Technical Assistance II
As Indonesia engages in regional and global economic integration through Regional Trade Agreement (RTA) negotiations, it is imperative to consider the impact on MSMEs and the potential benefits they could gain from an enabling trading environment. This is because MSMEs are the backbone of the Indonesian economy, where they represent 99% of Indonesian businesses and generate more than 50% of GDP. MSMEs in Indonesia create 92% of jobs for low-skilled workers, and offer opportunities for women in rural areas. By supporting the growth and sustainability of MSMEs, Indonesia can tackle unemployment challenges and promote inclusive economic development.
Incorporating specific provisions that address the needs of MSMEs in the various chapters of the RTA is essential. One important step before signing an FTA is to conduct sustainable impact assessments, as seen with the EU CEPA. These assessments help identify potential negative impacts and guide the inclusion of provisions to mitigate them. Such provisions may encompass measures to simplify trade procedures, reduce regulatory burdens, and enhance access to markets for MSMEs. Furthermore, capacity-building initiatives, such as training programs and financial support, can empower MSMEs to navigate the complexities of international trade.
Those key takeaways are taken from the capacity-building session on Non-Tariff Measures (NTMs), Trade Reform, and Sustainability. The session focused on MSME Provisions in Trade Agreements and was organized with the support of ARISE+ Indonesia. The workshop, held on February 16, 2024, brought together trade negotiators and analysts from the Directorate of World Trade Organization Negotiation and the Ministry of Trade, as well as policymakers from relevant ministries and agencies, including the Ministry of Women's Empowerment and the Ministry of Cooperative and MSME.
The Director of WTO Negotiation, Ministry of Trade, Mr. Wijayanto, said that the discussion is critical to understand the changing dynamics that shape MSMEs' integration into the global market.
"Exploring the current landscape will undoubtedly provide valuable insights into how we can improve the support system for MSMEs and encourage their active participation in international trade. By identifying actionable strategies, I hope we can empower MSMEs to tackle challenges related to NTMs and promote sustainable trade practices," said Mr. Wijayanto.
