MC11 in brief

Micro, small and medium-sized enterprises

In the majority of countries, micro, small and medium-sized enterprises (MSMEs) account for a significant proportion of employment. In both developing and developed countries, such companies  account for around two-thirds of total employment. In developing countries especially, small firms can be critical vehicles for social inclusion, including  by providing opportunities for women to participate in economic activities.

Although employees for MSMEs comprise the majority of the workforce in most countries, their contribution to GDP is lower, at around 35% in developing countries and roughly 50% in developed countries. This is mainly because these smaller enterprises are much less productive than their larger counterparts.  

In most countries, small and medium-sized enterprises (SMEs) are defined as firms employing between 10 and 250 people. Firms with up to 10 employees are usually referred to as micro firms.

Despite the emergence of new opportunities for smaller firms to connect to world markets, MSMEs' participation in international trade is very limited. Several studies have shown that MSMEs are more impacted by trade obstacles than bigger companies. Some of the obstacles include non-tariff barriers (NTBs), cumbersome regulations and border procedures, access to finance, and lack of transparency.

The special situation of SMEs is acknowledged and addressed in a handful of WTO agreements, plurilateral agreements and work programmes, and through technical cooperation. For example, some provisions in the Anti-dumping Agreement and the Agreement on Subsidies and Countervailing Measures reduce the burden of information requirements for small companies and allow governments to provide them any assistance practicable.

In recent years, the interest of some WTO members in bringing MSME issues to the fore of the WTO framework has increased. In the summer of 2016, the "Friends of MSMEs"* submitted a proposal that encourages members to address MSME issues at the WTO as part of a development-oriented agenda. Other members on the other hand fail to see how the problems faced by MSMEs could be addressed in the WTO through rule-making.

More recently, and in the context of preparations for the 11th Ministerial Conference, the Friends of MSMEs group submitted a draft ministerial decision calling for the establishment of a work programme under the General Council focusing on the needs of smaller firms. This work programme would centre on access to information, the regulatory environment, access to finance and reducing trade costs, among other things. Consultations are ongoing on this matter.

* Argentina, Brazil, Brunei Darussalam, Chile, Colombia, Costa Rica, Dominican Republic, El Salvador, the European Union, Guatemala, Honduras, Japan, the Republic of Korea, Malaysia, Mexico, the Republic of Moldova, Nicaragua, Pakistan, Panama, Paraguay, Peru, the Philippines, the Russian Federation, Singapore, Switzerland, Chinese Taipei, Uruguay and Viet Nam.