The year 1999 looks promising for ITC beneficiaries. While 1998 marked the end of a comprehensive organizational reform, 1999 and future years will be devoted to increased field activities aimed at national capacity building and benefiting from ITC’s enriched technical assistance tools and its ever-growing “product- network” approach.
Formerly a luxury trade, the silk industry is at a crossroads. New sandwashed silk brought a wider range of affordable silk products within the reach of millions of consumers during the 1990s. Competition from high-tech synthetics has eaten away market share. Raw silk prices have plummeted by half, to the point that they threaten the sustainability of this industry.
Traditional producers are cutting back on labour-intensive silk production, as urban industries lure farmers from a business in which incomes dropped radically in recent years. Meanwhile, millions of livelihoods are at stake, especially in rural areas, for this traditional and environmentally sustainable product.
Silk has a miniscule percentage of the global textile fibre market—less than 0.2%. This figure, however, is misleading, since the actual trading value of silk and silk products is much more impressive. This is a multibillion dollar trade, with a unit price for raw silk roughly twenty times that of raw cotton. (The precise global value is difficult to assess, since reliable data on finished silk products is lacking in most importing countries.) To give an idea of the value, however, the annual turnover of the China National Silk Import and Export Corporation alone is US$ 2–2.5 billion.
Unlike some other textiles, silk-wearing traditions and demand go back a long way. A good example is India, where the local demand greatly exceeds supply (and hampers export growth). India has thus become the largest importer of raw silk, despite the fact that it is now the second largest producer. Some other silk producers are also experiencing fast-growing local demand, such as China, where consumers are increasingly able to afford the lower price range silk products. This pattern is also expected to repeat itself in Viet Nam.
Today’s export promotion strategies must reflect the changing nature of the international trade environment, if they are to have an impact.
Change in the past several years has taken many forms. Broad changes are affecting international trade, such as the Uruguay Round Agreement and the establishment of the World Trade Organization (WTO). In addition, three major issues have recently emerged that influence export promotion: growing interest in the environment and sustainable development, the importance of small and medium-sized enterprises (SMEs) as exporters, and the scope for increasing trade in services, especially those supplying information technology services and clean technology.
This article takes a closer look at one of those issues, trade promotion for SMEs.
How can importers and exporters in developing countries best take advantage of the Internet? A wealth of information exists on the rapid evolution and the benefits of the Internet. Less exists on how to sift through this information for the practical lessons and tips for exporting and importing firms, as well as trade support institutions.
Are you looking for timely business information at a relatively low cost? Many companies and trade support institutions (trade promotion organizations, professional associations, consultants) are adopting the Internet to improve their access to information sources, expand their scope of data collection and to bridge information gaps for specific international markets.
To reach global markets through Internet, businesses need to adopt a sound business strategy, coupled with flexibility to question traditional practices. This is the real challenge for businesses using the Internet, no matter where they are located.
The Internet can help service firms in developing and transitional economies exactly where they need it most. It helps them overcome two of the biggest barriers they face: gaining credibility in international markets; and travel costs and restrictions that impede export market development.
Most organizations do not use the Internet to buy goods and services—yet. ITC’s trend-trackers in international purchasing and supply management expect this to change, however, as Internet use becomes more widespread. Companies and governments in developing countries and economies in transition should take a second look at using the Internet to save time and money on purchases, and build better relations with suppliers.
Should small firms in developing countries take the plunge and invest in setting up an Internet site now? What lessons can they learn from Internet pioneers?
There are lessons in a recent Internet study of small and medium-sized exporters in the United States. The conclusion of participating firms: they plan to keep using the Internet for marketing and customer support, although they did not sell as much as they had expected.
Public procurement reform hurts. It touches vested interests, but improves the lives of individuals. I once visited a university hospital with the full apparatus to carry out open heart surgery, but with no sterilizing unit working. Rubber gloves were not thrown away, but washed with tap water, because replacements were never stocked. There was little chance to carry out heart surgery successfully. Infections spread quickly to all hospital patients. That situation was possible because purchasing decisions were taken by chief surgeons, who did not listen to the nurses and staff in charge of washing rubber gloves. None of these surgeons knew that the surgery instruments they were using were not sterilized.
H.E. Petru Lucinschi, President of the Republic of Moldova, signed a Memorandum of Agreement (MOA) to boost Moldovan exports with J. Denis Bélisle, ITC’s Executive Director, on 14 January 1999. The agreement was signed during an official visit of a high-level government delegation to ITC, led by the President and including several ministers, to discuss technical cooperation in trade promotion and export development.
