APEC strengthens its support for small businesses and the region’s economic and legal infrastructure by adding partners to its collaborative framework for online dispute resolution (ODR) in order to help micro, small and medium enterprises (MSMEs) resolve business disputes across borders.
The APEC ODR Collaborative Framework for Cross-Border B2B Disputes aims to resolve business-to-business cross-border disputes for global businesses, particularly small businesses, by focusing on low-value disputes. There are currently five economies participating in the framework, including China; Hong Kong, China; Japan; Singapore; and the United States.
“APEC has a role to play in assisting micro, small and medium enterprises through strengthening economic and legal infrastructure of their economies,” said Dr James Ding, the chair of APEC Economic Committee, which develops and promotes the collaborative framework.
“One of the many reasons why small businesses in APEC represent only a fraction of the region’s exports despite making up 97 percent of APEC businesses is the lack of access to quick and affordable commercial justice for cross-border transactions,” he explained. “Many small businesses avoid trading across borders altogether.”
A survey by the APEC Business Advisory Council showed the complexity of dispute resolution between different domestic regulations is a barrier to international trade and that a coherent dispute resolution framework can help ensure safe and efficient cross-border trade. The survey found that 58 percent of APEC MSMEs trading abroad, around 74 percent of them in emerging economies, lacked dispute resolution solutions.
“The collaborative framework is designed to boost business-to-business cross-border confidence by providing quick electronic resolution and enforcement of disputes across borders despite different languages and legal jurisdictions,” Dr Ding added. “Any fees charged under the collaborative framework should also be affordable and commensurate with the amount in dispute.”
Under the collaborative framework, online dispute resolution providers from the participating APEC economies may partner with the Economic Committee and join the framework by complying with the framework’s rules and procedures.
These providers must offer their own platform for online negotiation, mediation and arbitration. Once certified as being compliant with the framework, the online dispute resolution providers will be listed on the framework’s website and required to regularly report their progress to APEC.
Currently there are three providers that have been listed; eBRAM International Online Dispute Resolution Centre Limited (eBram); Hong Kong China Guangzhou Arbitration Commission (Online GZAC); and China International Economic and Trade Arbitration Commission (CIETAC). Additional providers will be listed as the initiative expands.
“We need to ensure that small businesses are empowered to trade across borders and, by leveraging this collaborative framework, the amount of time and costs spent by MSMEs in resolving disputes will be substantially reduced,” Dr Ding said. “Having this low-cost dispute resolution framework will also facilitate access to justice, enhance MSMEs’ competitiveness and create an enabling environment for businesses to thrive.”