Micro Small and Medium Enterprises (MSMEs)
Members: 91/164
Open Initiative
Status: Ministerial Statement Agreed for MC12

Recommendation on promoting MSMEs’ inclusion in regulatory development in the area of trade (Annex 4);In early 2017, a group of WTO Members calling themselves the “Friends of Micro, Small and Medium-Sized Enterprises (MSMEs),” led by Argentina, Brazil and Chile, successfully launched an informal dialogue on how the WTO could support the integration of MSMEs into international trade.

At the 11th WTO Ministerial Conference (MC11) in December 2017, Canada and 86 other WTO Members issued a Joint Ministerial Statement establishing an informal work program on MSMEs, which is still ongoing. Sessions of the Informal Working Group are open to any WTO member that wishes to attend or participate.

The group aims to address the burdensome barriers faced by MSMEs trying to engage in international trade – and widen the discussion on these issues at a multilateral level.

 

 

 

custom-preview
About this Plurilateral
Scope and Coverage

The Informal Working Group on MSMEs is not yet a negotiating group and remains both voluntary and non-binding. It covers a range of cross-cutting issues faced by a variety of members at all levels of development.  Since its founding mandate the group set out to, and continues to discuss:

  • improved access to information;
  • ways to promote a more predictable regulatory environment;
  • reduction of trade costs, including areas such as trade facilitation, shipping and logistics, and procedures and requirements related to origin; promotion, including through cooperation with other multilateral institutions, of better access to trade finance
  • identification of issues of particular interest that could be addressed in WTO Trade Policy reports;
  • consideration of how technical assistance and capacity building initiatives could consider the trade needs and challenges of MSMEs and
  • using the Internet as a tool for MSMEs to access global markets.

In May 2020, members of the Informal Working Group released a WTO statement acknowledging the particular impact that the COVID-19 pandemic was having on MSMEs around the world and pledged to make efforts to be transparent and take measures to support MSMEs. In December 2020, The Informal Working Group on Micro, Small and Medium-sized Enterprises (MSMEs) adopted a package of six recommendations and declarations aimed at addressing the unique challenges faced by MSMEs in international trade. Below is the list of recommendations and declarations that compose the package:

1.MSME-related information in WTO Trade Policy Reviews:

 The recommendation calls on WTO members to provide, on a voluntary basis, information on policies related to MSMEs during their WTO Trade Policy Reviews to enhance transparency and to be a source of good practices (e.g., number of MSMEs in the economy and their share in international trade or programmes that support MSMEs to trade).

2. Access to information:

Members are encouraged to support the Global Trade Helpdesk, a tool led by the International Trade Centre, the United Nations Conference on Trade and Development and the WTO to help MSMEs access market intelligence, including on tariffs and regulations.

3. Trade facilitation for MSMEs:

Burdensome customs procedures are especially hard on MSMEs. The Group is calling on WTO members to fully implement the WTO’s Trade Facilitation Agreement, exchange experiences to identify and promote good practices that can help MSMEs, and consider adopting digital customs procedures to ease these difficulties.

4. Promoting MSME inclusion in regulatory development:

New trade regulations can have unintended consequences for businesses, especially for MSMEs. Members are encouraged to analyse potential impacts for smaller businesses and consult with MSMEs before implementing new trade regulations.

5. Supporting implementation of the 2019 Decision on the WTO Integrated Database:

The Integrated Database (IDB) is the WTO’s official source of tariff and trade-related information. By keeping the IDB up to date, WTO members can help MSMEs access reliable and comprehensive information on tariffs and other market access data. This recommendation supports the voluntary submission of additional information and automatic electronic transmission of members’ tariff or import data to the IDB as per the May 2019 IDB Decision.

6. Access to finance and cross-border payments:

Access to finance and cross-border payments are major challenges for the engagement of MSMEs in trade. The Group calls on members to share best practices with a view to identifying concrete measures.

https://www.wto.org/english/news_e/news20_e/msmes_11dec20_e.htm

 

Looking Ahead

The major focus of the Informal Working Group more recently has been to develop a declaration on MSMEs for MC12. The key issues to be covered are:

  • Welcoming and acknowledging the six elements of the package (set out above)
  • Welcoming the launch of a trade platform for MSMEs which aims to provide trade-related information to small businesses that are trying to enter international markets.
  • Noting significant actions to promote MSME participation in international trade such as exchange of good practices, monitoring the progress of the December 2020 recommendations; workshops, information sessions and a meeting schedule
  • Noting the interplay with COVID and the path to recovery for MSME’s participation in international trade given their predominant dependence on imports.
  • Endeavouring to share the Group’s work with other WTO bodies including on trade facilitation; and continuing dialogue with the private sector.
  • The future work programme which is likely to be set from the declaration at MC12.
  • Announcing the winners of the “Digital Champions for Small Business” initiative at a side event during MC12. 

