Project Title

Facilitating SME Trade through Better Understanding of Non-Tariff Measures in the Asia-Pacific Region 

Project Year

2014   

Project Number

SME 03 2014 

Project Session

Session 2   

Project Type

Standard 

Project Status

Completed Project   
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Project No.

SME 03 2014 

Project Title

Facilitating SME Trade through Better Understanding of Non-Tariff Measures in the Asia-Pacific Region 

Project Status

Completed Project 

Publication (if any)

 

Fund Account

Operational Account 

Sub-fund

None 

Project Year

2014 

Project Session

Session 2 

APEC Funding

198,059 

Co-funding Amount

35,720 

Total Project Value

233,779 

Sponsoring Forum

Small and Medium Enterprises Working Group (SMEWG) 

Topics

Small and Medium Enterprises 

Committee

SOM Steering Committee on Economic and Technical Cooperation (SCE) 

Other Fora Involved

 

Other Non-APEC Stakeholders Involved

 

Proposing Economy(ies)

Philippines 

Co-Sponsoring Economies

Indonesia; Japan; Malaysia; Mexico; Papua New Guinea; Russia; Chinese Taipei; Thailand; United States; Viet Nam 

Expected Start Date

01/01/2015 

Expected Completion Date

30/11/2015 

Project Proponent Name 1

Jerry T Clavesillas 

Job Title 1

OIC Director 

Organization 1

Bureau of Small and Medium Enterprise Development, Department of Trade and Industry 

Postal Address 1

5/f, 361 Sen Gil Puyat Avenue, Makati City, Manila, Philippines 

Telephone 1

63-2 8977596 

Fax 1

Not Applicable 

Email 1

bmsmed@dti.gov.ph 

Project Proponent Name 2

Not Applicable 

Job Title 2

Not Applicable 

Organization 2

Not Applicable 

Postal Address 2

Not Applicable 

Telephone 2

Not Applicable 

Fax 2

Not Applicable 

Email 2

Not Applicable 

Declaration

Jerry T Clavesillas 

Project Summary

Two two-day workshops will be held on the margins of the APEC Small and Medium Enterprise (SME) Working Group Meetings in the United States (June 2015) and the Philippines (September 2015). The event will gather key enquiry points or focal agencies engaged in issuing trade regulations, SME agencies and trade promotion agencies in a discussion on non-tariff measures, issues, challenges, and opportunities.

The objective of the workshop is to develop greater understanding of non-tariff measures imposed by APEC economies and existing platforms e.g., WTO system of notification/online tools, agreements e.g. , the Bali Package and/or resources available for APEC economies so as to stimulate and improve trade for SMEs.

Relevance

SMEs account for more than 90 percent of all businesses and provide as much as 60 percent of the workforce in the Asia-Pacific. Making it easier for SMEs to export is an important step that APEC can take to encourage the growth and development of SMEs in the region. Reduction of tariffs duties was a means toward encouraging trade across the region however other barriers to trade still persist including the difficulty in complying with standards and requirements across the border.

According to Policy Support Unit (PSU), tariff duties have experienced a substantial decrease over the years (for example, the average tariff in APEC was 16.9% in 1989, 6.6% in 2009 and 5.7% in 2012) but there is a general perception that the use of non-tariff measures (NTMs) in recent years has increased worldwide. Further, it noted the CTI’s observation in the potential increase in protectionism as NTMs could be used as tariff substitutes distorting trade and suggested APEC to further discuss these topics and examine the impact of NTMs on trade in more detail. (Reference: PSU Paper on Perceptions In the Use of NTMs in the Asia Pacific Region, May 2014). 

It may be recalled that in May 2011, the Joint Ministerial Meeting of the Ministers Responsible for Trade (MRT) and the Small and Medium Enterprises Ministers (SMEM) identified the top 9 trade barriers facing SMEs in APEC region including, among others problems navigating differing, legal, regulatory and technical requirements.  For SME exporters in developing economies, these varying requirements can be particularly difficult to meet given the challenges they may face in obtaining information and in terms of their ability to demonstrate conformance in a reliable and accurate manner. 

