INF/MSME/R/41  
 
22 January 2024  
(24-0476) Page: 1/4 
  Original: English  
 
INFORMAL WORKING GROUP ON MSMES  
OPEN -ENDED MEETING OF 7 DECEMBER 2023  
Summary of discussions  
The following communication, dated 22 January 2024, is being circulated at the request of the 
Coordinator of the Informal Working Group on MSMEs, Ambassador Matthew Wilson (Barbados).  
 
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1.1.  The MSME Informal Working Group (MSME Group) met for its fifth open -ended meeting of the 
year on 7 December 2023. A total of 42 delegations1 attended the hybrid meeting, including three  
non-working Group members (Cambodia; Morocco; and Thailand). DDG Hill joined the MSME Group 
to provide brief introductory remarks and express her support.  
1.2.  The Group reviewed the expected outputs for MC13 including : 1) a joint compendium on Access 
to Finance for  Women -led MSMEs ( INF/MSME/W/46 -INF/TGE/W/7 ) with the Informal Working Group 
(IWG) on Trade and Gender and the International Trade Centre (ITC); 2) a compendium on Special 
Provisions for MSMEs in Authorized Economic Operator (AEO) Programs ( INF/MSME/W/47 ); and 
3) business and policymaker handbooks compiling the guides of the Trade4MSMEs website. Members 
were invited to review the compendia on access to finance and AEO programs and to send any 
comment they may have by the end of December 2023. Revised  versions of the compendia will be 
circulated  in early 2024. The English versions of the two handbooks are completed and the French 
and Spanish versions will follow. The draft Chair's text ( INF/MSME/W/45 ) was also briefly discussed 
during the meeting.  
1.3.  The Chair informed the Group that a joint session with the co -chairs of the IWG on Trade and 
Gender to launch the compendium on Access to Finance for Women -led MSMEs  was being planned 
during the ITC-WTO High -Level Event on the Launch of the Women Exporters in the Digital Economy 
Fund & the SheTrades Summit preceding MC13. Other o pportunities will be explored to release the 
compendium on AEO Programmes and to showcase the Trade4MSMEs website and  The Trade Game, 
including possible activities on the margins  of the MC13 business forum.  
1.4.  Members updated the Group on their work to implement the 2020 December Package of 
Recommendations and Declarations. The EU commented on their work to develop MSME -related 
trade policies and Hong Kong, China reported on the inclusion of information on MSME -related 
statistics and programmes in their just -completed ninth WTO trade policy review.  
1.5.  Presentations of research received in relation to the Group's March 2023 call for papers on 
"MSME Provisions in Regional Trade Agreements: Objectives and Observed Outcomes" were made. 
Two papers were provided by the delegation of the Philippines titled "Th e Impact of FTA Import 
Utilization on Firm Performance: An Assessment of Philippine Manufacturing MSMEs" and "Survey 
 
1 Argentina; Australia; Bahrain , Kingdom of ; Barbados; Brazil; Cambodia ; Canada; Chile; China; 
Colombia; Costa Rica; Czech Republic; European Union; Georgia; Germany; Honduras; Hong Kong, China; 
Hungary; Japan; Kazakhstan; Korea, Republic of; Macao , China ; Mongolia; Morocco ; Netherlands; Peru; 
Philippines; Poland; Portugal; Russian Federation; Saudi Arabia , Kingdom of ; Slovenia; Spain; Switzerla nd; 
Chinese Taipei; Tajikistan ; Thailand ; Türkiye; Ukraine; United Kingdom; United States  of America ; and 
Viet Nam (non-MSME Group members are in italics ). INF/MSME/R/41  
 
