Removing Barriers to SME Access to International Markets

Your Excellency Mr. Dimitris Sioufas, Minister for Development, Greece
Honourable Ministers
Distinguished delegates
Ladies and gentlemen,

I have great pleasure and honour to be present here at the Opening ceremony of the OECD-APEC Joint Conference on "Removing Barriers to SME Access to International Markets". On behalf of the Asia-Pacific Economic Cooperation (APEC) Secretariat, I would like to express our deep gratitude and appreciation to the Greek Authorities for hosting this important Conference. I would also like to welcome all the distinguished guests and delegates who travelled great distances to participate in this event.

Since its establishment in 1989, APEC has been the premier forum working to achieve its goals of shared economic development and prosperity in the Asia-Pacific region through promotion of free and open trade and investment, and economic and technical cooperation. Recognizing the vital role of small and medium enterprises (SMEs) in the socio-economic development of its members, APEC has long paid great attention to facilitating a secure and favourable business environment for SMEs.

SMEs form the economic backbone of the APEC members. According to the Profile of SMEs and SME Issues in APEC 1990-2000 which was published in 2003, they account for over 98% of all enterprises and employ as much as 60% of the work force. While they make a very important contribution to GDP growth and socio-economic development, they only account for about 30-35% of exports. This shows that contribution of SMEs in terms of trade is relatively low in comparison to their total number. Taking this into account, APEC has exerted substantial efforts to create an environment conducive to the development of SMEs and to help them gain access to international markets.

The importance of addressing SMEs' access to international markets or their internationalization was highlighted by the APEC SME Ministers in 2002 when they "acknowledged the substantial contribution of SMEs to trade in the APEC region and the potential benefits in economic development to be gained through enhancing the participation of SMEs in export markets". APEC's SME Ministers called on APEC working groups and sub-fora "to develop programs to remove obstacles related to regulatory reform and legal framework, financial services, access to technology and capacity building with the aim to ease the transition into export for SMEs and micro-enterprises". Over the years, APEC's activities in support of SMEs have been going along this track.

The overwhelming trend of our time is globalization. It has resulted in rapid changes in international markets, and posed both opportunities and challenges to SMEs. One of the greatest challenges to SMEs is to "go global" or to gain access to the international markets. Given their limited capacity in a number of aspects, this challenge is really serious to SMEs compared to multi-national enterprises (MNEs) which are "born global" and in a very much better position.

In such circumstances, we ask the question - how to "go global" or to be internationalized successfully? The answer certainly lays in the competitiveness of SMEs. Hence to improve their competitiveness is of vital importance. Over the past years, APEC has focused its great attention on creating a truly enabling environment for SMEs through: (i) the improvement of legal and policy framework, macro-economic infrastructure and tackling all other "behind-the-border" problems; (ii) providing more favourable conditions for SME activities through diverse programs of human resources development, financing, capacity-building and technical assistance; (iii) facilitating SME business through creating more export opportunities, reducing business transaction costs and encouraging their innovation activities.

In this regard, SMEs could benefit a great deal from the success of the 13th SME Ministerial Meeting in Viet Nam in September this year where Ministers adopted the "Hanoi Declaration on Strengthening SME Competitiveness for Trade and Investment", which calls upon members to develop specific measures to improve competitiveness, innovation and entrepreneurship.

It is important to note that while we have achieved great success in facilitating our business by considerably reducing and eliminating tariff and non-tariff barriers to trade and investment, "behind-the-border" obstacles have become increasingly significant factors in hindering SMEs to access to international markets. SMEs also need help in addressing other difficulties, for example, improving basic understanding of market principles and practices, access to financing, lack of experience in handling import-export activities, technological expertise, market information and experience, etc.

In this context, the identification of issues and impediments constraining SME growth and their contribution to the socio-economic development is of paramount importance. That's why our Conference in the next two days is both timely and appropriate.

In its efforts to facilitate SMEs in gaining better access to international markets, APEC has attached great significance to the broad collaboration among member economies as well as with international organizations and other stakeholders.

Over the past years, APEC has maintained fruitful cooperation with the World Bank and the Asian Development Bank, and benefited from their research and experiences on promoting private sector development and SMEs in particular. In line with the World Bank's "Doing Business" indices, an APEC symposium on "Ease of Doing Business" was organized this year to draw attention to the need to deal with domestic regulatory obstacles and ensure effective and market-friendly regulation for business.

In 2003 the APEC SME Working Group conducted two seminars on "Growing the APEC SME Exporters Community". The intent was to better understand the views from the APEC SMEs, small business associations and industry groups on how APEC could tackle the important issue of identifying and reducing impediments to trade for regional small businesses. Based on the results of these seminars, APEC proceeded further to conduct a research project to evaluate options for the more effective identification and monitoring of impediments to SME export activity. In 2004 this evolved into the joint project between APEC and OECD on SMEs and Entrepreneurship.

This join effort is a concrete outcome of the growing cooperation between the OECD Working Party on SMEs and Entrepreneurship and the APEC SME Working Group. It is yet another example of the successful co-operative activities of APEC and OECD in areas such as regulatory reform, digital economy and international investment. The APEC-OECD Integrated Checklist on Regulatory Reform is also instrumental to the improvement of business environment for SMEs.

Distinguished participants,

There is a heavy agenda in front of us. It is our high responsibility that over the next two days we make our utmost efforts to identify key barriers to SME access to international markets, to describe best practice programmes, and to develop appropriate policy responses and other effective measures to address these barriers.

We have high expectations that with your wisdom and active participation, the "OECD-APEC Athens Action Plan for Removing Barriers to SME Access to International Markets" will be adopted. This will be one of the most significant outcomes of the Conference as it constitutes an important platform for our concerted efforts to create a more favourable environment for SMEs to develop and contribute more effectively to the socio-economic development and prosperity of our economies.

With this in mind, I wish the Conference great success.

Thank you.