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Associated Press
David Pietig, operations manager for Arlington Plastics Machinery in Elk Grove, Ill., expects to hire more workers to handle NAFTA trade.

Pacts promise boost in free-trade exports

– Small businesses may get an export boom under trade agreements the federal government is hammering out with Pacific and European countries.

Just 1 percent of U.S. companies export. Overseas markets represent a huge opportunity for small businesses that want to increase their revenue, but expensive tariffs, burdensome paperwork and delays in customs make doing business with some countries more trouble than it’s worth.

The Trans-Pacific Partnership and the Trans-Atlantic Trade and Investment Partnership could change that. The agreements aim to make exporting easier by eliminating tariffs, reducing paperwork and getting goods through customs faster. That would not only increase companies’ sales, it could create jobs and provide a boost to the slowly growing U.S. economy.

The Trans-Pacific Partnership with 11 countries near or on the Pacific Ocean would create $124 billion in U.S. exports each year, according to the think tank Peterson Institute for International Economics. The Trans-Atlantic Trade and Investment Partnership, which covers the European Union, could increase U.S. exports by $23 billion a year, according to the European Center for International Political Economy, another think tank.

If previous trade agreements are a guide, the deals could be good for small business. The 20-year-old North American Free Trade Agreement with Canada and Mexico eliminated tariffs on products that are at least 51 percent made in the U.S., making U.S. goods cheaper for Canadian and Mexican customers.

A quarter of small and medium-sized company exports in 2011 were to Canada and Mexico.

Sales of used plastic processing equipment to Canada led Arlington Plastics Machinery to hire two extra workers, operations manager David Pietig says. Under NAFTA, 3.5 percent import and export tariffs are waived.

Exports account for about 15 percent of the Elk Grove, Ill., company’s sales, up from about 3 percent before NAFTA. He expects to hire more people to handle the volume.

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