The Confederation of Indian Industry launched its national version of Trade Secrets: The Export Answer Book at a ceremony held 26 November 1998 in New Delhi, in partnership with ITC and the Indian Ministry of Trade. The meeting attracted over 200 government, business, and education officials, and generated heavy national media coverage. The guide answers over 100 commonly asked questions about exporting.
ITC followed up the event with a two-day training programme for ten other countries that are producing their own national versions of the guide. In addition, there are scores of other countries requesting information about undergoing the adaptation process. The generic version of the guide is available in English, French and Spanish, as well as guidelines on how to customize the publication.
Organizations from 17 countries have signed Joint Publication Agreements with ITC in order to produce a national version of Trade Secrets and disseminate it. The adaptation process takes roughly one year.
For more information, contact S. McCue, Adviser, Practical Guides, at mccue@intracen.org
From left to right: S. Piskolti, ITC; Mr. A. Khalifa, UN Resident Coordinator, United Arab Emirates; J. Denis Bélisle, Executive Director, ITC; H.E. Sheik Sultan Fahem Al-Qasimi, Minister of Economy and Trade, United Arab Emirates.
ITC and Arab Trade Financing Programme organized a “Buyers-Sellers” meeting on agricultural produce and processed foods in the United Arab Emirates in February 1999. The meeting was organized in close cooperation with the Abu Dhabi Chamber of Commerce and Industry and the Federation of the United Arab Emirates Chamber of Commerce and Industry. It was endorsed and supported by the United Nations Development Programme.
Business orders worth US$ 6 million were signed at the event, and negotiation initiated on another US$ 64 million, according to a review of over 40 evaluation forms submitted by participating enterprises. About 140 business persons attended from Algeria, Egypt, Jordan, Lebanon, Mauritania, Oman, the Occupied Palestine Territory, Qatar, Saudi Arabia, Somalia, Syrian Arab Republic, Tunisia and the United Arab Emirates. Trade promotion organizations from Jordan, the Occupied Palestine Territory and Egypt attended. In addition, the Islamic Development Bank, 14 banks in Arab countries, and trade-related organizations and consulting companies were present.
ITC’s Executive Director, J. Denis Bélisle, addressed the opening of this pan-Arab event, which was widely covered in local television and newspapers. “We believe that buyers-sellers meetings are effective tools for increasing trade,” Mr. Bélisle said. “They provide a means to transform political intentions for promoting intra-Arab trade into economic reality, as trade is actually generated during these events.”
A parallel exhibition was organized by the Abu Dhabi Chamber of Commerce and Industry, with 52 enterprises from 11 Arab countries exhibiting products.
For more information, contact S. Piskolti, ITC Chief, Office for Arab States, Europe and the CIS at piskolti@intracen.org or F. Nawas, Senior Trade Promotion Officer at nawas@intracen.org
New ITC Directors
Ms. Ingrid I. Vanore-Speer of Austria, Director of the Division of Technical Cooperation Coordination, retired on 31 March after 30 years of service in all three substantive divisions of ITC. Ms. Vanore-Speer was also ITC’s Focal Point for Gender in Trade Development. She is replaced by Mr. Martin V. Dagata of the United States, formerly ITC’s Director of the Division of Trade Support Services.
Mr. George Papazafiropoulos of Greece, Director of the Division of Product and Market Development, will retire on 30 April after more than 31 years of service spanning three divisions of ITC. He will be replaced by Mr. Peter Walters, recently appointed to this post.
Mr. Peter Walters of the United Kingdom joins ITC after having served for over eight years as Managing Director in a large international consulting firm. Before that, he spent three years as Director of Planning and Development in a development management company and nine years at the former Tropical Products Institute in London, now known as the Natural Resources Institute. A holder of a Masters degree in Agriculture specializing in Economics from the University of Oxford and a Masters degree in Agricultural Economics specializing in Economic Development from the University of London, Mr. Walters started his career at the Economist Intelligence Unit before taking up a post as Lecturer in Agricultural Economics at the University of Aberdeen.
Islamic Development Bank and ITC Sign Memorandum of Understanding
ITC and the Islamic Development Bank have agreed to work jointly to help member countries of the Islamic Development Bank fulfil requirements of the Uruguay Round agreements. Workshops on Technical Barriers to Trade and Sanitary and Phytosanitary measures will be organized later this year in Africa and Asia.
