Today, Brian Bieron, eBay’s Executive Director, Global Public Policy, testified at a United States International Trade Commission (USITC) public hearing focused on global digital trade. Brian’s testimony will help shape a report the USITC is writing titled, Global Digital Trade I: Market Opportunities and Key Foreign Trade Restrictions. The report, which will be finished in August, will help inform US officials in charge of negotiating trade agreements of barriers that U.S. businesses face in key foreign markets. This will help lead to better global market conditions for eBay-enabled micro, small, and medium-sized businesses (MSMEs).

Brian explained in his testimony that the global trading regime was not designed to facilitate hundreds of thousands, and eventually millions, of MSMEs engaging directly with international customers through online commerce, payment, and logistics platforms. As a result, these MSMEs are facing barriers that are unique to this new model of trade. Brian recommended that policy makers take the following actions to improve and expand opportunities under this new, more inclusive model of trade:

• Reduce or completely eliminate tax barriers to micro and small business trade by increasing low value “de Minimis” thresholds across the globe
• Include policies focused on micro business and platform-based trade in new or updated trade agreements
• Modernize global postal systems to better support global package-based commerce
• Promote an open Internet, globally
• Provide Coordinated Export Promotion Assistance to Internet-Enabled MSMEs

Brian specifically focused on the extremely low customs and tax de Minimis thresholds – the value below which goods can be shipped into a country before duties and taxes are assessed. At a time when global small business trade is a real possibility, countries that maintain low de Minimis thresholds or those seeking to lower them are imposing a de facto tariff on platform-enabled MSMEs.  The US set a small-business friendly, trade-promoting standard when it raised its de Minimis from $200, up to $800, last year. This stands in stark contrast to countries like Canada that has a $20 de Minimis, the lowest in the industrialized world.  The CD Howe Institute found that the Canadian Government spends four times more than it actually collects in duty and tax revenue on low-value ecommerce purchases.  The Australian Government is also considering a proposal to eliminate their $1000 threshold. This would clearly negatively impact Internet-enabled small business exporters in the US, as well as reducing choices and raising prices for Australian consumers. In addition, like in Canada, Australian small businesses use the Internet and platforms like eBay to access a world of consumers to great benefit, including consumers in the US. Brian made the point that using taxes to lock micro and small businesses into their own markets is not a pathway to growth and success. 

We will continue to look for opportunities to advocate on behalf of our sellers for the removal of barriers to platform-enabled trade and greater access to global markets.