Alibaba Group Executive Chairman Jack Ma is urging G20 nations to set up digital free trade zones that would enable small businesses worldwide to bypass complex regulations and protectionist trade policies that hinder global commerce.
“In most countries SMEs contribute more than 50 percent of GDP and an even higher percentage of employment,” said Ma this week at the St. Petersburg International Economic Forum, a three-day international conference on economic issues confronting Russia and the world.
Yet SMEs are shut out of global markets by obstacles such as complex regulations and market-entry regimes that only large companies can navigate, as well as a lack of access to financing, he said. “Over the past 20 or 30 years, financial systems were designed for the 20% of companies that are big multinationals, leaving 80% of businesses with no space to grow,” Ma said.
During two appearances at the St. Petersburg forum—Ma participated in a panel discussion and gave a speech—China’s most visible internet entrepreneur said he wants to reduce barriers by establishing what he calls the Electronic World Trade Platform (eWTP), a web-based body driven by small businesses that he envisions as a successor to the World Trade Organization.
“The WTO did a wonderful job in past years, and I think globalization is good,” he said. But the WTO has failed to make progress for many years because of conflicts among member governments and multinational corporations, many pushing protectionist trade agendas.
“We cannot wait for the government negotiation, let’s do something simple and easy to move things ahead,” he said. This would include not only the establishment of the eWTP but also setting up a digital version of the fabled Silk Road trade routes between Europe and Asia.
Ma wants to create a global online trading platform replete with virtual free trade zones for small businesses. These zones would allow small businesses in one country to sell to consumers in another, without anyone having to pay import duties and with speedy customs clearance. “Imagine if SMEs could buy and sell products anywhere in the world with mobile phones and PCs,” he said.
“We should build special rules and laws to help small guys move forward,” Ma explained. “Trains have stations, airplanes have airports, boats have docks,” he said. “We need global free trade zones for small businesses, or e-hubs,” Ma said, adding that Russia would be a logical host for a hub connecting Asia and Europe.
“We recommend G20 countries to support the Electronic World Trade Platform, which should help to support a new and more open way for global trade,” added Ma, who is the chaiman of the B20 SME Development Task Force, a G20 advisory group.
During the forum, Ma spoke on a range of topics, among them ways to address the problem of a vanishing middle class around the world, and how G20 countries ought to create a new type of visa to allow entrepreneurs to travel more freely.