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Aircraft Parts, Distribution, Export

SBA Gets Additional Authority to Support Exports

It can be quite difficult for small businesses to make sense of the confusing morass of export regulations – this is especially true for aircraft parts, where the State Department and Commerce Department have wrangled over jurisdiction, leaving an uncertain minefield of ambiguity concerning the treatment of dual-use aircraft parts.

There has been discussion of the possibility of making these regulations less complicated; but truly untangling the regulations is an unlikely pipe dream.  What is the next best thing?  How about an agency whose job is to help us make sense of these regulations?

Subtitle B of the Small Business Jobs Act is known as the Small Business Export Enhancement and International Trade Act of 2010.  That provision establishes additional infrastructure within the Small Business Administration to support exporting by small businesses.  While this may not provide direct support to the aerospace community, it promises to reflect a long-term investment that could prove quite useful to PMA and TSOA manufacturers as well as aircraft parts distributors and repair stations.

SBA is no novice when it comes to export.  SBA already provides support and information to promote small business exports.  But under the new program, SBA will be required to establish a formal network to provide export assistance to the small business community.  Some of the important tasks that this network may tackle include:

(A) trade promotion (promoting the ideas of expot, and promoting American imports, abroad);

(B) trade finance (such as steering businesses to the Ex-Im export finance assistance programs);

(C) trade adjustment assistance (helping those who lose jobs to imports/exports);

(D) trade remedy assistance (help when you are treated unfairly by a foreign government); and

(E) trade data collection (the information you need to identify markets).

In the long term, this means that there will be dedicated professionals in the US government whose mission will be to support small business exports.  This is important because much of the exporting focus tends to be aimed at large exporters.  I have advised small businesses on exporting; so I can tell you that this new Office at SBA could provide tremendous value to the aerospace community.

The new Associate Administrator will have a number of reporting obligations.  In periodic reports to Congress, the Associate Administrator will be required to report on the Office’s progress in establishing the infrastructure to promote and support small business exports, as well as SBA’s efforts to promote exports, and the results of those efforts.  This demonstrates that Congress will be holding the office accountable for real results.

This is supposed to be a jobs bill, so SBA will also be required to estimate the total number of jobs created or retained as a result of the export assistance provided by the SBA and its network of partners.

In many ways, this data has the potential to duplicate some of the work performed by the International Trade Administration (ITA).  ITA does some excellent work in these areas; but I think significant duplication is unlikely.  My experience has been that SBA and ITA have a good working relationship (for example, ITA’s Fred Elliott keeps turning up at SBA transportation meetings, and ITA has demonstrated a commitment to promoting exports by aerospace small business), so it is likely that this relationship will continue and the additional resources of SBA will permit some small-business-targeted resources while at the same time expanding the existing reach – including the aerospace reach – of ITA.

The final issue, of course, will be funding.  If this office receives adequate funding, then it could do some real good.  But if SBA assigns an Associate Administrator and then provides him or her with inadequate staff and resources, then the best intentions could fall flat.

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About Jason Dickstein

Mr. Dickstein is the President of the Washington Aviation Group, a Washington, DC-based aviation law firm. He represents several aviation trade associations, including the Aviation Suppliers Association, the Aircraft Electronics Association, the Aircraft Fleet Recycling Association and the Modification and Replacement Parts Association.

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