--I think strong examples of how we 
are coordinating with our Federal partners, not just to share 
information but to create real tangible tools, put them in the 
hands of small businesses to help them improve their 
opportunities to export, to grow their businesses, and to 
create more jobs.
    Senator Shaheen. And can I just ask for the benefit of our 
audience, how can people access the tariff tool and the other 
tools? Can they get that through your Web site?
    Ms. Johns. Yes. Well, export.gov really is that--Mr. 
Friedman also mentioned the need for a one-stop shop. In our 
experience, that is not so much a physical place, because, 
again, the needs are so diverse in terms of what the business 
is, what industry the business is in, et cetera. But we have 
created, again, in partnership with our Federal partners, 
export.gov, which is that virtual, that online front door, if 
you will, that can give a small business access to the plethora 
of tools that are out there to help them in the exporting 
arena.
    Senator Shaheen. Great. I do not know if either of you 
would like to add anything to----
    Mr. Cox. Senator, if I could give a more local perspective, 
here in New Hampshire, we are very pleased with the community 
effort, and by that I mean the U.S. Department of Commerce, 
USEAC, the Small Business Development Centers, the SBA, the 
states all work very much together, because we realize that for 
a small business, it is daunting. It is the Federal Government. 
How do I approach? It is the local government. It is the state 
government.
    So our colleagues are cross-trained. John Joyce with the 
Small Business Administration, Bruce Drossman with the Export-
Import Bank, ourselves, will make joint calls. We will visit 
the company directly. If a call comes in and it is not 
appropriate for us, we are on speed dials with one another. So 
we try to get that information to the company as quickly as 
possible to resolve their questions.
    Senator Shaheen. Thank you.
    Ms. Felton. Senator, I would add that all three agencies 
work very closely together and I think our various services and 
programs complement each other. I have been on a couple of 
different events, even though I am very new to Ex-Im Bank, with 
both colleagues from the Commerce Department and the SBA. The 
Commerce Department, in particular, offers trade missions that 
will take companies abroad, help them with market research, 
help them matchmake and to find opportunities to sell their 
goods and services abroad.
    Once the company is at a stage where they have got a 
contract or a purchase order, if it is appropriate, they can 
then, in terms of their business life and where they are with 
respect to financial statements, et cetera, that would be 
available to make them qualified to participate in Ex-Im Bank's 
programs, then they would refer that lead over to Ex-Im Bank 
and we would begin to talk about how we can help with our 
various programs.
    Senator Shaheen. Thank you.
    Senator Ayotte.
    Senator Ayotte. Thank you very much, Senator Shaheen.
    I actually wanted to follow up on Senator Shaheen's 
question, because as I understand it, in 2009, the GAO issued a 
report that expressed concern over export promotion targeting 
services. Just thinking about it from a small business 
perspective, as I understand it, there are about 20 different 
agencies that either have a direct or indirect role in trade, 
and one of the announcements that the President has made 
previously, I think around the State of the Union, was to look 
at this, the fact that 20 agencies interacted in some way on 
these issues, and to come up with a plan to streamline the 
efforts of government, hopefully to make it easier for the end 
user and to make sure that we were being efficient as possible 
with the resources that we have.
    I guess I would ask to all of you, I know that Mr. Friedman 
mentioned one-stop shopping, if you could update us on whether 
there is a plan that is going to be brought forward that would 
streamline more or has looked at duplication. I think it can 
often be really intimidating for small businesses when they are 
trying to deal with multiple agencies, and I do appreciate what 
you, Mr. Cox and Ms. Johns, have said about the attempts at 
coordination, but I wanted to get your thoughts on what the 
President had announced at the State of the Union and also the 
GAO report.
    Ms. Johns. If I may, Senator Ayotte, I will start. 
Certainly, we are always looking for ways to operate the agency 
more efficiently and more effectively. As good stewards of the 
agency, that is our responsibility. And so we have had 
conversations with our Federal partners as well as OMB about 
how we can ensure that we have the most streamlined and most 
easily navigable process for small businesses. And at the SBA, 
we are particularly sensitive to that because we live and 
breathe small businesses and trying to serve their needs and we 
know that it has to be easy--the resources for the Federal 
Government have to be easily accessed, easily understood in 
order for them to be useful. Otherwise, they are not going to 
be utilized.
    And so the export.gov, for example, is a response to that 
issue, to ensure that we are coordinating our resources and the 
information that we have across the Federal Government and 
putting that--packaging that in a way that is more easily 
accessible for small businesses.
    Senator Ayotte. I would love to hear from all of you. Also, 
should we do the one-stop shop? Should we eliminate some of the 
agencies' involvement to make it easier for small businesses to 
navigate and make sure that we are not duplicating some of the 
things that we are trying to accomplish?
    Mr. Friedman. If I may, Senator, I would support the idea 
of more one-stop shopping. In particular, in the travel and 
tourism business, there is a lot of conflict between, on the 
one hand, trying to advertise to get people to come here, then 
people trying to get a visa to come here, whether it is for 
business, they want to buy machinery or something in New 
Hampshire, they cannot get a visa in China and they do not want 
to come. Homeland Security may not welcome them when they get 
here.
    We are probably one of the only major countries in the 
world, frankly, that does not have a Minister of Tourism as a 
cabinet-level position, and tourism is actually the largest 
single industry in the world. So I think that simplifying these 
overlapping jurisdictions is very, very critical for actually 
small and--for all kinds of businesses, but big businesses can 
handle it because they have armies of people who can figure it 
out.
    Senator Ayotte. Right.
    Mr. Friedman. But the little guy, he is just stunned. I got 
an email from a Congressman in Vermont who had some Chinese 
people who wanted to come and invest a substantial amount of 
money in Vermont and hire 50 or 100 people. They could not get 
a visa. Well, Commerce cannot help with that. Homeland Security 
cannot. Sometimes people get to our borders and they get turned 
away. So it is a bit of a morass, and post-9/11, we have had a 
very defensive view of ourselves as a country.
    Senator Ayotte. Well, I appreciate that. Mr. Cox, I do not 
know if you wanted to comment?
    Mr. Cox. I would just say, Senator, that the one-stop shop 
was the genesis of the Export Assistance Centers and the idea 
was that no one agency would really be the agency. All agencies 
would share equally to help exporters, so that exporters, small 
businesses could come in, and regardless of whose 
jurisdiction--we would not worry about that. We would get the 
answers as quickly as possible.
    Here in New Hampshire, there is a great tradition of that 
with the International Trade Resource Center, where six or 
seven agencies participate under one roof to help get that word 
out to the company. Again, we want to help one another because 
the company's success is all of our successes.
    Ms. Johns. May I add one quick point, Senator Ayotte, and 
that is, particularly with the Department of Commerce, the way 
we have organized our thinking around this--I have talked about 
the identifying small businesses, preparing them, connecting 
and supporting, et cetera. The SBA is very focused on new to 
exporting, in other words, identifying those small businesses 
that are poised to be successful as exporters but need some 
preparation in order to really enter that arena and get going. 
So that is where we provide a very important set of resources 
because that is what we are built to do through our technical 
assistance and counseling programs, the various resources that 
we do every day for small businesses.
