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APEC Project Database

Project Title

MSME-Specific Provisions in FTAs

Project Year

2023

Project Number

CTI_205_2023A

Project Session

Session 2

Project Type

Standard

Project Status

Completed Project

Project No.

CTI_205_2023A

Project Title

*
MSME-Specific Provisions in FTAs

Project Status

Completed Project

Fund Account

*
APEC Support Fund

Sub-fund

ASF: Free Trade Area of the Asia-Pacific and Global Value Chains (FTAAP and GVCs)

Project Year

2023

Project Session

*
Session 2

APEC Funding

104,995

Co-funding Amount

0

Total Project Value

104,995

Sponsoring Forum

*
Committee on Trade and Investment (CTI)

Topics

Trade Facilitation; Micro, Small and Medium Enterprises

Committee

Committee on Trade and Investment (CTI)

Other Fora Involved

Other Non-APEC Stakeholders Involved

 

Proposing Economy(ies)

Malaysia

Co-Sponsoring Economies

Australia; Canada; China; Hong Kong, China; Indonesia; Peru; Philippines; Thailand; Viet Nam

Expected Start Date

01/12/2023

Expected Completion Date

30/06/2025

Project Proponent Name 1

Nurul Hidayah Idris

Job Title 1

Senior Assistant Director

Organization 1

Ministry of Investment, Trade and Industry, Malaysia

Telephone 1

+60362000526 / +60122003462

Email 1

Project Proponent Name 2

Vimala Murugan

Job Title 2

Senior Director

Organization 2

Ministry of Investment, Trade and Industry, Malaysia

Telephone 2

Not Applicable

Email 2

Declaration

Nurul Hidayah Idris

Project Summary

This project seeks to take inventory of MSME-specific provisions in FTAs in order to inform possible work related to MSMEs in the FTAAP agenda. Through a two-day Workshop in Malaysia in September 2024, this project aims to take inventory of MSMEs provisions in FTAs/RTAs and compile case study examples through desk research, open discussion and a case study method. The Workshop aims to:

a. Have open discussion involving industry players, government officials and think tanks on MSME-specific provisions or elements in current FTAs;

b. Information sharing by MSMEs on their experiences in internationalization, assisted through relevant / general FTA utilization by MSMEs, taking into consideration new and emerging challenges, as well as the lack of existing coherent MSME policies in APEC; and

c.  Prepare a report that identifies 1) factual inventory of SME provisions in existing FTAS/RTAs in APEC economies and 2) specific case study examples of MSMEs that have increased their exports with FTAs. This report could help inform future APEC work and activities. Identifying case studies of MSMEs utilizing existing FTAs to increase trade and support jobs may help inform future FTAs/RTAs in the APEC Region.

Relevance

Region

As already noted, 97 percent of businesses in the APEC region are Micro, Small and Medium Enterprises (MSMEs). MSMEs’ contribution to the Growth Domestic Product (GDP) ranges from 40 to 60 percent in majority of APEC economies. However, on average, MSME only accounts for 35 percent or less in direct exports.

Source: APEC Secretariat Website

Recognising the important role of MSMEs in each APEC economy, APEC Leaders continued to emphasise on the need to foster MSMEs’ participation in global and regional markets through the Aotearoa Plan of Action and the Bangkok Goals on Bio-Circular-Green (BCG) Economy especially on strengthening the roles of micro, small, and medium enterprises (MSMEs), including encouraging the formulation of an updated APEC Strategy for Green, Sustainable and Innovative MSMEs, building capabilities for MSMEs in sustainability practices such as the ESG and BCG approaches, and collaborating to improve opportunities for MSMEs.

Eligibility and Fund Priorities
This project conforms to the ASF-Sub-Fund on FTAAP and GVCs funding criteria as it aims to carry out the collective strategic study on issues related to the realisation of the FTAAP as well as continue the capacity building activities which was previously pursuit in the FTAAP under the Action Plan Framework of the 3rd Regional Economic Integration (REI) Capacity Building Needs Initiative (CBNI). This project will also promote GVC development and cooperation in assisting SMEs to benefit from GVCs as well as strengthening collaboration with other stakeholders on GVCs.

