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The Benefits of Internet-Enabled Trade to Small Business

01/14/2014 - 11:20am

By Christina Sevilla, Deputy Assistant USTR for Small Business

Internet-enabled trade has grown dramatically in recent years and is empowering millions of U.S. and foreign small businesses to sell their goods and services to customers around the world, 24 hours a day. Internet-enabled trade allows small businesses to have an online presence, while maintaining a physical local presence and contributing to the local economy and jobs in their communities. A recent series of studies of online marketplace data found that internet-enabled small businesses are more likely to export and reach more country markets than their offline counterparts. For example, one study found that almost all small businesses on online marketplaces such as eBay export and on average reach between 24 and 39 foreign markets. Small businesses can increase their export sales through their company web presence and multiple platforms.

Technology innovations are expanding the global customer base while reducing the costs of trade and reducing the importance of geographic distance in finding customers. The study notes that internet access increased 300% in all developing markets from 2004-2012, while online sales in all developing markets increased 800% over the same period. In 2013, the value of cross-border online trade was $114 billion across the U.S., United Kingdom, Germany, Australia, China and Brazil, with a combined 94 million online shoppers. This value is projected to increase to $307 billion in trade and 130 million online shoppers across these countries by 2018.

Trade policies that promote e-commerce and internet-enabled services, electronic payment methods and improved customs logistics can enable even more small businesses to grow and thrive globally online. This month, the U.S. and 159 other WTO members reached a historic trade facilitation agreement that increases predictability, simplicity and uniformity in customs procedures and includes key measures such as the online publication of steps to import, export, and transit goods, and use of electronic payments.

In negotiations for the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (T-TIP), the U.S. Trade Representative aims to promote U.S. competitiveness in the digital economy by ensuring that electronically-distributed products do not face government-sanctioned discrimination based on nationality or territory, committing to allow for the free flow of information to facilitate electronic commerce, and providing market access and national treatment commitments for cross-border services and Internet-enabled services, such as social networking services.