Fueling the Online Trade Revolution

A New Customs Security Framework to Secure and Facilitate Small Business E-commerce

Across the United States, individuals and small businesses are increasingly buying and selling goods and services online. According to the U.S. Census Bureau, the total value of online transactions in the United States grew from $3 trillion in 2006 to $5.4 trillion in 2012, about a third of U.S. GDP. Increasingly, these transactions are cross border. By 2017, a third of U.S. business-to-consumer (B2C) and consumer-to-consumer (C2C) e-commerce transactions will be with foreign counterparts, up from 16 percent today.

Behind these trends are the previously marginal participants in trade—small businesses, entrepreneurs, and consumers that transact with foreign buyers and sellers online. While the online trade revolution holds extraordinary potential for expanding small business exports and entrepreneurship, it is also presents pressing policy questions. How should customs security frameworks be aligned given the future of trade? How should policymakers revise these frameworks for a world where millions of businesses and individuals increasingly engage in billions of micro-transactions? This report aims to answer such questions and illuminate some of the policy dynamics surrounding e-trade.

Kati Suominen
Adjunct Fellow (Non-resident), Scholl Chair in International Business