Making FTAs more inclusive – A case for promoting SMEs in India

Tandon, Anjali (2020): Making FTAs more inclusive – A case for promoting SMEs in India.

Abstract

A dedicated support for SMEs through imparting information as well as addressing their concerns will not only improve prospects for SMEs, but will also contribute to greater utilization of the FTAs. While integrating into GVCs, standard compliance does not come easy due to lack of information and the additional costs imposed. The participation of SMEs in trade needs to be improved and strengthened through focussed interventions. With this view, a detailed review of the related provisions in the existing agreements provides useful leads through the mechanisms used. Although some FTAs with India as partner have SME related provisions, most others are silent on SMEs. In some cases, this is in sharp contrast to the presence of thorough provisions in the FTAs negotiated between (India’s) partner country and a third country. With forethought for bringing domestic SMEs in close contact with partner governments and business, recommendations are made for consideration while negotiating future FTAs.

• Item Type: MPRA Paper
• Language: English
• Keywords: paperless trade; information asymmetry; small and medium enterprises
• Subjects: F - International Economics > F1 - Trade > F13 - Trade Policy ; International Trade Organizations; F - International Economics > F1 - Trade > F15 - Economic Integration; L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L15 - Information and Product Quality ; Standardization and Compatibility

References

Al-Hyari, K., Al-Weshah, G. and Alnsour, M. (2012). “Barriers to Internationalisation in SMEs: Evidence from JordRan”, Marketing Intelligence & Planning 30(2): 188-211.

Anderson, J. E. and Van Wincoop, E. (2004). “Trade Costs”, Journal of Economic Literature 42(3): 691-751.

Anukoonwattaka, W. and R. S. Lobo (2019). “An Update on the Preferential Trade Agreements of Asia-Pacific Economies”, ESCAP Trade Insights, Issue No. 27, October.

APEC (2019). Annex 2 - Survey on MSME/MSME-Related Provisions in APEC Economies’ FTAs/RTAs, 2019/SOM2/012anx2

Caves, R. (1989). International Differences in Industrial Organization. In R. Schmalensee & R. Willig (Eds.), Handbook of Industrial Organization (Chap. 21, pp. 1225–1250). Amsterdam: North-Holland.

Delegation of the European Union to Vietnam (2016). Guide to the EU-Vietnam Trade and Investment Agreements.

Department for International Trade (2019). Impact assessment of the EU- Vietnam Free Trade Agreement (EVFTA) on the UK.

Duval, Y. and C. Utoktham (2014). Enabling Participation of SMEs in International Trade and Production Networks: Trade Facilitation, Trade Finance and Communication Technology, ARTNet Working Paper Series, No. 146, Bangkok.

Duval, Y. and K. Mengjing (2017). Digital Trade Facilitation: Paperless Trade in Regional Trade Agreements, ADBI Working Paper Series 747.

ESCAP (2020). ESCAP Digital and Sustainable Regional Integration Index (DigiSRII 1.0), Bangkok: United Nations Economic and Social Commission for Asia and the Pacific.

Fliess, B., & Busquets, C. (2006). The Role of Trade Barriers in SME Internationalistaion. OECD Papers, 6(13), 1-19.

Future of Business Survey (2017). Trade Report, created in collaboration with Facebook, OECD and World Bank IBRD-IDA. Government of India (2019). Annual Report 2018-19, Ministry of Micro, Small and Medium enterprises.

Government of India (2020), “Atmanirbhar Bharat Part -1: Businesses including MSMEs”, Prime Minister’s Vision, May 13.

Government of India and Confederation of Indian Industry (CII) (2018). Theme paper on Global Value Chains Expanding Boundaries of Indian MSMEs 2018-19, Ministry of Micro, Small and Medium enterprises and CII.

Gunaratne, K. A. (2009). “Barriers to Internationalisation of SMEs in a developing Country”, available at http://www.duplication.net.au/ANZMAC09/papers/ANZMAC2009-336.pdf

IMD (2019). World Digital Competitiveness Ranking. International Financial Corporation (2014), MSME Economic Indicators Analysis Note, World Bank Group.

International Financial Corporation (2019), MSME Economic Indicators Database, World Bank Group.

International Trade Centre (2020). SME Competitiveness Outlook 2020: COVID-19: The Great Lockdown and its Impact on Small Business, Geneva.

ITC, UNNExt and UNESCAP (2016). Making the WTO Trade Facilitation Agreement Work for SMEs .

Jaeger, M. M. and I. Borchert (2020). The representation of SME Interests in Free Trade Agreements: Recommendation for Best Practice, UK Trade Policy Observatory, University of Sussex and Federation of Small Business.

Kabiri, F. and Mokshapathy, S. (2012). “A Survey of Export Barriers Faced by Small and Medium Sized Enterprises in Iran”, Indian Journal of Innovation and Developments 1(7): 549-553.

Kantar IMRB (2015). Analysis of ITOPSTM Business.

Kantar IMRB (2016). Analysis of ITOPSTM Business.

KPMG and Google (2017). Impact of Internet and Digitisation on SMBs in India, January.

Li, Yue and J. S. Wilson (2009). “Trade Facilitation and Expediting the Benefits of Trade: Evidence from Firm Level Data”. Asia-Pacific Research and Training Network on Trade, Working Paper Series, No. 71.http://www.unescap.org/sites/default/files/AWP per cent20No. per cent2071.pdf

Martincus, C.V. (2016). Out of the border labyrinth: an assessment of trade facilitation initiatives in Latin America and the Caribbean, Inter-American Development Bank.

Mckinsey Global Institute (2017). Jobs Lost, Jobs Gained: Workforce Transitions in a Time of Automation.

Okpara, J. O. (2009). “Strategic Choices, Export Orientation and Export Performance of SMEs in Nigeria”, Management Decision 47(8): 1281-1299.

Organisation for Economic Co-operation and Development (OECD) (2008). Removing Barriers to SME Access to International Markets, Paris: OECD.

Organisation for Economic Co-operation and Development (OECD). (2005) SME and Entrepreneurship Outlook, Paris.

Sen, A. (2019). “India-Chile Set to Expand Preferential Trade, Explore Possibility of A Free Trade Pact”, The Hindu Business Line, September 26.

Sinani, E. and B. Hobdari (2006). “Export Market Participation: The Importance Of Sunk Costs and Spillovers”.

Singh, A (2019). “Can MSMEs Help India Achieve its ‘US$ 5-trillion Economy’ Goal?”, SME Futures, October 10.

Siringoringo, H., Prihandoko, D. Tintri and A. Kowanda (2009), “Problems Faced by Small and Medium Business in Exporting Products”, Delhi Business Review X Vol. 10, No. 2, July – December.

United States International Trade Commission (USITC) (2010) Small and Medium-Sized Enterprises: Characteristics and Performance, Publication No. 4189, Washington DC.

Vonk, J.,
S. V. D. Haar and P. D. Jong (2015). Evaluation of Five Export Coaching Programmes (2008-2013), Final Report, Project No.1297

WEF (2017). Paperless Trading: How Does It Impact the Trade System?, White Paper.

World Trade Organisation (2016). World Trade Report, Leveling the Trading Field for SMEs.

SICE website assessed at http://www.sice.oas.org/tpd_e.asp

WTO website assessed at https://rtais.wto.org/UI/PublicMaintainRTAHome.aspx