Regional developments, the most important of which is the recently concluded Bali Package on trade facilitation of the WTO passed in December 2013, give impetus to this work of lowering global trade barriers.  APEC SMEs stand to benefit from trade facilitation measures undertaken by regional bodies like the WTO if they understand the process, know how these NTMs affect trade and how these can be remedied/mediated/facilitated by existing platforms (e.g., notifications, enquiry points). Similarly, access to trade regulations and the importance of these regulations in promoting trade as well as in protecting consumers will improve SME trade. 

This project aims to further the goals of the Leaders in 2013 to strengthen and deepen regional economic integration and to eliminate barriers to trade and investment in the region by improving the capacity of SMEs and key organizations in understanding non-tariff measures and how these impact on trade. The APEC Sub-Committee Standards and Conformance (SCSC) noted that non-tariff barriers are estimated to cost businesses, primarily SMEs in the wine producers, approximately USD 1 billion a year. While the impact of these non-tariff barriers on other key industries of exports interest to SMEs have yet to be established, the need to understand these barriers is necessary for key agencies involved in trade regulations to address the issues and improve the participation of SMEs in global trade. 

This project is proposed at the SMEWG given the forum’s strong relationship and involvement with SMEs and industry organizations, which could help establish better communication and exchange of feedback between regulatory agencies and SMEs on matters pertaining to NTMs. 

This project will fall under Rank 1 of the Leaders and Ministers funding priority of promoting regional economic integration through free trade and investment, specifically in advancing trade facilitation and in promoting SME development and improving access to global markets. This will also address other issues enumerated under Rank 2 priorities on promoting women (e.g., especially in the handicraft sector where women are well represented; as well as in food processing) and in fighting corruption and improving governance and transparency, as APEC economies share experiences in streamlining regulations.

Objectives

1. To engage SMEs, industry organizations, policy makers and trade specialist in a discussion about each economy’s trade regulations e.g., technical barriers to trade and sanitary and phytosanitary regulations in the agriculture, processed food and handicrafts) and identify challenges, opportunities and best practices;

2. To promote awareness on existing institutional framework (i.e., WTO system of trade regulation notification/enquiry points), resources (i.e., WTO online tools on NTM) which SMEs, industry organizations and policy-makers can utilize to monitor/identify trade distorting policies of members, adopt measures, where necessary and resolve trade issues across member economies;

3. To identify recommended actions for APEC economies to take to improve trade facilitation initiatives for SMEs (e.g., establishing a trade facilitation center, legal assistance, capacity building of institutions, etc.)

Alignment

In the 2011 APEC Ministerial Meeting Statement, Ministers “instructed officials to continue work in 2012 to address barriers SMEs face in trading in the region”, which includes problems navigating differing legal, regulatory and technical requirements to trade. 

In 2012, SME Ministers again reaffirmed the importance of addressing trade and investment barriers and improving the business environment for SMEs including youth, women entrepreneurs, and MEs in the APEC region…. Ministers instructed officials to continue efforts to reduce such barriers and to improve business environment, and also instructed officials to continue working, in collaboration with the APEC Committee on Trade and Investment (CTI), towards the development of global supply chains, preparing SMEs and MEs for export readiness taking into account the importance of this topic for all APEC economies and to pay special attention to young entrepreneurs, women entrepreneurs and minority-owned SMEs and MEs in the APEC region. 

Leaders in 2012 have likewise reaffirmed their pledge to refrain through the end of 2015 from raising new barriers to investment or to trade in goods and services, imposing new export restrictions, or implementing WTO-inconsistent measures in all areas, including those that stimulate exports. In 2013, Leaders have again supported this stand to guard against the pressure to raise new trade and investment barriers. 

The SMEWG continues to address barriers to SME trade as contained in the APEC SMEWG’s Strategic Plan for 2013-2016, which sets the following as one of its 3 key priorities: improving business environment, market access and internationalization of SMEs. 

One of the issues confronting SMEs in trading across and within border, are the increasing number of non-tariff measures (NTM) being imposed by various regulatory agencies. Exporters, particularly SME exporters, find it difficult to comply with these differing technical rules and regulations on product standards and customs procedures. The lack of understanding by SMEs on these regulations as well as capacities in meeting these requirements are posing greater market access barrier for SMEs to trade in the region. 

