WITH its special provisions for small- and medium-sized enterprises (SMEs), the Trans-Pacific Partnership (TPP) agreement will boost the growth of smaller Singapore firms - but only if they are well-versed in the terms of the accord, and capitalise on the new opportunities which arise, say observers.
Association of Small and Medium Enterprises president Kurt Wee told The Business Times: "With trade barriers reduced or removed, it think that there will be better opportunities for our companies to tap into overseas markets. But it's easy to say that on paper; what's very important is that our SMEs follow through - go and rough it out, and compete for a piece of overseas domestic markets.
"That's going to be quite key. The action plans that our SMEs take are going to be much more important than the TPP or whatever trade agreements that are signed."
Touted as the biggest trade deal in history, the TPP is significant not just for its size - 12 countries are involved - but also for its special provisions for SMEs.
Nestled amongst the agreement's 30 chapters is one on Competitiveness and Business Facilitation, which aims to help the TPP reach its potential to improve the competitiveness of the 12 participating countries, and the Asia-Pacific region as a whole.
In particular, the chapter states that a Committee on Competitiveness and Business Facilitation will look at "ways the TPP can further enhance competitiveness, including enhancing the participation of micro, small- and medium-sized enterprises in regional supply chains".
Minister for Trade and Industry (Trade) Lim Hng Kiang noted that the TPP had been "deliberately designed" to be more inclusive, so that SMEs can take full advantage of its benefits.
Guy Harvey-Samuel, group general manager and chief executive officer, HSBC Singapore, applauded such efforts to ensure that the agreement is relevant to SMEs.
"This is important as HSBC research shows only 35 per cent of Singaporean middle market enterprises currently make use of Singapore's existing free trade agreements due to a lack of internal resources. So the next step is to help educate Singapore companies on the details of the agreement and for them to understand how they can take advantage of the proposed tariff reductions, the removal of services barriers and the access to new markets and value chains - which is a role that banks can play."
After five and a half years of tense negotiations, Singapore and 11 other countries - Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, the United States and Vietnam - reached a deal for the TPP on Oct 5 in Atlanta, Georgia, US.
- Despite optimism over historic TPP, doubts persist
- BT Explains: Breaking down trade barriers
- Editorial: Some promise, but it's not over till it's over
- Singapore seen being able to fulfil minimum wage requirement
- A long road ahead for newly minted TPP
- TPP: a breakthrough, yes - but still far from a done deal