Opening the WTO Door for SMEs to Trade

By James R. Meenan

The new World Trade Organization (WTO) Round of trade negotiations, commencing this November in Seattle, will provide a unique opportunity to engage the largest business community - small and medium size enterprises (SMEs) - in a process that could lead to their expanded international growth.

SMEs are a critical economic factor in poorer countries as well as the more developed economies in our world today. They make up a majority of the domestic business transactions but only play a limited role in international trade. Given their size and diversity of sectors in which they function, SMEs are highly adaptable between the developed and developing economies, provided that trade barriers are negated. Accordingly, SMEs are global economy’s greatest marginal opportunity for growth if they are actively engaged in the new WTO Round of negotiations and their trade issues are effectively addressed.

Outreach and Engaging SMEs

While national leaders have repeatedly urged to more effectively involve SMEs in trade, it has not yet materialized. The new WTO Round now offers these leaders the opportunity to codify some of the efforts that SMEs have initiated in regional trade negotiations and bring closure to their outstanding findings and recommendations.

SMEs are diverse, multi-sectoral entities that have trade issues both unique to themselves and cutting across multiple sectors. Thus a WTO mechanism to address SME trade issues must be flexible enough to allow SME inputs to the multi-sectoral negotiations that will take place, in addition to having their own unique issues addressed.

Issues Unique to SMEs
On the issues unique to SMEs, we have the benefit of the deliberations from the 18countries comprising the Asia Pacific Economic Cooperation (APEC) region that took place at the 1997 Ottawa SME Ministerial. In that forum, the SMEs identified the need for trade reforms in four areas:

Access to Markets;
Access to Technology;
Access to Finance; and
Access to Skills.

Through a collaborative consultation process within WTO member countries, SMEs can develop a comprehensive agenda for the WTO Round. Some issues that appear ripe for “resolution” are:

Cross Sector Issues
The wide dimension of SME operations in multiple sectors makes it vital that SMEs be permitted to have an input to those sector-related issues that will be negotiated in the new WTO Round. SMEs provided invaluable help in some regional negotiations, one being the Electronic Commerce efforts under the Free Trade Area for the Americas (FTAA). In that process, they actively participated in the joint public-private sector working group on Electronic Commerce with findings and recommendations to:

SMEs would no doubt provide a similar level of constructive insight to the country papers being presented to the WTO as well as the follow-on negotiations covering trade facilitation, electronic commerce, and market access.

The above information has been shared with and favorably considered by the Honorable Mike Moore, Director-General of the WTO and senior U.S. trade officials.

Mr. Moore responded: “I believe that small and medium enterprises are key to the success of any economy. I also believe that it is essential to ensure that they have the requisite access to markets, technology, infrastructure and services, as well as to government, in order to prosper.” He offered his encouragement for this work and stated he would circulate the material to his colleagues.

Conclusion -- Course of Action

Building on the constructive experience of the APEC SME Ministerial and related regional negotiations, the WTO now has the opportunity to outreach and mobilize SMEs as a constructive force to insure the broadest level of participation in the negotiations and subsequent passage of the new Round’s reforms. The following action plan is submitted for consideration:

The SME business community has much to offer the WTO in this new Round of trade liberalization negotiations. It is hoped that this opportunity will be seized to more fully integrate the trade issues of SMEs from poorer and developed countries into these deliberations.

James R. Meenan is Vice President of the International Management and Development Institute; an Associate in Global Business Access Ltd.; Chair, U.S. Industry Sector Advisory Committee (ISAC 14) Representing Small/Minority Business on Trade Policy Matters; and steering committee member of the U.S. Alliance for Trade Expansion (US-Trade). He has spent a career in poorer countries fostering private enterprise development.

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