For reasons of efficiency and equity, the consequences of
this troubling situation for smaller enterprises are of special
concern. While the rise of the internet and of express
delivery package services has created the potential for a
multitude of small companies to sell and buy all over the
world, thereby taking the efficiency-enhancing effect of trade
potentially to a new level, their involvement in trade remains
limited in most instances, and international trade continues
to be dominated primarily by the largest corporations.
According to the Financial Times (FT), at present almost half
of the revenues of companies that are part of the S&P 500
are generated internationally, compared to a little shy of a
quarter for “small-caps”, which, despite their appellation,
are actually large companies, with market capitalization
of $300 million to $2 billion. International trade is more
open and predictable than ever before, but the cost and
complexity of engaging in international trade remain far
too high and often prohibitively so for small companies.
Researchers have estimated that “trade costs”, the total
cost incurred in delivering a product from the factory door
to the ultimate consumer, including transport, customs
procedures and distribution, can easily exceed the cost
of its production, and that these “trade costs” could be
substantially reduced if customs procedures and transport
regulations were rationalized, distribution channels were
made more competitive, and protectionist standard setting
and corruption were reduced.