Although NTMs are legitimately used to safeguard health and protect consumers, it is also sometimes used as protectionist measures. Policymakers, particularly, SME agencies responsible for promoting the development of SMEs, must be well conversant of these NTMs, know whether such are legitimately used or merely giving unnecessary burden to SMEs, and be able to recommend appropriate policies to address trade related issues which are inhibiting the participation of SMEs in global trade. 

For SMEs and policy-makers particularly SME agencies supporting the APEC SMEWG, greater understanding of NTMs is aligned to the overall goal of increasing regional trade and improving access of SMEs to markets.

TILF/ASF Justification

Not Applicable.

Beneficiaries and Outputs

Outputs:  

The projects shall have the following outputs: 

A) Workshops to improve SMEs’ level of awareness on NTMs 

The project will conduct two workshops on relevant SME industries which will engage discussions on NTMs being imposed in APEC economies on agriculture and processed food (session 1- June 2015) and handicrafts (session 2- September 2015). 

The workshops will bring together SMEs, industry organizations, policy makers and trade specialists to discuss trade regulations in the APEC region, establish awareness of existing institutional framework and resources, and develop a set of recommendations for APEC economies to implement so as to facilitate trade among SMEs. The workshops will focus on the following sectors: 

1)     Agriculture and processed food (June 2015)

2)     Handicrafts (September 2015) 

B) Guidebook for SMEs in Doing Business in the APEC Region (Self-funded) 

A Guidebook for SMEs on Doing Business in the APEC Region will also be developed for the agriculture, processed food and the handicrafts sector. The publications hope to guide SMEs in APEC with the resources and tools available to assist them in trading in the region. The guidebook aims to provide APEC SMEs with information on available resources, key contact points such as WTO-enquiry points, trade promotion agencies, regulatory agencies which can assist SMEs in trading in the region. The Guide will also present APEC economies’ regulations for accepting entry of agriculture, processed food, and handicrafts in their economy.   This guidebook will be made available in electronic form and a few hard copies will be prepared for circulation to member economies. 

C) Recommended Actions (for endorsement to SME Ministers)

After each workshop, recommended actions will be developed to improve trade facilitation for SMEs in the in the covered sectors. Recommendations may include the: Conduct of awareness seminars and training on NTMs in respective economies to help SMEs better understand NTMs and include, as appropriate and in collaboration with CTI, training of trade officials and key stakeholders in resolving disputes, especially when an NTM becomes a non-tariff barrier (NTB) or a range of capacity building programs that economies should take to address the most challenging NTMs to SMEs. It is critically important for SMEs to know how disputes are handled and what they can do when their product is held at the border due to an arbitrary measure. 

The recommendations, which will be incorporated as inputs to the SMEWG Strategic Plan 2016-2020 will be submitted to the SMEWG for endorsement to SME Ministers to advance trade facilitation of SMEs. The Project shall also recommend a practical coordination and monitoring mechanism to follow up these recommendations. 

This project also takes advantage of the opportunity to collaborate with the US Project on Supply Chain Capacity Building for SMEs’ on-site tour of a cold-chain storage facility in Atlanta, Georgia. This activity enhances SMEs’ understanding of good manufacturing practices (GMP) which are imposed by various health regulatory agencies across the world for biological products requirements (e.g., agriculture and processed food). 

At the workshop on handicrafts which will be held in Iloilo City, Philippines on the margins of the APEC SME Ministerial Meeting in September 2015, the project will also take the opportunity to get feedback from SME exhibitors of the proposed handicrafts fair to be organized at the sidelines of the meeting, on NTMs which they find difficulty complying with and how they are able to handle such obstacles to trade.  

Outcomes:  

The project is expected to have the following outcomes: 

A) Increased level of awareness on NTMs among participants (e.g., SMEs, trade specialists, industry organizations) 

The project is expected to improve the participants’ level of understanding of NTs (e.g., “low” to “high”). A simple baseline survey will be done before and after the workshop to measure improvement. Workshop participants are likewise expected to cascade their learnings in this workshop in their respective economies. 

