Trade Policy, Regulation Biggest Challenge for State’s Exporters
Trade policy and regulation is the single greatest challenge for Connecticut exporters, according to a new survey released today.
CBIA’s 2017 International Trade Survey of Connecticut Businesses found 40% of exporters are challenged by government policy and regulation, followed by international competition (23%), overall costs (20%), and cultural differences (12%).
CBIA economist Pete Gioia said improving tax policy—including preserving tax incentives that not only offset some of the costs of doing business, but also encourage companies to invest here—could go a long way toward making Connecticut a better state for exporters.
“This survey shows that there are numerous Connecticut companies with a significant part of their business dedicated to exporting,” Gioia said.
“The challenge for the state is to encourage more businesses to get involved in exporting, as well as grow participation for occasional exporters.”
Connecticut companies exported $14.4 billion in goods and services in 2016, or 1.5% of total U.S. exports. Connecticut companies exported $14.4 billion in goods and services in 2016, or 1.5% of total U.S. exports.
Since CBIA’s first international trade survey in 2007, the number of Connecticut companies engaging in exporting has risen sharply—from 53% to 77% over a 10-year period.
The largest foreign markets for Connecticut exporters are North America (73%), Western Europe (63%), and Northern Asia and the Pacific Rim—China, Japan, and Taiwan (51%).
North America regained its position over Western Europe as the largest foreign market since the last survey in 2015.
Connecticut companies exported $14.4 billion in goods and services in 2016, or 1.5% of total U.S. exports.
- While 98% of respondents have websites for their goods and services, 76% acknowledge their website is not capable of processing international orders
- Connecticut’s top three export categories are transportation equipment, machinery, and computer and electronic products, sold primarily to France, Germany, and Canada
- One-third of non-exporting respondents reported they are interested in trading to foreign markets
- 36% believe involvement in international trade is possible for their businesses within the next two years
- Businesses identified lack of knowledge and experience (32%) and the costs of exporting (27%) as the biggest barriers to entry
After this survey was distributed, the Trump administration withdrew the United States from the Trans-Pacific Partnership agreement, which continues today without U.S. participation.
In 2015, 79% of businesses believed the TPP agreement, then under negotiation, would be beneficial for trade. The impact of the U.S. withdrawal from the TPP on Connecticut exporters is yet to be seen.
Gioia said exporting continues to be vital to the state's economy and its long-term prosperity, spurring economic growth and creation of jobs here in Connecticut and nationwide.
While most Connecticut exporters are veterans in international trade, the survey shows both exporters and non-exporters would benefit from help to expand into the global marketplace.
"Untapped potential remains for the state’s leading job creators—small and midsize businesses—to enter new global markets, increase their share of U.S. exports, and compete for customers based outside our nation's borders," Gioia said.
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