[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]




 
  ACCOMPLISHMENTS AND CHALLENGES AT THE SBA'S OFFICE OF INTERNATIONAL 
                                 TRADE

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

                                HEARING

                               before the

                      COMMITTEE ON SMALL BUSINESS
                             UNITED STATES
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED FIFTEENTH CONGRESS

                             FIRST SESSION

                               __________

                              HEARING HELD
                              MAY 23, 2017

                               __________
                               
                               

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            Small Business Committee Document Number 115-021
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                   HOUSE COMMITTEE ON SMALL BUSINESS

                      STEVE CHABOT, Ohio, Chairman
                            STEVE KING, Iowa
                      BLAINE LUETKEMEYER, Missouri
                          DAVE BRAT, Virginia
             AUMUA AMATA COLEMAN RADEWAGEN, American Samoa
                        STEVE KNIGHT, California
                        TRENT KELLY, Mississippi
                             ROD BLUM, Iowa
                         JAMES COMER, Kentucky
                 JENNIFFER GONZALEZ-COLON, Puerto Rico
                          DON BACON, Nebraska
                    BRIAN FITZPATRICK, Pennsylvania
                         ROGER MARSHALL, Kansas
                           RON ESTES, Kansas
               NYDIA VELAZQUEZ, New York, Ranking Member
                       DWIGHT EVANS, Pennsylvania
                       STEPHANIE MURPHY, Florida
                        AL LAWSON, JR., Florida
                         YVETTE CLARK, New York
                          JUDY CHU, California
                       ALMA ADAMS, North Carolina
                      ADRIANO ESPAILLAT, New York
                        BRAD SCHNEIDER, Illinois
                                 VACANT

               Kevin Fitzpatrick, Majority Staff Director
      Jan Oliver, Majority Deputy Staff Director and Chief Counsel
                     Adam Minehardt, Staff Director
                     
                     
                     
                            C O N T E N T S

                           OPENING STATEMENTS

                                                                   Page
Hon. Steve Chabot................................................     1
Hon. Nydia Velazquez.............................................     3

                                WITNESS

Mr. Peter J. Cazamias, Associate Administrator, Office of 
  International Trade, United States Small Business 
  Administration, Washington, DC.................................     4

                                APPENDIX

Prepared Statement:
    Mr. Peter J. Cazamias, Associate Administrator, Office of 
      International Trade, United States Small Business 
      Administration, Washington, DC.............................    23
Questions for the Record:
    None.
Answers for the Record:
    None.
Additional Material for the Record:
    SBA OIG Report...............................................    26


  ACCOMPLISHMENTS AND CHALLENGES AT THE SBA'S OFFICE OF INTERNATIONAL 
                                 TRADE

                              ----------                              


                         TUESDAY, MAY 23, 2017

                  House of Representatives,
               Committee on Small Business,
                                                    Washington, DC.
    The Committee met, pursuant to call, at 11:00 a.m., in Room 
2360, Rayburn House Office Building, Hon. Steve Chabot 
[chairman of the Committee] presiding.
    Present: Representatives Chabot, King, Luetkemeyer, 
Radewagen, Knight, Kelly, Blum, Comer, Bacon, Fitzpatrick, 
Marshall, Estes, Velazquez, Evans, Murphy, Lawson, Clarke, 
Adams, Espaillat, and Schneider.
    Chairman CHABOT. The Committee will come to order.
    We want to thank everybody for being here today, and we 
would like to recognize somebody in our audience first, before 
we get to the business. I understand that we have a guest, Mr. 
Alex Bacon, from Omaha, who is the son of one of our newest and 
greatest members. Let us hear it for Alex. All right.
    Anybody else got any relatives here today that we want to 
embarrass?
    If not, we want to, again, thank everyone for being here to 
hear from the Small Business Administration's Office of 
International Trade, the OIT. Increasing small business exports 
has been a top priority for this Committee over the years, and 
I am pleased to be receiving an update from the OIT on their 
efforts to better coordinate Federal resources and help small 
businesses looking to export.
    There is no question that foreign markets hold incredible 
opportunities for America's small businesses. Ninety-five 
percent of all consumers live outside the borders of the United 
States, and yet, only 1 percent, approximately, of United 
States small businesses actually export--only about 300,000 of 
America's small businesses out of the 26 million business that 
we have in this country.
    Unfortunately, many small businesses consider exporting to 
be out of reach. Some small businesses believe it is too 
expensive or too complicated to find potential customers. Other 
small businesses that start exploring the idea of exporting 
often just give up because the process becomes too confusing 
and/or too complicated.
    I believe that these are the real barriers to trade. If we 
want to unleash America's most significant economic force, then 
we must make it easier for small businesses to participate in 
the global marketplace. It has become clear that we must compel 
the administration to continue its efforts to better coordinate 
Federal resources so they are more efficient, streamlined, and 
better prepared to help businesses navigate the export process.
    In recent years, my colleagues and I have taken steps to do 
just that. Congress moved to strengthen America's small 
business export activities by expanding the SBA's role in 
export promotion. OIT was directed to increase coordination 
efforts between Federal agencies engaged in export promotion, 
offer greater counseling and training to small businesses 
interested in expanding into foreign markets, and broaden its 
export finance counseling. Additionally, in 2015, Congress 
established the State Trade and Expansion Program, STEP. 
Replacing a 3-year pilot program, the STEP program awarded 
grants to States to strengthen their export agendas and assist 
small businesses looking to begin exporting or expand their 
existing export operations. Unfortunately, various Government 
Accountability Office and SBA Office of Inspector General 
Reports have identified a number of real shortcomings at OIT. 
Alarmingly, some recommendations made by GAO nearly 5 years ago 
still have not been addressed.
    The STEP Grant Program is of particular concern to this 
Committee. The OIT report released just this month found that 
the SBA was unable to provide consistent data regarding the 
program's awards and expenditures and that the SBA has not been 
updating its data accurately.
    Furthermore, the report indicates that grant recipients 
left over 25 percent of their awarded funds unused. This leads 
me to believe that there were probably opportunities for small 
business exporters that were completely missed. What good is 
allocating this grant money if it is not going to be 
administered properly, or worse, it goes completely unused?
    Finally, I would like to touch on another issue that has 
been raised in recent weeks, and that is the apparent lack of 
communication between the OIT and the Office of Advocacy. Last 
month, the United States and Argentina entered into a 
memorandum of understanding, MOU, on, and I quote, ``joint 
cooperation or regulatory coherence and meaningful engagement 
with private sector.''
    I understand that the OIT did not make the Office of 
Advocacy even aware of the agreement or ask for input on it 
until the agreement was nearly finalized. I am seriously 
concerned by this information. As I made clear, one of the 
things OIT is tasked with is coordinating Federal agencies' 
export promotion efforts. If they are unable to coordinate 
within their own agency, I am led to believe that the OIT may 
be incapable of following through on its fundamental 
responsibilities.
    So today, we will hear from OIT's associate administrator, 
Peter--is it Cazamias?
    Mr. CAZAMIAS. Cazamias.
    Chairman CHABOT. Cazamias. I am going to mispronounce that 
again a couple times.
    Mr. CAZAMIAS. That is quite all right.
    Chairman CHABOT. I apologize. You can call me anything you 
want to.
    Mr. CAZAMIAS. Story of my life.
    Chairman CHABOT. Chabot, Chabot, Cabbott, Shabot.
    On how the SBA plans to address the recommendations from 
the GAO and OIG, as well as how they plan to more efficiently 
and effectively assist America's small businesses hoping to 
join the global marketplace.
    And we again thank you for being here. And I would now like 
to yield to the ranking member, Ms. Velazquez, for her opening 
remarks.
    Ms. VELAZQUEZ. Thank you, Mr. Chairman. And welcome, Mr. 
Cazamias.
    Year after year we are told that small businesses are the 
catalyst for the growth of the U.S. economy, and rightly so as 
they create nearly two-thirds of new jobs and are responsible 
for countless innovations. A critical subset of this group is 
small exporters. In fact, 300,000 small businesses are sending 
their products across the world and three in five nonexporting 
firms are now interested in following suit. Firms that export 
grow faster, generate more jobs, and pay higher wages than 
other businesses. Clearly for our economy to continue gaining 
steam, it will increasingly depend on global commerce to fuel 
expansion.
    Despite the advantages that come with trade, it remains 
exceedingly difficult for small businesses to enter foreign 
markets. Just 1 percent of small firms in this country are 
exporting their goods overseas, and even though small and 
medium-size businesses account for 97 percent of American 
exporting companies, their exports count for only a third of 
all U.S. goods shipped overseas.
    The challenges small firms face are multifaceted. It takes 
time to identify foreign markets, to target new customers, and 
to learn the ins and outs of the exporting process. Nearly 40 
percent of small businesses say they do not export because they 
simply do not know where to start. Over half of small business 
exporters spend a minimum of 3 months and nearly 10 percent of 
their annual operating revenue just preparing to export. 
Compounding this obstacle is that they often have fewer 
resources to spend on developing a trade strategy or complying 
with complex regulations. As a result, they consistently enter 
fewer foreign markets than their larger counterparts with 
nearly 60 percent only entering one, while more than half of 
large firms export to five or more markets.
    These difficulties are something we must be mindful of as 
the administration works to negotiate NAFTA. In theory, 
balanced free trade agreements have the potential to be a 
significant driver of growth. By eliminating tariffs and other 
barriers to trade, they can help small firms expand sales 
globally and create jobs at home.
    In order for these benefits to be fully realized, however, 
we must hold our trading partners accountable for unfair trade 
practices and ensure that our small businesses receive the 
level playing field they were promised. Truth be told, small 
businesses often face challenges when it comes to competing 
with foreign imports produced in countries with lower labor and 
nonexistent environmental standards. Time and again we are told 
about new markets, but little discussion is given to the low-
priced goods that will spill onto our domestic marketplace. 
Good for consumers? Maybe. Good for small businesses? 
Definitely no. Regardless of this larger debate, it is 
absolutely critical that small businesses are able to compete 
with their larger counterparts by participating in this global 
marketplace.
    I would like to thank our witness, and I look forward to 
hearing how SBA export promotions are serving our small 
businesses.
    Thank you, Mr. Chairman. I yield back.
    Chairman CHABOT. Thank you very much.
    If Committee members have opening statements prepared, we 
would ask they be submitted for the record.
    And I will take just a moment to explain our timing rules 
here, which is pretty simple. Five minutes. The yellow light 
will come on after you have gone 4 minutes and that will let 
you know you have got a minute to go, and then the red light 
will come on. Since we just have one witness here this morning, 
if you need a little bit more time, you know, we will 
understand that as long as it does not go on too long. And then 
we will all question you for 5 minutes.
    And I would now like to introduce our one witness here 
today, who is Peter Cazamias. He is the associate administrator 
for the Office of International Trade, OIT, at the Small 
Business Administration. Mr. Cazamias has extensive experience 
in international commerce having worked in the United Kingdom, 
Hong Kong, and India. Prior to serving at the SBA, he spent 7 
years in the energy industry with FMC Technologies in Houston, 
Texas. Mr. Cazamias also served as a Marine, graduating from 
Officer Candidate School in 1997 and went on to the Basic 
School and Naval Justice School. And we thank you for your 
service.
    Associate Administrator Cazamias, you are recognized for 5 
minutes.

