U.S. Should Develop Policies, Trade Negotiations, to Help Customs Navigation for 'Microbusinesses,' E-commerce Experts Say

The Internet allows "microbusinesses" to thrive in sales abroad, and the U.S. government should develop policies to encourage that growth, said e-commerce and trade experts at a panel discussion hosted by eBay and the National Foreign Trade Council Oct. 24. The event coincided with eBay's release of a report focused on how 97 percent of its commercial users, including small sellers, use the website to sell to customers abroad. The U.S. government can take steps, both within its own policies and when negotiating trade agreements with other nations, to help Internet-enabled small businesses grow, panelists said, echoing the findings and suggestions in the report. The eBay report is available (here).

The Trans-Pacific Partnership's (TPP) provisions on the free flow of information across borders will help small businesses use the Internet to sell abroad, said Michael Masserman, executive director-export policy, promotion & strategy at the Commerce Department's International Trade Administration. The department is making "historic progress towards" the goal set by the White House in 2010 to double exports by 2014, he said. Masserman pointed to the department's expansion of online resources for businesses looking to export, including the relaunched Export.gov. That site "needed a little bit of a makeover," he said. Another Commerce resource Masserman cited is the Free Trade Agreement Tariff Tool, which lets sellers determine which tariffs apply to their sales and was begun last year.

(See ITT's Online Archives 12072435 for summary of the FTA Tariff Tool.)

The global trade system needs to be reorganized to support small sellers, said Brian Bieron, eBay senior director-global public policy. "There's a tremendous opportunity for government to make the underlying, logistical trade regime work for the really little businesses, as well" as the giant companies that typically dominated business advocacy on trade issues, he said. Bieron said there's a lot of procedural friction for eBay's very small sellers -- which he called "microbusinesses" because they are smaller than small businesses -- because "shipping, customs and duties are much harder when you're tiny." He urged the U.S. government to have "a conscious and public effort ... to inject helping very small businesses engage in cross-border trade in trade agreements." Government and companies including eBay should work together to create a trusted trader regime, which would allow small sellers to more easily navigate exportation requirements, he said. eBay said in a press release it is pursuing a pilot export-related service called the Global Shipping Program "to facilitate cross border trade and make it easier for sellers to navigate customs policies and track their shipments from start to finish."

The case to include trade facilitation measures in trade agreements "could not be more clear" because of the report, said former U.S. Trade Representative Susan Schwab, now affiliated with the Mayer Brown law firm and University of Maryland. Trade negotiators in other countries should read the eBay report, she said: "You find a lot of pushback from emerging economies" when it comes to free trade. Negotiators can use the report to show those emerging countries that "by opening up, they can replicate this model and, in some cases, replicate these kinds of numbers," Schwab said.

In addition to including small business trade facilitation provisions in ongoing trade negotiations, such as the TPP, completed trade negotiations should be revised, she said. "These shouldn't be static documents." They should be updated and upgraded as the technology that facilitates trade changes, Schwab said. There are other policy areas that will affect small sellers using e-commerce tools, Schwab said, including policies on cybersecurity, protecting intellectual property rights and privacy. These are the kinds of issues that "are going to be particularly hard for small businesses" to navigate if they become law through passage of a cybersecurity or intellectual property bill, she said.

One major issue is the U.S. de minimis level, which requires that any import or export over $200 must pass through CBP, said Ralph Carter, FedEx Express trade managing director. With the de minimis level set at $200, Customs has to spend its time and energy on small items that don't allow it to collect high duties, he said: Raising the de minimis level would allow "Customs to focus their scarce resources on higher value, higher risk goods." A higher level would make the customer experience better as well, he said. "Most of the delays in shipments happen at Customs." If the U.S. were to raise the level, it would expect its trading partners to do the same, he said. "I can think of no other policy tool that is as easy to implement and would have as high of an impact." Bieron pointed to S-3597 , which is sponsored by Sens. Ron Wyden (D-Ore), and John Thune (R-S.D.) and seeks to raise the de minimis level. "Encourage your representatives to support this idea, because it's going to tangibly improve your ability to export," said Bieron.

The U.S. government should let companies work to solve some of the problems that arise in cross-border sales, Carter said. The customer experience making purchases across borders "can still be frustrating." It will be third parties that can address those frustrations through technological developments, Carter said. "The policy space needs to make sure those innovative companies can thrive." The U.S. government should let the "solutions to these challenges bubble up," he said. -- Kate Tummarello