World trade receives a pretty bad press these days… You might have heard the line that international trade is bad news for workers; that it destroys local communities; or that it degrades our planet. Politicians on the campaign trail often claim that trade deals are simply a tool to help big companies at the expense of the man on the street. And all the while no one speaks up for the benefits of international commerce. So it’s no wonder that public opinion on trade is souring in many countries around the world.
We think it’s time to set the record straight.
We’re not going to tell you that the global trading system is perfect. We too think there is scope for positive change to enable trade to better serve the needs of families across the world.
But it’s only right that any debate on the role of trade in today’s economy is balanced and evidence-based. Policies based on myth, hearsay or political hyperbole rarely work out well. Take protectionism: sheltering industries from global competition might sound like a good idea, but evidence shows that it creates real hardship in the long run.
It might not be popular to say it but trade matters. In fact it matters today more than ever. We want to show you why… by quoting seven hidden gems of Belgium to whom trade matters.
If you think trade doesn’t matter to SMEs, think again…
Small- and medium-sized enterprises (SMEs) are the backbone of the world economy. Globally 95% of enterprises are SMEs, representing around 60% of private sector jobs. In Europe, official estimates suggest that SMEs play an even greater role in promoting employment and social cohesion—providing two out of every three jobs in the private sector.
Air-English (Saint-Hubert, Belgium)
Air-English is a small enterprise active in language services for the aeronautics industry. We have developed an exclusive methodology of language assessment for pilots, air traffic controllers, technicians and ground crew.
WHY TRADE MATTERS TO US
“More than 7,000 candidates all over the world are already certified by Air-English. By offering exam locations in over 10 countries, we have extended our reach to aviation professionals worldwide and offer them a language assessment that is tailored to their professional reality.”
Frederic Colson, CEO
Bio-X Diagnostics (Rochefort, Belgium)
Bio-X Diagnostics is a biotechnology company specializing in the development, production and marketing of diagnostic kits for diseases of livestock.
WHY TRADE MATTERS TO US
Export activities make up 80% of our turnover. The Belgian market is too small to allow Bio-X Diagnostics to survive and develop properly. This is why our company attaches such importance to ensure its visibility in the European Union and at the international level in countries such as China, Japan, Turkey and the United States.
Annita Ginter, CEO
Cibo (Tildonk, Belgium)
Cibo is a solution-driven provider of technical abrasive materials with unique expertise in the machining and finishing of stainless steel, aluminum and high quality titanium and cobalt alloys.
WHY TRADE MATTERS TO US
Growing export sales enabled Cibo to evolve from only a converter to a producer of high quality technical abrasives. We are now able to supply many new key accounts and focus on new markets. These additional sales have led us to establish a sales organisation in the United States and the construction of a new high-tech production facility based in Flanders.
Dominique Gilles, CEO
Herman Headwear (Wellin, Belgium)
Herman Headwear is a Belgian and international headwear specialist producing a variety of hats, caps, bonnets and accessories. Established over 140 years ago, we offer an incomparable range of headwear for all seasons.
WHY TRADE MATTERS TO US
Herman Headwear is already well established in Europe and in 2015 began sales to the United States and Canada. As Belgium has a temperate climate and a minority of headwear users, internationalization is essential to us to cater to countries with distinct seasons and where the culture of wearing hats and caps is more prominent.
Targeting our potential customers is essential for our business development. With its vast territory of different climates, a culture of headwear and 320 million potential heads to cover, the United States responded to our development expectations.
Alexandre Herman, CEO
Kabelwerk Eupen AG (Belgium)
Kabelwerk Eupen AG is an independent leading European manufacturer of power and telecommunication cables with more than 100 years of experience in cable production. We employ 850 people in our production facilities for cables, pipes and foam in Belgium.
WHY TRADE MATTERS TO US
The only way to steadily grow our business was to export to surrounding countries and worldwide. Our location in Eupen, in the heart of Europe, combined multilingual staff, has facilitated our international development. Our wide product range and focus on niche markets and products in a global market have built a very solid business base for our company.
Mike Goblet, Executive VP Sales & Marketing
Karl Hugo (Amel, Belgium)
Since 1970 Karl Hugo has been designing and manufacturing customized industrial machinery and production lines, for industries including steel, chemistry, energy, medical, glass, plastics, food and mining, for a wide range of companies in Europe, the Americas and Asia.
WHY TRADE MATTERS TO US
Even for a small-sized mechanical engineering company like ours, the Belgian market is too small to carry the necessary demand in terms of volume or to meet our production capacity. Without the benefits of global trade, our company wouldn’t have blossomed the way it has over the last 15 years, and we wouldn’t have developed our market and technical knowledge to the extent that we have. For the Belgian industry, exporting is not a luxury but a matter of survival.
Bernd Hugo, CEO
Lupulus (Bovigny, Belgium)
The brewery Les trois fourquets produces, conditions and sells the craft beer “Lupulus”. Based in Courtil, Belgium, the company employs 15 people and was founded in 2007 by Pierre Gobron.
WHY TRADE MATTERS TO US
Our brewery exports more than 60% of its global production, with Italy and France being the main markets. International trade has become essential for us. Though sold and produced locally, our beer has a strong appeal to foreign clients. International trade has helped advance business development with revenue from foreign sales allowing us to finance new material, hire personnel and invest in research to improve our products.
Pierre Gobron, CEO
What you might have heard…
You may be familiar with the argument that trade agreements only benefit big businesses. The idea goes that small firms lose out to multinational companies when markets are opened up to international competition—destroying local industries and shifting good jobs to other countries.
But is this really the case?
The available research paints a very different picture…
Evidence from a broad range of sources suggests that exporting can provide a huge boost to SME growth. One recent study showed that small businesses that trade internationally on average grow more quickly, pay better salaries and create more jobs.
It’s also important to understand the symbiotic relationship between big and small firms in today’s global economy. Around 80% of global trade occurs in global value chains coordinated by multinational companies, but close to half of “added value” within these chains is contributed by local SME suppliers. So when you think of big global brands like Unilever or Walmart, remember that their supply chains contain a huge number of small businesses supplying a vast array of components, products and services.
The contribution of small businesses to global value chains doesn’t seem to be accurately captured in international trade statistics at the current time. Estimates for the United States show that the export share of SMEs increases from approximately 30% to more than 40% when valued added exports are taken into account. This means that trade matters more to SMEs than official data might at first suggest.
What can we do to tap into the potential of trade?
Despite their growing presence in global value chains, SMEs still often face significant barriers when it comes to accessing global markets.
SMEs often lack the time, budget and in-house expertise to deal with trade roadblocks. Studies show, for instance, that many small businesses are discouraged from trading internationally as a result of complex paperwork and unnecessary bureaucracy at borders. What’s more, an increasing number of SMEs are held back from exporting by difficulties accessing cost-effective finance.
All this means that there is huge potential to use trade agreements and other policy levers to enable new waves of SME trade. The G20 group of leading economies has long acknowledged the need to support and empower small businesses: now is the moment to turn words into action…