STATEMENT OF PETER CAZAMIAS, ASSOCIATE ADMINISTRATOR, OFFICE OF 
       INTERNATIONAL TRADE, UNITED STATES SMALL BUSINESS 
                         ADMINISTRATION

    Mr. CAZAMIAS. Thank you, Chairman Chabot, Ranking Member 
Velazquez, and esteemed members of the Subcommittee. I want to 
thank you for having me here to give my speech and to hear your 
important views.
    Three weeks ago, about 3 weeks ago, I was honored to accept 
Administrator McMahon's appointment and begin my service as 
associate administrator for International Trade at the Small 
Business Administration, and today, I am honored to be able to 
meet with you and to listen to your important views on small 
business and trade.
    Since starting at the SBA, I have been familiarizing myself 
with the role of the Office of International Trade and its 
function in helping small business grow and thrive through 
exports and involvement in global commerce.
    Administrator McMahon believes that exporting is an 
essential component of small business growth because, as 
mentioned, 95 percent of the world's consumers and over three-
quarters of all existing purchasing power exists outside the 
U.S. border.
    Just a few weeks ago, I accompanied Administrator McMahon 
to the United Nations where she signed a proclamation naming 
June 27th as Micro, Small, and Medium-Size Enterprise 
International Day, and in so doing, she helped bring about 
international recognition to the vital role of small businesses 
in producing innovation, creativity, and job growth.
    Today, among over our 28 million small businesses also as 
mentioned, a very small percentage can claim the title of 
exporter. The Office of International Trade is charged by 
statute to improve upon the 1 percent number cited. Its stated 
mission involves, one, increasing the number of U.S. small 
businesses that export; and two, increasing the dollar volume 
of U.S. small business exports.
    The SBA, under the leadership of Administrator McMahon, 
will address this dual mission by focusing on three critical 
needs small businesses have when attempting to export.
    First is the need for information. The SBA Office of 
International Trade recognizes that guidance and support for 
small businesses is crucial to achieving a foothold in the 
international marketplace. As such, OIT has a network of 21 
export finance managers based in U.S. Export Assistance Centers 
who provide counseling on international payment risks and U.S. 
Government export financing options.
    Two is the need for capital. Small businesses cannot trade 
and export to these new markets unless they have access to 
capital. Specifically, trade finance. Small businesses are 
hardest hit by trade finance gaps and compliance challenges. In 
the United States, over one-third of all small businesses find 
financing harder to obtain for foreign sales than for domestic 
sales. Given this challenge, the SBA works with lenders to 
provide tailored trade finance loan guarantees so that small 
businesses can finance their foreign sales and growth where the 
private sector is unable or unwilling to act because of real or 
perceived risks.
    Three is the need among small businesses for overseas 
promotional products and market access. OIT emphasizes the 
importance of small business export promotion by strengthening 
its partnership with the State and territory governments 
through the State Trade Expansion Program, known as STEP, and 
through its chairmanship of the Trade Promotion Coordinating 
Committee's Small Business Working Group. This is a group of 
interagency representatives dedicated to the mission of 
increasing the number of small business exporters. And OIT also 
ensures that the interests of small business are adequately 
represented in bilateral and multilateral trade negotiations, 
always pressing for transparency, flexibility, and coherence in 
trade agreements so that foreign trade regulations do not 
unnecessarily burden U.S. small business exporters.
    I am able to attest to the dynamic power of exporting and 
international trade and the effect it has on small businesses 
and local communities. I hail from the South Texas border city 
of Laredo. Located on the north bank of the Rio Grande, 
Laredo's economy is virtually entirely based on international 
trade and it serves as one of the largest land ports in the 
United States.
    After graduating from Yale University, I served as an 
intern for the U.S. Commercial Service in Mexico City, where 
the negotiation of NAFTA was at the time a pressing issue. As a 
law student at the University of Texas, I studied and examined 
NAFTA's dispute resolution mechanisms. And more recently in my 
professional life, I drove the Asia-Pacific financial 
operations as the regional CFO for Insituform Technologies, a 
U.S.-based pipeline company. I then lived in Delhi, India, and 
led the operational turnaround of Insituform's flagship Asian 
operating company.
    I mention these background facts only to convey to you that 
I possess a longstanding interest in and familiarity with 
international trade and international business, and I intend to 
bring my practical, real-world business experience to bear in 
this role to help U.S. small businesses grow and prosper.
    To conclude, I wish to say that under the able leadership 
of Administrator McMahon, I will be committed to ensuring that 
our small business exporters find all the support they need to 
be able to expand into international markets. I furthermore 
will endeavor to effectively and efficiently administer the 
Office of International Trade. My goal is to enable OIT to 
expand the footprint of small businesses in the overseas 
marketplace, thereby spurring innovation and employment growth 
here at home.
    And with that, I wish to thank you for the opportunity to 
speak, and I look forward to answering your questions.
    Chairman CHABOT. Thank you very much. And I will recognize 
myself for 5 minutes to begin the questioning.
    Mr. Cazamias, as you mentioned, you have been in position 
all of 3 weeks now, so we obviously do not hold you responsible 
for anything that happened prior to you being there, unless, of 
course, you screwed something up in the 3 weeks you have been 
there. But as I mentioned in my opening statement, I do have 
real concerns regarding the OIT's lack of coordination with the 
Office of Advocacy.
    As the associate administrator for the Office of 
International Trade, will you commit to us to notifying the 
Office of Advocacy of any future MOUs or other agreements 
relating to international regulatory cooperation and small 
businesses? Will you defer to the Office of Advocacy on those 
matters?
    Mr. CAZAMIAS. Chairman Chabot, thank you for the question. 
I say without qualification, yes, I will absolutely in my role 
endeavor to keep the Office of Advocacy engaged and check with 
them every time we are having an MOU on the horizon.
    Chairman CHABOT. Thank you. That was the right answer. We 
appreciate it.
    A recent OIG report raises concerns about the Office of 
International Trade's oversight practices. Evidence suggested 
that four of the grants reviewed by OIG never received the 
required approvals from the associate administrator of OIT. How 
will OIT work to ensure that the STEP grant funds receive the 
proper approval going forward?
    Mr. CAZAMIAS. Thank you, Chairman Chabot. This is one of 
the issues that I have inherited. And we are taking a 
systematic approach to documentation oversight procedures. We 
have contracted already, the office has contracted a 
consultant, a Six Sigma lean operations consultant, to take a 
look at all of our processes, mapping the entire process out 
and identifying areas that are critical to quality, finding 
where there are gaps, reducing redundancies, and we hope that 
at the end of this process we are going to have a process that 
actually is more comprehensive and effective in being able to 
address some of the issues that have existed in the past.
    Chairman CHABOT. Thank you.
    The OIG reviewed the SBA's STEP Grant Program to determine 
how funds were used. According to the OIG, the SBA was unable 
to provide consistent data for fiscal years 2011 through 2015. 
In fact, every office they met with provided different totals 
for each year. What steps will the OIT take to ensure more 
accurate and greater consistency in its financial reporting?
    Mr. CAZAMIAS. Thank you, Chairman Chabot. This, as I 
understand, is part of the old reporting structure before 
fiscal year 2014 where discrepancies between various elements 
of the SBA were found. My understanding is that there is a new 
reporting structure in place. This, coupled with the approach 
we are now taking at mapping out processes and revamping our 
entire operational process for financial reporting and for 
documentation of milestone achievements, should produce the 
desired results.
    Chairman CHABOT. All right. Thank you.
    Congress authorized the STEP Grant Program to promote 
exports and expand trade opportunities at the State level. The 
OIG found that in more than half of the grants they reviewed 
