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2.4. Policy measures to reduce external barriers
External barriers are intended as barriers stemming from the home and target business/host environment
and include (OECD, 2008, 2013):
i. Procedural Barriers: barriers associated with the operating aspects of transactions with foreign
customers;
ii. Governmental Barriers: Barriers associated with the actions or inaction by the home and foreign
government in relation to its indigenous companies and exporters;
iii. Customer and Foreign Competitor Barriers: Barriers associated with the firm’s customers and
competitors in foreign markets, which can have an immediate effect on its export operations;
iv. Business Environment Barriers: Barriers associated with the economic, political-legal and socio-
cultural environment of the foreign market(s) within which the company operates or is planning
to operate;
v. Tariff and Non-tariff Barriers: Barriers associated with restrictions on exporting and
internationalising imposed by government policies and regulations in foreign markets.
2.4.1.Policies related to governmental and regulatory barriers
Many of the external barriers are related to rules and regulations controlled or managed by foreign
governments. Some of the primary tools to address these barriers are active engagement in multilateral
and bilateral negotiations, recourse to international legal proceedings to resolve disputes, and trade
advocacy. As outlined in Section 2.3, policies to overcome these external barriers can take the form of an
encompassing global strategy, aiming at securing favourable terms of access to markets, as in the above-
mentioned case of Canada’s Global Commerce Strategy (Box 2.1), or rather take the form of targeted
policies, which recognise that external barriers to SME export may differ significantly by area or country.
In the case of New Zealand’s strategy, for instance, key economic markets have been identified as having
particular potential for the country’s global relations and trade opportunities, namely China, India, US,
Australia, EU, Middle East and ASEAN, and specific strategies for each market have been developed.
Negotiation between governments represents a crucial step to ease governmental and regulatory barriers.
In recent times, the establishment of regional trade agreements (RTAs) has been a common trend across
the geo-political space. Typically RTAs not only reduce and/or eliminate tariffs, but also entail other
commitments, including government procurement, arrangement of business conditions for investment, or
the protection of intellectual property rights. In this perspective, they can facilitate closer cooperation and
continuous exchange between public officials from the countries involved. As a case in point, the Free
Trade Agreement (FTA) between New Zealand and China, entered into force in October 2008, as the first
FTA between China and an OECD member country, not only liberalises and facilitates trade in goods and
services, but also promotes the cooperation between the two countries in a broad range of economic areas
(Box 2.2).