    Then at a certain point it is appropriate to hand that 
business off to the Department of Commerce so that they can 
then pick up in their area of expertise, which is actually 
helping that--guiding that small business into a market outside 
of our country, et cetera.
    So this is--we are not taking a haphazard approach to this 
at all. We are being very thoughtful about how to play to our 
agencies' strengths to make sure that we provide that seamless 
level of support for small businesses.
    Mr. Friedman. And, Senator, I would add that, to echo what 
was just said, that to the extent that the SBA is more involved 
in helping some of the small businesses that may be very young 
companies--there was some discussion earlier of an incubator-
type approach to helping young companies that want to get 
involved in exporting, and these companies have a life cycle 
that they move through that make them get to a size and a stage 
of development that makes them more appropriate to then become 
eligible to use Ex-Im Bank programs, we can then pick them up 
at that point.
    The Commerce Department may have helped them identify 
market opportunities, to demystify some of what is keeping 
people from going out and starting to export. And then at some 
point, it becomes a company that is--that has an order, that 
has a market. We offer products that may be relevant to a 
company that is only selling in a single country or that has 
expanded and developed its exporting activity and now is 
reaching out and able to sell to multiple countries.
    But we at Ex-Im Bank also then help much larger companies, 
and so I think that we have a continuum along the not just--
just along the life cycle and stage of development and size of 
companies that we serve and that that is useful. We do have--we 
do cooperate very effectively and we have, I think, on our Web 
sites the ability to direct our customers to each agency, as 
appropriate.
    Senator Ayotte. Thank you very much.
    Senator Shaheen. Thank you.
    One of the things that we wanted to do a little differently 
today is give an opportunity for those people invited today to 
ask a question, so we have gotten questions from a number of 
you in the audience and I am just going to read one of those. 
Some of the questions were not questions that were really 
appropriate for the members of this panel. They dealt with 
other issues. And so I just wanted to let anybody who had 
submitted a question that is not for this panel know that we 
are going to forward those questions to the appropriate Federal 
agency so you can get an answer to them.
    This is from Peter Antoinette, who I think is still here. I 
saw him earlier. He is the President and CEO of Nanocomp. There 
he is. Peter asked what specifically can be done or should be 
done to simplify or reduce ITAR export regulations. We 
addressed this a little bit earlier. I think you addressed it, 
Dick, as you were talking in your testimony. Would you like to 
expound on what you had to say a little bit about what can be 
done to make our export control regime more user friendly for 
the businesses of this country?
    Mr. Friedman. Well, I think it somewhat goes to Senator 
Ayotte's question about single sourcing, single whatever, 
single window. I can actually read to you out of our letter to 
President Obama on this section. He said, a single window, 
which is a system that allows traders to lodge information with 
a single body to fulfill all import or export related 
requirements, would reduce a major barrier to U.S. exports and 
deliver immediate measurable results.
    The World Bank estimates that, globally, it takes an 
average of six days to move goods to or from the United States. 
A one-day improvement in that time, export time for imports by 
means of a single window, would increase U.S. trade by $29 
billion----
    Senator Shaheen. Wow.
    Mr. Friedman [continuing]. And create thousands of new jobs 
in the United States--one day. So, on average, some stuff is 
held up in these--with this bureaucratic stuff for months, and 
so if we can speed up the process and expedite this, these are 
customers. They are not foreigners. They are customers. And if 
you are McDonald's, you determine your success by how fast you 
can make hamburgers. So the speed is very, very important.
    Senator Shaheen. Thank you.
    Senator Ayotte.
    Senator Ayotte. Thank you very much. I think that goes to 
the overall question of what can we do to speed this up? What 
can we do, Mr. Cox, following up on what Mr. Friedman has said, 
from the Department of Commerce perspective? I know I am 
cosponsoring several pieces of legislation to make sure that 
the regulations are passed in Washington that impact small 
businesses, and all businesses, frankly, that there is more of 
an analysis of the indirect costs on business in terms of what 
the regulation does and making sure that we are trying to 
streamline more. Can you help us with--I hear this so much, 
whether it is ITAR or other areas, what Mr. Friedman has just 
described--what is being done right now and what more can be 
done to make it easier for businesses on the regulatory end.
    And I know, Ms. Johns, you have experience in the private 
sector on this, as well, so I would love to hear your thoughts 
on it.
    Mr. Cox. In terms of export regulations, my understanding 
is that there are proposals for a single entry type of 
processing, and I believe the hope, and I am sure the 
expectation is to speed up processing of export applications 
and licenses. Right now, there are a number of agencies--the 
Commerce Department, the State Department, the Treasury 
Department--that get involved in those export licenses. Then 
they get involved in dual use issues and ITAR, as we have 
heard. So there is a recognition. I think your comments, your 
interest is helping to push this issue.
    At the local level, I would say that our initiative is to 
make companies aware of the regulations, bring our officials 
from Washington to New Hampshire and elsewhere so they can have 
conversations; we can have seminars and discussions on these 
issues so that the people on the front lines in our offices in 
Washington also go back and understand the issues that are 
being faced by New Hampshire exporters.
    Ms. Johns. Senator Ayotte, what I would add is that you are 
absolutely right. As a retiree from the telecommunications 
industry, I know a little bit about regulatory issues and how 
they can sometimes impede business growth. And so what we want 
to make sure is that there is an appropriate level of 
regulation. It has its place. But we want to ensure that we are 
looking constantly for ways to not burden--to ensure that small 
businesses are not burdened by undue regulations.
    So a few things we have done at the agency. First of all, 
we started at home to make sure that our processes--we have 
gotten feedback. We have roundtables with small businesses 
around the country all the time, Administrator Mills, myself, 
other senior officials at the agency, to hear directly from 
small businesses, and we are taking that input and we are 
making improvements at home by streamlining our loan 
application processes, making sure that we have the touchpoints 
and using the new technology to allow us to be more customer 
friendly, if you will, for small businesses, and that work 
continues.
    Start-Up America is an initiative that the SBA has been 
very involved with, and we not long ago finished a nationwide 
tour in several key markets around the country to hear directly 
from small business owners and other key stakeholders about 
what were the regulatory burdens they were facing. That 
information has been compiled. We are in the final stages of 
preparing a report that will be shared across the government, 
and we will be working closely with our Federal partners to 
ensure that what we learned from the Start-Up America road 
tour, that those issues are being factored into plans that 
other agencies have for improving the regulatory process.
    Senator Ayotte. Thank you very much, and I know that both 
of us stand ready to work with you to make the regulations 
easier for our businesses, and hopefully we can speed that time 
up and really create more jobs here.
    Senator Shaheen. And one of the things that I think would 
be very helpful to everybody on the Small Business Committee, 
not just Senator Ayotte and I, would be to get copies of the 
council's letters, like the one you just read from, so that we 
can see what your recommendations are and we can make sure that 
that gets into the record for the Small Business Committee and 
that everybody has a chance to see those. That would be very 
helpful.
    [The President's Export Council letters appear in the 
Appendix on p. 84.]
    Mr. Friedman. I would be happy to send them to you.
    Senator Shaheen. Great. Thank you.
    Mr. Friedman. Sure.
    Senator Shaheen. I know that we have another panel to do, 
so I think, as interested as we are in what everybody has to 
say, we will do one more question each before we bring on the 
second panel.
