New Trade Agreement Would Help Black-Owned Businesses Prosper
Ron Busby | 8/16/2019, 6 a.m.
The number of black-owned businesses has increased by more than 30 percent over the last decade to 2.6 million. Congress can boost that number even higher by ratifying the United States-Mexico-Canada Agreement as signed by all three nations. This recently negotiated trade deal is full of provisions that will help black-owned businesses create, grow, and thrive for decades to come.
USMCA updates the North American Free Trade Agreement, the 1994 deal that quadrupled trade among the United States, Mexico, and Canada and created the world's largest free-trade zone.
Under NAFTA, black-owned businesses have flourished. Today, America's black-owned businesses generate more than $150 billion in economic output.
But the world's economy has transformed since 1994. Back then, music and movies were consumed via cassette and VHS tapes, data was stored on floppy disks, e-commerce barely existed, and the Internet was largely a tool for university researchers.
USMCA responds to the past 25 years of technological advancements with a slew of 21st-century provisions that will make it easier for Black-owned businesses to trade internationally— while making them more competitive at home.
Black business owners have long been at the forefront of innovation, specifically in creative industries. In 1959, Berry Gordy founded Motown Records out of a garage with just $800. He would go on to transform the music industry and manage a catalog that includes hits by The Temptations, Stevie Wonder, and Marvin Gaye.
Gordy's success was due in a large part to the robust intellectual property protections that safeguard American musicians, writers and other artists. For years, the United States has led the world in protecting intellectual property. Thanks to USMCA, Canada and Mexico will soon join us in protecting artists' creations and concepts.
Under USMCA, authors, musicians, filmmakers, visual artists, and software designers will enjoy 20 extra years of copyright protection for their creations compared to the status quo. This would afford black creators additional time to turn a profit from their books, music, art and movies— incentivizing the development of future creative content. USMCA also protects intellectual property beyond American borders, where 95 percent of the world's consumers live.
Black entrepreneurs are no strangers to the international market. Two decades after Motown's founding, Robert L. Johnson launched Black Entertainment Television with just two hours of programming per week. Today, BET programming reaches 90 million households around the world, from Canada and the Caribbean to Europe and sub-Saharan Africa. Black business owners across the country are eager to follow in Johnson's footsteps. Sixty-six percent of black business owners express a desire to
expand beyond their current region and scale.
USMCA gives black-owned businesses the ability to succeed in the ever-changing
international economy. The deal includes measures that would curb the trade of counterfeit goods and online piracy. Meanwhile, a prohibition on customs duties for digital products like video games and e-books will make it easier for Black creators to send their works abroad.
USMCA also raises the de minimis threshold, the value at which any international shipment is subject to customs duties and taxes. A higher threshold means that American businesses will pay less to ship products to customers in Mexico and Canada. Less paperwork, fewer fees, and larger markets all but ensure that black-owned businesses will become more profitable and competitive.
Reginald Lewis was the first black businessman to build a billion-dollar international conglomerate. When asked about the ambitions and future potential of black entrepreneurs, Lewis answered: "I think the sky is the limit."
Lewis was right. The talents and drive of Black entrepreneurs are boundless. And with USMCA ratified, there's no question that Black-owned businesses will reach new heights in the 21st century.
Ron Busby is president and CEO of the U.S. Black Chambers, Inc.