Scoping Study on Market Access Gaps of Preferential Trade Programmes in the Commonwealth

Micro, small and medium enterprises (MSMEs) form the backbone of economies across Commonwealth member countries, accounting for the vast majority of businesses and representing major sources of employment and entrepreneurship. Yet despite their economic significance, MSMEs remain chronically underrepresented in international trade. For many, particularly those operating in small and vulnerable economies with limited domestic markets, access to external markets is essential to expand production, benefit from economies of scale, and sustain growth.

Preferential trade programmes, which reduce tariffs and other market-entry barriers, offer a critical pathway for MSMEs in developing countries to access high-value export markets. Yet utilisation rates remain highly uneven: in 2024, rates of GSP preference utilisation among Commonwealth developing countries ranged from as low as 3.2 per cent in Kenya to over 97 per cent in Tanzania, Zambia, and Malawi — a disparity that points to deep structural barriers preventing many MSMEs from fully capitalising on available opportunities.

In 2026, TULIP was commissioned by the Commonwealth Secretariat to undertake a scoping study examining the market access challenges and barriers that prevent MSMEs in Commonwealth developing countries from fully utilising preferential trade programmes. The study covers a broad range of preferential schemes available to Commonwealth exporters, including the UK’s Developing Countries Trading Scheme, the Generalised System of Preferences (GSP) offered by the EU, and similar schemes offered by other developed and emerging economies, such as the United States, China, and India (via its Duty-Free Tariff Preference Scheme for LDCs).

The study maps the preferential trade programmes available to Commonwealth exporters, distinguishes between intra-Commonwealth and broader trade arrangements, and analyses available data on utilisation rates across different programmes and country contexts. A central focus is identifying the principal barriers that prevent greater uptake, including limited awareness of available programmes, complex eligibility criteria and rules of origin requirements, high administrative and compliance costs, stringent sanitary and phytosanitary and technical standards in export markets, and constrained access to finance and insurance. Particular attention is paid to the challenges faced by MSMEs in small and vulnerable economies, including least developed countries (LDCs) and small island developing states (SIDS), where administrative capacity and resources are most limited.

Building on this diagnostic work, the study identifies priority areas where MSMEs need targeted support and sets out concrete recommendations for initiatives and programmes the Commonwealth Secretariat can undertake to help MSMEs benefit more fully from existing and future preferential trade opportunities. The final output is an analytical report that will inform the Commonwealth Secretariat’s programme design and capacity-building agenda in trade and MSME development.