the participants did not spend the majority of the funds. How 
will the OIT establish and document its oversight procedures so 
that STEP program managers can monitor the grant recipients' 
progress more closely and help them meet their goals?
    Mr. CAZAMIAS. Thank you. This is an issue that is currently 
under investigation. I want the Committee to know that we are 
looking at all possibilities to understanding where the process 
may have failed in the past, whether it is an administrative 
issue--in year zero the applicants may have had certain needs, 
in year one they have changed. If this is the case and the 
reason for the gap, then we need to look at potentially 
creating new variation orders, change orders, and the like. 
However, maybe it is a problem of incentives. If that is the 
case, then the oversight process that is coming out of this new 
look at our procedures may very well answer the issue.
    The point is, I think that we are undertaking a 
comprehensive look at all of our processes, and we think that 
this is one of the things we are going to have in mind to be 
able to produce a more consistent result without those kind of 
gaps.
    Chairman CHABOT. Thank you. I think I have time to squeeze 
in one last question here.
    The Committee has heard concerns with the OIT's grant 
management and administration practices. There are a variety of 
Federal agencies that manage much more complex grants. I am 
wondering, has anyone from the SBA consulted with other Federal 
agencies to identify more efficient ways to administer the STEP 
program?
    Mr. CAZAMIAS. Thank you, Chairman Chabot. This is a 
question I will take under advisement and I will provide an 
answer to your office as soon as I have one.
    Chairman CHABOT. All right. Thank you very much. My time 
has expired.
    The ranking member is recognized for 5 minutes.
    Ms. VELAZQUEZ. Thank you, Mr. Chairman.
    Exporting is a key component of small business growth. Yet, 
only 1 percent of small businesses are currently exporting 
overseas. I have been here for 25 years. This is the list of 
all trade agreements that we have been able to get signed by 
the United States from Chile, Colombia, Jordan, Korea, NAFTA, 
CAFTA, Panama, Singapore, Peru, Trade Promotion Agreement, and 
every time that we have held hearings on trade agreements we 
always raise the issue about the potential, the economic 
potential of small exporters. And time and again we hear 1 
percent. One percent of small exporters are doing business 
overseas with one customer.
    So my question to you is while free trade agreements have 
opened up new markets and have always been sold to us and to 
the American people as benefitting small businesses, it is 
clear that large corporations are the primary beneficiaries. It 
was 1 percent 25 years ago when we were discussing trade 
agreements, and today it is only 1 percent. So what changes to 
free trade agreements will have the biggest impact on small 
firms?
    Mr. CAZAMIAS. Thank you, Ranking Member Velazquez, for the 
question.
    Ms. VELAZQUEZ. And I hope that you are all evaluating and 
discussing what changes, because the president is committed to 
renegotiate NAFTA. So there you have it.
    Mr. CAZAMIAS. Yes, Ranking Member Velazquez. Well, I will 
take the information you provided very seriously. What I can 
say is that it is clear that we are taking a look at all of our 
free trade agreements. I just came back last week from a Trade 
Deficit Panel where we were meeting with business owners from 
all over the United States--Colorado, North Carolina, and 
Maine--and we were looking at the legacy of our free trade 
agreements. And that legacy seems to be massive deficits. And 
the implication or the ramification of those massive deficits 
has been high unemployment and shuttered industries.
    Ms. VELAZQUEZ. I know all that. I want to know that now we 
are going to renegotiate the administration trade agreement. 
The chairman and I, we sit with a----
    Mr. CAZAMIAS. Eye to eye?
    Ms. VELAZQUEZ. What is the name? Right, the HAGON 
Commission and we are going to be providing our input. So it 
will be helpful if you explain to us, what are the 
recommendations since you are traveling and listening to small 
exporters throughout the nation so that we could make those 
recommendations.
    Let us go to the STEP program. It was authorized in 2010, 
right?
    Mr. CAZAMIAS. That is my understanding.
    Ms. VELAZQUEZ. So the STEP program was authorized. There 
are matching funds that are provided to the states. How are you 
measuring whether this program is actually generating benefits 
to small firms? What metrics are you using to measure the 
program's success?
    Mr. CAZAMIAS. Thank you for the question, Ranking Member 
Velazquez.
    Only 3 weeks into the position, this is one of the issues I 
have to get my hands around. I do know that we use an ROI 
metric that involves the dollars of exports that were generated 
as a result of our programs touching the businesses versus the 
cost to administer, but I will get a more precise and more 
robust answer for you as soon as I can.
    Ms. VELAZQUEZ. And can you tell the committee, and if we do 
not have time, would you please send to the committee what 
specific activities are authorized under this program? 
Otherwise, I will conclude that this is simply subsidizing 
state expenses. So those metrics are important and what type of 
activities are authorized to use the funds for.
    Mr. CAZAMIAS. OIT will provide that information summarily. 
Thank you.
    Chairman CHABOT. Thank you very much. The gentlelady's time 
has expired.
    The gentleman from Missouri, Mr. Luetkemeyer, who is the 
vice chairman of this Committee, is recognized for 5 minutes.
    Mr. LUETKEMEYER. Thank you, Mr. Chairman. And thank Mr. 
Cazamias for being here today.
    Just to follow up on a couple things here. I think the 
chairman made comment in his earlier remarks that GAO indicated 
that the past administration over 5 years had not done anything 
to fulfill some of their recommendations and so also in here 
there is some collaboration and coordination things that have 
not been done. And so the bar is pretty low for you from a 
standpoint that we wonder why we do not have an economy that is 
growing and we have something like this, SBA, which is supposed 
to stimulate growth and here we have twiddled our thumbs for 5 
years.
    Which brings me to the point, GAO also found that only 15 
percent of some individuals' time was being spent on the export 
promotion responsibilities. Can you tell me that these 
individuals who are spending 15 percent of the time doing their 
job, are they working on other jobs or are they watching movies 
on their screens or whatever else they are doing? Or what are 
we doing here?
    Mr. CAZAMIAS. Congressman, I take the message very clearly, 
and I will commit to examining this issue.
    Mr. LUETKEMEYER. Okay. Just kind of curious. We do have 
examples of some of the employees being caught, you know, 
playing games and watching videos and things on their tube, and 
so when GAO says this, is it something like that or do they 
actually just have overlapping duties that they are actually 
doing other things instead of doing their job? I mean, there 
are other things they could be doing productively, I assume.
    From your experience, with regards to exporting, what would 
you see as the barriers for small businesses to export that you 
can help them overcome with your new job?
    Mr. CAZAMIAS. Thank you for the question, Congressman 
Luetkemeyer. I think the three issues, the three areas where we 
are able to provide the most effective assistance is in 
information, especially for new exporters, so that we can give 
them an idea of how to go about internationalizing their 
business, as well as in capital, because the Office of 
International Trade does act in areas where there is a 
perceived or actual risk that the private sector does not wish 
to act in providing trade finance. So I think in providing that 
kind of liquidity is an area where we are able to assist. And 
then thirdly, in market access, in coordinating dual trade 
missions with businesses and connecting them with overseas 
markets is something we are committed to doing.
    Mr. LUETKEMEYER. One of the things that Congress is looking 
at as well as the President has suggested is a border 
adjustment tax or some sort of leveling of the playing field 
fee whenever products come into the country. Have you seen the 
problem on exports going out where our companies have been hurt 
by the ability to compete because of the border adjustment tax 
of other countries? And have you discussed it with small folk 
yet with regards to them having a fee perhaps imposed on some 
of their inputs that they turn around and have to export? I 
mean, it is kind of a complicated situation, but I am just 
curious if you have looked at it at all or if you have any 
comments.
    Mr. CAZAMIAS. Congressman Luetkemeyer, I just got back last 
week from a Trade Deficit Panel at the Department of Commerce, 
and just as you alluded to, the datapoints, which are very few 
