In recent years, the U.S. has run record trade deficits. Both
political parties made trade, foreign competition and outsourcing
key issues in the November 2004 elections, even charging that some
foreign nations, such as China, were not following free trade
deals, dumping products onto the U.S. market.
That trade has been a key political issue is hardly surprising:
As free trade has expanded, competing in a global environment has
become increasingly important to small businesses. And
Entrepreneur's "Point/Counterpoint" team,
veteran New York Democratic congresswoman Nydia Velázquez and
young Arizona Republican congressman Rick Renzi, are battling for
the interests of U.S. small companies.
Entrepreneur: What, if anything, do you think the
broad role of Congress should be in helping entrepreneurs deal with
international competition?
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Rep. Velázquez: For small businesses to be able to
work in an international environment, they must have access to
trade export assistance. Unfortunately, the fiscal year 2006 budget
request [submitted by President Bush] cuts vital funding.
Rep. Renzi: Congress should support retraining programs
for workers who lose their jobs from international competition. The
SBA [should increase efforts] to go to the ground and work with
local community colleges to do training for these guys.
What specific government programs do you think are most
effective in helping entrepreneurs handle foreign competition?
Velázquez: The SBA's U.S. Export Assistance
Centers [which provide exporting advice to small companies in many
U.S. cities]. But they were cut by $1.5 million in the 2006 budget.
The Overseas Private Investment Corporation, which provides project
financing for U.S. businesses in 144 developing countries, [is also
effective].
Renzi: What the SBA can do with community colleges or
military veterans, they can [do with] people who have lost jobs
through trade--in manufacturing, for example--and are trying to
make the transition to [owning] their own small business. They need
help learning how to open a business and how to get capital from a
local bank. But the SBA's budget [is lean]--when you talk about
vocational training, we're not doing enough for these guys. I
push back against my party on the SBA budget.
Which countries, if any, are entrepreneurs in your district most
worried about as far as competition? What specific remedies do
people in these industries expect from Congress?
Velázquez: The area of most concern is the
manufacturing subassembly, which now takes place mostly in Mexico
and China. As this phase of assembly continues to take place
abroad, competition [increases among] manufacturers here.
We do have to get foreign countries to truly abide by these
trade agreements [such as not dumping goods]. Many countries are
not living up to these requirements. We should be working toward
creating a more level playing field so that all small-business
exporters have the tools they need to successfully compete, and
goods and services included in the trade agreement [must] cover
those industries that our nation's small businesses participate
in.
Renzi: In the free trade agreements, you've got to
find ways to protect fragile U.S. industries from short-term unfair
trade competition. Small U.S. manufacturing is particularly fragile
because if you look at the labor costs, our labor costs are lower
in Arizona than in some other states, but they still don't
compare to China, so in our state, small manufacturers are going
out of business. And China is trying to dump products below cost
into the U.S., to drive U.S. companies out of markets, so Congress
needs to push the World Trade Organization to closely scrutinize
Chinese trade.
Joshua Kurlantizick is a writer in Washington, D.C.