WE ARE sitting at a crossroads of change in global trade, one that is expected to usher in a golden era for Asia's small and medium enterprises (SMEs). The Trans-Pacific Partnership (TPP), initiated during the global economic downturn in 2009, finally concluded in October among12 Pacific Rim nations - Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam, and the United States - encompassing close to 40 per cent of the global economy and a third of the world's trade.
Although it has taken more than five years to complete, and is pending ratification by national parliaments, the free trade agreement is expected to open up new opportunities for both big and small companies looking beyond their home markets for growth. Special consideration has been placed on the SME sector, because they typically do not have the resources to navigate the complexities of trade regulations, or invest in physical distribution centres overseas, let alone break into dominant domestic business networks to get their product to market. All this is expected to change, with the TPP setting important policy foundations for supporting global production networks and e-commerce.
Did you know for example that today's preferred SME suppliers are no longer competing on price, but on responsiveness, lead time, on-time delivery, and the ability to collaborate with lead firms to manage supply chain risk and disruption? Did you know more than half of all Asia-based online shoppers would abandon their shopping carts if they were told their shipments would take more than 11 days to arrive? And that on average Asian online shoppers are only willing to wait four days for their shipments?
These are some of the realities of the global marketplace which the TPP is well positioned to address on behalf of SMEs, many who either supply global buyers or sell direct to consumers. TPP disciplines such as time-release guarantees for express shipments; advanced rulings for classification and valuation; and self-certification of origin, are designed with the small business owner in mind, to enhance predictability, simplify border clearance processes, shorten lead-times, and improve competitiveness.
Together with the opening up of express delivery and logistics services, measures guaranteeing the flow of data supporting SME real-time, and interactive collaboration with lead firms, these new rules serve as important policy infrastructure for SME participation in global trade.
Capacity building and technical assistance are core foundations of the TPP, to help developing country members implement new policies and systems to meet the rigour of 21st century trade. In the same vein, recognising the needs of SMEs, UPS has partnered governments to help SMEs by sharing best business practices, standards, and experiences. The US-Asean Business Alliance for SME Competitiveness is one such partnership and has, since early 2014, trained more than 2,000 SMEs in the region.
There is no better time than now for SMEs to go global. To all SMEs - it's time to share with the world your day-dreams, your "ahas", your sketches, sticky-notes and ideas. Time for small to think big.
- The writer is the president of UPS Asia Pacific Region. UPS is a lead company in the US-Asean Business Alliance for Competitive SMEs and has partnered SME agencies throughout the world to help SMEs export and join global supply chains.
