Small Firms Predict International Trade to Account for 50% of Revenues by 2019

by Megan Dunsby for http://startups.co.uk/

The majority of small and medium businesses worldwide expect to generate up to 50% of their revenues internationally by 2019, according to a new study conducted by the Economic Intelligence Unit (EIU) on behalf of DHL Express.

The Breaking borders report, which surveyed 480 small and medium firms from 12 countries across 20 industries, also found that, despite international optimism about overseas trade, many companies still feel there are “severe obstacles” which stop them from entering new markets.

 Overcoming different market environments was listed as the biggest hurdle with other key barriers to international growth including political instability, administration costs to establish a local presence, and cultural differences; 84% described the unfamiliarity of foreign markets as important to determining its attractiveness.

The survey also reflects a gap in international activity between small and medium companies in developed and developing countries – 69% of small firms in Germany, France, Italy, Japan, Canada, USA, and the UK (G7) currently trade internationally as opposed to 46% of businesses in Brazil, Russia, India, China and Mexico (BRICM).

In addition, small and medium enterprises from BRICM markets were found to be more likely to seek growth opportunities in other developing countries, while businesses from G7 economies are more active in other developed markets.

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Food security, agriculture development and trade facilitation

A recent consultation at WTO discussed sensitive and important issues : food security and agriculture development in the perspective of trade facilitation.

In particular, one proposal from the G-33 group of developing countries suggests extra special treatment to protect their poor farmers including taxing early adoption of goods for food security.  However, responses on this matter varied with supporters mainly came from developing countries in the G-33 and Agriculture G-20 group. While all agreed that food security is of crucial importance, some questioned whether  such proposal might imply no disciplines on stockholding and argued that the biggest boost to food security would come from reforming agriculture trade.

Most members concluded that the discussion was constructive that set forth future negotiation dialogue.  More consultations from delegations would be expected, but a balance between agriculture and other subjects such as trade facilitation is demanded.

For more information: http://www.wto.org/english/news_e/news12_e/agng_07dec12_e.htm