Benefits of the EU-Australia Free Trade Agreement: SMEs and Global Value Chains

In the past decade, Australia and the European Union (EU) have been active partners in promoting a multilateral, rules-based framework for trade. Both believe that creating a level playing field in this way is the key to enhancing nations’ opportunities to increase markets for their products, particularly for their small and medium size enterprises (SMEs). The current Free Trade negotiations between the EU and Australia are an opportunity for both parties to achieve a comprehensive agreement that sets a new benchmark for economic cooperation between key trading partners, reducing all kinds of barriers to trade.

There is concern, however, that SMEs may not take advantage of these new arrangements. Only four percent of Australian companies export at all, and most of these are larger companies. SMEs in particular struggle to export because of their limited resources. A further challenge for SMEs is that Global Value Chains (GVCs) are constantly evolving so that even if SMEs see opportunities to benefit from the Free Trade Agreement (FTA), they are unclear about how best to position their products in global markets

This means that even though European integration has led to much greater opportunities for SMEs through trade, they are not realising all their potential benefits. This project will promote an innovative approach to recognising how SMEs can use FTAs to engage with GVCs; it will develop strategies for sharing these insights with SMEs and civil society; and it will develop specific learning resources for use in universities and other adult learning environments.

Objectives

• examine the existing engagement of EU and Australian SMEs in EU-Australia trade, bringing together the evidence on how they participate in GVCs; 
• identify opportunities arising from the forthcoming agreement which will be of particular relevance for SMEs, and the implications for their productive engagement with GVCs; 
• explore the awareness of SMEs about these potential opportunities, and the implications for their engagement with GVCs; 
• collaborate with the Australian Trade and Investment Commission (Austrade), European and Australian chambers of commerce in seeking to share the new learning about the emerging trade opportunities arising from the role of the EU, and how SMEs can exploit them; and 
• develop new curriculum resources for use in business courses, enabling students and potential entrepreneurs to see the opportunities that arise from the EU and Australian trade strategies, given the dynamic character of GVCs.

People

• Professor Bruce Wilson
• Professor Bruno Mascitelli
• Professor Gabriele Suder
• Dr Chloe Ward  

Erasmus