Capacity Building

1. Develop knowledge, abilities and skills on MSMEs’ provisions from FTAs and examples of how MSMEs have utilized existing FTAs to increase trade and support jobs.

2. Provide an opportunity to learn and emulate best practices from each other.

3.  Create awareness for government officials to understand the needs of MSMEs to ensure practical and appropriate policy-making in the future.

This project complements the FTAAP Work-Program for MSMEs.

Objectives

Increasingly, initiatives that enable FTAs to distribute the benefits of trade in a broader manner are becoming a critical priority in most APEC economies. The challenge is especially greater for a diverse region as the Asia-Pacific region. While several issues included in FTAs could affect this objective, there is a need to examine how FTAS have been utilized to support the inclusiveness of smaller enterprises and how SMEs may take better advantage of FTAs. This focus could include a stock take of existing SME provisions in existing FTAs/RTAs in APEC economies and case studies of micro, small, and medium enterprises (MSMEs), including SMEs owned by women and minorities as well as in in rural areas, that have increased their exports with FTAs. It is hoped that through these efforts, the prosperity of APEC’s economic growth would be shared across the region.

Alignment

APEC

1. 2023 SMEMM Chair’s Statement: APEC economies to collaborate with business support organizations and academic institutions to continue to develop policies, technology solutions, and capacity building measures that address key barriers that MSMEs face.

2. 2022 Bangkok Goals on Bio-Circular-Green (BCG) Economy: Strengthening the roles of MSMEs, including encouraging the formulation of an updated APEC Strategy for Green, Sustainable and Innovative MSMEs.

3.  2022 APEC Business Advisory Council (ABAC) Report on The New MSME Economy - Post Pandemic Drivers for Growth: Collaboration with policy makers, MSME associations and business sectors on new designs and delivery approaches for MSME support program.

4. 2021 Aotearoa Plan of Action: By promoting start-ups and advancing MSMEs’ access to finance, global markets, and global value chains as well as Building on APEC’s work on supporting MSME’s and women’s economic empowerment.

5.  2021 Small and Medium Enterprises Working Group Strategic Plan 2021-2024: To assist MSMEs through intensifying the inclusive human resource development and equip with the skills and knowledge for the future by addressing critical and emerging issues pertaining to the growth and development of SMEs in the APEC region.

6. 2020 Putrajaya Vision 2040: To further advance the Bogor Goals and economic integration in the region in a manner that is market-driven, including through the work on the Free Trade Area of the Asia-Pacific (FTAAP) agenda which contributes to high standard and comprehensive regional undertakings.

Forum

This project is aligned with the FTAAP Agenda Work Plan in response to Leaders’ commitments in the Putrajaya Vision 2040, the Aotearoa Plan of Action as well as the Bangkok Goals on Bio-Circular-Green (BCG) Economy for APEC to take forward work on the FTAAP agenda. The 2020 CTI Annual Report to Ministers notes the importance of developing work in the FTAAP agenda on “emerging and predominant trends and next generation trade and investment issues” including work that has not achieved consensus in order for APEC to be an effective incubator of ideas.

APEC Putrajaya Vision 2040 also enhances the work on FTAAP agenda. Furthermore, in order to advance the work on the FTAAP agenda, the Aotearoa Plan of Action, which was endorsed in November 2021 AELM, stipulates to carry out studies on convergence and divergence across all chapters of regional trade agreements that contribute to high standard and comprehensive undertakings as a collective action.

Beneficiaries and Outputs

Output 1 - Research Work

Research Work will consist of:

i. Desktop Research: to see the current state of MSME-Specific provision in the FTAs among all APEC economies.

ii. Pre-workshop Survey of participating economies:

A pre-workshop survey through online questionnaires will be distributed to confirmed participants, from CTI and Small and Medium Enterprises Working Group (SMEWG) members prior to the event to gauge their views and understanding on MSMEs-specific provisions in current existing FTAs/RTAs. A combination of closed-ended and open-ended survey questions will be developed. The respondents will be given between two to three weeks to complete the survey.

