#SMEExportersInTheKnow Series: CPTPP Now In Force – Its Impact on US SMEs and Supply Chains1/4/2019
The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) -- officially entered into force on 30 December 2018 -- is renamed from the original Trans-Pacific Partnership (TPP) after the United States pulled out in March 2017. The CPTPP is set to facilitate trade among its 11 member countries (Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore and Vietnam) by reducing trade barriers, increasing regulatory coherence and transparency, and lowering operating costs for businesses when exporting/importing.
Sixty days after the sixth of eleven members (in this case, Australia) ratified the pact on 30 October 2018, the CPTPP was bound to be effective. As a result, on 30 December, tariff reductions went into effect for trade among Australia, Canada, Japan, Mexico, New Zealand, Japan, and Singapore, with a second round of tariff cuts happening just two days later on 1 January 2019. For the other signatories — Vietnam, Malaysia, Chile, Peru and Brunei – the CPTPP will come into force sixty days after they each ratify the agreement and tariff cuts will be in line with already-implemented reduction schedules. Keys to a Successful Small Business ExporterAs a strategy, trade can seem risky for a small business. Even if working in a familiar language, the consumer base is foreign, the procedures and red tape can be overwhelming, and the logistics are complicated if encountered for the first time. On top of it all, peers and politics assume trade is meant for the titans of industry and not smaller companies.
In reality, many small businesses are able to access the benefits of trade and have utilized it as a smart growth strategy. In fact, 98% of the 300,000 US companies exporting are small and medium sized businesses and are proven to sell more, support more jobs, and pay higher wages than small businesses that do not. Furthermore, 58% of small businesses in the 2016 National Small Business Association survey reported that they have exported, a third of which said 10% to 50% of their sales were due to exporting. In the global landscape, 34% of US goods exported originate from small and medium businesses. Resources for the Small Business ExporterInterested in expanding your small business into exporting? These resources are a great way to learn more about international trade and get started.
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