SPEECHES — DG ROBERTO AZEVÊDO

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  • Workshop - How to Support MSMEs: Sharing of National, Regional and Multilateral Experiences

  

Thank you Ambassador Casanueva,
Excellencies,
Ladies and gentlemen,

Good morning – and welcome to the WTO.

I am pleased to join you today. From the outset, let me thank the Friends of MSMEs for their kind invitation and for organizing this event.

Over the past months, we have seen a high level of activity from this group. This is the third event hosted by the Friends of MSMEs in less than six months. I understand that there has been a good level of engagement, and I think that this is very positive.

These conversations play a very important part in helping to bring the MSME perspective into the wider trade debate. And it is fantastic to have some representatives from capitals. This dialogue can only more forward with the right perspectives if it is well-informed. And the perspective from capitals is as fundamental as the perspectives that can be found at a more international level.

We all know that MSMEs play a big economic role.

They are the backbone of many economies, representing more than 90 percent of all companies worldwide and accounting for 60 percent of employment. They are major employers of women and young people, and a key driver of innovation.

Yet, their participation in world trade does not reflect their importance domestically. In developing countries, for example, exports represent less than 10 percent of MSMEs' total sales.

Clearly there is scope to do more here. Helping MSMEs 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.

Our discussions here can help to raise awareness of the obstacles that MSMEs face. Over the course of these debates, we have had a chance to highlight a range of barriers that affect MSMEs' participation in international trade.

Those barriers include:

  • lack of appropriate information and skills,
  • difficulties in accessing trade finance,
  • burdensome customs procedures,
  • and high fixed costs.  

The smaller the companies, the greater the challenges seem to be.

If we want to help MSMEs to trade more, we need to understand better what is standing in their way. This is very important.

And we also need to focus our minds on ensuring that MSMEs get the support they need. That’s what this workshop is all about.

It’s actually quite an innovative event. You have brought together a wide range of experts, from domestic, regional and international organizations, and from the public and the private sectors.

Over the next two days you will have the opportunity to discuss your experiences and share success stories. I hope that this can help spark new ideas and approaches to tackle the obstacles that MSMEs face.

In fact, I am glad that many of the MSME conversations are moving into a more solution-oriented mode. 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.

I am sure that this workshop will be an important addition to those efforts.

And the WTO has not been sitting idle on this issue. Actually we have been taking some important steps to respond to some of the challenges MSMEs face.

Initiatives like the WTO Trade Facilitation Agreement will have a huge impact in cutting trading costs for MSMEs.

I could also point to the capacity building support that we deliver on a number of fronts, also together with partners like ITC and UNCTAD. There is also the work of the Enhanced Integrated Framework in a number of other areas, as well as from different parts of this house.

I’ve focused on these elements on previous occasions, so today I’d like to highlight a few other aspects of our work.

First, access to information.

This is vital for all businesses – but, as ever, the bigger companies have greater capacity to manage this challenge. By increasing access for all, MSMEs stand to benefit the most.

Therefore we are working with the ITC and UNCTAD to develop a platform to centralize relevant trade-related information, such as rules and regulations on exports – down to the details on specific products in specific markets. I look forward to build on this ongoing cooperation between our institutions.

At the WTO, we are also working on an Open Data Initiative to improve the architecture of our data - and access to it.

The initiative aims to better integrate WTO databases and information systems. It will establish a Single Information Point to simplify access to information stored at the WTO. And it will ensure that our data is open and that it can be easily retrieved.

In addition, we will work with interested members to apply Open Data Principles to facilitate the access of trade-related information on a global scale.

This is a long term endeavour, but I believe it can significantly contribute to making access to trade-related information easier, especially for MSMEs.

So that's the first area I wanted to highlight.

The second is on trade finance for MSMEs.

The gap regarding trade finance (demand v. availability) remains huge – especially for MSMEs. Globally, 58 percent of trade finance requests by MSMEs are rejected, against just 10 percent for multinational companies.

I have therefore been working with a variety of partners to put a focus on this issue.

In July I met with the development banks to examine what we could do to improve the supply of trade finance for the smaller players. And I have been working closely with the CEO of the International Finance Corporation on this important issue.

We met again earlier this month in Washington DC, 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.

But it is also clear that we need to improve the regulatory dialogue. We must ensure that the very necessary steps taken by regulators after the financial crisis do not have unintended harmful consequences for trade finance. We will be pursuing this point over the coming weeks, together with the IFC.

So that’s the second point.

Finally, we are trying to capture some of the energy that we are seeing from the private sector itself.

Business engagement in the WTO has soared over recent years, and one common theme has been helping MSMEs to trade.

We wanted to help highlight and deliver some of the great ideas that we had been hearing.

So together with the ICC we have launched the "ICC-WTO Small Business Champions" initiative. We’re inviting companies and private sector organizations to put forward their proposals on how they can encourage and support SMEs to do business across borders. We’ve had a huge amount of interest, from all over the world.

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.

I encourage you to get involved. 

There is more information on our website – and on the leaflets that are available at the back of the room today.

To conclude, I think we have built up some good momentum behind the MSME debate.

If we look back just a few months ago, it's clear that conversations have evolved quite quickly.

I know that some members are keen to discuss MSME issues at the 11th Ministerial Conference in Buenos Aires this coming December. By the way, the Friends of MSMEs tabled just yesterday a proposal for a draft Ministerial Decision establishing a work programme for MSMEs at the WTO. It covers some of the issues that I mentioned here, such as 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.

So, I hope we will keep up this dialogue. And I look forward to hearing about the outcomes of your conversations.

Working together, we can ensure that the trading system is ever more inclusive, and that its benefits are shared by all.

Thank you. I wish you all a very successful and productive event.

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