Trade and Sustainable Development Symposium

The trade landscape continues to transform and many companies are exploring how to remain profitable and operate in this changing scenario. One response has been to strengthen operations where the policy environment is most stable and where trade costs are lowest. For many companies, ‘their region’ represents such a place.For small and medium-sized enterprises (SMEs) regional trade has always been the most common form of internationalization. This is particularly important in the context of value chains, which are often more regional than global in reach.This session will explore how SMEs can benefit from participating in value chains – both international and regional – and how regional trade agreements (RTAs) may create and support greater value chain operations and ensure that SMEs can enter them, operate successfully and upgrade.Regional and multiregional value chains, including South-South, offer SMEs lower entry barriers than international value chains. However, the extent to which SMEs benefit depends on their position within the value chain, which is in turn determined by their bargaining power and competitiveness.Both the behavior of companies – lead firms and suppliers – and the shape of international value chains are intertwined with regional trade agreements. Indeed, regional trade agreements increase value chain driven trade, while value chains shape the design of trade agreements. Evidence suggests that it may be useful to look at value chains operations, the distribution of trade benefits and the design of RTAs in a holistic manner.The 2017 edition of the SME Competitiveness Outlook “The region: A door to global trade” will have its Latin America launch at this session.

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