Informal Working Group on Micro, Small and Medium-sized Enterprises

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Today, 95% of companies across the globe are MSMEs, accounting for 60% of the world's total employment. However, MSMEs face a number of obstacles when seeking to participate in international trade. To address these obstacles, 88 WTO members signed a statement at the WTO's 11th Ministerial Conference (MC11) in December 2017 declaring their intention to create an Informal Working Group on MSMEs to explore ways in which WTO members could better support MSMEs' participation in global trade. The Informal Working Group met for the first time in March 2018.

Participation in this Joint Initiative is open to all WTO members.

Participation
As of December 2021, there were 94 WTO members participating in discussions of the Informal Working Group. These participants cover all regions of the world and all levels of development, accounting for around 80 per cent of world exports.

The MSME package of recommendations and declarations, adopted in December 2020, was sponsored by 97 WTO members. As is the case for all the joint initiatives, participation in the MSME Informal Working Group is open to all WTO members. The initiative is currently coordinated by Ambassador Jose-Luis Cancela of Uruguay. In the lead-up to MC11 in Buenos Aires and up to January 2018, discussions were led by Chile's Ambassador to the WTO, H.E. Mr Hector Casanueva.

Outcomes and current discussions
A database of MSME-related information in Regional Trade Agreements was launched in 2019.

In December 2020, the Group endorsed a package of six recommendations and declarations aimed at addressing challenges smaller businesses face when they trade internationally (INF/MSME/4).

The package includes:

a call for WTO members to provide information on MSME policies during their Trade Policy Reviews to enhance transparency and serve as a source of good practice
a call for WTO members to support the Global Trade Helpdesk, an online platform intended to bring trade and business information for companies, especially MSMEs, into a single area
support for full implementation of the Trade Facilitation Agreement and a recommendation for WTO members to share good practices related to MSMEs
a call for promoting the inclusion of MSMEs in the development of trade regulations to minimize regulatory burden
support for the implementation of the 2019 Decision on the WTO Integrated Database to permit access for MSMEs to information on tariffs and other import taxes
a call for exchanges of good practices to help identify measures that can facilitate MSMEs' access to finance and cross-border payments.
In 2021, the Group launched a Digital Champions for Small Business initiative in partnership with the International Chamber of Commerce and the International Trade Centre to help small businesses go digital and increase their participation in international trade.

Winners were announced in a virtual ceremony on 2 December 2021.
A database of MSME references in Trade Policy Reviews was also launched in 2021.

The Group is working on the development of a Trade4MSMEs web platform, aimed at bringing trade-related information for MSMEs and policymakers into one self-contained area. The platform will contain MSME trade guides, which will provide small businesses with information about export procedures, and policymaker trade guides covering key challenges faced by MSMEs with links to relevant studies and good practices.

New topics under discussion include digitalization issues, such as cyber-readiness, facilitating imports of low-value shipments, innovative policies for MSMEs, and issues facing rural-based MSMEs.

On 24 September 2021, the Group finalized a draft Ministerial Declaration that is open to all WTO members for sponsorship.

Why an Informal Working Group for MSMEs?
Firms with fewer than 250 employees account for 78% of exporters in developed countries but only 34% of exports, according to the 2016 World Trade Report. In developing countries, MSMEs' exports amount to only 7.6% of total sales in the manufacturing sector, compared with 14.1% for large manufacturing enterprises.

MSMEs' participation in international trade has remained limited for a number of reasons, including lack of relevant skills, lack of knowledge about international markets, non-tariff barriers, cumbersome regulations and border procedures, and limited access to finance, in particular trade finance. The smaller the companies, the greater the challenges seem to be to participate in international trade.

The MSME Informal Working Group seeks to fully integrate MSMEs into global trade. In the Joint Statement issued in December 2017, the Group committed to identify solutions that would help companies, and particularly MSMEs, increase their participation in world trade, while taking into account the specific needs of developing countries.

Origins of the Informal Group
In 2015, the Philippines identified MSMEs as a dynamic sector and suggested that “the General Council shall consider the most appropriate arrangement to facilitate discussions” (JOB/GC/80).

In July 2016, Brunei Darussalam, Lao PDR, Malaysia, the Philippines, Singapore and Thailand reported on a workshop on “Enhancing the Participation of Micro, Small and Medium Enterprises (MSMEs)” aimed at enhancing awareness of MSMEs' role in international trade (JOB/GC/95).

At a General Council meeting in May 2017, a group of 47 members (counting EU member states individually) launched an Informal Dialogue on MSMEs chaired by Ambassador Casanueva of Chile.

In June 2017, Argentina, Brazil, Paraguay and Uruguay submitted a proposal for the development of a work programme covering areas such as information and transparency, trade facilitation, e-commerce and trade finance (JOB/GC/127).

Several workshops were organized in the run-up to the signing of the joint statement at MC11 to emphasize the importance of having a specific forum to discuss MSMEs at the WTO.

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