    I would like to just ask each of you, just very briefly, if 
you could talk about what kind of outreach efforts you have, 
because one of the things that we are all struggling with is 
how do we make sure that businesses in New Hampshire and 
throughout the country know what is available to them. So if I 
could just ask you, each in one minute to talk about what you 
are doing at your agency to make outreach available.
    Ms. Johns. Should I start, Senator?
    Senator Shaheen. Yes, please.
    Ms. Johns. Well, Senator Shaheen, that is an area that is 
very close to my heart because it is striking to me how many 
businesses, small businesses around the country, do not have a 
full understanding of what the SBA does. And so outreach is 
high on our agenda, to build awareness about the SBA's 
resources, access to those resources, and we are particularly 
focused on exporting.
    As has been expressed in a number of very powerful ways 
through the panelists, we have got to change the mindset of 
small businesses in this country to let small businesses know 
that the tools are there, the resources are there for them to 
get involved in exporting. That is where the new markets are. 
And if we do not, we are going to have a huge detriment for our 
small businesses.
    So we are doing a number of events, exporter matchmaking 
events. We are involved with the Department of Commerce through 
the District Export Councils, the 56 of those around the 
country. We are using new technology through our newly revised 
Web site. We have an exciting contest that is underway on 
YouTube that is a cosponsorship with Visa, tell us your 
exporting story. That contest was just launched in August. We 
will be announcing the winner in November and that winner will 
get not only cold, hard cash, they will also get the benefit of 
Gold Key service from the Department of Commerce.
    So we are trying to be as creative as possible to use every 
opportunity through our headquarters efforts, but we have a 
very powerful tool in that the SBA has 68 field offices. We 
have a district International Trade Officer in each one of our 
district offices. We have an increased presence in the USEACs, 
20 of those around the country, and we are intending to bring 
more online.
    So we are operating on all fronts to make sure that we are 
using the tools, connecting with partners, and using all 
networks that we can access to tell the story that, small 
businesses, now is the time to get involved with exporting.
    Senator Shaheen. Great.
    Ms. Felton. Yes, Senator. We have a number of initiatives 
that we have launched in the last year or two in order to make 
sure that we are reaching out more effectively to small 
businesses, one of which I mentioned earlier the Global Access 
Forums. We have webinars. We have a new small business portal 
that will direct small businesses quickly to where to go on our 
site in order to find what they need in order to access Ex-Im 
Bank programs.
    Importantly, we have five regional offices. We are, as I 
mentioned, a small agency. We have a Northeast Regional Office. 
Bruce Drossman is here today and he can--he will be sticking 
around to make sure that he can talk to everybody who might 
have a need. But he is based in New York. He is responsible for 
handling our potential customers and developing leads in New 
Hampshire. What he will do is help determine what the need is 
that the business has and direct them to the right place. They 
may be insurance brokers. We, I should also mention, use a 
number of lenders who have delegated authority to process 
things quickly and Bruce would be able to help determine who 
would be the best fit for the customer's need.
    Senator Shaheen. Great. Bruce, do you want to stand up so 
everybody can see you. Thank you.
    And we are going to ask all of the SBA people who are here 
to stand up, too.
    Ms. Johns. I have a great team with me today.
    Senator Shaheen. Marie, would you like to introduce 
everybody who is here.
    Ms. Johns. We have got lots of people here today, so--our 
Regional Administrator, Jeanne Hulit, is here. Our District 
Director is here, Greta Johansson, and members of their team. 
Marilyn is our International Trade Officer for the New 
Hampshire District and doing a great job. Who have I missed? 
John Joyce, yes, is here, and our Advocacy Regional 
Administrator--when we talk about regulatory impediments, our 
Office of Advocacy at the SBA is a critical partner in that 
work and our Region I Administrator is here, as well.
    Senator Shaheen. Great. Thank you. So if you need help from 
any of these people, you know who to check at the end.
    Jim.
    Mr. Cox. Senator, with that, I cannot let my own people off 
the hook. I want to introduce Justin Oslowski and Taylor 
Little, who are great partners here in New Hampshire----
    Senator Shaheen. Thank you.
    Mr. Cox [continuing]. So they are our turn-to people.
    What I would say in response to your question is that we 
are, like SBA and Ex-Im Bank, always running events, always 
doing programs. We are very pleased to have a partnership with 
the Granite State District Export Council. John Sutton of 
Dartware is our chair of it, and the next panel, you will be 
hearing from the Vice Chair, Grace Preston. That is a public--
it is a private sector voice of what is going on in the 
exporting community and it keeps us honest and gives us 
guidance and it helps us out in a great way.
    Events are being held all the time. I mentioned a couple of 
seminars and webinars. I am very pleased that your interest as 
Governor and your interest as Senator to lead a trade mission. 
It is a fantastic event where people can learn of the 
opportunities, whether they can attend or not. These markets 
are out there. Some are very easy and approachable for small 
companies that are just getting started. Some are very 
difficult and it is not transparent what goes on in those. So 
having an executive-led trade mission is very important and I 
would certainly invite Senator Ayotte, if opportunity presents 
itself, to lead a trade mission, as well. It does provide great 
opportunities for companies to see first-hand and it is quite a 
bit of work, as you are aware. Those are long, long days.
    Those are some of the areas that we focus on. Again, the 
partnerships, the working in the community, getting the 
counseling done through all the partners, just the great 
partnerships here in New Hampshire are key to us.
    Senator Ayotte. Thank you.
    Dick, I do not know if you want----
    Mr. Friedman. I am not doing any coordination. I have no 
people here.
    [Laughter.]
    Mr. Friedman. But I just would say one thing. I think that 
the dollar is very favorable for trade. ``Made in USA'' is 
prestigious worldwide, and ``Made in New Hampshire'' is 
particularly prestigious because people think of New Hampshire, 
whether it is maple syrup or Segways or whatever----
    Senator Ayotte. We would fully agree with that.
    [Laughter.]
    Mr. Friedman [continuing]. About quality. And people who 
export ought to blast on their boxes or whatever, ``Made in the 
USA,'' ``Made in XYZ, New Hampshire, USA.'' There is a gigantic 
potential. We have got to learn to think. Can you imagine a 
Japanese company that does not think about exporting? I do not 
care how big they are. That is their business. We have got to 
get back to the basics, that 95 percent of the consumers are 
non-American.
    Senator Shaheen. Great. Well, thank you all very much.
    Senator Ayotte. Thank you very much.
    Senator Shaheen. We hope that you will stick around for the 
second panel and hear what some of the New Hampshire folks who 
are engaged in trade have to say. Thank you.
    So we are going to be switching over panels, and while we 
are doing that, let me just recognize two people on my staff 
who have worked really hard to put together this event, Chris 
Neary who is my assistant who works with the Small Business 
Committee, and Scott Merrick, who works with business interests 
here in New Hampshire, and Senator Ayotte, you may want to 
introduce folks who you have here.
    Senator Ayotte. Yes. I want to introduce John Lawrence from 
my staff, actually from Washington, up here to help me. And 
then I have other members of my staff who are here, Susan 
Terzakis, who is here in the back, who also works in the New 
Hampshire office, and my State Director, Bud Fitch, is 
wandering around here somewhere, along with Steve Monier, who 
works on veterans' issues for me, and Liz Johnson, who does 
press for me.
