Why our economies need inclusive trade
In the vibrant flea market in Apia, Samoa, bustling with eager vendors and tourists browsing stalls lined with elegant Polynesian dresses and colourful Pacific jewellery, one lady stands out. At just 27, Molly has managed to build up a lucrative business selling the dresses she designs and makes, often with fabric she prints herself in the traditional Samoan style of elei. Her entrepreneurial brilliance saw her grab the runner-up position for the prestigious 2013 Commonwealth Youth Awards for excellence in development work. But what makes Molly special is her grit, courage and sheer determination.
Earlier this year, Molly’s business was totally destroyed in a fire. For many, it would have been the end of an entrepreneurial dream. But Molly refused to give up. Instead she went through the painful process of rebuilding her business from scratch.
The Commonwealth Secretariat and the International Trade Centre (ITC) share a passion for people like Molly. We are both committed to extending the benefits of trade to countries and communities that have long languished on the margins of the global economy. This means helping businesses in developing countries – especially the small and medium-sized enterprises (SMEs) that employ most people – become more competitive and tap into lucrative international markets. It means enabling disenfranchised groups like the rural poor and refugees to connect to market opportunities beyond their immediate surroundings. And it means empowering women as equal economic actors.
ITC’s SheTrades initiative is working with governments, the private sector and civil society groups to remedy obstacles holding back women in the economy. The aim is to connect one million women entrepreneurs to world markets by 2020. Over the past two years, ITC catalysed tens of millions of dollars in commercial deals between agriculture producers in eastern Africa and Indian companies, through a project backed by the UK government.
Commonwealth trade experts have also been leading a range of initiatives to ensure that marginalised groups can take advantage of global trade opportunities. The India-Commonwealth SME association, a collaboration between the Commonwealth and the Government of India, identifies opportunities to bring LDCs into so called global value chains, which include every stage of production from conception and design through to the sourcing of raw materials, manufacturing and marketing. This is projected to increase exports from 20 LDCs by US$12 billion, while bolstering India’s export total as well.
The Secretariat’s flagship Commonwealth Trade Finance Facility, which will insure exporters against the risk of non-payment, is a critical trade enabler that is often unavailable or unaffordable to SMEs in developing countries. The initiative has the potential to give small states access to up to US$ 100 million of incremental trade finance over a three-year period.
We are keenly aware of the challenges that regions, countries and individuals still face in taking full advantage of global opportunities. We hear the concerns about emerging issues including climate change, Brexit and the formation of ‘mega regional’ trading blocs such as the Trans Pacific Partnership.
These are some of the issues that will come into sharp focus at the ITC’s flagship World Export Development Forum this week in Colombo, Sri Lanka. It is an opportunity for small and medium-sized businesses to meet potential clients and investors, share views with trade policymakers, and access support from international trade development organisations. This meeting is important because of its potential to vitalise and grow private sectors across the globe. It can contribute to reshaping international policy and practice in ways that would concretely contribute to strengthening SMEs.
It is also an opportunity for the Commonwealth and ITC to think about how we could collaborate more, and to urge financial institutions, other international organisations, governments and the private sector to work with us to lower the hurdles facing SMEs in the world economy.
Trade is inextricably linked to economic growth, but in order for it to thrive it must be more inclusive. Trade is at the heart of the recently agreed sustainable development goals; because it affects people’s ability to find decent work, to afford healthcare, access education, fund innovative ideas and address climate change. Ultimately, trade is about delivering higher incomes and opportunities for the people and families who depend on their businesses to survive. Trade is about the rice farmer in India, the tour operator in the Caribbean, the tech entrepreneur in Africa and the young clothes vendor in a Samoan market.
• Patricia Scotland, Baroness Scotland of Asthal, is the Secretary-General of the Commonwealth of Nations. Arancha González is the Executive Director of the International Trade Centre.