APEC Small and Medium Enterprise (SME)
Fourth Ministerial Meeting
Ottawa, Canada, 18-19 September 1997
JOINT STATEMENT
I. INTRODUCTION
1. The Fourth APEC Ministers' Meeting on Small and Medium Enterprises was held
in Ottawa, Canada, September 18-19, 1997. In conjunction with the conference,
a Business Forum and Exposition, hosted by Industry Canada and the Canadian
Chamber of Commerce, took place September 17-18.
2. Ministers applauded the Leaders' call for incorporating SME priorities
throughout the APEC agenda . Leaders have recognized the prominence of SMEs
in all APEC economies and their need for greater support in making the transition
to an open trade environment. Building on the foundation laid at previous Ministers'
meetings on improving economic conditions to facilitate the growth of SMEs,
Ministers committed to strengthen the SME Agenda and to provide policies
and activities that will provide meaningful results to SMEs.
3. Ministers underlined the strong contribution of SMEs to economic activity
within the APEC region, and their impact on intra-regional trade and investment.
SMEs comprise over 90 percent of all enterprises in the region; contribute
between 30-60 percent of GDP of APEC economies; generate about 35 percent of
the region's exports; and account for between 32-84 percent of employment in
APEC economies.
4. Ministers emphasized the importance of policies and programs to support
SMEs at both the domestic and international levels . They view APEC initiatives
on trade and investment liberalization, trade facilitation and economic and
technical cooperation as essential complements to their domestic efforts in
helping SMEs penetrate new markets and develop the necessary skills and technology
to improve their competitiveness.
5. Ministers agreed with the APEC Business Advisory Council (ABAC) on areas
in which APEC is best suited to help SMEs: reducing barriers to trade and investment;
helping SMEs take advantage of new opportunities; building a better business
environment; and, improving and upgrading government capacity to serve SMEs.
Ministers reported a number of accomplishments to address SME needs in these
areas.
II. ACCOMPLISHMENTS
6. Ministers endorsed the SME Framework developed by the APEC SME Policy
Level Group (PLG) to provide a horizontal SME focus across APEC . They agreed
with the Framework's guidelines to: direct APEC activities to respond to needs
expressed by the SME community; benefit and involve SMEs directly; and, respond
to real needs of the marketplace.
7. Ministers complimented the PLG for the publication of the APEC Report,
"Helping Your Business Grow: Guide for Small and Medium Enterprises
in the Asia-Pacific Region". The Report communicates to SMEs, APEC's concrete
and positive measures to address SME priorities. At a time when profound changes
transform national and regional economies around the world, concerted action
on the part of APEC helps create an open, efficient trading regime and address
the special needs and priorities of SMEs. They recommended that the Report
be updated regularly to measure the effectiveness of APEC in supporting the
growth of small business throughout the region. (The Guide is attached as
Annex A.)
8. Ministers agreed to recommend to APEC Leaders that the APEC SME Framework
be considered by all APEC working groups in designing and implementing SME-
related activities. Ministers noted that many APEC fora, including the PLG,
APEC Committees, and Working Groups had activities underway that could benefit
SMEs. The Framework will assist them in this context.
9. Ministers also welcomed the progress on the 13 initiatives undertaken
by the PLG in the past year. They noted that these projects will help the
public and private sectors better serve their clients and improve the dissemination
of information to SMEs in a number of fields.
10. The Chair highlighted the importance to SMEs of the Trade Liberalization
and Facilitation Agenda. Ministers agreed that the harmonization and streamlining
of customs procedures will facilitate the conduct of business and reduce transaction
costs for SMEs. They gave their support to the Sub-Committee on Customs Procedures
Collective Action Plan and agreed to convey to APEC Ministers and Leaders its
importance in improving the trade and investment environment for SMEs.
III. KEY THEMES OF MINISTERS' DISCUSSION
11. Fostering an environment conducive to SME growth, including dynamic young
enterprises, is a key to job creation and economic prosperity. Ministers recognized
that SMEs experience obstacles at their critical growing stage. They emphasized
the need to address such difficulties as: entering global markets; adopting
existing innovative technologies; recruiting and developing necessary human
resources; obtaining financing including risk capital; and accessing information.
Ministers wish to convey to Leaders that it is critical to provide a business
environment adapted to SME needs and which encourage the creation of enterprises.
They are committed to make the changes at the domestic and APEC levels to create
an environment that will facilitate the development and growth of SMEs.
They stressed the importance for policy makers to learn about best practices
from examples across APEC economies, and consider how to apply these lessons
to reduce barriers to growth, improve infrastructure for SMEs, and foster a
tax system consistent with SME development needs.
The Ottawa Meeting considered issues of importance to SMEs in five key areas
of access to: markets, technology, human resources, financing, and information.
Ministers emphasized that by addressing these issues in all fora, APEC will
move significantly towards the Leaders' objective of incorporating the needs
of SMEs in its agenda.