New Release of Trade Statistics PC-TAS
The 1997 version of PC-TAS, the world’s largest trade database on CD-Rom, is now available. It covers the five years 1993 to 1997 from 84 reporting countries and permits an assessment of market trends for over 3500 products in some 200 countries and territories. The price remains at US$ 900, with a 50% discount for clients in developing countries and economies in transition (i.e. US$ 450).
TradeMap Profiles on the Internet for over 180 countries and territories
National trade performance profiles for 1997 are now available on ITC’s web site (http://www.intracen.org./itc/services/rau/trademap.htm). Developed by ITC’s Market Analysis Section, the profiles identify for each of the countries under review the most dynamic products (champions), underachievers, and losers in declining markets.
These profiles are part of ITC’s larger TradeMap services which offers indicators for refining international marketing strategies. Tailor-made TradeMap services are being used by trade promotion institutions and enterprises in numerous countries.
ITC’s Services Exporting Homepage has features designed specifically for industry associations, to support their efforts. Below are ways associations can use this site to attract new members and retain current members in an increasingly competitive market.
ITC’s Market News Service (MNS), begun in 1978, is entering its 21st year of service to exporters and importers in developing countries. MNS helps them determine when and where to sell or buy a variety of primary and semi-processed products, by providing timely, unbiased and accurate price and market information, as well as a contact service that matches exporters and importers. Recent innovations in MNS include more in-depth analysis and a special fund allowing free service to subscribers in least developed countries (LDCs).
MNS reports cover eight areas: fresh fruits and vegetables; fresh-cut flowers; ornamental young plants; rice; bulk-packed fruit juices; spices, spice seeds and herbs; leather hides and skins; pharmaceutical raw materials and essential drugs.
A network of 180 correspondents worldwide contributes to the reports, including major importers, exporters and governmental organizations. This allows MNS product specialists at ITC headquarters to collect up-to-the-minute data on prices paid for specific products; supply and demand trends; and economic, climatic and legislative information that could affect the market situation in the days and weeks ahead. The analyzed information is sent within 24 hours by e-mail, fax or airmail to subscribers around the world. MNS reports are sent weekly, bi-weekly or monthly, depending on the product group.
For more information about MNS reports, including details on how to subscribe to receive various reports, visit ITC’s web site at http://www.intracen.org/service/mns/mns.htm or contact Lina El-Nabulsi, ITC Marketing Adviser, by at e-mail or by fax at +41 22 730 0906.
Latest ITC Publications
HPS Groundnuts (Peanuts): A Survey of Selected European Markets. 76 pages. Market survey on groundnuts in the Netherlands, Norway and the United Kingdom, with particular reference to phytosanitary measures and prevention of aflatoxin contamination—for each country reviews, market situation and trends, trade structure, prices, market access channels and importers’ requirements; also provides selected importers’ and sector-related addresses, as well as sample quality specifications; includes guides to the prevention of aflatoxin contamination in groundnuts.
Information Technology Services: A Handbook for Exporters from Developing Countries. 114 pages. Handbook focusing on drawing up strategies to promote and develop information technology services exports from developing countries—describes information technology (IT) services having potential export markets; gives overview of the global market; outlines levels of institutional support needed to promote foreign trade in IT services; introduces use of Internet to obtain information on business opportunities and gives lists of relevant information sources; provides hints for successful marketing of IT services; examines business opportunities for marketing information technology components in internationally funded projects; identifies skills and technology requirements to sustain exports of IT services and means of acquiring them; contains list of useful addresses.
New CD-Rom: Trade Information Tool Kit
A collection of ITC trade information products is now available on CD-Rom. The “Trade Information Tool Kit” simulates an Internet web site, and provides fast retrieval of information. It includes:
• ITC Bibliographical Databases. International Trade Database, Published Market Research, Multilateral Trading System and the Index to Trade Information Sources.
• COMREG. A software for managing company register, based on international standards and codes, and using the ITC Classification of Product Groups and Services (correlated to the Harmonized System).
• ITC’s Virtual Exhibition Centre. This ITC web site promotes trade of artisanal products from developing countries and economies in transition.
• Classification of Products Groups. A correlation between the Harmonized System Classification 1996 and the ITC Composite Product Group Classification.
• Selected trade information articles and training materials to develop information products and services, including the Internet section in this magazine.
The “Trade Information Tool Kit” was developed by ITC’s Trade Information section. It is available free to trade support institutions, such national trade promotion organizations, chambers of commerce, professional associations and training centres.
