INF/MSME/R/34  
 
31 October 2022  
(22-8161) Page: 1/4 
  Original: English  
 
 
INFORMAL WORKING GROUP ON MSME S 
OPEN -ENDED MEETING OF 12 OCTOBER 2022  
Summary of discussions  
The following communication, dated 31 October 2022 , is being circulated at the request of the 
Coordinator of the Informal Working Group on MSMEs.  
 
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The MSME Informal Group (MSME Group) met for its fifth open -ended meeting of the year on 
12 October 2022. A total of 51 delegations1 attended the hybrid meeting, including 10 non -working 
Group members (Angola; Cambodia; Central A frican Republic; Chad; Eswatini; Iran (Obs.); 
Madagascar; Thailand; Togo; and the United States of America).  
 
1  SUMMARY OF DISCUSSIONS  
1.1.  Discussions by the members focused on implementation of the 2020 MSME Package and ideas 
for the way forward. Mexico reported on the recent inclusion of a MSME section in its October 2022 
TPR report while the European Union and Uruguay informed the Group regarding their work to 
implement the 2019 IDB Decision. Interest was expressed to improve and expand the database on 
MSME -references in TPRs to make this information more searchable, as well as to include Q&A 
documents with answers to MSME -specific questions. Members also discussed the importance of 
outreach and assistance to those who have endorsed the 2020 MSME Package  but have not yet been 
able to commence its implementation.  
1.2.  Regarding the way forward, several members expressed an interest  to better understand 
MSME -related provisions in regional trade agreements, their impact and best practices for use. Other 
topics no ted by Group members include  rural MSMEs, sustainability, cross -border paperless trade, 
low-value shipments, and applying gender perspectives on MSME trade recommendations . The 
Group also discussed having dedicated sessions and compendiums of good practice s on specific 
topics of interest . 
1.3.  Two briefings on MSME -related discussions in other WTO Committees were given from the 
Secretariat regarding first the July TBT Committee MSME thematic session and second the 
implementation of the 2019 IDB Decision. It was noted that f rom the TBT Committee, WTO Members 
agreed to exchange their experiences in areas including the environment, digital products and 
MSMEs. The TBT Committee's thematic session also stressed the clear need for support to assist 
MSMEs with complianc e. Regarding the IDB decision, three members have bilateral agreements for 
electronic transmission of data and there is a parallel initiative for developing economies and LDCs 
to consider using UNCTAD's ASYCUDA to transmit data automatically to the WTO. Ca nada and 
 
1 Angola ; Argentina; Australia; Austria; Bolivia, Plurinational State of; Brazil; Cambodia ; Canada; 
Central African Republic ; Chad; Chile; China; Costa Rica; Côte d'Ivoire; Czech Republic; El Salvador; Eswatini ; 
European Union; France; Hong Kong, China; Hungary; Iran (Obs) ; Israel; Japan; Kazakhstan; Korea, Republic 
of; Latvia; Liechtenstein; Madagascar ; Malaysia; Mexico; Netherlands; New Zealand; Peru; Philippines; Russian 
Federation; Saudi Arabia, Kingdom of; Singapore; Slovak Republic; Spain; Sweden; Switzerland ; Chinese 
Taipei; Thailand ; Togo; Türkiye; Ukraine; United Kingdom; United States of America ; Uruguay; and Viet Nam 
(non-MSME Group members are in italics).  INF/MSME/R/34  
 
