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Trade facilitation policy for MSMEs

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Trade facilitation policy for MSMEs

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For many MSMEs, navigating the complexity of doing business globally while maintaining acompetitive edge requires the development of new skills and knowledge, as well as the ability todraw on a trusted network of skilled professionals and consulting services with the requiredcompetencies to support their business growth

Many of these businesses have significant international growth potential from day one of theiroperations and are essentially “born global”. Competing on a global scale from the outset means it isimperative that these businesses enjoy access to support networks and an ecosystem that allowsthem to take advantage of new opportunities.

HOW TRADE FACILITATION AND DIGITALISATION EMPOWER MSMES

Trade support services that are geared to areas such as trade finance, logistics and supply chainmanagement, and customs and freight forwarding have traditionally seen low levels of participationby MSMEs.At times this is because MSMEs lack to initiative to take advantage of the support on offer, and attimes it can be the result of a disinclination by service providers to assist smaller and especiallymicro-sized businesses. This needs to change.A core component of facilitating greater MSME participation in global trade is not only to ensurethat they are not disadvantaged from a trade facilitation perspective, but that they are activelysupported in terms of engaging in a broad spectrum of trade activities.This is where the Trade Facilitation Agreement and the overall shift to greater digitalisation can be ofsignificant value to MSMEs trading cross borders, in that they allow MSMEs to enjoy:

  • simpler processes so that more MSMEs traders are able to seek greater engagement ininternational trade;
  • improvements in supply chain efficiency allowing MSMEs to operate more effectively andwith more certainty;
  • removal of inefficiencies and challenges caused by inconsistent regulations, inherent genderbiases, and/or subjective assessments as goods cross multiple jurisdictions;
  • reductions in working capital requirements as processing times (especially at customs, portsetc) are significantly improved compared to the handling of manual documents’
  • reductions in waste (especially for dairy and other perishable products) as goods transferfaster through ports to the end consumer/use; and
  • innovation in new and emerging products and services around tracking, financing andinsuring goods in a most efficient and real time manner.

    NOTES ON AEO PROGRAMS: BENEFITS AND CURRENT STATUS

  • AEOs can be key partnership drivers between customs administrations and businesses, while facilitating the transparent and predictable trading environment that MSMEs can thrive in, given their time and resource-poor nature;
  • The number of MRAs signed or under negotiation has considerably increased, and have demonstrated increased engagement with relevant stakeholders, creating a basis for a harmonised approach toward achieving bilateral and plurilateral recognition agreements;
  • As of 2018, WCO reports 77 AEO programs operational, 17 AEO programs under negotiation, 57 MRAs concluded, 35 MRAs under negotiation;
  • The largest number of operational AEOs are in Asia, where APEC calls for the development of common standards across APEC economies that would harmonise regulations and procedures;
  • In general, AEOs should be established according to guidelines that achieve direct benefits including: easier admittance to customs simplifications; provisions for prior notice so long as it does not jeopardise the control to be carried out; reduced data set entries for entry and exit summary declarations; fewer physical and documents-based controls; priority treatment for consignment if selected for control; and choice of place for controls;
  • AEOs should also derive several indirect benefits that are not linked directly to customs-side of their business, such as: recognition as a safe and secure business partner in supply chains; improved relations with customs through a dedicated contact point; improved relations with other government authorities and their certification schemes; mutual recognition along the supply chain which can avoid duplication of security and compliance controls.

    IDEAS FOR THE WTO FRIENDS OF MSMES COMMITTEE


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