MI Training Highlights Need to Use Free Trade Agreements to Boost SME Growth

December 12, 2017

The recently-concluded modular training program on “Enhancing the Utilization of Free Trade Agreements (FTAs) by SMEs” underscored the importance of utilizing free trade agreements to better maximize trade opportunities for small and medium-sized enterprises (SMEs) especially in the Greater Mekong Sub-region (GMS).

The training, organized by MI with the support from the Thailand International Cooperation Agency (TICA) and Singapore Cooperation Program (SCP), was held on December 4-8, 2017 at the MI Residential Training Center, Khon Kaen, Thailand. Twenty-eight participants from relevant government agencies, Chambers of Commerce and Industry, business associations, SME exporters and business development service (BDS) providers from Lao PDR, Myanmar, Thailand and Vietnam, joined the one-week training program.

“SMEs constitute around 98% of our enterprises in the region but the utilization of FTAs has been quite low. The basic objective of this training is to make our SMEs access the free trade agreements, and at the same time understand their benefits,” explained Mr. Madhurjya Kumar Dutta, Director of MI’s Trade and Investment Facilitation Department.

While some companies in the GMS possess the knowledge to take advantage of the benefits offered by these FTAs, SMEs in the region with limited resources to handle multiple tariff schedules and document requirements do not yet fully understand how to utilize FTA provisions. The training was therefore designed to address this gap by informing them of emerging trade issues relevant to the GMS, the trade opportunities for SME exporters, and procedures and requirements in utilizing these FTAs.

The one-week training covered four modules: (1) conceptual framework of RTA/FTA and implications in regional SME context; (2) negotiating issues in a FTA; (3) accessing trade benefits of FTA; and (4) promoting utilization of FTAs by SMEs. In-class lectures were complimented with a field visit to Perm Poon Patana Industry Co., Ltd. to help participants better understand the extent of FTA utilization of firms in the ASEAN region, the challenges and perspectives of an SME business operation, as well as provide on-the-ground knowledge of effective business operations.

Speaking at the training’s closing ceremony, Dr. Watcharas Leelawath, MI Executive Director, remarked that the FTAs are present and available but utilization is very low. “We waste a lot of money negotiating the FTAs so we need to utilize the FTA and the knowledge dissemination about FTA and FTA utilization,” he noted. He further expressed his appreciation of the participants’ interest to use the knowledge that they learned from the training in their business, as well as disseminate the knowledge to other people. “We want to magnify the impact of this project, and you are the mechanism to do it,” he said, addressing the participants.

Participants developed their country-wide action plans and will be implementing them in their respective countries from December 2017 – March 2018. The action plans cover dissemination activities of lessons learned on the utilization of FTA to related government agencies and SMEs in Lao PDR, Myanmar, Thailand and Vietnam. The training program will finally conclude with a synthesis and evaluation workshop by the end of March 2018. 

Category: Trade and Investment Facilitation

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