 

Membership

The Group is currently comprised of the following Members: Afghanistan; Albania; Antigua and Barbuda; Argentina; Armenia; Australia; Bahrain; Belize; Brazil; Brunei Darussalam; Canada; Chile; China; Colombia; Costa Rica; Cote D’Ivoire, Dominica; Dominican Republic; Ecuador; El Salvador; European Union; Grenada; Guatemala; Guyana, Honduras; Hong Kong, China; Iceland; Israel; Japan; Kazakhstan; Kenya; Republic of Korea; Kyrgyz Republic; Lao People’s Democratic Republic; Liechtenstein; Malaysia; Mauritius; Mexico; Republic of Moldova; Mongolia; Montenegro; Myanmar; New Zealand; Nicaragua; North Macedonia, Norway; Pakistan; Panama; Paraguay; Peru; Philippines; Qatar; Russian Federation; Saint Kitts and Nevis; Saint Lucia; Saint Vincent and the Grenadines; Saudi Arabia; Singapore; Switzerland; Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu; Turkey; Ukraine; Uruguay; the United Kingdom and Vietnam.

Key Documents
News
  • WTO - Working group on small business discusses preparations for MC12 At their last meeting before the WTO’s 12th Ministerial Conference (MC12), members of the Informal Working Group on Micro, Small and Medium-sized Enterprises (MSMEs) on 8 November reviewed the group’s plans for MC12, including the launch of the Trade4MSMEs platform. The aim of the platform is to provide trade-related information to small businesses seeking to reach international markets and relevant information for policy makers.

  • WTO - Public Forum discusses how to help small businesses become more resilient Representatives of micro, small and medium-sized enterprises (MSMEs) shared stories of resilience during the COVID-19 pandemic at a session held on 30 September at the Public Forum. Following a keynote speech delivered by International Trade Centre (ITC) Executive Director Pamela Coke-Hamilton, panellists reflected on how to help small businesses adapt to changing trade realities, become more resilient and engage more effectively in global value chains.

  • WTO - Working group on small business close to finalizing ministerial declaration Members of the Informal Working Group on Micro, Small and Medium-sized Enterprises (MSMEs) on 26 July moved closer to a final draft ministerial declaration for the WTO’s 12th Ministerial Conference (MC12). The Group also reviewed the implementation of the package of declarations and recommendations for MSMEs adopted in December 2020. New topics, such as intellectual property rights and innovation in relation to MSMEs, were also discussed.

  • WTO - Call for proposals for “Digital Champions for Small Business” initiative The “Digital Champions for Small Business “ initiative was launched today (25 June 2021) at a joint event hosted by the Informal Working Group on Micro, Small and Medium-sized Enterprises (MSMEs), the International Trade Centre (ITC) and the International Chamber of Commerce (ICC). The aim of the initiative is to help small businesses go digital and increase their participation in international trade. Proposals on how to help MSMEs address the difficulties they face with digital trade should be submitted by 15 September 2021.

  • WTO - Working group on small business reviews draft ministerial declaration At a meeting of the Informal Working Group on Micro, Small and Medium-sized Enterprises (MSMEs), held on 24 June, WTO members discussed a draft ministerial declaration, a key element in the Group’s preparations for the WTO’s 12th Ministerial Conference (MC12). They also looked at implementation of the package of declarations and recommendations for MSMEs adopted in December 2020.

  • WTO - Working group discusses roadmap to MC12 and explores new topics At a meeting of the Informal Working Group on Small and Medium-sized Enterprises (MSMEs), held on 4 May, WTO members discussed what the Group aims to deliver at the WTO’s 12th Ministerial Conference (MC12) and explored new topics to help small business benefit from international trade. The Group also looked at the implementation of the package of declarations and decisions adopted in December 2020.

Analysis and Articles
  • OECD - OECD SME and Entrepreneurship Outlook 2021 Small and medium-sized enterprises (SMEs) and entrepreneurs have been hit hard during the COVID-19 crisis. Policy responses were quick and unprecedented, helping cushion the blow and maintain most SMEs and entrepreneurs afloat. Despite the magnitude of the shock, available data so far point to sustained start-ups creation, no wave of bankruptcies, and an impulse to innovation in most OECD countries. However, government support has been less effective at reaching the self-employed, smaller and younger firms, women, and entrepreneurs from minorities. Countries were not all even in their capacity to support SMEs either. As vaccine campaigns roll out and economic prospects brighten, governments have to take the turn of a crisis exit and create the conditions to build back better. The OECD SME and Entrepreneurship Outlook 2021 brings new evidence on the impact of the crisis and policy responses on SMEs and entrepreneurs. It reflects on longer-term issues, such as SME indebtedness or SME role in more resilient supply chains or innovation diffusion. The report contains country profiles that benchmark impact, factors of vulnerability, and sources of resilience in OECD countries, and give a policy spotlight on liquidity support and recovery plans for SMEs.