    Senator Shaheen. Thank you.
    I think two of our panelists are here. I do not know if Tom 
Moulton has--there he is. Thank you. We have you in the middle 
here.
    [Pause.]
    Senator Shaheen. We are going to go right into the second 
panel because we are running a little bit behind. We started a 
little late, so hopefully we can run over a little bit, but we 
do not want to run over too long since we promised folks that 
we would get you out as close to four as possible.
    But we are delighted to have a second panel of New 
Hampshire witnesses here, and they will help us explore some of 
the issues that were raised by the first panel, those 
challenges faced by New Hampshire small businesses as they try 
and export.
    We will hear directly from small business exporters about 
their experience, and I would like to begin by introducing Dawn 
Wivell, who anybody who has worked in exporting in New 
Hampshire knows that she is the former Director of New 
Hampshire's International Trade Resource Center. She just 
retired recently. We are really going to miss her. But the good 
news is that she is now going to be in the private sector.
    I worked with Dawn very closely during my six years as 
Governor and I continue to rely on her expertise. So under 
Dawn's leadership, I think everybody who has spoken today has 
talked about how well New Hampshire has done with regards to 
trade. Well, that speaks to all of the innovative businesses we 
have here, but it also speaks to Dawn's leadership and the work 
of the International Trade Resource Center. So thank you, Dawn, 
very much, for being here.
    Ms. Wivell. Thank you.
    Senator Shaheen. I would also like to introduce Grace 
Preston, who is the International Sales Manager at Secure Care, 
which is based in Concord. Secure Care's employees design, 
manufacture, and service systems that protect Alzheimer's and 
dementia patients from wandering out of nursing homes. They 
protect infants from being abducted from a hospital maternity 
ward. Under Ms. Preston's leadership, Secure Care has generated 
millions of additional dollars in revenue by exporting its 
products. Utilizing both state and federal resources, Secure 
Care has developed working relationships in Ireland and 
Australia and plans to continue expanding to new international 
markets. So, again, we are delighted to have you here, Grace.
    I will turn it over to Senator Ayotte to introduce Mr. 
Moulton.
    Senator Ayotte. Thank you very much, Senator Shaheen. It is 
my privilege to introduce Thomas Moulton, who is here today. In 
1989, Tom founded Sleepnet in Hampton and now serves as the 
President and CEO. Sleepnet has been making quality products 
that help hundreds of thousands of people around the globe 
sleep better, and we all could use that, right?
    [Laughter.]
    Senator Ayotte. It has become an industry leader in mask 
innovation and development. Tom's passion for American 
manufacturing and job creation has led to his success, and a 
lot of hard work. In two-plus decades, he has grown his company 
to a position where it exports to 30 countries in 14 languages. 
Sleepnet has 25 employees, all in New Hampshire, and all his 
products are designed and assembled in the United States, with 
65 to 70 percent of his sales coming from exports.
    It is a privilege to have Tom here with us today and we 
look forward to hearing your perspective, and I thank you.
    Senator Shaheen. So, again, thank you all for being here. 
We hope you will try and stick with the five-minute time limit, 
please, and if we can ask you to speak directly into the 
microphone so we can make sure we can record your testimony.
    And I will ask you to begin, Dawn.

     STATEMENT OF DAWN WIVELL, FORMER DIRECTOR, OFFICE OF 
  INTERNATIONAL COMMERCE/INTERNATIONAL TRADE RESOURCE CENTER, 
                     STATE OF NEW HAMPSHIRE

    Ms. Wivell. Okay. Thank you, Senator Shaheen. Good 
afternoon, Senator Shaheen and Senator Ayotte. I would like to 
thank you for this opportunity to address this committee on the 
importance of exports to our economy and how we might boost 
U.S. exports to the level at which they should be.
    My name is Dawn Wivell and for the past 21 years I have 
proudly served as the International Trade Director for the 
State of New Hampshire. I resigned my post less than two weeks 
ago to launch an international business development company. 
Previously, I worked in the private sector, both overseas and 
in the U.S. in sectors ranging from oil drilling to import/
export to manufacturing. I also spent five-and-a-half years 
with the Italian government, where my job was to assist Italian 
companies to penetrate the U.S. market.
    During my two decades with the state, I have witnessed 
tremendous growth in exports, in export markets, in the 
sophistication of our industry base and our capabilities. As 
has already been mentioned, at $4.4 billion in sales, New 
Hampshire's exports increased by 43 percent in 2010, reaching 
an all-time record, in addition to being the highest percentage 
increase amongst the States.
    The bottom line in dollars and cents, which is the number, 
I think, that is really exciting, is that New Hampshire 
companies sold over $1.3 billion more in goods in 2010 than 
they did in 2009. That number does not even account for the 
export of services, which we do a lot, and we are unable to 
quantify that due to available data. Moreover, our exports 
continue to increase, and as of the end of May, we are already 
up another 12 percent. I think in this current economy, that is 
pretty tremendous.
    One-quarter of all manufacturing workers in New Hampshire 
depend on exports for their jobs. Over 2,200 New Hampshire 
companies export, 88 percent of which are SMEs, which generate 
42 percent of New Hampshire's total exports. This is the ninth 
highest share among the States and well above the national 
average, which is about 31 percent, I think.
    According to the Tech America Foundation, New Hampshire has 
the third highest tech export concentration in the nation, 
accounting for 50 percent of total exports.
    Over the years, I have had the opportunity of working with 
a huge spectrum of companies in nearly every industry sector. I 
have worked with many very small companies that have achieved 
amazing results in the foreign marketplace, some of which would 
no longer be in business were it not for their foreign sales. 
As we all know, these entrepreneurs and innovators are the 
drivers of the U.S. economy, the job creators. Companies like 
them throughout the world are the drivers of the global 
economy. I can attest to the fact that the majority of economic 
development agencies around the world are equally focused on 
the development of the sector of their economy and they are 
hyper-focused on export-led growth.
    The term SME or SMB is a term that one can freely use 
across any language without translation. The difference is that 
the United States spends just one-sixth of the international 
average helping its small businesses to export. In actuality, a 
World Bank study found that each dollar increase in export 
promotion expenditures bought a 40-fold increase in exports.
    The reality is that there is tremendous untapped 
opportunity for our small businesses in the global marketplace. 
However, these businesses need a little help and they are 
competing with businesses around the world that get a lot of 
help. What they need in terms of assistance is access to 
buyers, market intelligence, capital, advocacy, reduced tariff 
and non-tariff barriers, reasonable export regulations, and 
technical assistance. These are all services that are offered 
in whole or in part by the federal export promotion agencies 
and by the state trade offices.
    However, over the past couple of years, budget reductions 
on the federal and state levels have severely hampered the 
ability to effectively provide these services. For example, the 
U.S. and Foreign Commercial Services provides programs that are 
essential to U.S. exporters, the most important of which is 
their customized matchmaking with buyers and partners, their 
ability to provide direct market intelligence, customized 
marketing events, and in-country advocacy. These are 
fundamental needs that are essential to achieving America's 
goals of doubling exports in five years. Yet over the past few 
years, the U.S. and FCS has lost 239 staff positions, some 
overseas offices, and has undergone many budgetary constraints, 
including significant cuts to travel funds.