Access to Markets
Ministers recognized that SMEs face special problems related to their size
and that, in the context of rapid trade liberalization, SMEs need to develop
capacities to take advantage of the opportunities of a more open regional trading
system. They noted that SMEs have specific challenges in finding partners or
agents for joint ventures. They acknowledged the detrimental effects on SMEs
of the lack of international harmonization of standards and professional qualifications,
including investment laws and taxation procedures. They also pointed out the
lack of adequate, cost-efficient, and competitive transportation systems outside
of the sub-regional arrangements, especially across the Pacific Ocean. They
encouraged the Transport Ministers to look at measures to ensure adequate and
competitive transport arrangements. They noted the potentials of the Internet
as a marketing tool, and noted the efforts of the Telecommunications Working
Group to develop a framework for electronic commerce transactions. Ministers
welcomed the progress made in reducing tariff and non-tariff barriers to trade,
and encouraged action on harmonization of customs procedures, better protection
for intellectual property, and improvement of the investment environment. They
encouraged the work undertaken to establish best practices studies and seminars
on market development.
Access to Technology
Ministers observed that in a knowledge-based economy, applications of information
and communications technology can be a great equalizer for SMEs; however, when
SMEs have limited access or understanding of these technologies, their prospects
are reduced. Ministers welcomed technology-related initiatives such as the APEC
Technomart II, the Study of Best Practices in the Management of Technological
Extension Programs, and the Cross-Border Inter-Firm Linkages project, which
will facilitate technology transfer from industrialized to developing economies.
Access to Human Resources
Ministers discussed the implications of an emerging knowledge-based economy
on the need for constant training and skills upgrading for SMEs in both developed
and developing economies. Ministers recognized that Human Resources Development
(HRD) for SMEs needs a comprehensive approach including: social structures and
systems such as educational reforms or nourishing entrepreneurship in the society;
a labour market mechanism and self-help by each enterprise; and governmental
support. They emphasized that APEC, and its member economies, should involve
SME support groups in strengthening and deepening their activities related to
HRD to foster human resources of SMEs in the region. They welcomed the numerous
initiatives that will be launched in 1997, including: an APEC Centre for Entrepreneurship;
a study on women entrepreneurs; a benchmarking database; a workshop to promote
diagnosis and guidance skills; and, a Distance Learning Program and Certification
Standards for Small Business Counsellors.
Access to Financing
Ministers reviewed the results of a recent consultation of APEC business associations
which revealed that many SMEs lack awareness of financing resources and programs
available from commercial banks and other private sector and government sources,
and that they have difficulty defining and articulating their financing needs.
The Report stressed the need for the financial institutions to be responsive
to the needs of SMEs, and for continuing simplification of trade documentation.
Ministers also welcomed the initiatives being taken by business associations
to increase the competitiveness of their SME members.
Ministers congratulated the export credit agencies (ECAs) for taking the
lead in exploring measures to support SME exporters such as: surveying the
export and import financing needs of APEC SMEs; producing a report on the best
practices of APEC ECAs to address the key issues of importance to SME exporters;
actively seeking ways to increase awareness of and access to APEC ECAs services
through innovations like Internet websites on ECA services; seeking ways to
involve commercial lenders more fully in trade finance; working on areas of
common concern to most APEC ECAs including support for SME service exporters
and the benefits of Credit Scoring foreign buyers; and, developing a Protocol
of Understanding among APEC ECAs to be signed at the Heads of APEC ECAs' meeting
in November in Vancouver.
Ministers recognized the importance of providing cost savings to SME exporters
through policy actions such as: encouraging APEC economies to eliminate
withholding taxes on any export financing provided by commercial lenders supported
by ECAs; and discussing with the appropriate authorities the possibility of
reducing or eliminating the risk weighted capital requirements on financial
institutions backed by ECAs for export and import transactions involving SME
companies. Ministers recommended that these issues be referred to the APEC
Finance Minister process for consideration as part of their action plan for
1998.
Access to Information
Ministers agreed that access to accurate and timely information is crucial
for SMEs to compete and grow in a global market environment. They recognized
the important role that governments play in providing information to SMEs and
believed that APEC may make the greatest near-term contribution towards information
access. The Ministers acknowledged that to benefit SMEs, government information
must be relevant, timely, and effectively and efficiently transmitted. It must
not impose unnecessary compliance costs on SMEs. Ministers highlighted projects
undertaken in several economies and from various APEC fora focusing on ways
to provide accurate and timely data, benchmarks, essential information, intelligence,
and knowledge, such as one-stop shops, electronic information systems and integrated
delivery systems. They also highlighted ongoing initiatives to disseminate information
on regional infrastructure development projects. They urged the PLG to intensify
its work, in concert with other APEC bodies, to gather and disseminate information
that will be useful to SMEs and policy makers in the region.
The Ministers noted that business associations are placing a strong emphasis
on information gathering and dissemination and welcomed their proposals to share
information among themselves across APEC economies.
IV. ADOPTION OF THE 1997 APEC SME ACTION PLAN
12. In recognition of the need to further the significance of SME-related
activities throughout APEC, Ministers endorsed the 1997 APEC SME Action Plan.
