SMEs still facing 'very big' hurdles in export markets, says WTO director-general

He points out that although the technology is there, regulations and governments' collaborative efforts are lacking


IN the digital world, the level playing field for big and small companies is supposed to be flat. In reality, small and medium enterprises are still handicapped as ever and face, according to Roberto Azevedo, director-general of the World Trade Organization, "still very big" hurdles in export markets.

The boss of the global trade watchdog, who was on a quick stopover in Singapore, conceded that such problems as those which used to plague small and medium enterprises should have been reduced at least, if not totally licked, with the Internet. Yet, he pointed out, SMEs continue to be ignorant about the regulations, requirements and procedures when they export to other countries.

"They all recognise the problems but the question is how do you make the information available, how do you provide more transparency?" Mr Azevedo said on Tuesday after meeting with representatives from 25 Singapore companies and public agencies gathered by International Enterprise Singapore, the government's trade promotion arm. "The big companies can figure it out but SMEs don't," he said. "So although the technology to make it possible is there, the regulations and collaborative effort on the part of the government to make it possible is not."

In fact, according to Gina Lim, group director, Ecosystem Development Group at IE Singapore, digitisation itself has its own problems, with the standardisation of rules on the fast-expanding e-commerce being key among them.

While it remains an uphill task to get more SMEs to go digital to ride on the global boom in e-commerce, IE Singapore said local companies here also face key challenges in digital protectionism isuch as forced server localisation, data privacy and censorship.

There are also difficulties with security and ease of online payments, customs regulation, distribution and shipping, and inconsistent digital infrastructure development among countries as well as trade finance.

"When it comes to South-east Asia, which is a huge e-commerce market, there is fragmentation of customs processes and (the) presence of non-tariff barriers in each country as Asean moves towards integration," IE Singapore said in a fact sheet released to the media.

"The problems you see here are problems you see everywhere in advanced economies," said Mr Azevedo, pointing out that the challenges Singapore SMEs encounter are very similar to those in the West.

"If we can make progress in solving the problems, we will be helping mostly SMEs which make up a big chunk of the economy," he said. "A lot can be done in terms of customs cooperation, standardisation, facilitating trade, customs procedures, trade financing. The question is how we take the first step."

Cooperation is key and, according to him, the private sector has a big role to play. "The government, even if they want to be helpful, don't know the actual problems and challenges on the ground."

In his meeting with Singapore companies, Mr Azevedo invited them "to be proponents for solutions, come up with ideas, notions of how to standardise, how to provide clarity, transparency in the digital transactions in a way that can be shared by other countries, and embrace countries in a more international effort".

He said: "There's a genuine disposition to discuss these things, to find ways to improve the environment for SMEs", but there is still a need to prioritise because there are so many different problems.

"What we need is to prioritise and say these are the things we need to do," Mr Azevedo said. "Is it trade financing? If it is, let's work on trade financing. Let's see what kind of solutions can be found. Is it harmonisation of customs procedures? If so, which and then let's work on that and find whatever it is that they find to be a priority and work on that."