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Is free trade for SME's an opportunity or threat?

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SMEs (Small and Medium Scale Enterprises) often seem small compared to large groups, and this makes them less efficient and less competitive. Similarly, their products also appear more artistic, and sometimes of lower quality.

Nevertheless, several SMEs have managed to establish themselves across the world. Though their situation is admittedly difficult, they seem more prosperous today. In recent decades, the global economy and the European economy have strengthened international competition. This has affected companies with an export profile, and companies targeting the domestic market as well. Some of the drivers behind the growing internationalization of SMEs have a firm base politically, technologically and economically.

In general, the WTO is dedicated to liberalizing the conditions under which international trade takes place. In Europe, several factors like tighter integration, a continual expansion of the European market, general trends of liberalization, and deregulation have effectively created a single market. The old barriers to trade have been deleted, or are in the process of being deleted. A more efficient market for the benefit of consumers is emerging.

Technology has dramatically improved access to information and communication, and this has enabled geographical dispersion of production. It should also be added that transportation has become more efficient and cheaper, for both goods and people. Political changes and declining transport costs have led to the establishment of a production structure that is more internationalized, and a new situation of global competition will soon be the sight of the day.

The companies involved in free trade are generally companies that market niche products technically and historically have acquired expertise in manufacturing the product.

Survival against the big business goes first by choosing more efficient products. Some of them will find no cost to initiate projects to develop innovative new products, therefore the specialization of SMEs is a major asset.

Going international appears to be a necessity since these markets represent opportunities that must also be sought from outside, Europe itself is not enough. This explains the huge share of export turnover of the European SMEs.

Tags: SME'e; free trade-threat or opportunity; Europe markets

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