Why Are Trade Agreements So Important to Smaller Firms?

Leon Trammel of Witchita-based Tramco (a conveyor-belt manufacturer) explains (Smaller Companies Grab Bigger Share of Surging U.S. Exports , Courtney Schlisserman, Bloomberg, Nov 23):

Faster global communications and fewer trade barriers have enabled businesses like Tramco, with few or no factories overseas, to take advantage of the strongest global economy in almost three decades....

``For small companies, exporting is the only way for them to tap into foreign markets.'' [says John Murphy of the U.S. Chamber of Commerce - Ben] ...

``Since it takes time to build up foreign contacts and distribution channels, these firms are probably just starting to develop their export potential and will reap benefits in the future,'' Carson said. ``There is a learning process here that everyone has to go through.''

Advances in communications, such as the Internet and cell phones, have been an important factor opening opportunities for smaller firms, said Tramco's Trammel, who employs 140 workers, most in Wichita....

Trammel took the export plunge after touring a former client's factory in Europe and realizing the company could benefit from installing his conveyor belts. For the next 10 years ``our international sales consisted largely of my ability to travel,'' Trammel said. The company now has clients in 52 countries.

``It is easier to sell overseas now,'' Trammel said. ``Air travel and communication is so great that you can communicate anywhere in the world.''

Lower tariffs as a result of free-trade agreements have also helped. ...

``The free-trade agreements are really an important element for the smaller companies because tariffs and non-tariff barriers pose less difficulties for large multinationals,'' the U.S. Chamber's Murphy said. ``For smaller enterprises, the tariffs can be a deal-breaker.''

Prfesumably less important because larger firms can produce abroad and bypass tariff barriers, and have the resources to address non-tariff barriers.

Comments

[r4 gold karte]

Entrepreneurs should be cautioned that international trade involves many complexities above and beyond the basic disciplines necessary for operating a domestic business.