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  Uruguay, who are among the three WTO Members having an agreement with the Secretariat for 
automatic exchange of data, strongly encouraged other Members to follow suit. Canada also 
expressed an interest to better understand potential impediments Me mbers face for implementing 
the IDB Decision so that they can be addressed. Overall, the members of the MSME Group welcomed 
these two updates and expressed a keen interest in continuing to be regularly informed of MSME -
related discussions in the WTO. In th is regard, the Group invited the Secretariat to prepare a 
mapping of MSME -related work and discussions in other WTO bodies.  
1.4.  The Secretariat also provided two briefings. The first briefin g presented the findings of a 
literature review on the effects of regi onal trade agreements on MSME trade participation prepared 
by the MSME Secretariat team (INF/MSME/W/40). The RTA literature review found that RTAs have 
an indeterminate effect on MSME trade -participation, demonstrating both positive and negative 
impacts. A dditionally, there is an important gap when it comes to analysis of the impacts of specific 
MSME chapters and provisions. Members expressed significant interest in continuing the discussion 
of this issue, including through the exchange of good practices. T he second briefing, b y the Services 
Division, focused on cross -border payments and the GATS. It was noted that the GATS is the only 
facility that could allow for further integration of payment systems and global services, but it remains 
underutilized. The briefing was followed by a knowledge sharing session organized by the WEF with 
the IADB and Visa on inclusive trade and cross -border payments. The knowledge sharing session 
also underscored the need for system interoperability and the importance of cross -border payments 
for e-commerce.  
1.5.  The Group also received three other thematic presentations from the ITC, the IOTA Foundation, 
and the Global Express Association (GEA) on trade facilitation, digitization of trade documents, and 
low-value shipments. The ITC p resented the key findings of its publication "Supporting SMEs through 
trade facilitation reforms" and underlined the need for plain language as mandated under the TFA; 
flexibility and policies designed with smaller businesses in mind especially when develo ping 
programs for authorized economic operators (AEOs) since MSMEs can both benefit significantly from 
AEO programs and be hurt by their criteria; and finally, the need for e -payment systems to 
streamline the trade process. IOTA highlighted how digitalizat ion and automation can simplify 
populating information in trade forms, much of which is repetitive. The speaker stressed the need 
for businesses and government agencies to use open, global standards when digitalizing trade in 
order to facilitate interopera bility and promote integration. Finally, the GEA highlighted two systems 
it proposes to simplify tariff payment and collection on low -value shipments, thereby reducing 
compliance challenges for MSMEs. Additionally, the GEA called for a global repository fo r duty and 
tax rates operated by a global public institution to be established to promote predictability and 
reliability of the information and invited WTO members to consider the role that the WTO could play 
in this regard.  More details on each of these p resentations are available in the Annex.  
1.6.  Members were updated on current developments of the Trade4MSMEs website. Efforts are 
underway to secure long -term funding of the site as the partnership with TAF2+ is coming to an end 
in December 2022. A strategic p artnership has been established with Trade Finance Global and 
discussions are being held with the UK Institute of Export and International Trade. Promotion 
continues with four country webinars held and two more planned for Mexico and the Dominican 
Republic . Twelve new guides were also issued in advance of the Public Forum in September.  
1.7.  The two runners -up for the 2022 Small Business Champions, Inclusive Trade and Sidley Austin, 
briefed the group about their top ranked proposals, namely Verified for Impact an d Sidley's Emerging 
Enterprise Pro Bono Program. The two winners will try to re -connect and present their proposals at 
the next MSME Group meeting.  
2  NEXT STEPS  
2.1.  Meetings for 2023 have already been planned for 16 March; 27 June (MSME Day); 28 June; 
12 October  and 7 December.  
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  ANNEX  
PRESENTATION SUMMAR IES 
1  INTERNATIONAL TRADE CENTRE (ITC)  
1.1.  The International Trade Centre (ITC) provided the MSME Group with a presentation on MSMEs 
and trade facilitation based on their 2018 report Supporting SMEs Through Trade Facilitation 
Reforms: A Policymaker Toolkit . The Trade Facilitation Agreement (TFA) is especially important for 
MSMEs whose competitiveness is impacted twice as much as large firms by trade inefficiencies. 
Within the TFA, the ITC has identified 19 TFA provisions that impact MSMEs most, either positively 
or negatively, and provided recommendations for how to address reforms bearing a MSME -
perspective in mind. Besides the strong recommendation for publishing information in plain language 
and implementing commonly used solutions like e -payments, the ITC also identified the 
disproportionately high benefits MSMEs can gain from AEO -status. However, the ITC noted that 
MSMEs are sometimes prevented fr om joining AEO programs because of criteria related to volume 
or frequency of shipments as well as financial requirements, all of which the ITC recommends 
eliminating. The ITC also noted the need for e -payments to streamline the customs process, 
especially  in economies where there are large "unbanked" segments of the population and many 
traders cannot send traditional money transfers. To close, it was underscored that "reforms that 
work for larger firms might not benefit MSMEs, but reforms that work for MSM Es will also benefit 
larger firms ". 
2  IOTA FOUNDATION  
2.1.  In a follow -up of the 15 July 2022 presentation by the IOE&IT on the United Kingdom -Kenya 
Trade Logistics Information Pipeline (TLIP), the IOTA Foundation presented more details on its work 
with TradeMark  East Africa to integrate TLIP into a pilot program. Fundamentally, IOTA noted there 
is a need for standards harmonization across trade in order to digitalize and automate international 
trade. Currently, the trade process remains full of paper and by the t ime a customs official sees 
these many documents they are removed from the actual supplier by at around three to four levels. 
Rather than rely on declarations, the IOTA Foundation is working to use blockchain so that each 
party in the transaction has acces s to the information and can share data in a trusted way. However, 
to make this system work, information must be standardized. By doing so, it not only makes 
automation possible but also reduces the burden of the trade process given that as much as 80 % of 
the information is identical across documents (for example contact information, product, weight 
etc.). To conclude, the ICC -WTO Standards Toolkit was referenced as a starting point to increase 
standardization . 
3  GLOBAL EXPRESS ASSOCIATION (GEA)  
3.1.  The Global Ex press Association (GEA), an organization representing three of the largest global 
express carriers i.e., DHL, FedEx and UPS, returned to the MSME Group to present on two proposed 
low value shipment (LVS) duty/tax collection processes, their common features , and a proposal for 
a global duty/tax rate repository. As detailed in two documents submitted to the MSME Group 
(INF/MSME/P/2 and INF/MSME/P/3) and the GEA's 2021 presentation, two main options are 
proposed to simplify the duty compliance burden for trade rs – namely a simplified flat -rate duty for 
all dutiable imports below a certain de minimis  threshold or a simplified classification structure based 
on plain language with varying tax/duties attached to these categories. One of the key features of 
these tw o systems are their "vendor models" that rely on the seller as the source of information. 
These two systems would benefit from cross -border cooperation among customs officials given that 
buyers must pay the duties but vendors hold the information. A global  repository, which the GEA 
suggests that the WTO could hold, might contain information related to national duty/tax rates, the 
type of simplified duties applied, the value threshold, the commodity list, and the GST/VAT or other 
tax rates if applicable. Ult imately, an automated system relying on standardized information would 
be the most efficient and beneficial to firms of all sizes.  
4  WORLD ECONOMIC FORUM (WEF) INFORMATION SESSION  
4.1.  The World Economic Forum (WEF) organized an information session on Cross -border payments 
for MSMEs. In their introductory presentation, the WEF underscored the importance of basic INF/MSME/R/34  
 
