Trade Capacity Building for NAFTA:

Helping Small Businesses Achieve

Better Outcomes
Professor Steve Jenner
College of Business Administration
& Public Policy
California State University
Dominguez Hills
E-mail: sjenner@csudh.edu
Outcomes vs Inputs
DESIRED OUTCOMES:
exporter business performance:
sales growth
Longevity
jobs/retention
distributors/agents USDOC
additional countries
INPUTS:
Workshops, seminars, conferences, consulting,
websites, grants for trade shows
Actual vs potential

 226,000 exporters
 Potential 7 million
 26 million total
Success Stories

 Faces of Trade www.traderoots.org

3 Case Studies by Prof. Jenner:

 Air Power in Mexico

 Engineering Services

 Pulse Engineering Clinic

SME Exports 2005 $ billion
International Trade Admin.
24% NAFTA = $64 billion
29% Mexico = $33
21% Canada = $31
46% CAFTA = $7
74% Nicaragua = $ .4
51% Guatemala = $ 1
Need for Stronger
National Advocacy
 Small Business Exporters Association
 US Chamber of Commerce
 Congressional Committee
Resistance to Assistance

Small business managers fear

international trade due to their
misperception of risks:
foreign language necessary
financial risks
no attorney, marketing
increased costs ex) freight
Richard Ginsburg SBA
SBDC surveys

Prof. George Solomon GWU

US Dept. of Commerce

 www.tradeagreements.gov
 Alliances with eBay FedX UPS
 New Basic Guide to Exporting
 Intl Trade Advisory Committee
ITAC 11 small and minority
business
Seamless Service Process

 Maurice Kogon’s model

 Best Market Reports for 17 industries
prepared by students
Practitioners and Educators
working together
 Identify the most promising industry
sectors
 Identify specific small businesses in
those sectors
 Show them how they can win export
sales
 Provide success stories by following up
with service providers
Reframe NAFTA Debate

 How to make it work for small

business exports given devaluation
US$ and reduced tariffs (Offense)
versus
 How to reduce competition on the
basis of labor and environmental
standards (Defense)
NAFTA Controversy

NAFTA increased the aggregate trade

and investment flows between the
U.S., Canada and Mexico, but many
observers believe that the benefits did
not reach small businesses.
NAFTA “helped other
countries more”
 Most people in the United States,
Canada, and Mexico believe that
NAFTA produced better results for the
other trade partners
 “Our country lost more than it gained
compared to our trading partners
within NAFTA” and that “Some of our
people were harmed”
3 Research Questions
1. What can be done to attract more
individuals, especially minority
entrepreneurs, to grow small businesses
that take advantage of NAFTA? 
2. What do these individuals need to know
about NAFTA and trade and investment
from the micro (firm) perspective?
3. How well are their needs currently being
met? What are the deficiencies in terms of
meeting their needs?
Results of a 2007 survey
of experts
 Small business managers need
relevant training and consulting as
well as micro-loans for export
marketing and transaction credit
guarantees
 Offer incentives for small businesses to
exhibit at international trade shows
Deficiencies

 How and where to export to Mexico

and Canada
 How to deliver the goods
 How to apply their financial skills
(fiscal responsibility, budgets, getting
paid)
More Deficiencies

 Lack of knowledge of export controls

and quality compliance standards
(ISO/EU Certification)
Center for International
Trade Development (CITD)
According to Maurice Kogon, Director of the
Torrance CITD, 80 percent of U.S. firms do
not export because they lack three
fundamentals:
1. the ability to produce a competitive
product,
2. sound entrepreneurial practices
(operations management and basic survival
skills), and
3. the knowledge of how and where to
export.
User cars to Mexico

 Monday March 10, 2008 only 1998

cars allowed
 No tariffs
Other sectors

 Export services logistics legal acct

 Aerospace
 Agriculture and Food processing
 Military
 Manufacturers
 Apparel