A written output of an estimated of 2 to 3 pages of the survey findings will be shared with the experts for further deliberation at the Workshop.

Output 2 - 2-Day Workshop

A two-day Workshop which tentatively to be held in Peninsular Malaysia with participation from APEC economies under the CTI and SMEWG provides the avenue for experts and participants to share their thoughts and recommendations on next generation MSME-specific provisions and possible next steps for the Work Program on MSMEs in FTAAP. The workshop will be divided into few sessions to discuss / brief on the following:

a) Overview of the current state of MSME-Specific provision in FTAs among APEC economies based on the Research Work;

b) Highlights from the region based on case studies;

c)  Sharing of best practices which includes discussion on how female participation can be promoted in the field;

d) Discussion on exploring for cross-fora collaboration;

e) Interactive sessions with the participants on the outcome of the workshop. To recap the key learning, what they gained, and how they can/plan to apply the new information, resources or learning in their roles; and

f)  Dissemination of of the Post Workshop survey forms.

The following issues are also planned to be discussed during the Workshop:

a) MSMEs’ experiences in internationalization, through utilization of relevant/general FTA/RTA provisions on MSMEs;

b) Sharing of the key findings from the Research Work;

c)  Possible MSME-specific priorities or desired elements to be included in future FTAs/RTAs; and

Emerging opportunities and challenges for MSMEs in the 21st century approach to FTAs/RTAs.

Output 3 - Summary Report

A brief Executive Summary of maximum 3 pages and full Summary Report of the Workshop of minimum 12 pages which include key findings from the Research Work and sharing of best practices from APEC economies will be circulated with the participants, CTI and other relevant APEC fora i.e. SMEWG for consideration in building future action plans. The consideration of the Executive Summary and the Summary Report will be done inter-sessionally.

The Summary Report will be uploaded into the Meeting Document Database on the APEC website as well as to be published as APEC Publication through APEC Publication Database.

Outcomes
1) Active participation and engagement promoted by raising awareness of the participants on the MSME-related provision in current FTAs/ RTAs and their challenges. This will be measured by the percentage of participants responding positively in the Post-workshop Survey.

2) Two-days Workshop:

i. Develop knowledge, abilities and skills on beneficial MSMEs provisions in FTAs.

ii. Provide an opportunity to learn and emulate best practices from each other.

iii. Networking.

3) Impact on policy making is an important outcome of APEC-funded project. This may be measured by the percentage of positive response from the participants to the relevant questions in the Post-Workshop Survey, by surveying the member economies 6 to 12 months after the project completion.

Beneficiaries

The immediate beneficiaries of the project are government

officials in Ministry of International Trade and Industry (MITI), Department of Trade and Industry (DTI), Ministry of Entrepreneurs and Cooperatives Development (MECD) and other stakeholders, including policymakers from APEC economies, particularly developing economies, who are involved in MSMEs policy-making and trade negotiations.

In addition to that, the immediate beneficiaries are also among the strategic and managerial level from the private sectors which involve in micro, small and medium enterprises namely Philippine Trade and Investment Centers (PTIC), Enterprise

Singapore (ESG), SME Corporation (SMECorp) and etc.

a) Primary beneficiaries : On the selection criteria for participants, priority will be given to subject matter experts, those in direct relevance to the subject, as well as key industry players, researchers and analysts. Participants will also be selected in a balance of background, industry / enterprise and gender, particularly in encouraging more female participation.


The Workshop will bring together experts and interested stakeholders of trade in services, particularly from MSMEs, and it is expected to be attended by government officials and other stakeholders from APEC developing economies that are involved in

MSMEs policy-making and trade negotiations. Nominations through the focal points from

CTI and SMEWG of each Economy with the policymakers and trade negotiators who are familiar with their economy’s services domestic regulation priorities and commitments, including current situations of MSME. Participants should have the authority to contribute to advancements in their MSME sectors.

