1. APEC Ministers and their representatives responsible for SMEs from: Australia; Brunei Darussalam; Canada; Chile; the People's Republic of China; Hong Kong, China; the Republic of Indonesia; Japan; the Republic of Korea; Malaysia; Mexico; New Zealand; Papua New Guinea; Peru; the Republic of the Philippines; Russian Federation; Singapore; Chinese Taipei; Thailand; the United States of America; and Viet Nam gathered during 28-29 September 2006 in Hanoi, S.R. Vietnam for The Thirteen APEC Ministerial Meeting on Small and Medium Enterprises (SMEs).

2. The meeting was also attended by the Executive Director of the APEC Secretariat, the APEC Business Advisory Council, official observers: Pacific Islands Forum and ASEAN Secretariat. The Women Leaders' Network and the Organization for Economic Cooperation and Development attended as invited guests.

3. The policy theme of the meeting was "Strengthening SME Competitiveness for Trade and Investment" in line with the Vietnam's APEC 2006 theme of "Towards a Dynamic Community for Sustainable Development and Prosperity". Ministers aimed to identify the best policies and entrepreneurial practices to strengthen SMEs competitiveness for trade and investment in the APEC community.

4. In supporting the APEC 2006 theme, Ministers agreed that it is important for the APEC's SME activities to contribute to ongoing progress intended to build one economic community in the Asia-Pacific region, as instructed by APEC leaders.

5. Prior to the formal plenary sessions, Ministers had a separate retreat session to share experiences and views on various aspects of increasing SMEs' competitiveness for trade and investment. There were practical discussions and a meaningful exchange of views by the Ministers on policy issues affecting SMEs within APEC.

The Hanoi Declaration on Strengthening SME Competitiveness for Trade and Investment

6. Ministers adopted the attached "Hanoi Declaration on Strengthening SME Competitiveness for Trade and Investment" and agreed to give effect to it, where practicable, in their economies.

7. Ministers directed SMEWG members to ensure that they more effectively share experiences, undertake high quality research and formally communicate best practice in the areas of enhancing SME competitiveness for trade and investment. Proposed focal areas for SMEWG consideration are: innovation and cluster development; incubation and entrepreneurship development; rules and regulations; financing; and capacity-building in supply chain management.

8. Ministers welcomed the SMEWG's leadership of the APEC Private Sector Development Agenda. They affirmed the importance of a supportive business environment for SME growth. They noted that, based on the priority areas identified at the Montreal Symposium, the SMEWG is committed to holding capacity-building workshops where member economies can share best practices and discuss how to best achieve improvements in the business climate of their respective economies. The first of these workshops is to be held in Hobart, Australia in March 2007.

9. Ministers welcomed the submission by 13 member economies of the Daegu Initiative's innovation action plans. As 2006 is the first year of its implementation, Ministers encouraged more member economies to participate in this project.

10. Ministers noted the efforts of the APEC SME Innovation Center to form a collaborative network among its members by conducting its comparative study on APEC innovation policies in order to more effectively disseminate best practices of SME innovation policies such as Korea's innovative portal spi-1357 system.

11. Ministers supported the APEC SME IPR Initiative and encouraged best practices in IPR laws and enforcement. The Initiative, together with greater awareness and knowledge of IPR will form key elements in the encouragement of both innovation and entrepreneurship. The Initiative will be implemented on a voluntary basis.

12. Ministers supported the SMEWG's contribution to the important work on pandemic preparedness by welcoming the USA guide entitled "Pandemic Preparedness Planning and Implementation for Small Businesses". Ministers shared their economies' pandemic preparedness efforts and noted that an APEC pandemic preparedness for small business checklist will be developed before their next meeting. Ministers emphasized the importance of preparedness and mutual cooperation between member economies in reducing the negative effects arising from disasters.

13. In recognition of the cross-cutting nature of the APEC SME process, Ministers reaffirmed the importance of coordinating APEC efforts and activities of SMEs across all fora as outlined in the 2004 "APEC SME Coordination Framework." The main objective of the framework is to direct related efforts and activities towards promoting the growth and competitiveness of APEC SMEs. Ministers were informed of progress made to forward the goals of the APEC SME Coordination Framework.

14. Ministers encouraged the SMEWG to focus its efforts and play a more proactive role in facilitating APEC members to share lessons learned in implementing business environment reforms, particularly those that enhance SME competitiveness for fair trade and investment. In doing so, the SMEWG will enhance its stature as the focal group that collaborates intensively with related APEC fora, and is responsible for identifying and disseminating APEC-wide measures and good practices towards the creation of a business environment conducive for trade and investment, particularly for SMEs and micro-enterprises.

15. SME Ministers encouraged further collaboration between APEC SMEWG and the APEC Finance Ministers' Technical Working Group. Ministers noted the outcomes of the Conference on "Strengthening support and cooperation for the development of APEC SMEs", which was held on 27 July 2006, in Ha Noi, Viet Nam, under the chairmanship of Industrial and Commercial Bank of Vietnam. Ministers welcomed development of future activities to be taken by MOU signatory institutions to create better financing and enhancing further development of SMEs.

16. Ministers received the recommendations by the SMEWG Chair to improve the management of the SMEWG. Changes will include streamlining the meetings' agenda and having new chairing arrangements to ensure the chair's continuity and responsibility for the agenda.

17. Ministers asked the SMEWG to complete its consideration of the other recommendations in the independent reviewer's report on the SMEWG, and to agree how to deal with each of them before the end of its 24th meeting in Hobart, Australia.

Co-operation and Collaboration with Related Organizations

18. Ministers encouraged the SMEWG to continue its cooperation with the OECD through sharing of information and research results (e.g. the seminar on global value chains to be hosted by Japan in May 2007). Ministers welcomed progress made in the joint APEC-OECD project that aims to identify the key barriers to SME access to international markets (as perceived by governments and by SMEs), to describe best practice programmes, and to develop appropriate policy responses and other cost-effective initiatives to address barriers. Ministers encouraged economies to actively consider and pursue the recommendations that emerge from that exciting project.

19. Ministers also thanked participation by and contributions from related organizations and business societies such as the APEC Business Advisory Council (ABAC), Women Leaders Network (WLN), and Pacific Economic Cooperation Council (PECC) and noted the importance of the private sector perspectives and contributions to advance APEC's SME work.

20. WLN submitted the results of the 11th WLN Meeting held September 19-22 in Hanoi. The theme of the meeting was "Towards a Dynamic Community - Enhancing the Competitiveness of Women Businesses for Sustainable Development and Prosperity." The WLN submitted recommendations in line with the theme of the meeting. The SMEWG was asked to review the WLN recommendation, and to give them due consideration in the development of work plans and objectives for 2007.

21. Ministers recognized the importance to assist those SMEs and micro-enterprises in local cultural industries that have high potential but lack a channel to conduct export. They considered the holding of virtual expositions as one of effective ways to adopt e-commerce to promote international trade and enhance the capability of SMEs and micro-enterprises on exploring new business opportunities in overseas markets. In the same line, Ministers also encouraged APEC member economies to make effort toward local products promotion through holding related seminars.

APEC SME 2007 Theme and Sub-Themes

22. Ministers noted that the APEC SME 2007 theme is to be "Enhancing the business environment for SMEs" with three Sub-themes:

23. Ministers also took note that the next SME Ministerial and related meetings will be held in Tasmania, Australia from 4-9 March 2007.