still, are mixed. It does seem that the idea of a border 
adjustment tax has been received with mixed feelings on the 
part of small businesses. In some cases, they support it even 
though it will make their products more expensive. In other 
cases, they believe that it is going to make their products 
more competitive with imports.
    So I think we are at the beginning of the process in terms 
of a listening tour and data gathering, and I hope to be able 
to synthesize that information and be able to provide a more 
robust answer at some point throughout my tenure.
    Mr. LUETKEMEYER. Okay. One last question here. With regards 
to trade agreements, you know, you were a director at the 
United Nations here recently. Are you, whenever they have trade 
negotiations, or the SBA director herself, at the table 
whenever these negotiations take place so that you can 
represent small businesses and their problems or concerns with 
these agreements?
    Mr. CAZAMIAS. The Office of International Trade does have 
trade specialists who do perform the commander's guidance. So 
we have specialists who actually do this.
    Mr. LUETKEMEYER. Okay. So there is somebody representing 
the small business folks' interests whenever a trade agreement 
is negotiated?
    Mr. CAZAMIAS. That is exactly true.
    Mr. LUETKEMEYER. Okay. And I assume that, you know, the 
agreements that we have have been in place for many, many 
years, and a lot of them probably just need to go back and 
retweak them and make sure that--are you a part of those 
negotiations or have you pointed those out to the President or 
the administration or the trade authorities?
    Mr. CAZAMIAS. Yes, Congressman. We are starting out with a 
commercial dialogue with a number of nations as we are taking a 
look at these trade agreements anew.
    Mr. LUETKEMEYER. Okay. Very good. Thank you, Mr. Chairman.
    Chairman CHABOT. The gentleman's time is expired.
    The gentleman from Pennsylvania, Mr. Evans, who is the 
ranking member of the Subcommittee on Economic Growth, Tax, and 
Capital Access, is recognized for 5 minutes.
    Mr. EVANS. Thank you, Mr. Chairman.
    According to statistics from the U.S. Census, exports from 
the Commonwealth of Pennsylvania declined by 7.3 percent from 
2015 to 2016. There are a number of possible reasons for this 
decline but I am interested in supporting efforts of more small 
businesses to educate themselves and the possibility to seek 
customers outside the U.S. And to that end, most accounts of 
the Office of International Trade does a good job of helping 
businesses is my understanding.
    But I am concerned about the level of coordination between 
the U.S., Export-Import Bank, the Commerce Department, and 
other similar Federal agencies which assist. Could you please 
describe how you communicate with these other agencies being 
that you are only 3 weeks there, but in terms of your vision of 
coordinating with those other agencies?
    Mr. CAZAMIAS. Thank you for the question, Congressman 
Evans.
    Yes, as you mentioned, it is only 3 weeks, but to my 
understanding, we are involved with the TPCC, which is a group 
of interagency--different agencies that provide a common 
framework for all the tools the Federal Government has at its 
disposal to help small businesses export, and this is one of 
the main ways that we coordinate with other agencies through 
chairing the small working group at the TPCC.
    Mr. EVANS. So in terms of your own vision of it, I mean, I 
understand, what are your thoughts on it?
    Mr. CAZAMIAS. Well, my thoughts are that it is going to be 
very important that we run the Office of International Trade 
effectively and efficiently, and if that means that there are 
ways to streamline by coordinating with other agencies, that is 
something that we are all going to be for. It is much better to 
work in concert with other agencies than in a silo.
    Mr. EVANS. The internet and platforms such as eBay have 
broken down barriers for small firms. What can the Federal 
Government learn from these entries such as eBay has tried to 
convince more small firms to consider exporting?
    Mr. CAZAMIAS. We think the internet is a fabulous tool for 
innovation and growth, and so I can commit to you that it will 
be one of the very many different areas we look at to try and 
imitate in terms of innovation.
    Mr. EVANS. Do you have any specific ideas at this point? I 
know----
    Mr. CAZAMIAS. I am sorry, Congressman. Only 3 weeks into 
the job I cannot say I have any fully formed ideas yet on this 
issue.
    Mr. EVANS. Okay, no problem.
    I yield back the balance of my time.
    Chairman CHABOT. Thank you. The gentleman yields back.
    The gentleman from Nebraska, the father of Alex Bacon, is 
recognized for 5 minutes.
    Mr. BECAN. Thank you very much. I really appreciate your 
transparency and jumping in the job like you have, and we wish 
you well.
    Mr. CAZAMIAS. Thank you, Congressman.
    Mr. BECAN. I wanted to make sure I understood the 
differences of what some of the other agencies are doing out 
there. I know the Import-Export Bank, for example, supports a 
lot of our small businesses in our district. Could you help 
distinguish how you all differ with them and how you support 
small business and exports?
    Mr. CAZAMIAS. Well, I think there are two areas where I 
could speak to that. One is in terms of the trade finance that 
we offer, but, more importantly, I think one of the greatest 
differentiators of the small business administration is that it 
is specifically focused on small businesses. It is our reason 
for being. And this is something that is important to keep in 
mind because by focusing on small businesses, it does help 
avoid the bang-for-the-buck approach that ends up creating an 
overconcentration of focus and resources on the larger 
entities.
    Mr. BECAN. Okay. Thank you. And one thing that intrigues me 
is the matchmaker program and how you match the small 
businesses up with folks who help them reach access in other 
countries. Can you talk a little bit more about how that 
program is working? I think it has not been in existence for a 
long time. How many of these forms have you had and how is it 
working?
    Mr. CAZAMIAS. Congressman, I do not have that information 
at my disposal at this moment, but I will get it for you and we 
will send it over to your office.
    Mr. BECAN. Okay. Thank you.
    Mr. Chairman, I yield back.
    Chairman CHABOT. The gentleman yields back. Thank you.
    The gentlelady from Florida, Ms. Murphy, who is the ranking 
member of the Subcommittee on Contracting and Workforce, is 
recognized for 5 minutes.
    Ms. MURPHY. Thank you for being here today. I appreciate 
your testimony.
    As you mentioned in your testimony, access to capital 
remains a significant barrier for small firms to access foreign 
markets. According to a recent survey by the National Small 
Business Association, only 40 percent of small businesses were 
even aware of the SBA export lending programs.
    So two questions for you. One, do you think that the 
existing export loan programs are enough to meet the financing 
needs? And then secondly, what SBA plans do you have to better 
educate small businesses about the availability of the export 
loan programs?
    Mr. CAZAMIAS. Thank you for the question, Congresswoman.
    This is definitely one of the largest challenges I have 
inherited is understanding how to broaden our reach so that 
more small businesses are aware of the levers at their disposal 
at the Small Business Association. What I can say is that even 
now, the Small Business Association is--Small Business 
Administration is undertaking dialogues with local small 
businesses in Illinois, where there is a listening tour going 
on with the National Association of Manufacturers to understand 
exactly where our best practices have lied, what has been 
helpful, what has not been helpful. This is intended to not 
only improve the quality of our outreach, but also the breadth 
of it. So we are undertaking efforts to do exactly this.
    Ms. MURPHY. Why just in Illinois?
    Mr. CAZAMIAS. Oh, this is the beginning. This is one of our 
first stops. This is going to continue throughout a number of 
different States. I know Texas is next and there will be many 
others on the way.
    Ms. MURPHY. Great. Do you know if Florida will be on your 
list?
    Mr. CAZAMIAS. I intend to put it on the list.
    Ms. MURPHY. Great. Thanks.
    Moving on to a different topic, you know, the theft of 
intellectual property has become a real major problem in global 
business environment, particularly for small firms, and this is 
because they often lack the knowledge and the resources needed 
to adequately protect their IP abroad. The U.S. Patent and 
Trademark Office found that only 15 percent of small firms 
conducting businesses overseas know that they need to file for 
IP protection abroad. And this is really concerning. What does 
SBA plan to do to help small business owners guard themselves 
against theft of their IP in overseas markets?
    Mr. CAZAMIAS. Thank you for the question.
