Free trade focus overlooks lack of SMEs exporting, says export group

Australia is having the wrong debate about trade and more focus needs to be put on the small number of SMEs which are exporting, according to the Export Council of Australia (ECA).

“Trade agreements, like the TPP-11, are only as good as the companies using them. If we’re serious about boosting economic growth through trade, then trade agreements are only part of the answer. The priority must be to address the lack of SMEs in export,” said Heath Baker, head of policy at ECA.

The ECA has released its trade policy recommendations for 2018. The recommendations focus on how to encourage more SMEs into international trade.

“Australia is well behind OECD averages when it comes to both its export intensity and the contribution SMEs make to overall exports,” explained Baker.

Australia’s export intensity (its export value to GDP) is 21 per cent compared to an OECD average of 28 per cent. In G7 economies, SMEs account for around 25 per cent the value of goods exports—but SMEs only account for 14 per cent of Australia’s export value.

“Boosting Australian SME exports to the same levels as G7 countries would add around $36 billion to Australia’s GDP. There’s no reason Australian SMEs shouldn’t export at the same rates as American, British or Canadian SMEs,” said Baker said.

“Australia’s future prosperity can only be guaranteed by an economy that is open, outward-looking and competitive,” said Dianne Tipping, Chair of the ECA. “But there are simply too few Australian SMEs involved in international business. Today’s SMEs are tomorrow’s big businesses—encouraging more SMEs into trade now will strengthen Australia’s economy in the future.”


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