The workshop will also engage international organizations such as ABAC/ OECD/

UNCTAD/ WTO, private sectors involved in this area, key industry players in the member economies, as well as relevant APEC fora (such as CTI and Small and Medium

Enterprises Working Group (SMEWG)) that are also undertaking work related to MSMEs.

b) Secondary beneficiaries: This workshop will also benefits the government agencies back home as well as the private sectors which involve in micro, small and medium enterprises (MSME).

Dissemination

The Summary Report of a minimum 12 pages would include the key findings of the Research Work, recommendations and best practices from the experts and speakers. It will be made available for public access in the Meeting Document Database on the APEC website as well as to be published as APEC Publication through APEC Publication Database.

The brief report will not be presented at the CTI meeting since the CTI will only have meeting in August 2024 in the margin of SOM3. However, a brief update will be provided at the CTI3 under the agenda item on FTAAP to demonstrate the implementation of the FTAAP Work Programme for MSMEs. A brief report on the outcomes of the Workshop will also be shared through email to SMEWG in September 2024.

There is no intention to sell outputs arising from this project.

Gender

Please see Project Proposal posted in Supporting Documents folder.

Work Plan

Please see Project Proposal posted in Supporting Documents folder.

Risks

Please see Project Proposal posted in Supporting Documents folder.

Monitoring and Evaluation

Please see Project Proposal posted in Supporting Documents folder.

Linkages

This project will:

i. Continue APEC’s initiatives on MSMEs, taking into consideration developments of relevant discussions in other international fora, with a view to further advance APEC work in this area;

ii. Promote cross-fora collaboration by engaging and seeking inputs from SMEWG;

iii.  Proponent will ensure that the work will not duplicate previous or ongoing initiatives being undertaken in various APEC fora; and

iv. Focusing on topics that meet the objectives of the SME Working Group Strategic Plan for 2021-2024, which has provided a roadmap to address critical issues pertaining to the growth of MSMEs in the APEC region as well as to improve trade facilitation measures and leverage trade agreements.

Sustainability

Discussions and information gathered at the Workshop will contribute towards developing economies’ capacity in participating and further contribute towards a well-informed decision-making related to MSMEs.

The presentation and materials of this Workshop will be made available in e-copies to all participants after the project has been completed for future referral and guidance. A detailed report of the Workshop and any follow-up work will also be presented during CTI/SMEWG meeting. Report and presentations will also be made available on the APEC Publication Database Website.

To focus on the target group on MSMEs from APEC economies, as specified in the earlier sections, and relevant Ministries/agencies who are policymakers/regulators to share their best practices that will then create an opportunities and benefited both sides.

For longer term impact, the set of recommendations and best practices of good policy and regulatory practices in MSMEs that will be developed could be a useful tool for APEC economies to consider adopting. Participants will be deliberating on the good policy and regulatory practices in MSMEs across APEC economies and the discussions will be summarised into a best practices paper which will be a useful takeaways from the Workshop for the participants to consider adopting in developing and formulating their strategies with regard to the MSME-specific provisions in future FTAs/RTAs.

Direct Labour

Please see Project Proposal posted in Supporting Documents folder.

Are there any supporting document attached?

Yes
Project No.
Project Title
Project Status
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
Telephone 1
Email 1
Project Proponent Name 2
Job Title 2
Organization 2
Telephone 2
Email 2
Declaration
Project Summary
Relevance
Objectives
Alignment
Beneficiaries and Outputs
Dissemination
Gender
Work Plan
Risks
Monitoring and Evaluation
Linkages
Sustainability
Direct Labour
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
PMU Field 1
PMU Field 2
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On Behalf Of
Proposal Status
Originating Sub-Forum
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Attachments
Content Type: Standard Proposal