SPEECHES — DG ROBERTO AZEVÊDO
Ladies and gentlemen,
Good afternoon everyone.
Let me start by wishing you a happy MSME day!
I am very pleased to join you this afternoon.
Let me congratulate you on the timing of this workshop. Firstly, because it coincides with the MSME day celebrations. And secondly, because the Brazil match doesn't start for a few hours yet!
So I would like to thank Ambassador Shah for organizing this important event. My thanks also go to Ambassador Cancela of Uruguay for his leadership as general coordinator of the Group.
There's no doubt that we have come a long way since the last MSMEs day.
WTO members have taken important steps to bring the MSME perspective to the centre of our discussions.
The joint initiative on supporting MSMEs, which was launched in Buenos Aires last year, is a clear sign of these efforts – and of the progress made. This work continues with real energy and enthusiasm behind it. Although we must acknowledge that some are not in a position to support it, this initiative remains open for any member to join.
So far this year, there have been a number of important discussions, including about the obstacles that MSMEs face in accessing information, and in accessing trade finance.
On the latter point, I gave an update to the Working Group on Trade, Debt and Finance earlier this month. And I was pleased to report some real progress.
We have been working closely with our partners to close the gaps in trade finance provision, which is a particular issue for MSMEs. And the multilateral development banks have responded through their trade finance facilitation programmes.
In 2016, these programmes supported around $22 billion in trade transactions. In 2017, this increased to $30 billion. And in 2018, it is estimated that over $35 billion of trade will be supported by these programmes.
This would amount to an increase of more than 50% compared to just two years ago.
There is much more to do – but this is very encouraging.
And of course trade finance is one issue which has been raised under the joint initiative.
I understand that discussions here are set to continue with a view to identifying specific actions that the Group could take.
And today the focus is on trade facilitation.
Complying with diverse standards, rules of origin requirements, and border procedures can be a huge stumbling block for MSMEs.
These are fixed costs that do not depend on a firm’s size. So while the bigger players may have the resources to absorb these costs, smaller firms are left behind.
Take Latin America, for example. Our 2016 World Trade Report found that domestic logistics costs in Latin American countries can add up to more than 42% of the value of total sales for MSMEs. That compares to 15-18% for large firms.
So what can we do to help resolve this problem?
Today's discussion is an important step. We will hear from different experts and companies about what could be done in these areas, what is working, and what is not.
Implementation of the Trade Facilitation Agreement is a case in point.
By streamlining, simplifying and standardising customs procedures the TFA will help to cut trade costs and alleviate administrative burdens. And because these costs and burdens weigh most heavily on MSMEs, they stand to benefit the most from their removal.
And the TFA provides for other important avenues to ease MSMEs' participation in global markets.
For example, the new national trade facilitation committees can provide a useful line of communication for MSMEs to give their views on a range of trade facilitation issues.
Similarly, the Committee on Trade Facilitation here in Geneva provides a useful forum to raise such issues. And of course the same applies to other WTO bodies which are relevant to this issue, such as the Committee on Rules of Origin for example.
There is huge energy behind this discussion – and huge interest as well, especially from the private sector.
As you know, we hosted another 'Trade Dialogues' event earlier this month, on behalf of the B20 and the ICC. The attendees were from developed, developing and least developed countries. And the companies they represented ranged from MSMEs to multinationals.
The organisers' intention was to help members put some flesh on the bones of the various issues. And I think they did that. One of the discussion groups focused solely on MSMEs – and so I urge you to take a look at the report of their discussions, if you haven’t already.
They suggest that members should capitalise on existing tools, including the TFA. And they point to a number of steps that they would like to see governments taking – including making business-related information more readily available and accessible. The Global Trade Helpdesk that we are developing with the ITC and UNCTAD would make a big difference here.
Given the success of the event, there was a strong desire from business to keep this conversation going. And so I hope that further, more detailed ideas might be forthcoming in the near future.
I would also like, very briefly, to mention the Small Business Champions initiative that we support with the ICC.
This initiative was conceived as a platform for businesses to present and deliver their ideas for specific, practical projects which can help smaller companies join global markets.
There was a great response – with proposals put forward for awareness-raising campaigns, training schemes, and so on. In fact, we announced the latest successful proposal earlier today. It is from the Asian Association of Business Incubation. They are going to set up a knowledge-sharing network to help Asian MSMEs to start trading across borders.
We are now working to help deliver all of the projects under this initiative.
To conclude, it seems clear that this issue is really beginning to catch fire.
This is only the second year that we are marking world MSME day, yet already the issue seems well established.
Ultimately this is about ensuring that the trading system works for everyone – and that it is truly inclusive.
So I wish you a very productive session today.