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The Internet and mobile technology are lowering barriers to international trade in a revolutionary way, creating new global trade opportunities for very small businesses in particular, according to a study released by eBay Inc.
Using real trade flow data from eBay’s marketplace, the analysis found that 97 percent of commercial sellers (largely made up of small businesses) on eBay export. Of these small businesses, more than 80 percent export to five or more foreign countries. In contrast, fewer than 4 percent of offline businesses export and only 14 percent of these offline business exporters sell to five or more countries.
“Thanks to the Internet and mobile technologies, an entire world of small businesses and entrepreneurs can now participate in global trade and bring products to world markets,” said Brian Bieron, eBay Inc.’s senior director of federal government relations. “For the first time in history, global trade is open to every business, regardless of size – this is Commerce 3.0.”
The empirical analysis, carried out by Professor Marcelo Olarreaga of Geneva University, in conjunction with Sidley Austin LLP, was released at a panel discussion in Washington, DC sponsored by eBay Inc. and the National Foreign Trade Council (NFTC).
Jake Colvin, vice president at NFTC, led a discussion with representatives from government and the private sector, about crafting trade policy that meets the new realities of small business and 21st century trade.
“The idea that cross border trade is something that only large-scale businesses can participate in is no longer true,” explained Colvin. Technology is rapidly changing trade patterns, and attitudes and policies should evolve to reflect this new dynamic.”
At the event, eBay released recommendations of how U.S. policymakers can help reduce frictions that stand in the way of small merchants entering, growing and succeeding in world markets. The recommendations included:
- Improve delivery services by harmonizing shipping platforms between countries and creating interoperable systems that both the public and private sectors can utilize;
- Reduce customs complexity for small Internet-enabled merchants by increasing the de minimis threshold in the U.S. and enable ecommerce businesses to accept duty-free returns from their international buyers; and,
- Create innovative trusted trader programs that encourage the participation of small merchants and harmonize with foreign trusted trader programs through the signing of mutual recognition agreements.
“Customs and shipping-related trade barriers are major pain points that keep small businesses from fully realizing the benefits of global trade,” said Bieron. “That’s why eBay is committed to pursuing policies that make it possible for the smallest businesses and entrepreneurs to engage in global commerce.”
eBay is pursuing a pilot export-related service called the Global Shipping Program to facilitate cross border trade and make it easier for small businesses to navigate customs policies and track their shipments from start to finish. This shipping test is the latest in the continuum of shopping and selling improvements eBay has made to make it easier for customers to access more global inventory.
Mark Mastandrea, senior director of global fulfillment at eBay Inc., described eBay’s efforts to help businesses export and reach new markets from a technology standpoint. “The future of commerce bridges international borders, so we are developing new technology services that will help to streamline shipping to global destinations and help businesses navigate customs policies. We are already producing technology tools that enable consumers and retailers to connect, establish trust and transact globally. Such technology tools should be matched by legislative and policy action to deliver their full potential.”
eBay’s analysis and policy paper can be found here: http://www.ebaymainstreet.com/commerce3us.