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  on MSME/MSME -Related Provisions in APEC Economies' FTAs/RTAs". The UN Economic Commission 
for Africa (UNECA) provided a third paper titled "What is the positioning of SMES in the African 
Continental Free Trade Area (AfCFTA): Key findings based on the AfCFTA Country Business Index".  
1.6.  The Group also received three presentations. The first, from the delegation of Chile , presented 
their work towar ds inclusive trade through support for  industry  cooperatives and the inclusion of 
MSME -related language in RTAs. Next the International Trade Centre (ITC) joined the Group to 
present the ir recently released 2023 SME Competitiveness Outlook (SMECO) on Small  Businesses in 
Fragility, which shows that smaller firms experience more negative impacts from fragility than larger 
businesses, a problem given the generally increasing trend of global fragility from climate change, 
security, and health concerns. The Digi tal Cooperation Organization (DCO) joined next to present 
their work to support digital entrepreneurs through the STRIDE Association and women 
entrepreneurs through Elevate50.  
1.7.  The first "MSME Spotlight" featured a woman -led candle business from Barbados. T amara 
Gibson, the chief chandler, joined online to describe her business, the importance of e -commerce 
through her own website, and the challenges she encounters to trade internationally including 
shipping costs, logistics challenges in the Caribbean and navigating payment system discrepancies. 
The MSME Group Coordinator suggested continuing this segment in future open -ended meetings to 
allow members to hear directly from small businesses.  
1.8.  The Group adopted the 2023 Annual Report ad referendum , subject to f inalization . A revised 
version reflecting discussions at the 7 December 2023 MSME Group meeting and comments received 
by members will be circulated to members. In the absence of further comments within a 10 -day 
period , the report will be considered adopted.  
1.9.  Under "Other Business" the United States briefly informed the MSME Group to their recently 
held webinar related to the digital frontier for agriculture in developing economies. The Coordinator 
informed the Group that the proposed theme of the 2024 edition of the Small Business Champions 
competition was "Supporting Trade by Indigenous Peoples".  
1.10.  The next meeting of the MSME Group is planned for 19 March 2024 . Additional scheduled 
dates for regular meetings in 2024 include 9 July, 14 Octobe r, and 10 December.  
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  INF/MSME/R/41  
 
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  ANNEX  
PRESENTATION SUMMARIES  
1  THE IMPACT OF FTA IMPORT UTILIZATION ON FIRM PERFORMANCE, PHILIPPINES  
1.1.  Neil Irwin S. Moreno, Supervising Research Specialist with the Philippine Institute for 
Development Studies presented  his joint paper authored with Francis Mark A. Quimba and Abigail 
E. Andrada, titled "The Impact of FTA Import Utilization on Firm Performance: An Assessment of 
Philippine Manufacturing MSMEs" submitted under the MSME Group's 2023 call for papers. This 
research assessed the impact of free trade agreements (FTAs) on the performance of Philippine 
MSMEs, finding that FTAs substantially liberalized trade with benefits used by importers, although 
there was little evidence of FTA benefits to exports. By looking m ore closely at firm size, the authors 
found that MSME FTA users had significantly higher productivity levels than non -users. However, 
the use of FTAs was strongly linked to the volume of imports, implying that duty savings from using 
preferential rates nee d to be large enough to offset the costs of complying. Overall, the study showed 
the importance of FTAs for facilitating Philippine trade, with FTA -use significantly enhancing the 
import activities of MSMEs. The authors suggested that simplifying FTA proce dures could significantly 
lower compliance costs, thereby increasing the benefits to smaller businesses. They also noted that 
outreach on the benefits and use of FTAs through  targeted interventions could encourage FTA use 
by MSMEs given the information gap s vis a vis larger firms .  
2  SURVEY ON MSME/MSME -RELATED PROVISIONS IN APEC ECONOMIES' FTAS/RTAS, 
PHILIPPINES  
2.1.  The Philippines presented a second paper on MSME provisions in RTAs titled "Survey on 
MSME/MSME -related Provisions in APEC Economies' FTAs/RTAs". Or iginally provided to the 2019 
APEC Ministerial in Chile, the survey reviews MSME -related provisions in 33 RTAs of APEC Members, 
finding that MSME provisions increased over the years and have been focused in chapters on 
cooperation. Provisions related to MS MEs in RTAs vary depending on agreement, frequently 
highlighting cooperation and capacity building. In other cases, more specific areas are detailed in 
the agreements including information exchange, trade promotion networking, training or exchange 
programs  and a few agreements even include financial or technological support. In addition to 
cooperation chapters, government procurement, e -commerce, trade facilitation, investment, and 
intellectual property are also chapters where MSME provisions occur in APEC RTAs. Overall, there is 
a lot of variation in APEC RTAs with MSME provisions and most are framed in terms of a best 
endeavour approach with a focus on improving the capacity of MSMEs to trade.  
 