    I think I can say that we are going to take this issue very 
seriously and incorporate it as to one of the points that we 
use when we counsel small businesses in exporting.
    Ms. MURPHY. So you intend to integrate it into the baseline 
training?
    Mr. CAZAMIAS. That is going to be something we are 
definitely going to look at. The message has been received very 
well and it is going to be something that we are going to have 
to look at more seriously.
    Ms. MURPHY. Great, thank you. And I will yield back the 
remainder of my time.
    Chairman CHABOT. The gentlelady yields back.
    The gentleman from Kansas, Dr. Marshall, is recognized for 
5 minutes.
    Mr. MARSHALL. Thank you, Chairman.
    I guess, tell me some examples, who is doing a great job 
working with you? Can you give us some examples of some small 
companies that you really think are working well with your 
people?
    Mr. CAZAMIAS. Thank you for the question, Dr. Marshall.
    I think in the fullness of time I will be able to provide 
more examples when I have more information at my hand.
    Mr. MARSHALL. Okay. All right. I represent some small 
businesses that make precision agriculture products. And if I 
would go back and visit with them and say this is what your 
branch of government can help them with, what would you tell 
them? What would you want me to tell them that you are going to 
help them--and they do have some access to some markets in 
Europe now, but boy, they could sure use a boost.
    Mr. CAZAMIAS. Thank you for the question, Dr. Marshall.
    I think that one of the functions of the OIT is to try and 
open up foreign markets and make introductions between our 
domestic companies and foreign markets. So a number of the 
export centers will be able to counsel some of these small 
businesses and promote dual trade missions overseas or get 
involved in the matchmaking program or even through the STEP 
program to try and enhance that market access.
    Mr. MARSHALL. Okay. I guess my last question, what can we 
do to help you do your job better? What can we do in Congress 
to empower you?
    Mr. CAZAMIAS. Thank you for the question.
    I could not presume to give you advice only 3 weeks in, but 
what I can commit to is that my office will have a virtuous 
information loop with your offices so that when we can do 
something, provide some sort of information that will help us 
be successful and help you be more successful, we will 
certainly provide that information.
    Mr. MARSHALL. Thank you. And I yield back.
    Chairman CHABOT. The gentleman yields back.
    The gentleman from New York, Mr. Espaillat, is recognized 
for 5 minutes.
    Mr. ESPAILLAT. Thank you, Mr. Chairman, Ranking Member 
Velazquez, for this hearing. Thank you for your testimony.
    As the borders of the global market keep expanding, it is 
crucial that small business can benefit from this expansion and 
be competitive in a variety of arenas, especially in the topics 
related to export. The Small Business Administration Office of 
International Trade is an essential part of the development 
initiatives that will enhance and are strictly focused on 
improving the chances that small businesses will succeed in 
their economic ventures.
    The Hamilton Project specifically relating to this 
discussion in a paper titled, ``Minority and Women 
Entrepreneurs: Building Capital Networks and Skill,'' has 
signaled that research shows that minority and women-owned 
businesses rely significantly more on investments of personal 
or family wealth rather than on outside debt or equity. This 
clearly sets some minority and women-owned businesses at a 
disadvantage, especially when their families do not have the 
wealth to help them start out and maintain a business.
    My questions will focus on the constraints of the trade 
deals that many U.S. small businesses could choose to engage 
with; the countries, mainly NAFTA and CAFTADR. I know that 
there are significant hurdles placed by those trade deals on 
even big businesses--packaging, transportation, the hygienic 
level of the products that they may want to export, 
intellectual property. These are issues that are very 
cumbersome and often very difficult for even big businesses to 
engage with.
    Are there any particular plans to help, particularly 
minority, women-owned, and veteran businesses, veteran-owned 
businesses, to overcome these major hurdles that even large 
corporations often have, you know, some difficulties with? 
Otherwise, there is not going to be a real opportunity for 
small businesses to engage in trade outside of the United 
States. Do you have any roadmap as to how you are going to 
assist them?
    Mr. CAZAMIAS. Thank you for the question, Congressman.
    Yes, I think there is a dual answer to your question or a 
two-part answer. The first is that the Office of International 
Trade, Small Business Administration, does have programs that 
are dedicated to veteran, to women-owned businesses, and to 
minorities for counseling. But moreover, even at the Office of 
International Trade, we will be negotiating. We have 
individuals who will be negotiating trade deals with the idea 
of transparency in mind because we understand fully, and I 
understand fully having lived in India and having done business 
in India, the difficulty of compliance costs even on medium-
size businesses. The difficulty of having to repatriate capital 
back to the United States or register your business overseas.
    So yes, I could not agree with you more. It has a 
disproportionate impact on small businesses and we will be 
negotiating those trade agreements with the interests of small 
business in mind.
    Mr. ESPAILLAT. Okay. My last question is, is there a 
particular reason for which there has not been consistent with 
regards to the grant awards and expenditures in the past years?
    Mr. CAZAMIAS. I understand the question and I thank you.
    One of the things that I have learned as I have inherited 
this is that there were old reporting procedures that led to 
discrepancies. We are now taking a systematic approach, a look 
at our processes. Again, identifying areas that are critical to 
quality, identifying areas where there are redundancies. And we 
are going to map out an entirely new process taking a process-
based approach that we think will have a more robust and 
effective end towards this issue.
    Mr. ESPAILLAT. Thank you. I yield back my time.
    Chairman CHABOT. Thank you. The gentleman yields back.
    The gentleman from Kansas, Mr. Estes, is recognized for 5 
minutes.
    Mr. ESTES. Thank you, Mr. Chair.
    I guess I have more of a comment and maybe asking for a 
commitment for a longer term. In my district, we have a lot of 
involvement in trade. Most of that is with some of our larger 
manufacturing and aerospace companies, as well as a lot of the 
agriculture companies that are there. But we also have a lot of 
smaller businesses, particularly machine shops and other type 
product manufacturers in particular, and the message that I 
hear is the struggle to figure out what resources they have and 
how do they engage in that marketplace? And I know we were 
talking earlier about which one of us was newer on our roles, 
our respective roles, but I guess I would throw the challenge 
down to you and ask if you would strongly consider as you are 
developing your role how to support and work with those smaller 
businesses to help them get a better leg up and get as much of 
a percentage of the international marketplace as they do within 
the domestic market.
    Mr. CAZAMIAS. I commit to that without reservation, 
Congressman. That is, in fact, my mandate.
    Mr. ESTES. Thank you, Mr. Chair. I yield back my time.
    Chairman CHABOT. The gentleman yields back.
    The gentlelady from New York, Ms. Clarke, is recognized for 
5 minutes.
    Ms. CLARKE. I thank you, Mr. Chairman. And I thank our 
Ranking Member Velazquez.
    Foreign markets offer new opportunities for small 
businesses entrepreneurs to unleash their creative talents. 
Whether it is a craft product on Etsy or an industrial 
component for an automobile, each stand to benefit from the 
untapped potential of consumer markets abroad. However, the 
United States trade deficit is over $40 billion. This means 
that foreign actors hold a large amount of American currency 
and exercise influence over its value. This impacts everything 
from the price of fruit in the local grocery store to the cost 
of consumer electronics and basic clothing expenses at big box 
stores. When trade imbalances exist, consumers, often working 
families, are the most affected. These two factors--foreign 
consumer and foreign influence over the value of our currency--
are why it is so important for the SBA to help facilitate small 
business exports.
    So my questions are in that vein. The new administration, 
and Donald Trump's budget, proposes cutting the SBA's budget by 
5 percent. Have you examined how such a decrease could impact 
OIT's ability to carry out its mission and promote America's 
exports? And if so, how?
    Mr. CAZAMIAS. Thank you for the question, Congresswoman.
