Phl urges WTO members to prioritize SMEs

MANILA, Philippines - The Philippines has urged of the World Trade Organization (WTO) to prioritize small and medium enterprises (SMEs) and small farmers in the ongoing trade talks as they are most vulnerable to market uncertainties.

At the WTO biennial meeting in Geneva, Switzerland, Trade and Industry Secretary Gregory L. Domingo pointed out that SMEs and farmers should be at the center of negotiations in trade policies and agreements

“SMEs and small farmers should not just be an afterthought. Instead, they should be the primary concern in our policies and agreements. We need the establishment of the overarching framework of the Doha Development Agenda to drive us towards sustainable development,” he said. 

According to Domingo, the institutionalization of such framework is very important given that developing countries comprised mainly of SMEs and small farmers who “are most vulnerable to market uncertainties and who would most benefit from a harmonized trading system and open and fair markets.”

Statistics show that as of 2009, there are 780,437 business enterprises operating in the Philippines. Of these, 99.6 percent are micro, small and medium enterprises (MSMEs) and the remaining 0.4 percent are large enterprises. In addition, MSMEs generated a total of 3.6 million jobs in 2009 as against 2.1 million for large enterprises. This indicates that MSMEs contributed almost 63.2 percent of the total jobs generated by all types of business establishments that year. MSMEs account for 25 percent of the country’s total exports revenue. It is also estimated that 60 percent of all exporters in the country belong to this category. MSMEs are able to contribute in exports through sub-contracting arrangement with large firms, or as suppliers to exporting companies.

Small farmers, meanwhile, mainly comprised the Philippine agricultural sector. The agriculture sector accounts for about 35 percent of total employment, but only contributes 15 percent of gross domestic product in 2009.

Another area gaining more relevance for developing countries like the Philippines is “food insecurity”. Domingo called on WTO member-countries to craft agreements and policies “that will provide support system to its farmers including an appropriate trade and non-trade policy environment that is conducive for their survival, and for food security.”

“While food aid and trade play roles, there is no substitute to bringing investments back to developing countries for productivity and greater production to meet the ever growing demand for food,” he said.

In the same meeting, Domingo underscored the Philippines’ commitment to ensure the functioning and sustained enhancement of the multilateral trading system. “In a time of global economic uncertainty, we should remain committed to resist taking protectionist measures and continue to take action that is consistent with the rules and disciplines of the system,” he said.