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SMEs must tap benefits that free trade offers

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SMEs must tap benefits that free trade offers

Post  Admin on Wed Feb 09, 2011 8:07 am

by Azlan Abu BakarBusiness Times7 Jan, 2011

With research showing that only 22 per cent of Asian companies are
expecting free trade benefits, the question must be asked is, do they
really help SMEs?

In this rapidly changing trading landscape, a
few key points stand out, Federal Express president for Asia Pacific,
David L. Cunningham Jr said.

He said the removal of trade barriers will create opportunities that can lift many Asian SMEs onto the world stage.

"The opening up of more markets can benefit SMEs, delivering more
possibilities for services, trade and expansion," he said in an e-mail
to Business Times recently.

Thus, industry players can seize market opportunities quickly, giving
many the ability to "go global" from day one in their business vision.

Cunningham said with removal of trade barriers, Asian companies with
little more than a good idea can easily partner with providers in
neighbouring countries to churn out cutting-edge products for markets on
the other side of the world.

Likewise, SMEs in Asia can source components from international markets and assemble them locally.

He said all this can make smaller firms an even more potent force,
because of the way Internet use has multiplied and supply chains have
been reinvented to give SMEs much more access to new customers.

However, despite removal of trade barriers, many industry players are
still reluctant to fully tap trade deals to get that "competitive edge".

Cunningham said new trade deals have been inked in recent years, from
the Asean-China Free Trade Agreement to the economic cooperation
agreement between China and Taiwan, along with numerous bilateral trade
pacts - for instance, between India, Japan and Malaysia.

fact, there are more than 50 free trade agreements in the region, and
the sheer number and complexity of these are often overwhelming for a
large proportion of smaller businesses.

"It is not that they
(SMEs) do not want to reap the rewards of more open trade - often it is
that they do not always know how," Cunningham said.

He said
against the backdrop of the ever-expanding free trade environment in
Asia, complex customs regulations, duties and taxes remain one of the
biggest barriers to SMEs' access to regional and international markets.

Cunningham said this type of market access is yet to be tackled by
major trade agreements, yet is crucial to job creation, economic growth
and future prosperity for businesses around the world.

believe that if governments work to simplify complex regulatory
frameworks, it will strengthen the health and competitiveness of SMEs
and their economies," he added.

Read more:
SMEs must tap benefits that free trade offers

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