The project as a whole serves as an avenue for SMEs, key industry players and policy makers to engage in discussions on non-tariff measures imposed by APEC economies and existing platforms, agreements or available resources on trade regulations of member economies, identify issues and challenges to complying with these NTMs by SMEs. This will ultimately assist policy makers including SMEWG members, identify appropriate technical assistance programs within their economy and across APEC address the concerns of SMEs in dealing with the most challenging NTMs. 

SMEs, industry organizations, policy makers and trade specialists will be able to gain a more in-depth understanding of trade regulations of APEC economies, including technical barriers to trade, sanitary and phytosanitary regulations in the agriculture, processed food, and handicrafts. 

The project will likewise assist in building relationship among trade specialist, SMEs and other key stakeholders. In this manner, SMEs would know whom to contact in case they encounter problems with their products being held at the border due to arbitrary measures. Trade specialists, on the other hand, would be able to undertake immediate action on complaints made by SMEs, by having a useful tool (e.g.,WTO online tools on NTM), which can help them identify trade distorting action by member economies. Well-informed SMEs and trade specialists on what actions to take when goods are held at the borders will help facilitate and/or improve trading in the region (e.g., lower incidence of trade disputes or higher number of disputes resolved across APEC). 

B) Improved policies for trade 

Policy makers will be able to strengthen policies for trade for SMEs through established awareness of existing institutional frameworks and recommended actions for trade challenges in APEC economies. This will also encourage promotion of start-ups by raising awareness on non-tariff measures at the early stages of their growth as an SME. Improved policies and better understanding of non-tariff measures have a great potential to boost economic growth through SMEs development and trade facilitation in APEC economies. 

Better understanding of NTMs and identifying the most challenging non-tariff measures to SMEs will help in developing technical assistance programs and other interventions for SMEs. This may include the identification of more targeted programs to helping SMEs comply with mandatory standards/trade regulations being imposed by member economies. The identification of these NTMs most crucial to SMEs will also help in prioritizing on-going work to harmonize trade regulations across APEC.  As an initial step, the project will identify policy issues requiring further work for discussion, identify champion economies which can lead succeeding work on addressing the concerns of SMEs in dealing with NTMs, and establish collaboration with other on-going work related to addressing the barriers to SME trade. Recommendations will be submitted to SME Ministers for endorsement to Leaders in 2015.  (The Philippines and the United States will try to organize a technical assistance workshop at the sidelines of the APEC SME Working Group Meeting in Spring of 2016 to address or help SMEs’ comply with these NTMs.)  

Beneficiaries:  

SMEs, both male and female, industry organizations, policy makers and trade specialists are direct beneficiaries of this project. Women business owners, as they are well represented in the handicrafts, processed food and agriculture sectors, will be invited in this workshop. Women leaders and CEOs will likewise be invited as speakers to give their success stories in trading across the region (i.e., the United States is assisting with the recruitment of women leaders based in the US like the WeconnectOnline.com and the Alliance for Artisan Enterprises). Other sponsoring economies will also be requested to recruit women speakers. The project aims to have at least 30 percent participation of women as speakers and workshop participants. 

SMEs and industry organizations will gain better understanding of non-tariff measures and procedures that are necessary in successfully engaging with buyers, investors and other partners. Knowledge of these NTMs will lessen exploitation of SMEs. Identify best practices that could serve as benchmark and taking into consideration recommendations, will be essential in SME development. 

Government representatives/SMEWG delegates, policy makers and trade specialists will be enlightened on what directions to take to promote trade facilitation of SMEs in the APEC region. The better understanding of these NTMs and knowing which of these are most challenging to SMEs will help in identifying technical assistance programs, policy issues or in developing/establishing/identifying  needed resources (i.e., information portal) to assist SMEs enter markets. 

After each workshop, participants will be asked to prioritize a list of possible technical assistance programs they deem necessary to address the challenges.

Dissemination

The Project overseer will consolidate all the presentation materials and prepare a comprehensive report for dissemination to SMEWG delegates and workshop participants and other interested groups. The PSU staff will also be invited to include information on similar activities/studies undertaken on NTMs. 

Final output arising from the project will be forwarded to the APEC SME Working Group members for onward transmittal to interested groups. The target audience includes SME policy development officials, trade promotion agencies, APEC economies’ WTO-enquiry points, industry associations and SMEs in the APEC region.