    The capacity to keep up with the ever-growing demand is a 
problem. Many of the states partner with the Commercial 
Service, and none more so than the State of New Hampshire. A 
recent trade mission to Canada led by Governor Lynch 
demonstrated to me how counterintuitive these reductions are. 
In many regards, Canada is the most important market to U.S. 
exporters, yet there is only one Commercial Officer covering 
the entire country and the local staff is and was so 
overburdened that they had to hire an outside contractor to 
support the needs of the mission participants. And this 
mission, by the way, consisted of 17 companies, most of which 
were new clients.
    Many state trade offices have suffered severe cuts to their 
trade promotion budgets, aggregated at about 20 percent. In the 
case of New Hampshire, the International Trade Resource Center, 
which not so long ago was a national award winning program 
serving hundreds of New Hampshire companies, has been reduced 
to one staff person with a zero travel budget.
    The State Trade and Export Promotion Grant Program, which 
came out of the 2010 Small Business Jobs Act, will provide 
much-needed support to the state trade offices to meet the 
demands of their clients. While the program has seen delays and 
has been burdensome to some of the state trade offices, 
particularly with the recent requests for adjustments and 
resubmission, it is a boon for every state and is much 
appreciated. As a bonus, I appreciate that the STEP program may 
spawn some new and innovative programs.
    Another issue which continues to be very important and 
increasingly so is the fact that there is no mandate or 
directive in place which provides a real incentive for federal-
state collaboration. The effectiveness of collaboration cannot 
be overstated. The organizations at the local level working in 
the field know their companies, their assets, and their 
weaknesses better than anyone.
    In New Hampshire, this collaboration, which has included 
the state office, the U.S. Commercial Service, Ex-Im Bank, SBA, 
SBDC, TDA, and MEP, has worked beautifully and is something 
that we became known for. It is quite confusing as to why this 
issue, which has been brought up so many times, has never been 
seriously addressed.
    Economists and analysts are predicting a significant global 
economic transformation over the next decade where emerging 
economies will account for more than half of all global growth, 
where economic powers will shift and the world economy becomes 
multi-polar. Barring any major calamitous event, demand should 
continue to grow and may even be unprecedented. Accordingly, 
both opportunities and competition will increase. It is of the 
utmost importance that we consider the impact of investing and 
the potential for growth. In addition to the fact that export 
jobs pay more, it is a well documented fact that those 
companies that exported during the last couple of years were 
able to sustain their business, in great part due to their 
broader customer base.
    There are many reasons why exporting is actually becoming 
more viable, such as the rapid diffusion of information 
technology. In addition to being at the vanguard of innovation, 
the most compelling reason why we know that American SMEs can 
compete in the global marketplace is that they have already 
been successful in the most competitive market in the world.
    Again, thank you for this opportunity to speak, and thank 
you, Senator Ayotte, and I want to thank Senator Shaheen, in 
particular, as always, for all the many years of significant 
contribution you have made to small business and exports in 
particular.
    [The prepared statement of Ms. Wivell follows:]

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    Senator Shaheen. Thank you very much.
    Mr. Moulton.

  STATEMENT OF THOMAS MOULTON, PRESIDENT AND CHIEF EXECUTIVE 
                 OFFICER, SLEEPNET CORPORATION

    Mr. Moulton. Good afternoon, Senators. Thank you for having 
me. As my university professor taught me to KISS, ``keep it 
simple, stupid,'' and I will try to do that for you, to be 
short and brief but hopefully to the point.
    My name is Tom Moulton. I am the Founder and President of 
Sleepnet Corporation in Hampton, New Hampshire. Sleepnet is the 
leading domestic manufacturer of masks that sleep apnea 
sufferers wear nightly. For over 15 years, I have employed 
eight to ten manufacturing employees, 25 to 30 at some times, 
including engineers and business people as well. I do this in 
part in the spirit of patriotism and partly because it makes 
sound business sense.
    For the first time, however, I have begun to source 
components in Asia. While this does not affect the Sleepnet 
workforce, I am not blind to its impact on my New England area 
vendor base, whose staff will be less busy and pay fewer taxes 
as a result.
    I have been asked to comment on the role of exports in job 
creation for America. But before I can make my comments and 
observations, it is my opinion that we first must reflect on 
our past for guidance and then be willing to make changes in 
order to create a better future for all of us. I will talk 
about the manufacturing in particular.
    It is a vital and key economic component to any 
industrialized nation. Typically, for every one manufacturing 
job, seven other jobs are created. The key to America's 
economic strength was created and embodied in manufacturing. 
From manufacturing, many other industries were created--
finance, banking, insurance, real estate, trade, the service 
industries, et cetera. Make no mistake, it is powerful and 
impactful to an economy. If you doubt it and do not believe me, 
look what manufacturing has done for China and other economies 
over the past two decades. It is not rocket science.
    Just to segue for a second, on the front page of the Wall 
Street Journal today, there is quite a naval aircraft carrier 
that China has built, and quite frankly, you cannot do this if 
you do not have superior manufacturing. That is something to 
take note of.
    Unfortunately, over the recent decades, America has lost 
its competitive edge and is on a continuing downward slide. We 
have literally given away our technology and manufacturing jobs 
to others, and I find it sinful.
    We say, how did this happen? It is really not hard to 
figure out, and I often refer the scenario to my business 
colleagues as corporate treason. I say it was far from our 
objectives to wake up one day and find ourselves in an 
unfavorable business climate created by government, largely 
caused by overregulation, onerous labor laws, and over-
taxation. They found themselves in an uncompetitive environment 
for business, so they went elsewhere with manufacturing jobs to 
improve their bottom line. The result is an ongoing catastrophe 
and a slow death for our nation.
    What can we do to reverse the slow death? Give 
manufacturing companies a good reason to come back to and set 
up shop in America again. Where and how can the government help 
manufacturers? Get involved and get out of the way. 
Predictability, I feel, with government incentives and 
technology. America is known for its ingenuity. We can compete 
with cheap labor because we have better technology. At least, 
our country has been known to create cutting edge in technology 
in all different industries.
    For starters, I think the government needs to create 
meaningful and long-term incentives for manufacturers to 
reinvent in themselves, by giving opportunities for companies 
to invest in new equipment, so they can be competitive in our 
global economy. Look how some of the foreign car companies have 
set up manufacturing plants in the South and have done well. 
And if you look at Detroit now, it is abominable. Sixty years 
ago, Detroit was a shining jewel, and today it is a rust bowl. 
Very sad.
    Commit to some long-term R&D tax credits. Temporary 
incentives do not give companies ability to do long-term 
planning. Competing in business is a marathon, not a spring. 
Well-run businesses that pay taxes require predictability from 
their government on how they are treated.
    Education, and you can refer to the Wall Street Journal 
article of yesterday on how to close the skills gap, a very 
good article if you have not read it. It is excellent on 
education. There are about three million jobs available right 
now, but we do not have the skill sets to support them.
    As I referred to again in the past, numerous industries can 
point to their very existence as the result of creations, 
including computers, microwaves, and communication technology. 
To ensure the future viability of the future manufacturing 
workforce, new engineers and scientists are needed to create 
the next big thing, or 100 things. It is critical we train that 
next generation of math and science majors in this country that 
want to and can stay here.