    The mantra at the SBA is to run this office effectively and 
efficiently. So we will see this as a great opportunity to be 
able to do more with less.
    Ms. CLARKE. I have been hearing more with less for the past 
decade and I have yet to see it produced, especially when you 
look at 1 percent. So let us try to use creativity and 
innovation.
    Do you think that existing SBA export loan programs are 
enough to meet the financing needs of small businesses or do 
gaps still remain?
    Mr. CAZAMIAS. Thank you for the question, Congresswoman.
    This is an issue that I will definitely have to get my 
hands around to understand exactly where the distribution of 
demand is, exactly where our supply is hitting, and where there 
are gaps. This is one of the primary initiatives that I hope to 
be able to fulfill in the near term in my role.
    Ms. CLARKE. Very well. And Congress is currently discussing 
ways of reforming the taxation of earned income abroad. How 
would a change in the treatment of foreign income impact OIT's 
efforts, and what do you view as OIT's role in training small 
businesses about changes to the tax code if they are made in 
order to assure these entrepreneurs and assure this Congress 
that there will be no undue hardship as a result?
    Mr. CAZAMIAS. Thank you, Congressman.
    The Office of International Trade has in its purpose to try 
to internationalize small businesses and make them exporters. 
If tax policy is something that becomes a critical component of 
being able to help small businesses export, I can only assume 
that our trade finance experts will be able to provide the 
necessary counseling so that they can become exporters because 
that is our purpose.
    Ms. CLARKE. And is that something that you would personally 
be examining to make sure that there are not any unintended 
consequences?
    Mr. CAZAMIAS. I can personally commit to ensuring that 
whatever tax policy implications will come down the pike, we 
will incorporate that or examine it very carefully and 
incorporate it into our counseling sessions as needed.
    Ms. CLARKE. Very well. I yield back the balance of my time, 
Mr. Chairman.
    Chairman CHABOT. Thank you. The gentlelady yields back.
    The gentlelady from American Samoa, Mrs. Radewagen, who is 
the chairman of the Subcommittee on Health and Technology, is 
recognized for 5 minutes.
    Mrs. RADEWAGEN. Talofa lava. Thank you, Mr. Chairman, and 
thank you, Ranking Member Velazquez, for holding this hearing. 
Mr. Cazamias, thank you for testifying.
    Mr. CAZAMIAS. Thank you, Congresswoman.
    Mrs. RADEWAGEN. So Mr. Cazamias, what does the SBA estimate 
it spent on export promotion activities in fiscal year 2016? 
Does this include export financing, small business development 
centers export counseling, the export-related activities of the 
district offices, and STEP program? If not, how much did the 
SBA spend on the activities in fiscal year 2016?
    Mr. CAZAMIAS. Thank you, Congresswoman.
    My office does have the breakdown of those numbers and we 
will supply it to your office.
    Mrs. RADEWAGEN. Thank you very much.
    I yield back the balance of my time, Mr. Chairman.
    Chairman CHABOT. Thank you. The gentlelady yields back.
    The gentlelady from North Carolina, Ms. Adams, who is the 
ranking member of the Subcommittee on Investigations, 
Oversight, and Regulations, is recognized for 5 minutes.
    Ms. ADAMS. Thank you, Mr. Chairman. Thank you, Ranking 
Member Velazquez, for hosting the hearing today. And Mr. 
Cazamias--is that correct?
    Mr. CAZAMIAS. Yes, that is correct.
    Ms. ADAMS. Thank you very much for your testimony.
    You talked a little bit about the small women-owned 
businesses, and, of course, I had a question, but I wanted to 
just add to that. You talked about what you all were going to 
do or what you think you might do. I wanted to add rural 
businesses to that as a part of that. I have a special interest 
in women-owned businesses, and those are the socially and 
economically disadvantaged, and making sure that there is equal 
opportunity in terms of this process, particularly the STEP 
proposals as they come across your desk, the weight that you 
give them. But I probably do not need to ask that question. It 
sounded like you are going to be focusing at least to some 
degree on that.
    But let me ask about the discretion that is provided to you 
by the trade facilitation and Trade Enforcement Act in helping 
to assist these disadvantaged communities. Do you find that 
that is going to be helpful to you?
    Mr. CAZAMIAS. Thank you, Congresswoman.
    This is something, whether it is going to be helpful, I do 
not have the information at hand, but I am sure I can tell you, 
I can assure you that the importance of minority-owned 
businesses and women-owned businesses is very high on the 
priority list of this administration, of this Small Business 
Administration. Knowing the identity of our administrator, 
Administrator McMahon, you can understand that she also finds 
it of the utmost importance, and I know that we, even last 
year, were awarding exporter lender of the year to entities and 
banks that have shown outstanding performance in making SBA 
loans to minority-owned businesses. So it is something that is 
very high on the visibility and that we have a commitment to.
    Ms. ADAMS. Great. Thank you.
    You know, when we look at the businesses that are growing 
the fastest, they are women-owned businesses, and more 
specifically, African-American women-owned businesses.
    But let me ask another question. Do you have any data 
available about STEP proposals that have been approved from 
rural, women-owned, and socially economic disadvantaged 
businesses that you may have taken a look at?
    Mr. CAZAMIAS. I will have my office take a look at that and 
provide it to yours.
    Ms. ADAMS. Okay, great. And a follow-up to that, I was 
interested in the percentages, and I know you are just getting 
started, and certainly, I wish you well, but also, in terms of 
the percentages that are submitted by rural, women-owned, and 
socially economic disadvantaged businesses, I am just curious 
about the data that has been kept and what those percentages 
might be, as well as not only what the numbers are but what the 
approval rate of those have been.
    Mr. CAZAMIAS. Thank you, Congresswoman.
    Whatever information we have in terms of the breakdown, we 
are going to provide it to your office.
    Ms. ADAMS. Thank you very much.
    Mr. Chairman, I am going to yield back the rest of my time. 
Thank you.
    Chairman CHABOT. Thank you. The gentlelady yields back.
    And I know the chair is not supposed to comment on these 
kind of things, but that is one beautiful hat, I think.
    Ms. ADAMS. And I thank you very much for saying that. It is 
one of my 1,094 in my collection and I am wearing this as far 
as my birthday celebration for this week. But thank you very 
much.
    Chairman CHABOT. All right. Well, happy birthday. Yeah, 
excellent.
    The gentlelady's time is expired.
    The gentleman from Iowa, Mr. Blum, who is the chairman of 
the Subcommittee on Agriculture, Energy, and Trade, is 
recognized for 5 minutes.
    Mr. BLUM. Thank you very much, Mr. Chairman Chabot. And I 
concur with you on my colleague's hat. It is very beautiful. I 
was admiring that.
    And also, I was not aware, but that is a great statistic 
about female, minority-owned businesses growing amongst the 
fastest businesses. That is tremendous. Good to hear.
    Thanks for being with us today, Mr. Cazamias.
    Mr. CAZAMIAS. Yes, thank you.
    Mr. BLUM. Yes. Glad to hear you are from the private sector 
and you have had a tremendous amount of experience in 
international business as well, I have read.
    I would like to have your personal thoughts on TPP. With 
your international trade experience, you must have some 
thoughts on that agreement.
    Mr. CAZAMIAS. Well, Congressman, I think the current 
administration's new approach of looking at trade agreements on 
a one-to-one basis is really badly needed. Clearly, it is 
important that we start reevaluating what our trade posture is 
so that we do not run the kinds of deficits we have 
historically and give a better chance to our domestic producers 
in being able to compete.
    Mr. BLUM. So I take it that you did not like TPP because of 
the framework, because it was not bilateral or----
    Mr. CAZAMIAS. Well, I believe that a one-to-one, a one-to-
one type of trade posture is going to be beneficial.
    Mr. BLUM. And what are your feelings on NAFTA?
    Mr. CAZAMIAS. Initially, of course, back in 1992, and I am 
from the, you know, border country, I was initially supportive 
of it. I saw the burgeoning growth that it had, the effect it 
had on my city. But after 25 years, we have a lot more 
datapoints. We have a lot more in the way of datapoints now, 
and I have, unfortunately, seen what the legacy of these trade 
deficits are, and they are shuttered industries and high 
unemployment. So it is high time we take a new look at our 
trade agreements.
    Mr. BLUM. EXIM Bank, they provide financing for export 
