NCPA - National Center for Policy Analysis


February 4, 2005

The World Trade Organization has its critics, but small and medium-size businesses in the United States have greatly increased their exports thanks to the 10-year old organization.

According to the U.S. Department of Commerce, small and mid-size businesses account for 97 percent of America's export of goods and services. The WTO helps smaller firms by reducing the cost of exporting, an issue that would not normally pose challenges for large firms that can better protect their interests.

However, more needs to be done in breaking down trade barriers:

  • Two-thirds of U.S. imports are duty-free, and average industrial tariffs are under 2 percent; however, developing countries impose import tariffs that are twelve times as high.
  • Customs procedures in many developing countries are slow and outdated, and rules and fee structures vary from country to country.

Furthermore, unlike the United States, China and Europe have aggressively negotiated for what they want from the WTO:

  • China has worked to maintain its undervalued currency resulting in cheap exports flooding the market.
  • Europe has been permitted to keep their tax breaks for small businesses despite rulings against American tax advantages.

Source: Elizabeth Wasserman, "Happy Birthday, WTO?" Inc. Magazine, January 2005.

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