APEC Small and Medium Enterprise (SME)
Third Ministerial Meeting

Cebu, The Philippines

5-6 September 1996

JOINT STATEMENT

FOUNDATIONS OF SME WORK IN APEC

1. The Third APEC Ministerial Meeting on Small and Medium Enterprises (SMEs) was held on 5-6 September in Cebu, Philippines. The meeting responded to the APEC Leaders' call for strengthened APEC dialogue to promote cooperation in fostering the vitality of SMEs in the region.

2. The Ministers came together cognizant of the principles of mutual respect and equality, mutual benefit and assistance, constructive and genuine partnership and consensus building. Their discussions were guided by the Osaka Action Agenda as the template for work in APEC. This Action Agenda calls for action oriented economic and technical cooperation in a wide range of areas, including SMEs.

3. The diverse character of APEC and the different levels of SME development in APEC economies were recognized as important parameters in further developing the SME Action Program, with the view of exploring these diversities toward greater complementarities leading to more efficient production, greater employment opportunities, promotion of sustainable development initiatives in SMEs, and mutual benefit among APEC member economies.

4. SMEs play critical roles in all APEC economies as sources of growth, employment, income, trade, innovation, entrepreneurship, and opportunity for people. Ministers recognized the importance of stronger intra-regional cooperation and partnership with the private sector and other support groups. This cooperation and partnership will enable APEC to address the growing challenges and opportunities facing SMEs, including the need to achieve sustainable development and to address the specific needs of women entrepreneurs in APEC.

5. Ministers are committed to continued cooperative efforts to allow SMEs to achieve their full potential and to contribute to the APEC goals of free and open trade and investment, and enhanced economic and technical cooperation in the region.

II. ACCOMPLISHMENTS

6. Last year in Adelaide, Australia, APEC SME Ministers agreed on measures to foster the Bogor Declaration goals of achieving free and open trade and investment and strengthening economic and technical cooperation. The SME Action Program was fully endorsed by the Economic Leaders in Osaka as a means of obtaining sustainable and equitable development throughout the APEC region.

7. The SME Action Program incorporated a set of principles to guide APEC work and projects in the five priority areas. Substantial progress was made in exchanging information on policies, programs and services for SMEs. This increased policy makers' understanding of issues affecting SMEs in the APEC region and enabled them to develop tools to help SMEs grow and adapt to an environment of increasing globalization.

8. Ministers commended the various economies on the completion of more than ten projects, under the aegis of the Ad Hoc Policy Level Group on Small and Medium Enterprises (PLG-SME), including the establishment of the APEC Center for Technology Exchange and Training for SMEs (ACTETSME). In order to make ACTETSME an APEC-wide organization and ensure its success, Ministers agreed that efforts should be made to reinforce and support the program of ACTETSME, and directed the PLG to report to SOM the operating requirements of ACTETSME including the necessary action to constitute the ACTETSME Governing Board. Relatedly, the ACTETSME could become a focal point of a common website that integrates the electronic database of all APEC economies.

9. Ministers welcomed the comprehensive report sponsored by Canada and the Philippines entitled "APEC and SMEs - A Synthesis of Issues, Findings and Suggestions for Future Action". The report prepared by PECC identified over fifty projects that have been undertaken by APEC Working Groups and Fora since the establishment of APEC in 1989. This underscored the importance of SMEs and the commitment of APEC member economies in assisting SME development.

10. Ministers commended the economies for their effort in deepening the spirit of cooperation through the initiatives under the SME Action Program. Ministers also urged economies to continue the good work and endeavor to complete existing projects and commence work on new initiatives on the basis of challenges that have been identified through continuing dialogues.

III. GREATER PRIVATE SECTION PARTICIPATION

11. The Ministers welcomed the increasing participation of the private sector and encouraged greater business involvement in the APEC SME Action Program. In particular, they noted that the APEC Business Advisory Council (ABAC) has identified SMEs as a major priority area in its work program for 1996, which will form part of its report to the APEC Economic Leaders in November 1996. Ministers encouraged a close partnership between the PLG-SME and ABAC in the development of public-private initiatives of benefit to SMEs.