Gender

Women are well-represented in the priority sectors of this workshop, namely: agriculture, food processing, and handicrafts. We intend to invite some women entrepreneurs to speak on their experiences in trading in the region. We will also highly encourage the participation of women SMEs. At least 30 percent of invited speakers and participants will be women.

Work Plan

Month/Year

Activities

September 2014

The Project Overseer has started contacting its WTO Mission in Geneva regarding the conduct of this workshop in 2015; Discussing also with it’s the Department’s Export Marketing Bureau and WTO-enquiry points in the Philippines to initially identify possible topics that would be useful for SMEs. (The Philippine WTO Mission in Geneva will coordinate with the appropriate WTO officials to request for the availability of resource persons needed for this project). 

The Philippines has also contacted the US on how we can collaborate with the Cold Chain Capacity Building Project, as we believe this is an important technical regulation/NTM that SMEs’ must comply with. 

January – February 2015

Conduct of regional survey on non-tariff measures implemented in the agriculture, food processing and handicraft sectors which small and medium enterprises find difficulty complying with. This short survey is designed to help in identifying appropriate speakers that will help SMEs have better understanding of these NTMs. 

March 2015

Draft agenda and identify possible stakeholders and speakers with the assistance of the SMEWG, CTI and Philippine WTO–Mission in Geneva.

April 2015

-   Distribution of letters of invitation for the June 2015 workshop

-   Accommodation and flights arrangement

-   Distribution of Administrative Circular to participants

June 2015

(Atlanta)

Implement the workshop

Assess survey feedback.

June – August 2015

-   Distribution of letters of invitation for the September 2015 workshop

-   Accommodation and flights arrangement

-   Distribution of Administrative Circular to participants

September 2015

(Manila)

Implement the workshop for the handicrafts sector

Assess survey feedback;

prepare a comprehensive project report on the 2 workshops.

The Philippines will prepare a comprehensive report that includes a plan of action for addressing the most challenging NTMs to SMEs and a range of possible technical assistance needed. The action plan will be based on the information provided by speakers and participants and respondents during the survey. The action plan will also identify champion economies which can lead succeeding work on addressing the concerns of SMEs in dealing with NTMs, identify policy issues requiring further work for discussion and establish collaboration with other on-going work related to addressing the barriers to SME trade. Recommendations will be submitted to SME Ministers for endorsement to Leaders in 2015. 

November 2015

-   Submission of documentation of outcomes of the workshop for circulation to APEC SMEWG and relevant fora

-   Preparation of self-funded guidebook for SMEs in Doing Business in APEC. An electronic copy of this publication will be made available to member economies and a few hard copies will be circulated to the SMEWG members. 

Risks

Low participation rate of start-ups or investors: We will promote the event through email updates and social media. Moreover, the event will be promoted through APEC networks. 

Duplication of work done by other workshops: To avoid duplication, we have identified industries that are highly relevant to the Philippines and APEC as previously identified by the SMEWG as priority sectors. Moreover, we will design a program that will ensure that participants will be able to maximize the gains from the workshops. Collaboration and coordination with  SMEWG and other fora will be pursued by the PO to find synergies and complementation. 

Delays in preparation: We will follow the work plan and ensure that we meet the deadlines set. Moreover, we will ensure that there is proper coordination between and among people assigned with tasks that are critical to the successful implementation of the project. 

No follow up action or no support for the recommendations. We shall gather support from the relevant working groups, particularly the SMEWG and will seek their endorsement of the recommendations to the Ministers. The recommendations of the projects will be submitted as inputs to the development of the next SMEWG Strategic Plan (2016-2020), particularly on business environment, market access and internationalization of SMEs.

Monitoring and Evaluation

Prior to the conduct of the workshop, the organizing committee plans to conduct a regional survey on non-tariff measures implemented in the agriculture, processed food and the handicraft sector. This will help in designing well-informed workshops and in determining experts who will be excellent choices for the topics identified for discussion. 

The organizing committee will also monitor the project’s progress. Moreover, there will be an assessment of the organizing committee’s adherence to the work plan to identify lessons learned and best practices which could later on be used in planning and designing of similar projects. 

