A lack of protective policies in international trade means that micro, small and medium enterprises (MSMEs), particularly those in developing countries, could lose out in competition with their bigger rivals, Trade Minister Muhammad Lutfi has warned.

The digitalization of MSMEs depended on innovation and technology that developing countries like Indonesia were lacking, Lutfi said. He added that the absence of adequate international rules to regulate digital competition among MSMEs would create “victors” that might kill off small businesses and industries in emerging economies.

“The international trade system must be collaborative and fair to ensure the welfare of MSMEs,” he told the G20 Trade and Investment Ministerial Meeting (TIMM) in Sorrento, Italy, earlier this month, according to a press release from Oct. 16. He also pointed out that the gap between the abilities of developed and developing countries to support domestic agriculture and fisheries also resulted in unfair competition.

Lutfi said the G20 had a key role in pushing the World Trade Organization (WTO) to allow policy space for developing countries.

“WTO reform is an opportunity for developing countries to voice the longstanding inequalities in the multilateral trade system,” he said, and that WTO reform should prioritize the development aspects in existing agreements.

Read also: Indonesia to voice developmental concerns at WTO conference

Center of Economic and Law Studies (CELIOS) director Bhima Yudhistira said there were as yet no international trade rules to prevent predatory pricing in e-commerce, including dumping and import of goods at deliberately low prices. Big companies had a technological advantage in collecting data and marketing their products, he said.

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