Aid for Trade at a Glance 2015
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Aid for Trade at a Glance 2015

Reducing Trade Costs for Inclusive, Sustainable Growth

The Aid for Trade Initiative has allowed for the active engagement of a large number of organisations and agencies in helping developing countries and especially the least developed build the infrastructure and supply-side capacity they need to connect to regional and global markets and improve their trade performance. The new development paradigm under the post-2015 Development Agenda requires an integrated approach to ensure that the aid for trade achievement leads to inclusive and sustainable development outcomes. Embedding trade cost at the centre of the Aid for Trade Initiative provides an operational focal point for such action among a broad collation of stakeholders.
The 2015 joint OECD/WTO publication Aid for Trade at a Glance focusses on how reducing trade costs will help in achieving inclusive and sustainable economic growth. The publication contains contributions from the Enhanced Integrated Framework, the International Trade Centre, the United Nations Conference on Trade and Development, and the World Bank.
 

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Chapter
 

How aid for trade helps reduce the burden of trade costs on SMEs You or your institution have access to this content

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Author(s):
OECD

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Small and medium-sized enterprises (SMEs) represent the backbone of economic activity in both developed and developing country economies. SMEs tend to be less productive than large firms, and the productivity gap is particularly pronounced in developing countries. Evidence shows that SMEs that are integrated in global markets – whether directly or indirectly – are more productive than those that do not participate in trade. Integration into global and regional markets is thus likely to contribute to closing the productivity gap between SMEs and large enterprises, with positive repercussions on the inclusiveness of growth. SMEs suffer disproportionally from trade-related fixed costs, which create a bias in favour of large firms that find it easier to overcome fixed costs. A reduction of fixed costs to trade can therefore contribute to making trade more inclusive. Survey evidence reported in this chapter shows that costs related to access to information, access to trade finance or regulatory burdens are particularly important for private sector activity. In order to design effective solutions to reduce relevant costs, in particular those occurring at the border, collaboration between the public and the private sector is useful.

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