    Our immigration policy, our education policy and incentives 
around each will have an outsized effect on whether we have 
1,000, 10,000, or 100,000 new engineers, and the resulting 
multiple of manufacturing jobs that they will create ten years 
from now. There needs to be a comprehensive plan to ensure 
future manufacturing jobs. It is vital.
    And that is it. I appreciate the opportunity you have given 
me to give some personal thoughts on the matter. I am both 
honored and humbled to be asked to be here. I took my time away 
from my business today because I care and I really want to make 
a difference in my country. I love my country. I love the State 
of New Hampshire where I reside. I raised my family here. Like 
you, my motivation is to support the efforts to make life 
better for my fellow citizens and my country. I am an American, 
and I am proud to be one. Thank you.
    [The prepared statement of Mr. Moulton follows:]

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    Senator Shaheen. Thank you.
    Ms. Preston.

STATEMENT OF GRACE PRESTON, INTERNATIONAL SALES MANAGER, SECURE 
                      CARE PRODUCTS, INC.

    Ms. Preston. Senator Shaheen, Senator Ayotte, thank you 
very much for inviting me today, and I am really honored to be 
able to give a perspective from a small New Hampshire 
manufacturing company.
    Secure Care Products was founded in 1979 to provide health 
care facilities with radio frequency identification technology, 
RFID. We basically, as the Senator said, protect Alzheimer's 
dementia residents from wandering out of a nursing home and we 
protect infants from being abducted from a hospital's maternity 
ward. Secure Care Products is a wonderful example of a small 
New Hampshire manufacturing company, only one of which that 
makes the state so great.
    It is safe to say that Secure Care Products initially 
dabbled in the international marketplace, but it was not until 
the mid-1990s in which the international expansion took off. We 
would not have been able to do this without the assistance of 
both state and federal service initiatives. The New Hampshire 
International Trade Resource Center and the U.S. Commercial 
Service helped us in many ways. Such things as Gold Key 
matchmaking services, trade missions, sometimes coordinated 
through a joint state and federal effort, market research, and 
just plain general guidance have allowed Secure Care Products 
to successfully expand the overall growth of our company.
    I would like to share a few examples with you that help 
validate how Secure Care has benefitted from both state and 
federal export assistance initiatives. Secure Care established 
one of our most important international relationships in 1997 
during a Gold Key matchmaking trip coordinated through the U.S. 
Commercial Service. Secure Care signed a distributor in 
Ireland. A Gold Key is a program offered by the U.S. Commercial 
Service that helps specific in-country partnerships at a 
minimal cost.
    Since then, this relationship has grown and flourished. 
Today, more than a decade later, this partnership has generated 
millions of dollars worth of revenue to Secure Care and helped 
our company hire and sustain jobs. Looking forward, we are now 
working together to further leverage the synergy between our 
two companies into growth outside of Ireland and further into 
other European markets.
    Within more recent years, another Gold Key matchmaking 
program established a new Australian partner in 2008. This 
relationship is not only producing sales, but today we are 
cooperating in new technology development together with the end 
goal of bringing new products and offerings to all of our 
current and future customers worldwide.
    To further quantify the importance of just these two 
relationships alone, Ireland and Australia, these two 
partnerships have generated approximately six percent of our 
2010 annual revenue, so just two partnerships.
    Even such programs that do not equate to immediate returns 
are critical to our future sustained growth of our company. In 
2007, I personally participated in a trade mission with Dawn to 
the Kingdom of Saudi Arabia that was coordinated on a state 
level by the New Hampshire International Trade Resource Center. 
As you can imagine, there is an inherent cultural challenge as 
a businesswoman traveling into Saudi Arabia. The trade mission 
allowed me to successfully represent Secure Care, investigate 
market conditions, and develop critical relationships. The 
trade mission provided me a hands-on understanding of both 
market and cultural conditions that I otherwise would not have 
been able to access.
    At the beginning of this year, when the Saudi Ministry of 
Health mandated that all maternity hospitals in the Kingdom of 
Saudi Arabia implement an RFID solution like ours, I was well 
positioned with knowledge, understanding, and most importantly, 
the credibility in having traveled to the region to pursue the 
opportunity. Last month, we secured our first sale in Saudi 
Arabia, and the company has been chosen as one of two companies 
that were short-listed from a field of 13 companies to bid 
under a Ministry of Health tender for 150 Saudi hospitals. I 
believe that our chances for such opportunities are 
strengthened by the support we receive from state and federal 
export initiatives.
    My last example is literally playing out as I speak to you 
today. We are in a highly competitive situation for a premier 
hospital in Doha, Qatar. We are competing against a Canadian 
company. With one phone call to the local U.S. Commercial 
Service Office, I have access to U.S. Embassy staff in Doha to 
provide advice and advocacy in hopes of securing the business. 
One phone call, that is all it took. It is our hope that the 
embassy can provide some lobbying efforts on our behalf, an 
effort that otherwise we would not have been able to accomplish 
on our own, and I would be happy to let you know how it turns 
out. I am still in the process of working with everyone.
    The challenges we face in our particular business are 
many--budgets, competition, specifically in our market, a very 
long sales cycle in hospital sales. As a small manufacturing 
company of less than 100 people, our resources are extremely 
limited. To have access to a wealth of information, in-country 
experts on local business climate, and those willing and able 
to lobby on our behalf is invaluable. While we are not the 
biggest company in New Hampshire, I believe that we are a solid 
example of what makes the New Hampshire business community 
thrive.
    In closing, state and federal programs such as the 
International Trade Resource Center, Small Business 
Association, U.S. Commercial Service, are valuable tools for 
small companies like Secure Care, which increasingly have 
limited resources available for developing knowledge and know-
how and opening up markets overseas. If your company is not 
global, it is going to be tougher and tougher to survive the 
ever-competitive marketplace. Thank you.
    [The prepared statement of Ms. Preston follows:]

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    Senator Shaheen. Thank you. Thank you all very much for 
your testimony.
    Ms. Preston, you had two great anecdotes about the help 
that Secure Care has gotten with exporting, and you talked 
about working with the Commercial Service and, of course, with 
the International Trade Resource Center. Were you able to take 
advantage of any other federal or state resources, and were 
there any lessons from your experience that you can share about 
collaboration within or among the agencies?
    Ms. Preston. It is evolving now, and as our deals get 
bigger and bigger, particularly working with the Ministry of 
Health in Saudi Arabia--I have actually just spoken to Bruce 
Drossman to see if he could come over and talk to us about 
financing, credit, insurance, that type of thing, because we 
are going to be looking at that as we move into bigger and 
bigger deals and as we expand. So it is evolving every day.
    Senator Shaheen. Great. Thank you.
    Senator Ayotte. Thank you very much. I wanted to follow up. 
I appreciate both these New Hampshire stories about businesses 
built here and wanted to get both of your insights, both Mr. 
Moulton and Ms. Preston, on what are the regulatory challenges 
that you are facing and how can we help cut through some of the 
red tape that you are facing? Both of us serving on the Small 
Business Committee--I also serve on the Commerce Committee--and 
I think hearing your perspective on the ground level would be 
helpful to us as we move forward. I have heard so many stories 
from small businesses in our state that are really concerned 
about well-intentioned things passed in Washington that, when 
put in application, do not always work, and I am sure, Ms. 
