New Effort to Remove Obstacles to International Trading by Small Companies

Smaller companies that want to be active in international trade face an array of obstacles, some domestic and some foreign. These barriers include tariffs, nontariff barriers like quotas and requirements to have business partners in a destination market, customs procedures, and domestic regulations.

The bad news is: while most of these barriers affect companies of all sizes, smaller companies tend to be hurt the worst. They can’t rapidly shift their product sourcing from one country to another to get around a trade barrier, like most large companies can. And a trade barrier that adds $10,000 to the cost of a transaction is probably inconsequential for a $1 billion sale, but a deal killer for a $100,000 sale.

The good news is: many of the world’s governments are now recognizing these issues and beginning to address them.

Two groups of governments, the Organisation for Economic Development and Cooperation (OECD) and Asia-Pacific Economic Cooperation (APEC), have banded together to look for solutions.

After several years of preparatory work, OECD and APEC met in Athens last November to come up with a joint “Action Plan.” The plan is designed to encourage the fifty or so member nations of the two groups – and other countries that are following their work – to eliminate barriers to international markets affecting small and medium-sized enterprises (SME’s).

Although the Plan is somewhat technical and general, it nevertheless represents a genuine and welcome breakthrough in the understanding of SME’s in international trade by a wide array of government representatives.

“Best practices” for helping SME’s now are being identified and recommendations for adopting them more broadly are being offered.

SBEA took part in the Athens Conference and plans to follow the developments closely in this area. A copy of the “Action Plan” will be found here:

http://www.oecd.org/dataoecd/4/17/37818332.pdf.)

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If you have ideas to offer on this subject, please feel free to contact the SBEA office (202-659-9320, or fax to 202-872-8543) and share them with us.