In the growing world economy, the North can no longer rely
solely on trade led by Fortune 500 corporations. Trade must also
increase in the South if all are to bene-fit from a growing world
economy. Policy makers and businesses of all sizes must realize the
strategic importance of the developing world, not just from the
traditional sociopolitical perspective, but from the perspective of
fostering an integrated global economic framework. It is in
every-one's best interest to respond to global trends in ways that
will foster growth in all countries, including the least developed
ones.
Why? Simply put, trade between firms in developing and developed
countries provides the margin for expanded opportunities for trade
and investment. There is a mutuality of benefit in trade, an
inextricable link that contributes to economic development in all
countries. Companies that export to developing countries will
expand into new markets, reaching consumers with increasing
purchasing power. Companies importing from developed countries will
gain access to high-quality, lower-cost products that improve their
competitive edge.
Yet the question remains: How is it possible to help developing
countries while letting market forces prevail? Based on extensive
research into trends in international business conducted at
Georgetown's McDonough School of Business and on practical
experience gained at the International Trade Centre, this article
identifies issues in international trade that will affect
developing countries, outlines some initial steps taken by ITC to
help businesses and countries benefit from these global changes,
and presents an opportunity not to be missed.
The three most important dimensions are trends in globalization,
new forms of partnership and the rapid development of information
technology.
Globalization
Worldwide manufacturing and out-sourcing strategies have made
the production of goods cheaper, faster and better. To compete,
producers must be able to measure levels of competitiveness and
correct weaknesses. This requires market information, an ability to
understand and forecast demand and creativity in adapting products
and finding a market niche. These requirements add up to three
strikes against developing countries. They have serious limitations
in research and development, great difficulty in accessing trade
information and often lack sophisticated marketing skills.
Creativity and new technologies, on the other hand, present these
countries with unique opportunities to catch up with the
industrialized world. Harnessing these for the benefit of
developing countries is a collective challenge.
Competitiveness is the sine qua non of success anywhere. Yet to
become competitive, firms in developing countries must be able to
measure and evaluate their performance. ITC has therefore developed
a "competitiveness gauge" that enables firms in developing
countries to compare themselves to baseline data from manufacturers
around the world. Producers can compare their production,
organization and practices with those of enterprises in the same
sector, and know where to improve their performance.
New forms of partnership
As developing countries foray more deeply into the global
economy, intense teamwork between business and government and among
business people themselves has become imperative. Firms and
governments must bury their mistrust and communicate constructively
on strategies and collaboration. At the firm-to-firm level,
businesses must begin to share costs and lessons learned. An
emerging trend in the industrialized world is for companies to
share the costs of assets such as infrastructure, buildings,
employees, storage, transport, repairs, telecommunications systems
and the joint marketing of complementary products. Developing
countries have to find their own models for joint ventures,
value-added partnerships, strategic alliances and cooperative
agreements. These are the ways of the future where risks are shared
and partnerships rule the day.
ITC has pioneered tools for developing-country exporters that
address criteria for successful cooperation between the public and
private sectors, as well as with non-governmental organizations and
agencies such as trade promotion organizations and industry
associations. Akin to Pareto's 80:20 rule, these tools are kept 80%
the same while 20% are customized to respond to local needs, thus
achieving economy and customization in a partnership-based
approach. The Executive Forum on National Export Strategies held by
ITC in autumn 1999 provided a unique opportunity to review success
stories of partnership-based and export-led global development
strategies.
Harnessing communications
Countries without efficient telecommunications infrastructure
were long seen as doomed and excluded from benefits of electronic
commerce such as faster service and shipment, more precise order
transmittal, online interaction in the production process and
specific forecasting of supply and demand. Yet the lack of
up-to-date communication is no longer a permanent handicap. It used
to be that governments regulated and controlled communication (and
postal) services because only they could afford to. Today, the
investment required to establish a basic national
telecommunications system has fallen drastically, allowing private
firms to bring telecommunications to any country - and to do it
within two years. The question is not if, but when, developing
countries will participate in and benefit from trade based on
global telecommunications.
As developing countries become ready to participate in the new
electronic economy, ITC serves as their one-stop shop for guidance
on implementing commerce strategies. It offers advice on
cybermarketing, international purchasing, quality and logistical
aspects of e-commerce for agricultural and manufactured goods as
well as services.
Responding to needs identified through research, ITC offers
programmes that can match exporters and importers of fresh fruit
and vegetables, profile successful service-export strategies,
sponsor online exhibitions of products from developing countries
and provide answers to commonly asked questions regarding
e-commerce.
The implementation of the World Trade Organization multilateral
agreements has brought about unprecedented growth in international
trade. Helping developing countries to capitalize on it is
essential. They must be assisted in practical ways to catch up with
the industrialized world.
Developing countries have to be part of the surge in global
well-being, and they are ready to assume the responsibility of
becoming successful partners in the global business community. As a
result of profound changes under way in globalization,
tele-communications infrastructure and technology, industrialized
countries would be well advised to trade with firms in developing
countries, not only to enhance trade and investment opportunities
in this promising, prosperous world of ours, but to lower
production costs, extend product life cycles, reduce costs of
importing components, services and manufactured goods and expand
market access. Otherwise, chances for development, growth and
stability will be jeopardized for all, North and South alike.
J. Denis Bélisle is Assistant Secretary-General of the
United Nations in Geneva and Executive Director of the
International Trade Centre UNCTAD/WTO. Michael R. Czinkota teaches
at Georgetown University's McDonough School of Business in
Washington, D.C.
ITC Encourages Reprints
This article has appeared in the Japan Times and The Journal of
Commerce in the United States. ITC encourages readers to reprint
Forum articles locally. Please send two copies to the Editor,
Trade Forum, ITC, Palais des Nations,
1211 Geneva 10, Switzerland. E-mail: domeisen@intracen.org