Participants will also be requested to evaluate the workshop in terms of its content, benefits and effectiveness in achieving its objectives. This will also provide information on the diversity of participants and determine women’s participation in the event. 

After the event, there will be an assessment of the change in the SMEs’ degree of understanding of the Non-Tariff Measures. An Impact Assessment of the improvement in trade facilitation for SMEs in the identified industries, especially to Philippine participants, will be done a year later to gauge how their understanding of NTMs helped them in trading in the region. The Guidebook on Doing Business in the Region will likewise have an assessment indicator on its usefulness to SMEs. 

The Project Overseer will submit a project monitoring report to the SMEWG Program Director.

Linkages

This project will involve close collaboration between the SMEWG and the CTI, along with relevant CTI subfora, ATCWG, SCSC, IPEG and GOS. This project will also collaborate with activities happening at the sidelines of the APEC SMEWGs to find synergies and complementation. 

This NTM initiative is the first SME project on trade facilitation which would further support investment and SME development in the Asia Pacific Region. Understanding NTMs is important to help SMEs better access international markets. 

APEC is the best source of funds for this project due to its alignment to APEC priorities and promotion of regional economic integration. The project is directly related to one of the priority areas of “Business Environment, Market Access and Internationalization” of the SMEWG Strategic Plan for 2013-2016.

Sustainability

To sustain the gains from the workshops after project completion, we will work closely with focal points and stakeholders concerned with trade facilitation for SMEs to follow-up on their progress and to refer them to experts for advice. 

The outcomes of the project can be used as reference for similar projects and capacity building activities. A survey questionnaire may be devised to find out how participants intend to utilize learnings from the workshop.  The Guidebook on Doing Business in the APEC Region should also be able to serve as a simple handbook for helping understand trading in the APEC region. The Guidebook intends to provide basic NTM-related rules and regulations of the 3 sectors. It will also provide contact information of relevant trade promotion agencies, regulatory agencies and institutions which can provide advice in doing business in APEC.

Project Overseers

The Project Overseer will be Jerry T. Clavesillas (Tel: +632 751 5036 local 5036, Email: JerryClavesillas@dti.gov.ph), Assistant Director and Officer-in-Charge of the Bureau of Small and Medium Enterprise Development, Department of Trade and Industry. He has managed and implemented several donor-assisted assignments on SME promotion and development. 

The main point of contact responsible for this project is Cynthia Dela Cruz (Tel:+632 751 03 84 local 2510, Email: CynthiaDelaCruz@dti.gov.ph), Senior Trade and Industry Development Specialist at the Bureau of Small and Medium Enterprise Development, Department of Trade and Industry.

Cost Efficiency

Not Applicable.

Drawdown Timetable

Not Applicable

Direct Labour

Not Applicable

Waivers

Not Applicable.

Are there any supporting document attached?

No 
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Project No.

Project Title

Project Status

Publication (if any)

Fund Account

Sub-fund

Project Year

Project Session

APEC Funding

Co-funding Amount

Total Project Value

Sponsoring Forum

Topics

Committee

Other Fora Involved

Other Non-APEC Stakeholders Involved

Proposing Economy(ies)

Co-Sponsoring Economies

Expected Start Date

Expected Completion Date

Project Proponent Name 1

Job Title 1

Organization 1

Postal Address 1

Telephone 1

Fax 1

Email 1

Project Proponent Name 2

Job Title 2

Organization 2

Postal Address 2

Telephone 2

Fax 2

Email 2

Declaration

Project Summary

Relevance

Objectives

Alignment

TILF/ASF Justification

Beneficiaries and Outputs

Dissemination

Gender

Work Plan

Risks

Monitoring and Evaluation

Linkages

Sustainability

Project Overseers

Cost Efficiency

Drawdown Timetable

Direct Labour

Waivers

Are there any supporting document attached?

hdFldAdmin

Project Number

Previous Fora

Secretariat Comments

Reprogramming Notes

Consolidated QAF

Endorsement By Fora

PD Sign Off

Batch

Forum Priority

Committee Ranking Category

Committee Priority

PDM Priority

Priority Within Funding Category

Monitoring Report Received

Completion Report Received

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PMU Field 3

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