	Introduction

Some Members of Congress believe the contributions of small businesses to commercial innovation and economic growth could be enhanced through greater access to growing international markets. Only 1% of small businesses in the United States export. With roughly three-quarters of world purchasing power and almost 95% of world consumers living outside U.S. borders, more attention is being paid to the potential of small business programs to increase employment in the export sector. This report begins with the history, role, and scope of the Small Business Administration's (SBA's) export promotion activities and the creation of SBA's Office of International Trade (OIT). It then uses quantitative data from SBA and qualitative data from other sources to present performance analysis of SBA's international programs. SBA's Office of International Trade

SBA provides export promotion and financing services to small businesses through its business loan programs, management and training programs, and other initiatives. SBA's OIT coordinates these activities as it assists with four stages of export promotion: (1) identifying small businesses interested in export promotion, (2) preparing small businesses to export, (3) connecting small businesses to export opportunities, and (4) supporting small businesses once they find export opportunities. Congress does not directly provide an appropriation amount for each of the SBA's three export-focused loan programs or for trade-related counseling provided through SBA's management and training programs. 114-113 ) appropriated $18.0 million for the STEP program in FY2016. In the 114 th Congress, the Trade Facilitation and Trade Enforcement Act of 2015 ( P.L. Loan Programs

SBA has three loan programs that are specifically targeted toward exporters, and many of SBA's broader loan programs also support export-related activities. In general, the surveys indicate that these programs assisted small businesses at all stages of development. Issues for Congress

This section of the report introduces three policy issues for consideration as Congress looks to the future size and scope of SBA's export promotion activities: (1) are there barriers to exporting or market failures impeding smaller firms from international trade? Incomplete information among small businesses concerning the benefits of internationalization and how to internationalize their business could be indicative of a market failure, though, particularly if more information could allow small businesses to operate more efficiently and increase competition. As previously mentioned, Congress elevated the goal of export promotion within SBA when it established an assistant administrator to head the OIT in the Small Business Jobs Act of 2010 ( P.L. 111-240 ). In any case, co-location of some of these services (in the form of U.S. 114-125 contained provisions that are intended to increase coordination of federal export promotion programs, reform the Export.gov web portal to be more accessible to small business exporters, integrate state trade programs into federal trade programs, and clarify the role of the TPCC in promoting state and federal export promotion programs.
According to Census Bureau data, approximately 1% of small businesses in the United States currently export. With roughly three-quarters of world purchasing power and almost 95% of world consumers living outside U.S. borders, more attention is being paid to the potential of small business export promotion programs to grow small businesses and contribute to national economic output. In addition, some Members of Congress believe the contributions of small businesses to commercial innovation and economic opportunities for firms and workers could be enhanced through greater access to growing international markets.
Consistent with these policy goals, the Small Business Administration (SBA) provides export promotion and financing services to small businesses through its loan guaranty programs, management and training programs, and other initiatives. SBA's Office of International Trade (OIT) coordinates these activities as it assists with four stages of export promotion: (1) identifying small businesses interested in export promotion; (2) preparing small businesses to export; (3) connecting small businesses to export opportunities; and (4) supporting small businesses once they find export opportunities.
The Small Business Jobs Act of 2010 (P.L. 111-240) elevated trade within SBA by establishing an assistant administrator to lead OIT and report directly to the SBA administrator. The act also first authorized the precursor to what is now known as the "State Trade Expansion Program" (STEP), which provides grants to states and territories to assist small businesses based on a trade promotion plan developed by the applicant state. The STEP program was appropriated $18.0 million for FY2016.
In FY2016, SBA's export-related loans amounted to approximately $1.5 billion (approximately 5.0% of the value of SBA's annual loan portfolio). Although SBA has three loan programs that are specifically targeted toward exporters, most of SBA's lending support for export-related activities occurred through its broader loan programs. Surveys indicate that relatively few clients of SBA's management and training programs request trade-related counseling.
This report begins with the history, role, and scope of SBA's export promotion activities and the creation of OIT. Next, it uses quantitative and qualitative data from SBA to provide performance analysis of SBA's international programs. This report concludes with a discussion of three policy issues for Congress.
First, export promotion programs could have a policy rationale if barriers to entry are indicative of a market failure to efficiently allocate investment toward small exporters (e.g., because of disproportionately high costs to comply with trading regulations or insufficient information about the net benefits of trade). Many of these conditions, though, could be due to higher risk profiles for small exporters instead of a market failure.
Second, export promotion is sometimes viewed as important to U.S. trade "competitiveness," by boosting U.S. exports in sectors that are cutting-edge, or have become displaced by lower-cost producers overseas. Some critique this theory by arguing that these policies are economically inefficient, if they distort capital from flowing to activities with the highest economic return.
Third, the range of federal export promotion programs has led to administrative challenges among some small-business clients and potentially led to the duplication of services using taxpayer money. The Trade Facilitation and Trade Enforcement Act of 2015 (P.L. 114-125) enacted reforms intended to address some of these concerns. The 115th Congress might consider progress made toward these reforms as part of its small business policy agenda.