Wivell, you have insight on that, as well.
    Mr. Moulton. The unintended consequences.
    Senator Ayotte. Right.
    Mr. Moulton. Exactly. Well, our product is an FDA-approved 
product and obviously you have to go through the regulatory 
approval and things like that, 510(k) processes. It is kind of 
good to get that expedited so it does not get worn down. That 
would be our perspective from my lens.
    That is what would help our business, so that we can 
basically try--because we have a lot of new products in the 
pipeline right now, and in order to get them through, some 
require 510(k) approval. Obviously, we go through all kinds of 
biocompatibility testing, materials, you know, do testing to 
make sure the products are safe and secure, as is typical of a 
low-risk product. But, to be able to get that process condensed 
so we can get the products to market is helpful, because the 
sooner you can get it to market, the sooner you can hire more 
people, and we do a significant amount of business overseas, so 
on the horizon, that is helpful.
    Not to segue out of the regulatory thing, but also, and I 
know it is probably a topic we certainly cannot discuss in 
great detail, but free trade. One thing that concerns me is 
that Brazil is a very big market. We want to get in there, but 
the problem with Brazil is they tax the product, like, twice to 
get it into the country. We have got a great product. They want 
it. But if I sell it for $50, they are going to whack it 
another $50 and now they make me not competitive. So there is a 
lot of protectionism going on there.
    So I know there are all kinds of debates on free trade and 
open borders, but there has got to be some common sense there, 
too. That would be very helpful, if you can do those things.
    Senator Ayotte. Great. Thank you very much.
    Ms. Preston.
    Ms. Preston. We are FCC regulated here in the U.S., and 
whenever we enter into a new country, we have to get approval 
to operate our radio frequencies in-country. So a lot of it is 
just working with the local regulatory authorities, but I have 
also asked U.S. Commercial Service and the embassies overseas 
to help us kind of push that process through.
    The other issue that I have is, because I am working and 
quite active in the Middle East is--I know it was mentioned in 
the previous panel--but getting visas for some people to come 
here. So we want to train people. We want to get them up and 
going because it is critical for us to have local 
representation in a market. If I cannot get people here to be 
trained on our products, it is going to be very difficult for 
us to have support in-country.
    Senator Ayotte. Thank you. I do not know if you had 
anything you wanted to add.
    Ms. Wivell. Well, just very simple common sense would 
dictate that the export promotion agencies should work together 
with the export regulatory agencies. They completely work at 
cross-purposes, and you see some of the most ridiculous things. 
I am sure you have heard all of the stories where it just 
absolutely--the regulations do not make sense and they 
absolutely do not work together. They do not see the reason to 
work together. They think very differently and there is really 
absolutely no reason why they could not sort of see the 
benefits and detriments. Obviously, you have, again, heard the 
stories about all of the companies who lose sales to similar 
companies, competitors in other countries, because they do not 
have the same regulatory issues.
    And the visa situation, since Gracie brought it up--sorry, 
we call her Gracie--is a big issue. So you work with a company 
that has gone and made a great deal, maybe signed with a great 
distributor or is doing a joint venture, and they have not even 
thought that they are not going to be able to bring these 
partners over here to do training. So you might have worked on 
it for months and months, a year, and it is time to get over 
here, get people trained, and start really selling. You cannot 
get a visa.
    Senator Ayotte. Thank you very much. I appreciate your 
insight.
    Senator Shaheen. Dawn, in your testimony, you talked about 
the challenge of federal and state collaboration and that there 
is no requirement that agencies work together at the federal 
and state level. Were you suggesting that you think there ought 
to be legislation that requires that, or did you have other 
thoughts about how to make that happen?
    Ms. Wivell. Well, since we have been talking about it for 
the entire 20 years that I have been in this job, my colleagues 
and my former colleagues all over the country, it is something 
that we talk about on and on and on, maybe it would take 
legislation. It seems that it should not have to, because the 
whole point is that the collaboration is so important. We have 
talked about that several times today, the leveraging 
resources, working together, but especially at the field level.
    So if you want to talk in practical terms, in a lot of 
states, there is no collaboration. We are so fortunate that we 
have that in New Hampshire and it has been awesome. We are all 
really good friends. We are all cross-trained, as Jim Cox said, 
and we work really well at handing clients off. We work as a 
group, seamless operation. That is very unusual. We have had--
when we started doing that, we had, I think, nine or ten states 
actually fly out and some federal people fly out and watch us 
because they could not understand how we did that. I do not 
really get that.
    But there is no--I have brought this up at other times when 
I have testified. There is no incentive. There is no directive. 
There is no mandate, you will work with your local partners. 
You will--this is part of what your job is, and somehow, I 
guess, you will be measured on that performance. But there is 
no mandate that comes from Washington, D.C. So you will find 
states--Pennsylvania is a very good example. The State of 
Pennsylvania office and the Department of Commerce office, they 
hate each other. They do not work together at all. It makes 
absolutely no sense. That is a huge exporting state. It has got 
a lot of great companies, a lot of opportunities. They do not 
work together. The territoriality, it does not make sense.
    So there has to be, I think, some kind of incentive, 
mandate, directive. I do not know why it would take 
legislation. I know you have got the Trade Promotion 
Coordination Council, and for years and years and years, the 
State Trade Directors have--we have a formal organization. We 
have been advocating for that a state person has a place on 
that council so that there is more coordination, and it has 
been ignored.
    Senator Shaheen. So do you think as the Small Business Jobs 
Act is being implemented and the STEP program that is part of 
that and some of the other focus on exporting that is part of 
that legislation, are there any ways as that is being 
implemented to encourage more of the kind of collaboration that 
you are talking about, do you think?
    Ms. Wivell. I think that is a good point and I think that 
because the STEP grant program is specifically coming out of 
the SBA that at the local level, there is going to be more 
coordination. So I actually think that is a very good point.
    Senator Shaheen. And perhaps guidelines for awarding those 
grants could include some sort of points for states that are 
working closely or with their federal agencies.
    Ms. Wivell. Yes. That is actually a really good idea.
    Senator Shaheen. I see Marie Johns shaking her head back 
there, agreeing. Thank you.
    Senator Ayotte.
    Senator Ayotte. I very much thank you, Senator Shaheen.
    Just to follow up on that, since we, based on the 
discussion of the prior panel, when we have got 20 agencies, 
federal agencies, we have done a great job of coordinating in 
New Hampshire, and I know that you are a huge leader in that, 
and that has been the New Hampshire way, that people actually 
talk to each other, that foreign concept.
    [Laughter.]
    But with 20 agencies at the federal level with some hand in 
export, import, trade policy, what can we--you have such a 
breadth of experience. I appreciate your feedback on making 
sure that we have a State representative on the council and 
others. So should we be making it more one-stop shopping, or 
from your experience over the years, what could we do better 
just to make sure that we are maximizing our resources, number 
one, and that we are making it easier for businesses, because I 
think it must be really confusing for a business to know which 
agency to start with.
    Ms. Wivell. Yes. The one-stop shop, I am a huge advocate of 
that and that is what has worked so well in New Hampshire. I do 
not see any reason why you cannot have that in every state. 
Basically, that puts everybody under one roof, and it is how 
you manage it and how it functions that is important. So 
everybody should be cross-trained like we are in New Hampshire. 
