On Tuesday, 14 November, SME Connect in partnership with SME Europe, arranged a working breakfast at the European Parliament on the topic of “International Cross-border Trade: Challenges and Solutions facing SMEs”. This event was hosted by JÖRGEN WARBORN MEP and member of the Committee on International Trade.
The panel saw the participation of PETER BERZ, Head of Unit for Single Entry Point for Enforcement, Market Access, and SMEs for DG TRADE at the European Commission; ROBERTO CORCIULO, President and Senior Consultant of IC&Partners Group; ELEONORA CATELLA, Deputy Director of International Relations at BusinessEurope; ERIC PELLETIER, Vice-President and Head of International Government Relations of Alibaba; BART VAN ZWOL, CEO of WHC Labs; GREET DEKOCKER, Managing Director of BeCommerce. The discussion was moderated by Dr. HORST HEITZ, Chair of the Steering Committee of SME Connect.
JÖRGEN WARBORN MEP, initiated the conversation by highlighting the role of SMEs in driving growth and emphasizing the need for strategic moves by policymakers to support them in the context of international trade. Mr. Warborn pointed out that out of 22.6 million SMEs in Europe, only 600,000 engaged in cross-border trade, revealing untapped potential.
Discussing Free Trade Agreements, he recognized the SME chapters but suggested room for improvement. He called for collective efforts to identify and overcome barriers preventing SMEs from international trade, particularly emphasizing regulatory burden and red tape.
In conclusion, he invited input from the audience to enhance SME chapters and address real challenges faced by businesses to improve competitiveness in Europe.
Continuing with a keynote speech, PETER BERZ, from DG TRADE, discussed collaboration with various services and agencies, emphasizing the need to share information about what Europe offers for SMEs to engage internationally. He stressed the significance of trade for growth, especially outside the EU in regions like Asia, Latin America and Africa. Mr. Berz highlighted the extensive network of Free Trade Agreements already in place, covering 44% of exports.
The core of the trade policy agenda is SMEs, but they encounter challenges in global trade, such as limited capacity for administrative procedures and information access. He promoted DG Trade’s initiatives to assist SMEs, including the Access2Markets portal, the Single Entry Point for raising concerns, and SME chapters in Free Trade Agreements. Mr. Berz also shared information about outreach events in Member States and underscored the importance of creating an SME friendly environment in trade partner markets through bilateral and multilateral efforts.
ELEONORA CATELLA, from BusinessEurope, continued the discussion, emphasizing the importance of SMEs for EU competitiveness. Agreeing with concerns about administrative burdens, she welcomed President von der Leyen’s commitment to a 25% reduction in proportionate requirements. She highlighted the role of Free Trade Agreements in ensuring market access for both exports and imports, calling for them to be SME-proof. She stressed the need for enhanced visibility on tariff phase-out and information dissemination.
Acknowledging the significance of all chapters in FTAs, she emphasized the importance of enforcement and implementation, noting the need for two-way information flow to address on-the-ground challenges.
GREET DEKOCKER, from BeCommerce, provided insights into the digital trade landscape in Belgium. She noted that out of 56,000 webshops, only 6,000 generate over 100,000 euros in turnover annually, highlighting the prevalence of small micro-enterprises in digitalization.
When examining the correlation between digitalization and export markets, among digitally transformed businesses, 21% of their turnover was exported. She emphasized that once businesses embraced digitalization, they were more likely to engage in export activities. Ms. Dekocker outlined the challenges faced by businesses in digitalization and export, stressing the symbiotic relationship between the two, as the World Wide Web inherently facilitates international trade. Digitalization, particularly through webshops and marketplaces, can lead to increased export capabilities.
Highlighting the role of marketplaces, she advocated for a level playing field to encourage SMEs’ participation and trust-building in these platforms. She suggested creating an environment that supports European marketplaces and addresses the trend of retailers entering the marketplace game.
From the SME perspective, ROBERTO CORCIULO, from IC&Partners Group, representing a private Italian-based company supporting SMEs in internationalization, emphasized the importance of unity in Europe despite its diversity. He highlighted the need for a European identity and emphasized the growing significance of online exports. Despite various support measures from the public system, he noted that small companies struggle to grasp and utilize available information effectively. He concluded with the challenges faced by SMEs, including a lack of professional skills, digitalization, and demographic shifts, and called for targeted financial support. It is important to provide non-financial services, and there is a need for more effective and widespread communication of public tools to support SMEs.
ERIC PELLETIER, from Alibaba, started by explaining the background of Alibaba.com, which was initially designed as a platform for Chinese businesses and has evolved into one of the world’s largest B2B marketplaces. He emphasized its role in diversifying trade globally, helping SMEs navigate aspects of international trade such as promotion, language considerations, customs, finance, and intellectual property registration.
Contrary to common perception, Alibaba sells more European products to Chinese consumers than it imports into Europe. Addressing SME concerns, Mr. Pelletier discussed Alibaba’s efforts in IP protection, advisory boards, and easy-to-access forms for customs. He also highlighted the platform’s role in supporting SMEs in reaching international markets, even those who may not initially consider themselves exporters.
He acknowledged the challenge SMEs face in adopting digital strategies and encouraged SMEs to explore international markets.
BART VAN ZWOL, from WHC Labs, representing a small family-owned business, highlighted the challenges and rewards of international business as an SME. Dealing with regulations, cultural differences, and compliance issues have imposed difficulties – nevertheless, WHC Labs learned to adapt and grow stronger. Looking ahead, he expressed dedication to international cross-border business and shared plans for expanding into the EU market.
Focusing on their experience in Asia, Mr. Zwol discussed their success on Alibaba’s platform and attributed their success to being 100% European products, resonating well with Chinese and Eastern consumers. He emphasized the potential for European small businesses to bring their products to international markets.
Mr. Zwol highlighted the advantages of expanding to the United States due to its larger market size, one language, and simplified regulatory processes compared to the complexities within Europe. He encouraged SMEs to view international expansion as both challenging and a chance for more business opportunities.