  • ICSB - Annual Global Micro Small and Medium-Sized Enterprises Report Th report covers a range of submitted papers from many countries, institutions,
    organizations, and individuals, which will comprise a collaborative and complete record of the current status of MSMEs. This comprehensive report seeks to amplify the essential findings and events of this year in history for MSMEs.

  • ITC - SME Competitiveness Outlook 2021: Empowering the Green Recovery The SME Competitiveness Outlook 2021 analyses how small businesses can rebuild from the COVID-19 pandemic so they are prepared to face the looming climate crisis. It provides a 20-point Green Recovery Plan to foster competitive, resilient and environmentally sustainable small and medium-sized enterprises (SMEs). The report finds that small firms are less resilient to shocks – whether the pandemic or climate change – because they do not have key business fundamentals in place. The report identifies key areas where small businesses with limited resources can invest to seize opportunities of the green transition – and what business support organizations, governments, lead firms in value chains and international organizations can do to empower small firms to be competitive, resilient and sustainable.

  • OECD - Trade in the time of parcels More parcels are crossing international borders than ever before. While this has given rise to new opportunities, not least for individuals and SMEs who are now more directly engaged in trade, it is also raising new challenges. This paper explores this complex and evolving environment, identifying the types of goods that are traded as parcels and the different actors along the parcels supply chain, as well as the policies to help ensure that parcels get to where they are needed.

  • ITC - SME Competitiveness Outlook 2020 - COVID-19: the Great Lockdown and its Effects of Small Business The SME Competitiveness Outlook 2020 analyses the impact of the pandemic on small firms, international supply chains and trade. It provides projections and a 15-point action plan for businesses, policymakers and business support organizations to weather the crisis – and gear up for a ‘new normal’ that needs to be resilient, digital, inclusive and sustainable. The report combines analysis of the impact of COVID-19 on firms based on a large-scale global survey, with case studies and a thought leader viewpoint. The projected drop in supply chain trade is evaluated by region, and in 85 country profiles.

  • IISD & CUTS - History and latest developments in the Informal Working Group This brief provides an overview of the WTO-related discussions on MSMEs in recent years, with a particular focus on the work undertaken since the last Ministerial Conference in Buenos Aires, Argentina, in December 2017. It outlines the current state of play as of late March 2020, while providing a detailed overview of the themes addressed to date in those informal discussions and what outcomes have been proposed.

  • WTO - World Trade Report 2016: Levelling the trading field for SMEs The 2016 World Trade Report examines the participation of small and medium-sized enterprises (SMEs) in international trade, how the international trade landscape is changing for SMEs, and what the multilateral trading system does and can do to encourage more widespread and inclusive SME participation in global markets.

Final Draft Declaration on Micro, Small and Medium Enterprises (MSME's) - For MC12

Circulated in unrestricted format on 22 October 2021 in WTO document WT/MIN(21)/1.

Signatories

We, the Heads of Delegations representing the following Members of the WTO: Afghanistan; Albania; Antigua and Barbuda; Argentina; Armenia; Australia; Bahrain, Kingdom of; Belize; Brazil; Brunei Darussalam; Canada; Chile; China; Colombia; Costa Rica; Côte d’Ivoire; Dominica; Dominican Republic; Ecuador; El Salvador; European Union; Grenada; Guatemala; Guyana; Honduras; Hong Kong, China; Iceland; Israel; Japan; Kazakhstan; Kenya; Korea, Republic of; Kyrgyz Republic; Lao PDR; Liechtenstein; Malaysia; Mexico; Moldova, Republic of; Mongolia; Montenegro; Myanmar; New Zealand; Nicaragua; Nigeria; North Macedonia; Norway; Pakistan; Paraguay; Peru; Philippines; Qatar; Russian Federation; Saint Kitts and Nevis; Saint Lucia; Saint Vincent and the Grenadines; Saudi Arabia, Kingdom of; Singapore; Switzerland; the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu; Turkey; Ukraine; United Kingdom; Uruguay; and Viet Nam,

