Small and medium-sized enterprises (SMEs) are the backbone of economies around the world. In developing countries alone, they employ more than 70% of the population and contribute over 30% of GDP. Yet despite their central role in driving growth, innovation, and livelihoods, SMEs continue to face significant barriers to participating in global trade.
On 14 January 2026, Cowater International convened trade and investment specialists from across its portfolio to explore these challenges and, importantly, the practical solutions that can help SMEs better compete in international markets. The webinar, Levelling the Playing Field: SMEs and the Future of Global Trade, brought together insights from programmes operating across Africa, the Middle East, Latin America, and the multilateral system.
From policy to practice: why SMEs struggle to trade
A central theme of the discussion was that while trade agreements and policy reforms are necessary, they are rarely sufficient on their own. SMEs often struggle to benefit from global trade rules due to a combination of high trade costs, complex customs procedures, limited access to finance, and challenges meeting international standards and certification requirements. These constraints are often compounded by weak digital infrastructure and limited access to timely, reliable market information.
As Don Stephenson, Trade and Investment Director with the Expert Deployment Mechanism for Trade and Development (EDM), emphasized, SMEs are frequently expected to compete internationally within systems that were never designed for their scale or capacity. For many small firms, the challenge is not a lack of ambition, but the cumulative weight of costs, procedures, and uncertainty associated with exporting.
Panelists emphasized that these barriers tend to reinforce one another and disproportionately affect women-, youth-, and disability-led enterprises. Without targeted support, SMEs can find that the cost and complexity of exporting outweigh potential gains, even in markets where preferential access exists.
Making trade agreements work for SMEs
Speakers stressed that trade agreements only deliver impact when SMEs are able to understand and use them. Many SMEs remain unaware of available trade preferences or lack the technical knowledge required to comply with rules of origin, sanitary and phytosanitary standards, and customs documentation. Long-term, hands-on advisory support is therefore critical to translate trade policy into tangible business opportunities.
Alicia Greenidge, Geneva Lead, TAF2+, funded by the Foreign, Commonwealth and Development Office, underscored that signing an agreement is only the first step. In practice, SMEs need hands-on, step-by-step guidance to translate trade commitments into real business opportunities. Without sustained advisory support, the benefits of trade agreements often fail to reach smaller firms.
Effective programmes focus not only on negotiation and reform, but also on implementation: supporting governments, business associations, and SMEs themselves to operationalize agreements in ways that reduce risk and build confidence.
Information as a catalyst for inclusion
Access to accurate, actionable information emerged as one of the most powerful enablers of SME participation in trade. Panelists noted that SMEs often fail to enter new markets not because opportunities do not exist, but because they lack clear guidance on regulations, standards, buyers, and logistics.
Nassim Nour, Team Leader of the Tasdeer programme, funded by the Foreign, Commonwealth and Development Office, highlighted that SMEs are willing to take calculated risks when they have the right information. When businesses have access to timely, trusted market intelligence, they are far more likely to invest, export, and grow. In this sense, information is not a “soft” intervention, but a core competitiveness tool.
Providing accessible trade and market intelligence — including digital tools, advisory services, and early warning systems — helps SMEs make informed decisions and respond more effectively to market shifts. In this sense, information is not a “soft” intervention, but a core competitiveness tool.
Designing trade support that is truly inclusive
Inclusive trade does not happen automatically. The discussion highlighted the importance of embedding gender equality, youth inclusion, and disability considerations into both trade policy and programme delivery. This includes addressing emerging “digital non-tariff barriers,” such as online harassment, cyber risks, and unequal access to digital platforms, which can deter women entrepreneurs from engaging in e-commerce and cross-border trade.
Nadira Bayat, Team Leader of the Facilitating Inclusive, Resilient and Sustainable Trade (FIRST) programme, funded by Global Affairs Canada, stressed that inclusion must be built into policy and programme design from the outset. When inclusion is treated as an add-on rather than a core objective, structural gaps for women, youth, and marginalized entrepreneurs tend to persist.
Panelists also underscored the value of multi-stakeholder dialogue, bringing together governments, SMEs, financial institutions, and civil society to design solutions that respond to real-world constraints.
Flexibility, resilience, and partnerships
In fragile and conflict-affected contexts, flexibility is essential. SMEs are often among the first economic actors to respond during crises and early recovery, yet they are also the most vulnerable to shocks. Blended approaches — combining technical assistance with cost-sharing, risk mitigation, and access to finance — can help SMEs adapt and remain viable.
Drawing on experiences across multiple regions, Don Stephenson noted that rigid programme models are poorly suited to volatile environments. SMEs require support mechanisms that can adapt as political, economic, and market conditions change.
Collective action also plays a critical role. Clustering, shared services, and business-to-business networks allow SMEs to overcome scale constraints, while diaspora networks can provide access to markets, investment, and mentorship.
Looking ahead
The webinar concluded with a strong reminder that SMEs depend on a predictable, rules-based global trading system. In an era of growing fragmentation and protectionism, multilateral institutions and development partners remain essential in ensuring smaller economies and enterprises have a voice.
As Don Stephenson observed, “Certainty is one of the most important objectives of trade agreements.” While tariff preferences can offer advantages, panelists agreed that predictability and confidence in the stability of trade rules are often more critical for SMEs planning investments and long-term growth.
Cowater International will continue this conversation in the coming months in its next webinar discussing its latest research publication, Putting Trade and Development Objectives into Practice: Lessons Learned and Policy Implications from Canada’s Expert Deployment Mechanism for Trade and Development (EDM).
Watch the full webinar here:
