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WTO seeks to open trade opportunities for small firms

World Trade Organization Director-General Roberto Azevêdo said helping small enterprises enter global markets “will go a long way to making the trading system more inclusive and improving the lives of individuals and communities around the world.”

   World Trade Organization Director-General Roberto Azevêdo wants to boost international trade opportunities for the world’s multitude of small companies. 
   According to the global trade body, more than 90 percent of all companies worldwide are small enterprises. These companies also account for 60 percent of all employment. However, in developing countries particularly, exports represent less than 10 percent of these firms’ total sales.
   “Clearly there is scope to do more here,” Azevêdo told attendees at the Oct 31 Friends of MSMEs workshop. “Helping MSMEs (micro, small and medium-sized enterprises) to join trade flows in greater numbers will go a long way to making the trading system more inclusive and improving the lives of individuals and communities around the world.”
   Azevêdo noted that the biggest obstacles for small companies attempting to enter the global market include lack of appropriate information and skills, lack of trade finance, burdensome customs procedures, and high fixed costs. “The smaller the companies, the greater the challenges seem to be,” he said.
   The WTO has raised the profile of small enterprises within its policy discussions. “I’ve been hearing a lot of interesting and practical ideas over the last few months about what could be done to help these companies to trade,” Azevêdo said.
   He said the WTO’s Trade Facilitation Agreement should have a “huge impact in cutting trade costs for MSMEs,” in addition to the organization’s efforts to increase resources for capacity building support in developing countries. 
   The WTO is working with the International Trade Center and the UN Conference on Trade and Development to develop a platform to centralize relevant trade-related information, such as export rules and regulations – down to the details on specific products in specific markets. “I look forward to build on this ongoing cooperation between our institutions,” Azevêdo said.
   The WTO’s Open Data Initiative is also expected to benefit small companies by providing streamlined access to information on trade. 
   The WTO wants to expand trade finance opportunities for small enterprises. “The gap regarding trade finance (demand vs. availability) remains huge – especially for MSMEs. Globally, 58 percent of trade finance requests by MSMEs are rejected, against just 10 percent for multinational companies,” Azevêdo said.
   In July, Azevêdo met with the development banks to examine ways to improve the supply of trade finance for the smaller companies. 
   “I have been working closely with the CEO of the International Finance Corporation on this important issue,” he said. “We met again earlier this month in Washington, D.C., to discuss what practical actions we can take. Of course, we need to maintain and even increase the support from the development banks to those economies where trade finance provision is weak.”
   To raise the voice of small enterprises in trade, the WTO and International Chamber of Commerce recently launched the “Small Business Champions” initiative, in which they’re inviting companies and trade associations to put forward proposals on how to encourage small enterprises to conduct cross-border trade.
   “The first successful proposal was from Google, and the second was from the Union of Chambers of Commerce of the former Yugoslav Republic of Macedonia. So that gives you an idea of the range – and more proposals are coming in,” Azevêdo said.
   There’s also increased interest to discuss MSME issues at the 11th Ministerial Conference in Buenos Aires in December. On Oct. 30, Friends of MSMEs submitted a proposal for a draft ministerial decision establishing a work program for MSMEs at the WTO, which includes access to information and trade finance.
   “If our membership sees a role for the WTO in the MSMEs discussions, I think this is very positive. Having said that, precisely what happens there will be up to the proponents. They will need to decide what they want to achieve and how. And, as with all issues that members want to discuss, I will make myself available to help,” Azevêdo said.