3  THE AFCFTA COUNTRY BUSINESS INDEX (ACBI), UNECA  
3.1.  Wafa Aidi from  the United Nations Economic Commission for Africa (UNECA) presented findings 
from the African Continental Free Trade Agreement (AfCFTA) Country Business Index (ACBI) with 
results for Angola, C ôte d'Ivoire, the Democratic Republic of the Congo, Egypt, Gabo n, Kenya, 
Morocco, Namibia, Nigeria, Rwanda, Senegal, South Africa, and Tunisia. The ACBI was launched in 
2018 to provide a means for businesses to give feedback on the implementation of the AfCFTA. 
These submissions are aggregated in the ACBI providing an  index that acts as a monitoring and 
evaluation tool. Findings according to the ACBI scores of the 13 countries reviewed show that 
businesses are mostly neutral in their perception of their country's trade environment but are more 
negative in terms of thei r ability to trade goods across borders. Awareness of a country's 
membership in regional trade agreements was relatively high, but awareness by businesses of their 
country's participation in the AfCFTA ranged from 34 % of those surveyed in Angola to over 80 % of 
businesses in Nigeria, indicating a broad range and potentially limited knowledge in some economies. 
Complying with the FTA's rules of origin (ROO) requirements is also perceived as the most restrictive 
aspect to trading by businesses. Overall, recomm endations that emerge from the survey include 
increasing the awareness of the opportunities provided by the AfCFTA and simplifying the compliance 
process for ROOs.  INF/MSME/R/41  
 
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  4  CHALLENGES AND OPPORTUNITIES OF MSMES AND COOPERATIVES IN 
INTERNATIONAL TRADE, CHILE  
4.1.  Chile p resented on their support for MSMEs to trade internationally, particularly through 
industry cooperatives. Chile's trade is dominated by large enterprises with 98.1 % of Chilean export 
value conducted by big businesses. Those MSMEs that do export tend to exp ort a single product 
and/or to a single region (60 % of MSME exporters). Only 17 % of MSMEs that export have recorded 
consistent annual sales over ten years and more than half (52 %) of MSME exporters are 
concentrated in metropolitan regions. Chile has a vari ety of cooperatives that bring entities, 
especially smaller businesses, together to exchange information and provide support, particularly in 
the services, production and labo ur, and agriculture sectors. In terms of next steps, Chile is working 
on the crea tion of the National Institute of Associativity and Cooperatives (INAC) and to provide 
support for cooperatives through mentoring and investment capital financing. At a policy level, Chile 
also works to promote MSME international trade participation throug h provisions in regional trade 
agreements, participation in international organizations, roundtables between the public and private 
sectors, and seminars on matters of interest to MSMEs. These roundtables and seminars at the 
national level help to discuss issues, gather experience and establish collaborative work to support 
trade.  
5  SMALL BUSINESSES IN FRAGILITY, ITC SMECO REPORT  
5.1.  Valentina Rollo, Head of Research at the International Trade Centre, presented the 2023 SME 
Competitiveness Outlook (SMECO) report titled "Small Businesses in Fragility: from Survival to 
Growth". This report gathered together a new "Fragility Exposure Index" by surveying more than a 
thousand companies in eight countries (Burkina Faso, Colombia, Honduras, Iraq, Kenya, Myanmar, 
South Sudan and Ukraine). Overall, the study found that smaller businesses are more impacted by 
the uncertainties of fragility including crime, conflict, or inequality. Informal businesses were found 
to be even more negatively impacted, as were women -led bu sinesses and businesses run by youth. 
The research further shows that while competitiveness and size of firms can sometimes buffer the 
impacts of fragility, the uncertainties of a fragile economy decreases firm competitiveness and leads 
to more "survivalis t entrepreneurship", or micro firms, eking out a living. Ultimately, the study finds 
a large variation in firm impacts with an important window of opportunity in which firm -level support 
can yield positive outcomes before more severe fragility and violence . However, the source of 
fragility must be ultimately resolved to ensure economic growth.  
6  DIGITAL COOPERATION ORGANIZATION (DCO)  
6.1.  Manel Bondi, Digital Taxation Director at the Digital Cooperation Organization (DCO) presented 
the organization's work. DCO is comprised of 13 Middle Eastern and African Members plus Cyprus. 
DCO's objective is to enable economic growth and social prosperity through digital transformation 
by sharing best practices and knowledge with their members through initiatives to support cros s-
border data flows, digital inclusion among women and youth, and market expansion for MSMEs and 
digital entrepreneurs. DCO presented their STRIDE Entrepreneurs' Association that aims to address 
the challenges faced by technology entrepreneurs, startups an d digital MSMEs looking to grow their 
businesses across DCO member states. In this initiative, DCO is working to harmonize policies across 
DCO members; create a central space to bring governments, businesses, and non -profits together; 
and develop a platfor m to support local entrepreneur expansion. DCO also presented their Elevate 
50 program to support women digital entrepreneurship through skills training, support for online 
store creation, access to finance and enabling women -friendly regulatory reforms. T his is done first 
by identifying eligible businesses, bringing them on -board through the Elevate 50 program and then 
providing monitoring and evaluation. DCO concluded with a call to increase membership and further 
work to identify the barriers and constra ints to digital harmonization and entrepreneurship.  
 
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