Linking outcomes from Bali to an SME focused transformative post-2015 development agenda

3 October 2013
ITC News
Opening statement by ITC Executive Director Ms Arancha González of the workshop on ‘Implications of potential Bali issues for the post-2015 development agenda and the development of dynamic partnerships’ at the WTO Public Forum, 3 October 2013
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First of all thank you very much to the Global Social Observatory (GSO) for inviting me to address you this morning. I am very happy to share this stage with colleagues and friends to take forward this issue of the relationship between a successful deliverable at Bali and the post 2015 development agenda.

My overarching message is very much one of cohesion and complementarities. Negotiations on the trade front and the impact of a successful Bali cannot and should not be seen in isolation from the post 2015 agenda. Trade is an integral component of delivering on development. And the actors involved in the two processes are the same! We have essentially the same members negotiating at the WTO and participating in the discussions at the United Nations. The organizational linkages are also clearly there. The WTO remains an important part of the international organizational architecture and its successes and challenges are shared by the United Nations and its respective bodies, including the ITC. Therefore, my first message is that a win at Bali is a win for the development agenda. No delivery at Bali potentially slows down the important insertion of trade into the post 2015 dialogue.

My second message is just that. Trade as a platform for growth, development, poverty reduction and employment must be an important element in the post MDG period. If I have one concern about the way the original MDGs were developed is that trade as a conduit for growth and development was very much on the periphery. We as a global community cannot afford to lose the opportunity this time of ensuring the concept of ‘trade as a growth tool’ is a fundamental component.

Very much linked to this is the role of SMEs. SMEs are the growth conduit for the future. And possibly the most critical issue that we as a global community will have to face in that future is global employment. The levels of global unemployment today are not sustainable. With growing populations, especially youth, in the potential-growth regions of the future, namely Africa and the MENA region, the challenge of jobs needs to be top on our agenda. And not just increasing the number of jobs but increasing the quality to ensure they are decent jobs.

SMEs are the world’s largest source of jobs and investing in SMEs is the greatest insurance policy we have of creating and sustaining more employment opportunities.

By 2030, 470 million young men and women will be entering the labour market. SMEs will create the significant share of this employment. SMEs are not only employment generation vehicles but they are innovation incubators, entrepreneurial laboratories, cultural and social vectors and if channeled correctly can be key platforms in inserting women into the productive value chains and aligning economics, environmental sustainability and food security. The question is whether we as a global community have really understood the potential inherent in SMEs as catalysts for delivering on the post 2015 transformative agenda.

And this is where ITC plays the key role and this is where the link between a successful Bali deliverable on Trade Facilitation and the post 2015 development discussion is clearly evident.

ITC is the one stop shop for SMEs. We help to provide the necessary tools and support to the traders to allow them to trade. WTO rules are as much about governments as they are about the end users of these rules: the private sector and specifically SMEs.

Trade Facilitation is an agreement grounded in reality. The world of the SME is about facilitating trade. SMEs do not produce to consume. They produce to trade. No SME business plan envisages that activities remain stagnant. Every SME aspires to grow and expand the reach of their products and services. Trade facilitation is the bread and butter of SMEs. Customs and border measures that make trading across borders prohibitively expensive and time consuming restrict the growth and the nimbleness of the very actors that future development will rely on.

For SMEs to grow and enter and move up value chains they need transparent and predictable trade facilitating rules and regulations. They need services that will make the importation of components and the exportation of goods flow in a timely manner. The test of how ‘investable’ an economy is, is predicated on the ease and cost of doing business. Restrictive trade facilitation measures undermine potential SME growth and downgrades investment profiles.

From the ITC perspective our work with SMEs is trade facilitation in action. We assist in matching demand and supply, in helping SMEs access finance, in ensuring they have a voice in national and regional trade dialogues, in integrating their priorities in national export strategies, in helping them understand and abide by trade laws and regulations, and in increasing knowledge and market penetration.

And we do this through direct technical assistance and capacity building in the field, by harnessing our network of multipliers to expand the impact and reach of our services, through our NTM surveys, by building capacity within SMEs, trade support institutions and governments to ensure the support is sustainable and by providing a series of public goods and tools that allow SMEs to take ownership of their growth trajectory. As you would have seen at the ITC booth in the Atrium we are increasingly moving to e-solutions and facilitating virtual markets. As an organization we have a responsibility to be one step ahead of our clients and for them the future is harnessing the power and reach of e-platforms.

Having predictable trade facilitation rules and regulations is critical in raising the export potential of SMEs. SMEs are crucial for employment creation and income generation especially in developing and least developed countries. And addressing the employment gap and focusing on sustainable economic growth in developing countries is the fundamental element in poverty reduction, reducing conflicts and ensuring food security. It is a concrete chain of inter-linked signposts.

My focus this morning has been very much on trade facilitation. However, there are other issues in Bali that would add momentum to the post 2015 dialogue. Providing a package for LDCs, addressing food security concerns and raising the profile of services are also critical potential outcomes.

The ITC will continue to support both the Bali and the post-2015 process. We have a comparative advantage in delivering on trade facilitation for SMEs and we are in the process of ramping up our trade in services delivery. Over 60% of our resources are focused on LDCs, LLDCs, vulnerable states and Sub Saharan Africa and we will continue to match and increase that going forward to assist them in having their issues reflected in the post 2015 dialogue and in helping them to meet any goals which may be set during that process. Our priority will also remain in addressing the priorities of the full spectrum of developing countries many of which have specific needs that the ITC is well equipped to service.

Thank you.