Preamble

Acknowledging that the integration of Micro, Small and Medium-sized Enterprises (MSMEs) in international trade enhances their contribution to the economic development of WTO Members, as sources of job creation, innovation, entrepreneurship and economic growth; Stressing that promotion of the participation of MSMEs in international trade is therefore an important issue in the WTO agenda; Recalling the centrality of the multilateral trading system, with the WTO at its core, to foster a transparent, inclusive, non-discriminatory, and predictable global trade environment that supports and enhances MSMEs involvement in international trade; Recognizing that the COVID-19 pandemic has had a significant negative impact on MSMEs and that a coordinated global response remains necessary to help MSMEs respond and recover from that impact; Reaffirming our pledge, as contained in our Joint Ministerial Statement at Buenos Aires1, to address obstacles related to foreign trade operations that represent a significant burden for MSMEs interested in participating in international trade; Reiterating our resolve to favour horizontal and non-discriminatory solutions which are likely to yield benefits for the participation of MSMEs in international trade, taking into account the specific needs of developing Members and least developed countries; Desiring to support the consideration of MSME-related issues in the regular work of WTO bodies and any other relevant work in the WTO;

Recommendations and Declarations

1.  Welcome the work of the WTO Informal Working Group on MSMEs since the 11th WTO Ministerial Conference that took place in Buenos Aires, Argentina, in December 2017 and the adoption on 11 December 2020 of a package ( INF/MSME/4 and Rev.2) including the following six recommendations and declarations:

a.

Recommendation on the collection and maintenance of MSME-related information (Annex 1); (For Annexes please refer to document INF/MSME/4 and Rev.2)

b.

Declaration on access to information (Annex 2);

c.

Recommendation on trade facilitation and MSMEs (Annex 3);

d.

Recommendation on promoting MSMEs’ inclusion in regulatory development in the area of trade (Annex 4);

e.

Recommendation on MSMES and the WTO Integrated Database (Annex 5);

f.

Declaration on addressing the trade-related aspects of MSMEs’ access to finance and cross-border payments (Annex 6) .

2. Trade4MSMEs

2. Welcome the launch of the Trade4MSMEs Platform and encourage sustaining and developing the Platform in partnership with key international organizations working on MSME and trade-related issues.

3. MSME RTA and TPR Databases

3.  Welcome the establishment of the MSME Regional Trade Agreements and Trade Policy Review databases available on the WTO webpage.

4. Declarations

4. Declare that:

4.1

The work of the Informal Working Group on MSMEs (the IWG) shall focus on issues of core significance to MSMEs and shall identify actions that could be taken to promote MSMEs’ participation in international trade, including fostering exchanges of good practices on how to best take into account MSMEs needs in domestic rulemaking.

4.2

The IWG will continue monitoring the progress of implementation of the recommendations and declarations set out in paragraph 1.

4.3

The IWG will pursue its work on the basis of the Buenos Aires Joint Ministerial Statement ( WT/MIN(17)/58/Rev.1 ), recommendations and declarations set out in paragraph 1 and will consider proposals submitted by members as well as any other inputs the IWG deems relevant in consistence with paragraph 4.1. We take note of the presentations made to the IWG, without prejudice to the position of IWG members.

4.4

We invite IWG members, with the support of the WTO Secretariat and relevant multilateral institutions as needed, to exchange good practices in areas of interest to the Group and to organize workshops and information sessions as appropriate.

4.5

The IWG shall meet at least twice a year and may hold additional meetings as appropriate.

4.6

The IWG shall promote effective coordination and information exchange on MSME-related issues with the other WTO regular working bodies, and IWG members shall do their best to promote MSME-related discussions within those bodies.

4.7

The IWG will continue to periodically share with the membership information on its work and discussions at the HoDs, General Council and the Ministerial Conference as well as to reach out to other Members in order to invite them to join the Group in light of the value of our initiative.

4.8

The IWG and its members should continue the existing dialogue with the private sector to ensure its work remains relevant for MSMEs.

MSME Contribution to Covid-19 Recovery

5. Express support for MSMEs in their efforts to manage the impact of, and recover from, the COVID-19 pandemic.

5.1

As a first response to the COVID-19 crisis, several IWG members circulated a “Statement on highlighting the importance of MSMEs in the time of COVID-19” on 14 May 2020 ( WT/GC/215 and Rev.1) .2 Looking ahead, the IWG is determined to foster a better understanding of how MSMEs can participate in international trade as a path to recovery considering not only the benefits MSMEs may derive from increased access to third markets but also because many MSMEs rely on imports in their activities.

5.2

The IWG will continue to support the WTO playing an active role in promoting open trade as well as resilient and sustainable value chains, which are essential to MSMEs’ economic recovery after the pandemic.

5.3

As a transparent, inclusive, non-discriminatory, and predictable global trade environment is crucial for MSMEs to make the most of trade opportunities, especially in these COVID-19 trying times, the IWG will encourage raising awareness and promoting the use of platforms facilitating MSMEs’ access to information. The IWG members will support the WTO Secretariat in its monitoring and information collection efforts, including on COVID-19 trade related measures. At the same time, the IWG will continue inviting members to fulfil their commitments regarding transparency, as a means to promote overall transparency for MSMEs and a more predictable regulatory environment, and to facilitate MSMEs’ effective participation in global trade.