activities in the private sector as well. Does the OIT, Office 
of International Trade, work in conjunction with the EXIM Bank? 
Do they provide loans maybe to smaller businesses that EXIM 
Bank would not look at? Because one of the things when we 
debated reauthorization of EXIM Bank was, well, the majority of 
the funding or the benefits go to five companies, five mega 
corporations, and that you do not focus enough on small 
businesses. So do you work with them? How is that relationship?
    Mr. CAZAMIAS. The level of coordination between the two 
entities is something I am going to have to get back to you on, 
Congressman, but I will say, it speaks to what I was saying 
earlier about the differentiating value of the Small Business 
Administration being able to focus on small businesses so that 
we do not take that ``bang for the buck'' approach.
    Mr. BLUM. Do we track the revenues, the export revenues of 
small businesses?
    Mr. CAZAMIAS. We track----
    Mr. BLUM. Do we have that number? Does the SBA have that 
number?
    Mr. CAZAMIAS. Yes. We track the export revenues that are a 
result of SBA counseling and SBA financing.
    Mr. BLUM. And what has that trend been? What are those 
numbers over the last 3 years?
    Mr. CAZAMIAS. Let me, before I take a guess, let me have my 
office provide those numbers so I can be specific. I do not 
wish to make a mistake in my testimony.
    Mr. BLUM. Because particularly in government, the Federal 
Government, we talk a lot, as opposed to the private sector, it 
seems like we are not so concerned about results sometimes. And 
I think we need to do a good job. I just would offer this 
advice to you of measuring things, and every time you testify 
here I am going to be asking you, you know, is that trend up? 
Is that trend in the right direction? Are our small businesses, 
in fact, exporting more to foreign countries than they were 
last year?
    Mr. CAZAMIAS. I sympathize with the sentiment, and I will 
be prepared.
    Mr. BLUM. What would you say are the main ways, the main 
methods that your office is going to help small businesses 
export?
    Mr. CAZAMIAS. I think there are, again, three ways that we 
are going to be able to help them export and that is, one, 
providing them the liquidity they need, especially for first-
time exporters, but also for businesses who have been 
successful in exporting. We are going to be able to provide 
them international trade loans that are going to help them 
expand their PP&E.
    Secondly, in opening up the markets and making connections 
between our domestic businesses and foreign markets and foreign 
buyers of domestic products.
    Mr. BLUM. And I am a small business owner, and we are in 
the software business, and access to capital is important. I 
get that. But I think before the access to capital, you need 
the connections. You just mentioned that, connections. Can you 
talk to me in the 29 seconds we have left about how is your 
office going to help small businesses connect with foreign 
entities that need their products?
    Mr. CAZAMIAS. Certainly, we have been coordinating with the 
States through the STEP program to conduct dual trade missions, 
joint trade missions, and to be able to have that kind of State 
cooperation so we can have those people who are closer to the 
businesses and understand what their needs are, make those 
connections to foreign entities.
    Mr. BLUM. Always remember that that connection is the first 
step. Before we need access to capital, they need that 
connection. They need a buyer, international buyer that is 
interested in their product. So I would hope you emphasize 
that.
    Mr. CAZAMIAS. Well received.
    Mr. BLUM. My time is over and I yield back the time I do 
not have, Mr. Chairman.
    Chairman CHABOT. The gentleman's time is expired. That is 
right, the gentleman's time has expired.
    The gentleman from Florida, Mr. Lawson, who is the ranking 
member of the Subcommittee on Health and Technology, is 
recognized for 5 minutes.
    Mr. LAWSON. Thank you, Mr. Chairman. And I want to thank 
you for being with us today.
    When I read the staff report, I thought it was very 
fascinating and very revealing to look at the report that said 
only 1 percent of small business was conducted in trade; and 
secondly, when they said that over 95 percent of people outside 
of this country were consumers. And I know that you have had a 
great deal of international experience in this particular area.
    So my question was centered around will it be financially 
feasible for small businesses to look more towards 
international trade, even though I have heard a lot of 
questions here this morning from a lot of the members about 
what we need, access to capital and so forth? But in 2017, when 
you see only 1 percent of small business in America not 
engaging in international trade, how do you respond to that? Is 
it financially feasible? Is it just something that we should 
not be involved in? I am not really sure.
    Mr. CAZAMIAS. Congressman Lawson, that is a terrific 
question and it is one of the challenges that we have to meet 
up to to be able to expand the number of U.S. businesses and 
the percentage of U.S. businesses that are exporting 
internationally. I think it is worthy of investigation to 
determine whether it is a perception issue, whether there is 
simply not the lack of awareness that it is important to 
diversify your customer base, to create new lines of revenue 
and find these international customers, or whether there is the 
perception that it is just too difficult, but I do believe that 
with the various trade financing options that exist at the 
Small Business Administration, we make it financially feasible. 
So perhaps it is something that we are going to have to 
investigate to understand if there is a perception or a lack of 
awareness, and if so, we need to figure out how to improve our 
outreach.
    Mr. LAWSON. As a follow-up, did you say at one time you 
were in India?
    Mr. CAZAMIAS. I lived in India for an entire year.
    Mr. LAWSON. Okay. And I was trying to understand how the 
people in India are able to do international trade in America 
in a lot of different areas, and technology and so forth, but 
we are not able to do the same kind. And that is what really, I 
am so glad that you have that experience because I look forward 
to working with you. And you might want to elaborate on that.
    Mr. CAZAMIAS. Congressman, I think it is related to what I 
was saying before. It is encouraging to know that we are taking 
a new look at our trade posture and that we are starting to 
look at one-on-one agreements because I think that this change 
of trade posture is going to have a measurable effect on what 
those trade balances are. So I look forward, as you do, I am 
sure, to see how this evolves over the next few years.
    Mr. LAWSON. Okay. Mr. Chairman, with that I yield back.
    Chairman CHABOT. Thank you. The gentleman yields back.
    And the ranking member is recognized to ask a question.
    Ms. VELAZQUEZ. Just one question. So we know that there are 
six federal agencies that share responsibility in providing 
export assistance to small businesses including: SBA, Commerce, 
USDA, and the EXIM Bank. You talk about liquidity and access to 
capital, so I hope that you do a better job at getting EXIM 
Bank to continue to do the job that they have done. Since they 
cannot make loans larger than $10 million now, you have seen an 
increase in lending for small businesses for the first time 
exceeded 50 percent. It used to be 20 percent. So you are the 
chair of the TPCC?
    Mr. CAZAMIAS. That is correct, Ranking Member Velazquez.
    Ms. VELAZQUEZ. Okay. I hope that you will take upon 
yourself to clear issues over jurisdiction as it relates to all 
these six federal agencies.
    Mr. CAZAMIAS. I will absolutely take that under advisement, 
Congresswoman Velazquez.
    Ms. VELAZQUEZ. Thank you.
    Chairman CHABOT. The gentlelady yields back. The gentlelady 
yields back.
    And we want to thank the witness for his testimony here, 
and the chair would like to commend members on both sides for 
their participation today and the incisiveness and the brevity 
of some of the questions as well. We have fit a lot in, I 
think, in an hour and 8 minutes here. And so I think great 
attendance by both sides, and I think you did an admirable job 
for having been in the position no more than 3 weeks. Very 
impressive.
    Mr. CAZAMIAS. Thank you.
    Chairman CHABOT. And as you know, ensuring that America's 
small businesses have every opportunity to export is essential, 
and I hope that this hearing encourages the OIT to continue 
improving its outreach and training efforts and better 
coordinate Federal resources for small businesses all across 
this country.
    And I would ask unanimous consent that members have 5 
legislative days to submit statements and supporting materials 
for the record.
    Without objection, so ordered.
    And if there is no further business to come before the 
Committee, we are adjourned. Thank you.
    [Whereupon, at 12:11 p.m., the Committee was adjourned.]
    
