I’ve written before about the incredible services the Commercial Service provides to U.S. exporters, and I have consistently lamented that too many companies—particularly small and medium-sized businesses—aren’t aware of and don’t take advantage of these services. Raising the cost of these services isn’t going to change that.
If you’re interested in trading with a particular country, the Commercial Service will help you research the market, including a preliminary assessment of the market potential for your product or service and provide recommendations for next steps. If you choose to proceed, their network of in-country staff will find, vet and arrange meetings with local agents, distributors or other reliable and trustworthy potential partners.
As a former board member of the Minnesota District Export Council, I’ve heard many examples of how valuable these services have been to U.S. companies as they’ve successfully grown their international markets. Unfortunately, many of these companies don’t allow the Commercial Service to trumpet their successes, because they don’t want to share this advantage with their competitors.
The International Trade Administration (ITA), the agency where the Commercial Service resides, is implementing this new fee structure so that it can fully recover the costs associated with these programs, per guidance from the Office of Management and Budget. There is certainly logic behind that approach. However, investing in the growth of U.S. exports is also an investment in the broader U.S. economy.
The benefits of exporting extend beyond the individual company receiving assistance. Increased exports support American jobs, strengthen local economies and contribute to overall economic growth. That's why previous administrations and Congresses have historically viewed export promotion as a worthwhile public investment rather than a service that should necessarily recover every dollar of its costs.
According to ITA’s own data, businesses that export grow sales faster, hire more people, and pay their employees more than businesses that do not. During times of economic downturn, companies that export are more likely to weather the storm than companies that do not.
About 97% of companies that export are small to medium-sized business, meaning they have 500 or fewer employees. Sixty percent of exporters employ fewer than 20 people. Because these smaller companies account for the majority of exporters and a significant share of net job creation, helping them identify new international opportunities can have economic benefits that extend far beyond the individual company receiving assistance.
These businesses will see fees increase by as much as 450%. Initial market checks will increase from $350 per report to $1,950 per report. International partner search increases from $750 to $2,500. And the Gold Key Service increases from $950 to $3,250 for small businesses.
Despite these increases, these services are still valuable and a great way for U.S. companies to expand. I will continue recommending that exporters contact their local U.S. Commercial Service office for assistance. But I’m concerned that the higher fees will present too high a barrier for the small businesses that would benefit the most.
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