ITA Export Promotion Fee Hike Disproportionately Affects Small Businesses, says U.S. Chamber
The proposed price hike in U.S. Commercial Service user fees will severely limit the ability of small- and medium-sized exporters to utilize its services,” said the U.S. Chamber of Commerce in comments on the International Trade Administration’s June 13 proposed rule to increase fees on U.S. Commercial Service export promotion services. As proposed, the fee for the Gold Key Matchmaking service, which pairs U.S. companies with potential buyers in foreign countries, would increase by 153 percent for small- and medium-sized businesses, the Chamber said. The fee increase would be almost as large as that for large companies. Less than 1 percent of small- and medium-sized companies that export use the ITA’s export promotion services, and this proposed increase would further reduce utilization, the Chamber said.
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According to the Chamber, the U.S. spends only one-sixth of the international average on export assistance to small businesses. “Small business exporters in the United States are at a severe competitive disadvantage,” it said.
But the proposed 153 percent increase would amount to a $1,071 increase in the service fee for small- and medium-sized businesses, nearly as much as the proposed $1,241 increase for large companies. “The disparity is that small- and medium-sized companies do not have the financial resources as compared to large companies to pay for this price hike in the service,” the Chamber said.
The effect of the proposed fee increase could be that an even smaller proportion of small- and medium-sized businesses use the ITA’s export promotion services. According to the Chamber, only 2,420 of 270,000 small- and medium-sized exporters, or about 1 percent, used the ITA’s fee-based services in fiscal year 2011, which include the Business Facilitation Service, Gold Key Service, International Company Profile, International Partner Search, Platinum Key Service and Single Company Promotion.
“The proposed increase in the fees for these services provided by the Commercial Service will only reduce that number and deter U.S. companies seeking to export,” the Chamber said.
More comments on the proposed rule are available here.
(See ITT’s Online Archives 12061308 for summary of the ITA’s proposed rule. Comments were due Aug. 14. See also ITT’s Online Archives 12072635 for comments submitted by the National Electrical Manufacturers Association.)