Enhancing SMEs Participation in Global Production Chains by Creation of Common Database

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1 2012/SMEWG34/023 Agenda Item: Enhancing SMEs Participation in Global Production Chains by Creation of Common Database Purpose: Information Submitted by: Russia 34 th Small and Medium Enterprises Working Group Meeting Jerudong, Brunei Darussalam April 2012

2 Enhancing Small and Medium-Sized Enterprises Participation in Global Production Chains By Creation of Common Database Introduction The subject of Small and Medium Enterprises (SMEs) involvement in global production chains is one of the key issues for most APEC economies. According to Annex B to the Leaders Declaration of 2011 adopted in Honolulu, Hawaii, the USA recent Free Trade Agreements (FTAs) have begun to include chapters or provisions on cooperation in the development of SMEs as a result of which it has become possible to strengthen the capacity of productive processes of SMEs. However, further efforts could be made for further fostering the SMEs participation in global production chains by means of including the corresponding provisions in new generation trade agreements. In this connection APEC Leaders have agreed to foster the inclusion of wording in FTAs concerning the joint efforts that the parties shall make to enhance SMEs participation in the global production chains in order to foster trade and investment in the region. Under the conditions that the level of APEC economies integration in the system of the global production chains is irregular, the importance of creation of a centralized source of information on this mechanism operation arises. Background Internationalization is an integral part of sustainable growth of SMEs but due to the limited resources and difficulties connected with the world market, many SMEs face internal and external problems of using new business opportunities abroad. In the course of the 15 th SMEs Ministerial Meeting in 2008 economies acknowledged that small and medium-sized enterprises face difficulties in the field of their involvement in a free and open trade environment. Ministers adopted a Strategic Plan having The Access to Markets and Internationalization of SMEs among its six priorities. At the joint meeting of APEC Ministers Responsible for Trade and SMEs in May, 2011three next generation issues were defined: (1) assistance in the global supply chains operation facilitation; (2) enhancing SMEs participation in the global production chains, and (3) development of effective, nondiscriminatory and market innovation policy. Moreover, SMEs Ministers identified the main barriers obstructing SMEs trade in the region including the following: (1) delays in the customs clearing connected with difficulties in search and collection of extremely complicated customs requirements and documents; (2) difficulties in the search and use of various legal, regulatory, and technical requirements of APEC economies. Ministers recommended continuing the work on the issues of elimination of the above problem points initiated in 2011 and in Proposal 1. Creation of a common information resource for SMEs which will promote companies inclusion in the global production chains. Such information base can be made on the basis of the already existing resources having united different sorts information from them at one place. This information resource may include : - Legislation in the field of entrepreneurial and foreign-economic activity of all the APEC economies; - tariff policy and customs regulation of APEC member economies; and - information that will help to find business partners in the APEC region. 2. Exchange of experience and the best practices in business strategies in management and when making decisions. Taking into account the existing differences in the level of SME sector development in APEC economies this area is of a great interest for economies, particularly in the field of international transactions demanding a large volume of highly qualified information. Timeline April 25-26, 2012, 34 th SMEWG presentation and discussion of the initiative.

3 May-June, 2012 accumulation of comments and proposals on the initiative realization. August 1-2, 2012, 35 th SMEWG report of working on initiative, presentation detailed draft of content of information base August 3, 2012, SMEMM presentation of the results at the Small and Medium Enterprises Ministerial Meeting work on the development of the common information resource for SMEs by means of intersessional consultations with APEC economies; holding events on the exchange of experience and the best practices in business strategies in management and when making decisions.

4 Initiative: Enhancing SMEs Participation in Global Production Chains by Creation of Common Database Background At the joint meeting of APEC Ministers Responsible for Trade and SMEs in May, 2011, three next generation issues were defined: (1) assistance in the global supply chains operation facilitation; (2) enhancing SMEs participation in the global production chains, and (3) development of effective, non-discriminatory and market innovation policy. 1

5 Proposal Creation of a common information resource for SMEs which will promote companies including in the global production chains. Such information base can be made on the basis of the already existing resources having united different sorts information from them at one place. This information resource may include : - legislation in the field of entrepreneurial and foreign-economic activity of all the APEC economies; - tariff policy and customs regulation of APEC member economies; and - information that will help to find business partners in the APEC region. 2

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