WTO Business focus Group 1 - MSMEs and E-commerce

WTO Business focus Group 1 – MSMEs and E-commerce

Recent years have witnessed remarkable developments in the digital economy, creating unprecedented opportunities for cross-border trade. The Internet is enabling micro, small and medium-sized businesses (“MSMEs”) to access global markets unlike ever before.

Studies show that MSMEs that use on-line platforms are around five times more likely to export than those in the traditional economy. Empirical research also finds that companies connected to the global economy are more productive and contribute to the development of more prosperous communities. Small businesses and entrepreneurs in developing economies are already at the forefront of this emerging trend.

But Internet-led changes to the composition, nature and speed of global trade are raising increasing policy frictions. Today’s trade rules – which largely reflect 20th Century patterns of trade-are not always well-suited to supporting the growth of MSME e-commerce.

What’s more, fragmented national rules on data, consumer protection and the availability of online information can act as a major impediment to trade-creating new market barriers and pushing up costs for MSMEs looking to enter global markets. One precondition for the success and viability of e-commerce is the ability for information to freely and efficiently cross borders-without being limited by technical barriers or anti-competitive bottlenecks.

It is proposed that such a WTO package could be built around three pillars:

(i) Enhancing connectivity and capacity building for e-commerce;
(ii) Enabling MSMEs to get goods sold online to consumers more efficiently (“Trade Facilitation 2.0”); and
(iii) Digital rules to support online growth and build consumer trust.

THE OPPORTUNITY

Traditionally, commerce over distance has come with significant costs—limiting the ability of MSMEs and businesses in developing economies to benefit from global trade. In an Internetenabled environment this does not need to be the case.

We believe that with the right global policies in place there is an opportunity to unleash a new era of “inclusive trade”: one in which all companies—regardless of size, sector or location—can benefit from equal access to the global trading system. Simply put, a trading system in which MSMEs are empowered to drive the transition to a fairer, more inclusive and robust world economy.