The 2016 World Trade Report
The World Trade Report is anannual publication that aims to deepen understanding about trends in trade, trade policyissues and the multilateraltrading system.The 2016 World Trade Report examines the participation of small and medium-sized enterprises (SMEs) in international trade, how the international trade landscape is changing for SMEs, and what the multilateral trading system does and can do to encourage more widespread and inclusive SME participation in global markets.
According to WTO calculations based on World BankEnterprise Surveys covering over 25,000 SMEs in developing countries, direct exports represent just 7.6% of total sales of SMEs in the manufacturing sector, compared to 14.1% for large manufacturing enterprises. Among developing regions, Africa has the lowest export share at 3% compared to 8.7% for developing Asia. Participation by SMEs in direct exports of services in developing countries is negligible, representing only 0.9% of total services sales compared to 31.9% for large enterprises.In developing economies, indirect exports of manufacturing SMEs account for 2.4% oftotal sales, compared to 14.1 per cent for large manufacturing enterprises. Although small, SMEs’indirect exports of services are larger than their directexports (2.6%, compared to 0.9%).Conversely, indirect services exports are smaller thandirect services exports in large firms (4.2% compared with 31.9%).

The report highlights the various challenges faced by SMEs inconnecting to world markets such as Non-tariff barriers have been cited as burdensome for SMEs, because they entail fixed costs independentof the size of the exporter.SMEs in themanufacturing sector consider high tariffs to be a greater obstacle to exporting than large manufacturing firms do. A study on the expected impact of the Trade Facilitation Agreement(TFA) shows that the TFA will particularly benefit SMEs by enabling improved transparency of information onrules and regulations in the foreign market. Other issues affecting SMEs are Access to information and distribution channels have also been highlighted as important trade obstacles for SMEs; Lack of, or insufficient access to, finance and finally; for SMEs operating in the services sector,restrictions to Modes 1 (cross-border supply of services) and 4 (movement of people acrossborders to supply services) with available empirical evidence suggesting that, in spite of some sectoral variation, service SMEs generallylean towards “soft” forms of trade, exporting mainlyvia cross-border trade and movement of contractualservice suppliers unlinked to commercial presence.Barriers to these modes of supply, such as requirementsto establish a commercial presence when supplyingservices across borders, or quotas on the movementof independent professionals, are therefore likely to beespecially burdensome for service SMEs.
The report into various sections that cover: Section B which examines all available evidenceon the various forms of SME participation in tradeand how it has evolved in recent years, exploring inparticular how it has been affected by new technologies(in particular ICT) and the development of GVCs.Section C considers how, when and why SMEsdecide to export or to internationalize and how thisaffects their productivity and growth.Section D explores the various obstacles that continueto impede the participation of SMEs in internationaltrade and finally Section E examines how regional and multilateraltrade disciplines and initiatives and internationalorganizations affect policy-related obstacles to SMEparticipation in trade. For more information please click here.....https://www.wto.org/english/res_e/booksp_e/world_trade_report16_e.pdf
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