I could get up and talk about Justin's programs as well as he 
could talk about mine.
    So you have to have a place where companies, small 
businesses, could walk in and everything is there for them, 
whether they need marketing, whether they need technical 
expertise, they need education, they need financing. It was a 
beautiful situation when we could take a company by the hand 
and he would mention, ``I think I might need money,'' and say, 
okay, we are going to take you to the money guy, and, okay, we 
are going to take you to the Middle Eastern guy, all in one 
location.
    But everyone had to be physically working together and they 
had to be told that you have--there is no territoriality. There 
is no duplication of efforts. Everyone needs to work together.
    I am really--it has to work on a local level. It has to be 
in the field where you are actually working with companies. It 
is great that the TPCC and all that, but that is way up in D.C. 
and that is not down where the companies are. And each state is 
different and the industry bases are different. The needs of 
the companies are different. And so each state should be able 
to sort of customize it to the way the state functions.
    Senator Ayotte. I do not know if our small business owners 
have any comments or experiences they have had with trying to 
deal with multiple agencies.
    Ms. Preston. I think, as an experienced professional, I 
have worked with the Trade Center for ten years now and I 
really feel sorry for the new companies that are going out 
there to try and export because they are not going to know how 
to negotiate those avenues. I have made the relationships. I 
know everybody at the Department of Commerce locally and I work 
with them quite frequently, Justin and Taylor, and I think it 
is going to be very difficult, and I am really sad that the 
budget was cut for the state because it was a great environment 
to call up and to go and have all these resources under one 
roof. I think it is a detriment to small businesses that are 
just getting out there to export.
    Ms. Wivell. I just want to add that the USEAC situation was 
created to do the one-stop shopping, but it should include many 
of the other agencies that you mentioned. There are 20 
agencies--the MEP, SBDC, TDA is a really good one that is often 
overlooked. They have some very--OPIC is another one. So 
everybody, or at least the staff, should be trained or cross-
trained on what they do so all the resources are there.
    Mr. Moulton. And we work with Dawn and Taylor, as well, and 
they have done a great job helping us. Even though I would 
encourage some small businesses that maybe cannot afford to go, 
like MEDICA is one of the largest medical trade shows in the 
world in Dusseldorf every fall and they get a group, if you 
could not afford it, a booth, if you will, a trade show booth, 
and they could take a series of, what, eight, ten different 
small companies and they could share a space to make it more 
economical to go there, and the Gold Key program opens up 
opportunities to speak with, where they can make, like, a 
matchmaker--harmony.com, if you will--to get companies lined up 
with the right distributor and contacts in the countries and 
they have been very helpful.
    Senator Shaheen. Thank you.
    Senator Ayotte. Export-harmony.com.
    Mr. Moulton. Export-harmony.com, yes.
    Senator Shaheen. We are trying to get us back on time, so I 
think we have time for each of us to have one more question, 
and I would like to again use a comment that we got from 
someone who I think is in the audience, though I have not seen 
him this afternoon. Ray Boissoneau [phonetic], is he--he was 
here, I think. But he asked something that I think is very good 
that has been touched on. Given the recent unemployment 
numbers, what can be done to lower the cost of doing business 
for exporters? Any thoughts that any of you have about that?
    Mr. Moulton. Well, one thing, if we could be competitive, I 
mean, it is about keeping your costs down. My main competitors 
are three particular companies. One is Phillips Medical over in 
the Netherlands. They bought a company called Respironics. 
Resmed in Australia, and Fisher and Paykel in New Zealand. They 
are all foreign companies. I have been forced to look to get 
sourcing because I have to compete with them on the cost of my 
product. They are the big 800-pound gorilla that I have to deal 
with.
    If I have to outsource outside the country, which I prefer 
not to do, to be honest with you. I really am doing everything 
I can to keep it internal. But if I have to be competitive, 
obviously, it would be helpful not to get the products that I 
am bringing in, or the components, getting taxed to death. If I 
can keep that as minimal as possible to cover the expense of 
doing that, that would be helpful, because then my end cost 
makes me more competitive, because they all have plants in 
China. I just refuse to go over there. I am not going to, as 
long as I can hold out.
    Senator Shaheen. Good.
    Mr. Moulton. Yes.
    Ms. Preston. I think from my perspective, and I have a 
sales and marketing role, is to ensure that the initiatives and 
the programs that U.S. Commerce offers do not go up in price, 
because I have a budget that I have to stick to, and if I spend 
too much money here, I cannot spend too much money elsewhere. 
So I have got to make my budget, just like my household budget, 
last. If the programs either go away or they get raised in 
price, it is going to be difficult for me to take advantage of 
that and grow our market.
    Ms. Wivell. I was just going to say that, and it is really 
important that you do keep the costs down. There was a movement 
a couple years ago to raise the prices and it would have gone 
up from something like $700, the Gold Key cost, to $3,000. So 
then you are competing with the private sector. And it was 
actually done quite sneakily. The OMB was trying to get this 
cost--I am not going to go into all that.
    But the Trade Offices advocated to keep the costs down and 
we were successful in doing so. Maybe the ITAR registration 
fees, you might want to take a look at that. And patents, the 
cost of patents and the time that it takes to get patents 
through. I do not see Mike Barratt in the audience from 
Aricept, but he had a great idea the other day. I was talking 
to him and he was saying that it takes, like, five years and 
several hundred thousand dollars to get a patent and he was 
thinking, you do it in Germany, it is like no time at all and 
does not cost anything. He actually lost a lot of money to a 
company that he had a patent situation here.
    But he had a great idea of starting something like a small 
claims court for patents worth under, like, $25 million, and 
make it quick and easy and inexpensive. That would make them 
more competitive, as well. A lot of good ideas.
    Senator Shaheen. I think the good news on patents is that 
patent reform legislation has passed both Houses. I think there 
is an agreement to move that legislation forward. This has 
actually had real strong bipartisan support, so it has been one 
of the things that people have gotten behind, and hopefully 
that will make a huge difference.
    But thank you all very much. Thank you for taking time to 
be here and for your testimony and for your good ideas, and we 
will take back what we have heard today, share that with the 
Small Business Committee, and hopefully all of us be able to 
respond in ways that will make it easier for small businesses 
to export.
    Senator Ayotte. Thank you very much. I appreciate it. Thank 
you, Senator Shaheen.
    Senator Shaheen. Let me also point out that the record of 
this hearing will be open for two weeks, so there may be other 
questions that we will submit. We will submit some of the 
questions that we got from the audience for answers from some 
of the agencies who have been represented here.
    Again, I want to thank--special thanks to all of the folks 
who have come from out of town, all of our witnesses from 
Washington. We hope you will stay overnight here in New 
Hampshire, enjoy----
    Senator Ayotte. Spend lots of money.
    [Laughter.]
    Senator Shaheen. Yes, enjoy what we have to offer.
    To all of you in the audience, thank you very much. We hope 
you will take note of everybody who represents one of the 
services that is available through our Federal Government, and 
if you need to talk to them, hopefully, they will stay around 
for a few minutes so you can have a chance to connect with them 
and get answers to any questions that you have had. Thank you 
all, again, very much.
    The hearing is adjourned.
    [Whereupon, at 4:07 p.m., the committee was adjourned.]


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