              A P P E N D I X
                            
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    Chairman Chabot, Ranking Member Velazquez, and other 
distinguished members of this committee; thank you for inviting 
me here to speak with you today.

    Three weeks ago, I was honored to accept Administrator 
McMahon's appointment and begin my service as Associate 
Administrator for International Trade at the Small Business 
Administration (SBA). Today, I am honored to be able to meet 
with you and listen to your important views on small business 
and trade.

    Since starting at the SBA, I have been familiarizing myself 
with the role of the Office of International Trade (OIT), and 
its role in helping small businesses grow and thrive through 
exports and involvement in global commerce.

    Administrator McMahon believes that exporting is an 
essential component of small business growth, because 95% of 
the world's consumers and over three quarters of all existing 
purchasing power are located outside the United States.

    Just a few weeks ago, I accompanied Administrator McMahon 
to the United Nations, where she signed a proclamation naming 
June 27th as ``Micro, Small & Medium-sized Enterprises 
International Day,'' and in so doing, brought international 
recognition to the vital role small businesses play in 
promoting innovation, creativity and job growth.

    Yet today, among our over 28 million U.S. small businesses, 
less than 5% can claim the title of ``exporter.'' The Office of 
International Trade is charged, by statute, to improve upon 
this number. Its stated mission involves: (i) Increasing the 
number of U.S. small businesses that export, and (ii) 
Increasing the volume of exports by U.S. small businesses. The 
SBA, under the leadership of Administrator McMahon, will 
address this dual mission by focusing on three critical needs 
small business have when attempting to export:

          1. The need for information. The SBA OIT recognizes 
        that guidance and support for small businesses is 
        crucial to achieving a foothold in the international 
        marketplace. As such, the Office of International Trade 
        has a network of 21 Export Finance Managers, based in 
        U.S. Export Assistance Centers, who provide counseling 
        on international payment risks and U.S. government 
        export financing options.

          2. The need for capital. Small businesses cannot 
        trade and export to these new markets unless they have 
        access to capital, specifically trade finance. Small 
        businesses are hardest hit by trade finance gaps and 
        compliance challenges. In the United States, over one-
        third of all small businesses find financing harder to 
        obtain for foreign sales than for domestic sales. Given 
        this challenge, SBA works with lenders to provide 
        tailored trade finance loan guarantees so that small 
        businesses can finance their foreign sales and growth. 
        SBA's three targeted export loan guarantee programs--
        Export Express, Export Working Capital and the 
        International Trade Loan--are designed to support small 
        businesses throughout the exporter life cycle, from 
        developing new markets, to financing export 
        transactions, to expanding plant and equipment due to 
        exporting success.

          3. The need among small businesses for overseas 
        promotional services and market access. The SBA OIT 
        emphasizes the importance of ``small business export 
        promotion'' by strengthening its partnership with state 
        and territory governments through the State Trade 
        Expansion Program (STEP) and its involvement chairing 
        the Trade Promotion Coordinating Committee's (TPCC) 
        Small Business Working Group--a group of inter-agency 
        representatives dedicated to the mission of increasing 
        the number of small business exporters.

          And, because the Office of International Trade is 
        also charged by statute with ensuring that the 
        interests of small businesses are adequately 
        represented in bilateral and multilateral trade 
        negotiations, we actively participate in developing 
        small business-beneficial trade commitments for 
        transparency, flexibility, and evidence-based decision-
        making, so that foreign regulations do not 
        unnecessarily burden U.S. small business exporters.

    Today, I am able to attest to the dynamic power exporting 
and international trade has on small businesses and local 
economies. I hail from the South Texas border city of Laredo. 
Located on the North bank of the Rio Grande, Laredo's economy 
is virtually entirely based on international trade and it 
serves as one of the largest land ports in the United States. I 
witnessed the burgeoning growth that international trade had on 
my native city.

    After graduating from Yale University, I served as an 
intern for the U.S. Commercial Service in Mexico City, where 
the negotiation of the North American Free Trade Agreement 
(NAFTA) was at the time a pressing issue. As a law student at 
the University of Texas, I studied and examined NAFTA's dispute 
resolution mechanisms. More recently in my professional life, I 
drove the Asia Pacific financial operations as a regional CFO 
for Insituform Technologies, an U.S.-based pipeline company. I 
then lived in Delhi, India and led a turnaround of Insituform's 
flagship Asian operating company. I mention these background 
facts only to convey to you, that I possess a long-standing 
interest in and familiarity with international trade and 
international business issues, and intend to bring the benefit 
of my experience to bear to help small businesses in our 
country grow and prosper.

    To conclude, I wish to say that under the able leadership 
of Administrator McMahon, I will be committed to ensuring that 
our small business exporters find all the support they need to 
expand into international markets. I furthermore will endeavor 
to effectively and efficiently administer the Office of 
International Trade. My goal is to enable the SBA to help 
expand the footprint of small businesses in the overseas 
marketplace, thereby spurring innovation and employment growth.

    With that I wish to thank you for the opportunity to speak 
with you today, and I look forward to answering your questions.


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