SMEs seen to play crucial role in global trade
MICRO, small and medium sized enterprises (MSMEs) are touted as the next frontier for expanding trade and growth as they are expected to take an increasingly crucial role in boosting the overall welfare across Asia-Pacific Economic Cooperation (Apec) member economies.
It would thus be necessary for Apec leaders to adjust the policy reform lenses to make it easier for MSMEs to be part of international trade and global value chains, said Ramon Clarete, former dean and current professor of the University of the Philippines (UP) School of Economics.
“Economic welfare gains are higher with global MSMEs. There will be more variety of products as more MSMEs become exporters, average productivity will rise as more resources get allocated to exporting enterprises, and competition in the global market will intensify which, in turn, will lower the average costs of products. Thus, it is only reasonable to seek trade reforms, policies, and regulations that will engage more MSMEs in the global market,” Clarete said in one of the Apec meetings held recently in Cebu.
“There is an added advantage to adjusting policy reform lenses toward addressing the barriers that particularly impinge on the participation of the largest group of businesses—the MSMEs. Inclusiveness does not only distribute the gains from trade more equitably among trading partners, it also increases the pie significantly,” Clarete added.
According to Clarete, more exports from MSMEs means having diversified products, increased productivity and increased competitiveness.
Similarly, Assistant Secretary Ceferino S. Rodolfo stressed that in enabling MSMEs to participate as direct exporters or as service providers in the global value chain, economies can look forward to increased trade flows globally.
“Like many developing countries, the Philippines will need to work hard to achieve the integration of MSMEs in global trade. The meetings and dialogues held in Cebu the past two weeks have yielded specific, concrete, and practical initiatives that Apec economies will implement to provide MSMEs wider opportunities to integrate into global or regional trade,” Rodolfo said.
The Philippines circulated the “Apec Implementation Plan for the Boracay Action Agenda to Globalize MSMEs” which outlined the possible work streams and indicators of progress per priority action.
According to Rodolfo, this was intended to be regarded as a ‘living document’ to guide officials and also to draw from the expertise of sub-fora, committees and working groups to fulfill the Boracay Action Agenda’s (BAA) objectives.
The BAA is an action-oriented initiative geared toward addressing the barriers faced by MSMEs in international trade. The priority areas for cooperation and action were identified as trade facilitation, e-commerce, financing and institutional support.
Rodolfo said the draft implementation plan included streamlining of processes for rules of origin (ROO), addressing issues of compliance to regulatory requirements, capacity building, bridging information requirements of MSMEs when they try to access global markets, and resiliency during disasters, among others.
