Marion Jansen, Chief Economist, ITC Bruegel, Brussels, November 9, 2016

SME Competitiveness Outlook 2016 Focus on standards and regulations Comprehensive analysis Global thought leader insights Case studies New econometric findings Guidance for SME managers 5 Point Action Plan for Policy Makers How to think strategically about standards: Regional snapshots

Why is this report relevant for decision makers in the EU Anything grown, produced or trade is subject to standards Competitiveness of EU SMEs matters for distribution of gains from trade within the EU: NTMs EU exporters face matter: SMECO NTM findings are relevant Consumer protection, environmental and social sustainability matter for EU consumers: 5 point action plan in SME Competitiveness Outlook (SMECO) 2016 is relevant SMECO regional snapshots and country profiles provide info on where to invest and from where to source

EU exporters face challenges

Standards are not only set in industrialized countries

Regulatory burdens hit small firms twice as hard as large firms

Burdens are mainly linked to procedural obstacles

Importers face challenges when sourcing from the EU Quality of national technical infrastructure matters

EU consumers demand “good” trade

Standards are in demand … but meeting standards is costly …

Private versus and governmental standards Exploit synergies between the two

Being part of an IVC reduces costs for SMEs But only the most competitive SMEs manage to enter IVCs

Meeting the standard to trade EU SMEs Sourcing from partner countries EU regional integration Role for EU technical assistance???

The EU and the 5 point action plan 4. Strengthen Governance (free flow of goods within single market) Joint EU standard setting: Through CEN and CENELEC EU national standard setters represented in EU bodies Mutual recognition for products not subject to EU harmonisation legislation within single market

Where to invest and from where to source (examples)

Asia Pacific Still unexploited export potential in IT and electronics Chemicals are promising avenue for export diversification (21% of the top 200 products are in this sector) International management and quality standards well adopted in large economies like China and India, but several other economies in region are lagging behind Shift from electronics/IT to chemicals will imply shift from compatibility standards to consumer protection standards.

Sri Lanka Still unexploited export potential in tea, textiles and rubber-based products Processed food and chemicals are promising avenues for export diversification International management standards relatively well adopted. Immediate business environment strong regarding regulatory aspects. Processed food and chemicals are among most regulated sectors. Role of consumer protection standards potentially important in future.

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