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  infrastructure and digital payments, especially in the face of a pandemic. F urther, the changing 
digital landscape for MSMEs has highlighted the need for payments to cover new digital services and 
e-commerce, many of which are linked with MSMEs, but which face challenges ranging from lack of 
infrastructure or interoperability to c yber-crimes. The WEF closed with four calls to action. The first 
was for continued investment in basic infrastructure for the digital economy, both physical and 
regulatory such as the MLETR guidelines. Second, the WEF call for a commitment to interoperable  
systems to ensure that payments can be made across borders. Third, the WEF proposed a 
commitment for international coordination pertaining to innovation and regulations. The final call to 
action was for a commitment for multi -stakeholder engagement in the  design of regulations.  All of 
these are essential for functioning cross -border digital payment systems . Following their 
intervention, the WEF introduced their two other speakers for the knowledge sharing session from 
the IADB and Visa.  
4.1  Inter -American Deve lopment Bank (IADB)  
4.2.  The Inter -American Development Bank (IADB) provided information on the growth of digital 
payment use in Latin America and noted Brazil as a case study of a leading economy with regards 
to adoption and use of innovative payment technolog y. In fact, Brazil adopted a national payment 
system, PIX, which has allowed over 40 million people to make their first bank transfer in 2020 and 
far outpaced other economies' payment system growth. Going further, the IADB described a joint 
program with th e WEF called Payments to Advance Growth for All (PAGA), which was launched in 
2021. Key takeaways from PAGA include the need to build good regulatory practices to reduce 
market barriers and promote innovation; encourage public -private sector collaborations ; explore 
digital trade agreements to secure cross -border digital payments; and facilitate new technology and 
innovation. Overall, the IADB noted the need for interoperability among payment systems; the 
importance of ensuring end -to-end payments for busine sses just as for individuals; digital identities, 
consumer protection and cyber security; and review of payment licensing.  
4.2  Visa 
4.3.  Visa described the changing payment environment and the way that economic digitalization 
can lead to greater equity and inclusio n. For example, women entrepreneurs are increasingly 
creating "born digital" and "born global" firms, relying on digital sales and exports from initialization 
of their business. Cross -border payments also go beyond trade and e -commerce, they are tied 
closely with remittances which continue to increase worldwide. Visa underlined the importance of 
payment interoperability, but perhaps even more importantly regulatory interoperability between 
economies' payments systems. One best practice in this regard that w as cited in the presentation 
was the Singapore -Australia Digital economy Agreement. This model demonstrates how economies 
can consider digital payment interoperability and standardization to increase secure, functioning 
payment transactions. Ultimately, to  increase access and ensure a more equitable digital economy, 
focus will need to be turned towards providing citizens with the opportunity to access digital 
networks; to increase digital skills; and to develop trust in digital systems and products.  
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