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C. TODAY
DIGITAL COMMERCE
at the Crossroads:
The Case for a Digital Trade Agreement
By John Murphy, U.S. Chamber of Commerce
The impact of the digital revolution on international However, these global opportunities may be put at
trade is just beginning. Digital trade is creating risk if a rising tide of digital protectionism overseas
substantial new opportunities for American companies isn’t contained. It is imperative that the United
of all sizes and diverse sectors — and not just firms States act now to frame new rules of the road for
traditionally seen as “internet companies.” As a result, digital trade so that American companies and
American businesses and the workers they provide are workers can seize the opportunities presented by
able to reach millions of new customers abroad more the digital revolution to boost American exports and
easily, inexpensively, and rapidly than ever before. create more good jobs at home.
The Opportunity: U.S. Small and Medium-Sized Businesses
Perhaps no other sector stands to benefit more from $541 billion in output in 2017 and supported more
digital trade than America’s small business exporters. than 6 million U.S. jobs. Small businesses that
While U.S. small and medium-sized businesses export have been expanding the overseas markets
generate about two-thirds all new U.S. jobs, it’s often they serve, the report found, from an average of
overlooked that 98% of the nearly 300,000 American seven countries in 2016 to 10 countries in 2018.
companies that export are small and medium-sized
businesses. These firms account for about one-third These larger-than-the-official-statistics results
of U.S. merchandise exports, according to data from indicate that digital trade is already contributing to
the U.S. Department of Commerce. the expansion of U.S. small business exports and job
creation. The Chamber’s study found digital trade’s
However, only about one in every 100 of America’s boost to small business exporters is especially
30 million small businesses export. In countries pronounced in the following three areas:
such as Germany and Switzerland, the share of
small or medium-sized firms that sell their products First, digital advertising plays an overlooked but
abroad is approximately five to ten times larger on a critical role in allowing U.S. small businesses to
per capita or per firm basis. economically reach potential foreign customers in
a targeted fashion. Small businesses simply had no
In this context, the digital trade revolution offers such tools in the pre-internet era: Print advertising in
impressive new opportunities for America’s small newspapers or direct mail were never feasible options
businesses. New digital technologies have the for U.S. small businesses trying to tap even nearby
potential to overcome longstanding hurdles facing and familiar markets such as Canada or Europe.
small exporters.
Second, modern digital tools are revolutionizing
The U.S. Chamber recently issued a report, payment collection, cited by small business
Growing Small Business Exports: How Technology exporters as a top challenge. Uncertainty around
Strengthens American Trade, and it uncovered some international payment collection was a principal
surprising findings. Based on a national survey of brake on small business exports even a few
more than 3,800 small businesses and a related years ago, but such risks and foreign exchange
economic analysis, the report produced a new complexities can now be managed in a cost-effective
estimate that 9% of U.S. small businesses currently manner by digital payment services.
export goods or services, a figure considerably
higher than indicated by official statistics. The report Third, international shipment firms,
estimated that small business exports generated including express delivery companies,
13 AMCHAM SOUTH CHINA
DIGITAL COMMERCE
at the Crossroads:
The Case for a Digital Trade Agreement
By John Murphy, U.S. Chamber of Commerce
The impact of the digital revolution on international However, these global opportunities may be put at
trade is just beginning. Digital trade is creating risk if a rising tide of digital protectionism overseas
substantial new opportunities for American companies isn’t contained. It is imperative that the United
of all sizes and diverse sectors — and not just firms States act now to frame new rules of the road for
traditionally seen as “internet companies.” As a result, digital trade so that American companies and
American businesses and the workers they provide are workers can seize the opportunities presented by
able to reach millions of new customers abroad more the digital revolution to boost American exports and
easily, inexpensively, and rapidly than ever before. create more good jobs at home.
The Opportunity: U.S. Small and Medium-Sized Businesses
Perhaps no other sector stands to benefit more from $541 billion in output in 2017 and supported more
digital trade than America’s small business exporters. than 6 million U.S. jobs. Small businesses that
While U.S. small and medium-sized businesses export have been expanding the overseas markets
generate about two-thirds all new U.S. jobs, it’s often they serve, the report found, from an average of
overlooked that 98% of the nearly 300,000 American seven countries in 2016 to 10 countries in 2018.
companies that export are small and medium-sized
businesses. These firms account for about one-third These larger-than-the-official-statistics results
of U.S. merchandise exports, according to data from indicate that digital trade is already contributing to
the U.S. Department of Commerce. the expansion of U.S. small business exports and job
creation. The Chamber’s study found digital trade’s
However, only about one in every 100 of America’s boost to small business exporters is especially
30 million small businesses export. In countries pronounced in the following three areas:
such as Germany and Switzerland, the share of
small or medium-sized firms that sell their products First, digital advertising plays an overlooked but
abroad is approximately five to ten times larger on a critical role in allowing U.S. small businesses to
per capita or per firm basis. economically reach potential foreign customers in
a targeted fashion. Small businesses simply had no
In this context, the digital trade revolution offers such tools in the pre-internet era: Print advertising in
impressive new opportunities for America’s small newspapers or direct mail were never feasible options
businesses. New digital technologies have the for U.S. small businesses trying to tap even nearby
potential to overcome longstanding hurdles facing and familiar markets such as Canada or Europe.
small exporters.
Second, modern digital tools are revolutionizing
The U.S. Chamber recently issued a report, payment collection, cited by small business
Growing Small Business Exports: How Technology exporters as a top challenge. Uncertainty around
Strengthens American Trade, and it uncovered some international payment collection was a principal
surprising findings. Based on a national survey of brake on small business exports even a few
more than 3,800 small businesses and a related years ago, but such risks and foreign exchange
economic analysis, the report produced a new complexities can now be managed in a cost-effective
estimate that 9% of U.S. small businesses currently manner by digital payment services.
export goods or services, a figure considerably
higher than indicated by official statistics. The report Third, international shipment firms,
estimated that small business exports generated including express delivery companies,
13 AMCHAM SOUTH CHINA