12. Ministers also recognized the importance of business matching activities led by the private sector and commended initiatives undertaken by the Asia-Pacific Business Network III (APB-NET III). At the APEC Opportunity business events last year in Adelaide, organized by APB-NET, business participants estimated the value of potential intra-APEC trade resulting from the event to be more than US$ 60 million. This year, 455 participants from the eighteen member economies of APEC attended the APB-NET III Congress in Manila. Ministers see real value in linking these trade events to Ministerial meetings because they enable identification of issues of concern to SMEs and an exchange of views on these issues between Ministers and business representatives.

13. The Ministers also welcomed the initiative of the Philippines in organizing and conducting the Asia-Pacific Young Entrepreneurs Conference which enhanced business networking among young entrepreneurs in the region.

14. Ministers recognized the value of the recommendations from the APBNet Congress and the Young Entreprenuers Conference. These include the specific actions to remove impediments to time-efficient business travel, reduce human resource constraints by ensuring skilled workers for SMEs, improve access to information on-line, share best practices and provide opportunities for networking and information exchange. Ministers urged the PLG SME to consider the recommendations in developing their Action Program for 1997.

IV. FUTURE ACTIONS

15. Ministers recognized the importance of advancing the SME Action Program and the policy dialogue between APEC economies. The value of these efforts could be enhanced by giving increased recognition to initiatives and activities that:

• Directly benefit SMEs;
• Are of broad benefit to APEC member economies;
• Complement private sector activities;
• Complement and advance the SME work of other APEC Working Groups; and
• Provide opportunities for public sector-private sector dialogue and cooperation.

16. As the SME Action Program cuts across many of the activities of APEC Working Groups and Fora, Ministers urged the PLG-SME to link its activities with the initiatives of other Working Groups such as Telecommunications, Industrial Science and Technology, Human Resources Development, Trade Promotion, etc. In this connection, the Ministers encouraged the PLG to undertake joint dialogues with lead shepherds of relevant ecotech fora to increase complementarities in project initiatives.

17. Ministers recognized the importance and endorsed the participation of support groups and institutions which address the needs of SMEs. These support groups provide appropriate assistance in the area of information, training, technology, marketing and financing. Ministers expressed appreciation to Japan for establishing the Trade and Investment Liberalization and Facilitation (TILF) Special Account.

18. With the support infrastructure in place, SMEs are poised to further take on the challenges brought about by increased liberalization in investment and trade in the Asia Pacific region. This will help foster the objectives of the Bogor Declaration of free and open trade and investment by 2010 for industrialized economies and 2020 for developing economies, as well as economic and technical cooperation towards achieving sustainable development in the region.

19. Ministers welcomed the broadening of activities to advance the Action Program on SMEs, as reflected in the new initiatives considered by the Ad Hoc Policy Level Group on SMEs. These address key cooperation issues enhancing efficient management of SME policies and programs through the exchange of best practices, increasing the use of information technologies to improve SME access to business intelligence, and expanding market opportunities for APEC SMEs.

20. Since SMEs are located not only in the urban centers but also in the rural areas, Ministers encouraged the development of initiatives that would empower and strengthen rural SMEs through activities and policies that focus not only on individual enterprises but also on groups of enterprises and cooperatives, as stated in the Second SME Ministerial Meeting.

21. In order to pursue further the agenda on SME development in APEC, Ministers welcomed the extension of the mandate of the PLG-SME, as agreed at the Third APEC Senior Officials Meeting in Davao, Philippines, in August 1996, for two more years -- from April 1997 to March 1999.

22. Ministers agreed to hold further a meeting in Ottawa, Canada on 18-19 September 1997. This meeting will examine new policy issues and opportunities to promote growth and competitiveness of SMEs across the APEC region. Ministers expressed satisfaction at the decision of APB-NET to capitalize on the success of previous initiatives by organizing a business forum and exposition in Ottawa on 17-18 September 1997, in conjunction with the Fourth SME Ministerial Meeting.

23. Ministers welcomed the offer of Malaysia to host the 1998 SME Ministerial Meeting.

V. RECOMMENDATIONS TO THE LEADERS

24. Ministers agreed to report the accomplishments and developments of the third SME Ministerial Meeting to APEC Leaders so that while they meet in Subic in November theu would be able to reflect upon the importance for APEC and member economies to reach out to SMEs in the region; and, the need to strengthen APEC work to bring the greater benefit for SME activities through participation of support groups contributing to the development of SMEs, and through further incorporation of SME priorities throughout the APEC agenda.