SMEs and International Trade

Recent empirical evidence on the international activities of European firms shows that efficiency gains from exporting seem to accrue only to medium and large exporters, due to the presence of relevant fixed costs in the exporting activity. The surveyed policies on the status of SMEs in international trade practices have shown that fixed costs are likely to persist in the future, due to the increasing complexity of international trade operations, and the lack of a systematic policy related to SMEs within the multilateral negotiating framework. Even within a regional approach to economic integration (regionalism), the existence of significant costs of implementation in the rules of origin act as an important obstacle for the access of SMEs to the integrating area. Some proposals specifically related to SMEs start being discussed in international fora (specific provisions for SMEs within FTAs, or a special clause on SMEs needs within the WTO negotiations), but practical actions are still lacking. The same discussed changes to provisions on geographical indications of products or public procurement do not seem to be specifically centred on the needs of SMEs, and thus are not likely to significantly foster their involvement in international trade activities. In the absence of policies aimed at a systemic reduction of fixed costs for SMEs within the working of international markets, Governments have been trying to reduce the fixed costs of their international involvement via a number of export promotion policies. However, the results of these policy actions are not clear-cut, with the surveyed evidence pointing to mixed results obtained in terms of effective support for the internationalization of SMEs. [...]