They congratulated the PLG for developing infrastructures that will provide
lasting benefits for APEC economies, in particular: the Network of Institutes
for Small Business Counsellors, the APEC Centre for Entrepreneurship, and the
Benchmarking Database. They also welcomed initiatives to reduce wastage of resources,
time and cost in accessing information and new markets, and they appreciated
the latest project undertaken by China. The achievements of this project will
provide basis for China to create progressively a more open operational environment
for SMEs in China. (The 1997 SME Action Plan is attached as Annex B.)
13. Ministers welcomed Japan's initiatives to foster SME diagnosis and guidance
skills in the APEC region. This project emerged from the discussion and agreement
at the last Ministerial meeting in Cebu to encourage involvement of SME support
groups in developing tangible outcomes that will directly benefit SMEs. Ministers
also welcomed Korea's initiative to conduct a study on women entrepreneurs,
owners and managers of SMEs in the APEC economies.
14. Ministers noted the improvement in information sharing and coordination
of activities among APEC working groups, and the efforts of each group to address
Leaders' priorities. Ministers encouraged PLG members to continue working
closely with their counterpart working groups as well as the private sector
and support organizations to ensure initiatives that will bring real benefits
to SMEs.
15. Ministers welcomed the views of the APEC Business Advisory Council (ABAC)
and urged PLG members to work closely with them in developing policies supportive
of SMEs. They recognized the efforts and progress made during the year in taking
action on ABAC 1996 SME recommendations to Leaders -- APEC Network of Networks,
SME Finance Round Tables, and SME Statistical Indicators. They welcomed
the Philippines' and Japan's initiative in linking APEC economies' websites
and creating an SME business homepage to provide easy access to information.
16. They also appreciated the significance for trade acceleration, and of measures
to facilitate financing for SME exporters and importers. They commended the
United States for its survey of SME Trade Financing issues and Canada's leadership
in consulting business associations and export credit agencies to explore measures
to address these issues. Ministers recognized the importance of APEC measuring
progress at the firm level, and believed that the Philippines' work on statistical
indicators will be key in helping APEC groups assess their performance.
V. PRESENTATIONS BY THE BUSINESS SECTOR
17. Ministers congratulated the APBNet for the success of the Business Forum,
the quality of speakers and the relevance of information and tools provided
under the four themes of the Forum: market access and partnership strategies,
financing strategies, business skills development, and technology innovation
and commercialization.
As an overall recommendation, the Business Forum urged APEC SME Ministers to
establish a results-based business plan targeted to SMEs, complete with timelines,
deliverables, objectives and priorities. Key action items among the recommendations
were: upgrade the APEC Economy Home Pages on the Internet, with linkages to
major private sector Internet sites in the respective economies; implement an
APEC Multiple Entry Business Visas providing stays of 90 days in order to improve
access of business persons to APEC economies; expand SME Finance Roundtables;
address SME concerns on financing and in particular export financing; ensure
information is provided to SMEs in a form which meets their needs; and reduce
documentation burden imposed on SMEs from a wide variety of sources.
18. Ministers recognized the significance of the business sector recommendations
to ensure SMEs have a growing role in trade liberalization and investment. They
directed PLG members to use these recommendations in developing the 1998 Action
Plan.
19. Ministers also heard from young entrepreneurs who actively participated
in the Business Forum. Ministers welcomed the recommendations from the young
entrepreneurs at their "Business Leaders of Tomorrow" meeting. The
Ministers supported their objective to promote a culture of entrepreneurial
spirit, economic growth and to encourage greater cross-cultural understanding
among youth to meet the needs of a globally competitive economy. Ministers directed
the PLG to assist the young entrepreneur associations to achieve their objectives
. Ministers noted that several of the key initiatives being undertaken in
the next year would actively promote the growth and development of young entrepreneurs
in Asia-Pacific.
20. The Women Leaders' Network called on the SME Ministers to recognize gender
as a concern that cuts across many issues, and to integrate a gender perspective
at all levels of SME work. They called on them, as well, to ensure the full
participation of women through equitable representation at all levels of APEC
fora with a target of at least 30 percent women participants at senior levels
by the year 2000. Ministers agreed to promote gender sensitive policies and
measures related to the development of SMEs to empower women in technical, managerial,
and entrepreneurial fields . They directed PLG members to consider actions
recommended by the Women Leaders' Network to support the development and growth
of women entrepreneurs.
21. Ministers complimented the Alliance of Manufacturers & Exporters Canada
for its initiative in convening the first meeting of business associations throughout
APEC to develop an action plan to assist their SME members. They called on
the business sector and business organizations to lead in facilitating greater
participation by SMEs in APEC trade and investment opportunities and encouraged
the PLG to partner with them in creating a better business environment for SMEs.
VI. NEXT MINISTERS' CONFERENCE
22. Ministers welcomed the offer by Malaysia to host the Fifth
APEC SME Ministers' Meeting in Kuala Lumpur on September 10 and
11, 1998. They expressed their support for Malaysia's decision to provide fora
for delegations representing businesses, business associations, export credit
agencies, young entrepreneurs and women leaders, in conjunction with the Ministerial
meeting.
23. Ministers thanked Canada for its guidance in chairing the meeting, and
the people of the National Capital Region for their hospitality in welcoming
the government and business delegations.
