MANILA, PHIILPPINES – Member economies of the Asia-Pacific Economic Cooperation (APEC) must enhance the participation of small and medium enterprises (SMEs) in the automotive industry to spur regional growth, a Philippine trade official has said.

In his keynote speech on Wednesday, Trade Assistant Secretary Ceferino S. Rodolfo said globalization makes a good driver of cooperation because it enables many economies to be key players in automotive manufacturing by participating in production activities of global value chains (GVCs).

“But an economy’s participation in GVCs does not readily translate to inclusive growth. We need to deliberately foster SME participation in automotive GVCs,” Rodolfo said.

Globalized competition and barriers to trade have a disproportionate impact on SMEs as well as on larger enterprises, he said, noting however that by fostering SME development for inclusive growth, APEC economies also realize that a broad-based SME network is critical in providing support and complementation to larger enterprises.

Rodolfo further said that the development of small and medium enterprises could be a source of flexibility, nimbleness and quick reaction to emerging trends.

In short, he said, SME development is key not only for inclusive growth but also for sustaining competitive advantage.

Rodolfo also said that there are specific and tangible opportunities for APEC members to cooperate in developing SMEs in the automotive sector.

These include developing an actionable agenda on empowering SMEs to penetrate the supply chains and factory networks of automotive brand principals around the region.

He said that this can be done through the implementation of the GVC-SME for the Automotive Sector Project proposed by the Philippines and Malaysia.

The proposal is under South Korea’s umbrella project of Capacity-Building for SMEs’ Integration into Global Value Chains in Major Industries, proposed in 2014 by the Committee on Trade and Investments (CTI) during the 3rd Senior Officials’ Meeting (SOM) of the APEC.

There are also initiatives important to ensure SME participation as they involve the development of new products and of coordinating standards, he said.

These include discussions on a template for the E-Vehicle Roadmap, a deliverable of the 2015 Automotive Dialogue Working Group based on instructions of the CTI.

Trade experts value the global trade in auto parts at $1.5 trillion.

With SMEs accounting for 97 percent of firms in the APEC, experts said an integrated region necessarily requires SME participation.

The 22nd APEC Automotive Dialogue opened in Makati City on Wednesday, carrying the theme, “Integrating SMEs into the Automotive Global Value Chains.” –