Expanding Trade Under a Free Trade Regime: Issues related to Market Access

Abstract

Market Access issues are increasingly gaining importance due to their revival in the Doha Ministerial Declaration (DMD). Since 2001, the EU has adopted the everything but arms (EBA) initiative to allow developing countries increased access to its markets. The policy is expected to benefit poorer countries with increased volume of trade. Since a large number of exporters from developing countries belong to small and medium enterprises, the premise of this paper is to understand the impact of the EBA initiative on increased market access for small and medium sized enterprises. This paper analyzes four selected export industries of Bangladesh: leather, knitwear, pharmaceutical and the shrimp processing industry and their export to five EU countries: UK, France, Italy, Germany and Spain. Four categories of barriers were studied in this paper and in-depth interview techniques with top executive from 20 different companies were utilized. Each of these interviews took several days. Based on the responses, the paper shows that technical barriers to trade are the major stumbling blocks for the SMEs in Bangladesh. In most cases, cost of compliance, inadequate technical skills and instructional weaknesses are major problems. Among other types of barriers, the second most important one in term of market access is related to customers and administrative procedures for customers valuation, classification, formalities, and rules of origin. Therefore, the World Trade Organization (WTO) should address these market access issues explicitly from the perspective of small and medium sized enterprises.