Expanding trade is an effective way for countries to develop their
economies and reduce poverty. Today’s globalizing world offers new
market opportunities, but at the same time much greater competition.
With new challenges, some find it difficult to know where to turn to
for help. That’s where the International Trade Centre (ITC) comes in.
Traditional approaches to competitiveness do not fully address today’s business realities.
In the globalizing world of today, export constraints are diminishing:
falling trade barriers; declining transport costs; new information and
communications technologies; international migration; and fluid
investment flows create new business prospects and bring skilled
players into new markets.
At the same time, products and services – and demand for them – are changing rapidly.
New opportunities are matched by new challenges: keeping up with snappy
innovation in products and services; intense price wars that squeeze
out production inefficiencies and transform supplier relations; soaring
quality requirements that weed out those unable to meet them; and new
competition on the domestic front, with more imports and locally-based
multinationals.
With fiercer competition, the winners are those with the sharpest competitive edge. What sets them apart?
In ITC’s view, being competitive hinges on “supply capacity” –
producing competitive goods and services, and having the ability to
export them. Building supply capacity doesn’t happen by itself: it
requires a complete shift, away from export promotion, where the focus
is on getting visibility for existing exports in foreign markets.
Countries need to move to export development and look at
competitiveness from a “border-in”, rather than the traditional
“border-out”, perspective. They must help their firms develop the
capacity to innovate, ensure supply to new markets, develop relations
with new business partners and anticipate new opportunities.
This complements classic approaches to raising competitiveness, relying
on macroeconomics (“depreciate the exchange rate”); microeconomics
(“cut red tape”); comparative advantage (exports based on natural
resources, labour costs and available capital); or market access,
particularly for the agricultural products that many developing
countries supply.
Businesses need help to process more market information than before; to
grasp quickly areas with potential, such as South-South trade or
services; to sharpen their use of technology; and to match new
environmental, and other, standards. They also need modern legal and
financial systems, business-friendly regulations and open trade
regimes, which help draw business and investment partners. Finally, to
be truly competitive, they need answers to development gaps in transportation, connectivity, health and education.
Solutions
Competitiveness strategies. In partnership with relevant players, develop competitiveness strategies at national, sectoral and firm levels.
Improve supply capacity. Provide better trade support
services to firms and build capacities in key areas such as trade
information, finance, quality, law, management, purchasing and e-trade.
Training. Encourage continued training, and learn and adapt
export skills from more advanced business partners and returning
migrants.
South-South trade. Explore business integration and export links in other developing regions.
How ITC Can Help
All ITC programmes and services aim to build supply capacity and improve competitiveness. Among them:
Capacity building and training. ITC’s programmes and tools
include: strengthening institutions managing trade information centres,
trade finance, packaging, quality and other issues; training of
purchasers, business counsellors (Business Management System), services
exporters, credit providers and others; expert assistance for sectors
such as textiles and clothing, creative industries, spices, food and
beverages and other sectors.
Strategy development. Executive Forum on National Export
Strategies for “best practice” models and templates, and assistance
with sectoral export development strategies for artisanal products,
coffee, organic products, wood, services and other sectors.
Trade information and analysis. TradeMaps analyse trade
flows for countries, sectors, investments and trade barriers; online
access to trade information sources through the Trade Information
Reference Centre; Market News Service reports; International Trade
Forum magazine; bulletins on export quality, finance, packaging; Trade
Secrets guides answer frequently-asked questions from exporters.
Benchmarking and diagnostic tools for firms include Fitness Checkers
for export readiness, e-competence and quality management; the
Competitive Edge to identify strengths and weaknesses; and for
institutions, the Trade Support Index helps assess their services.
Businesses in developing countries can’t afford to ignore global trade talks.
International trade agreements are reshaping national laws on where and
how companies can trade. Whether we speak of agriculture, services,
textiles and clothing, intellectual property or other topics, WTO
agreements dominate the international trade arena. WTO member states —
148 so far — are even now refining a set of global trade rules. What’s
more, bilateral and regional agreements add layers of complexity to the
environment in which business has to make decisions.
Businesses in developing countries have not made their voice heard
enough in the trade negotiations that lead to these rules. And often
they are not satisfied with the results. Governments have sometimes
agreed to trade rules that hinder their firms’ ability to do business.
Their most important exports don’t reach enough foreign markets, while
their local markets are open to competition for which they were not
prepared.
Negotiators need the views of business. They have many policy options
to assess and their teams are often small. It’s not easy to analyse the
business implications of market access barriers, influence
international standards or evaluate the impact of different trade
proposals on exporters. Nor is it possible if business and government
do not work together.
There has been little tradition of “business advocacy” in the South. As
global trade talks continue to shape the business environment,
exporters and governments in the developing world must learn to work
with one another to improve market access and obtain special conditions
for their firms.
Solutions
Public-private teams. When a government’s vision and the
private sector’s drive come together, it can be extremely effective.
Countries need to go to global talks in business-government teams if
they want results that benefit their economies.
Successful negotiation strategies depend, to a large degree, on
the quality of collaboration between national trade negotiators and
business leaders.
Industry groupings. While big private corporations can
promote their interests individually, most of the smaller firms can’t
afford to. Business needs to do its homework, on an industry basis, and
inform governments under what sort of rules they can do business.
Information and training. WTO rules are not written in the
language of business. The business community needs to understand what
is on the negotiating table and how they can influence the outcome.
They need help in sorting the complex package of bilateral, regional
and multilateral rules in force. Most importantly, they need good
practices and telling business cases so that they can conduct effective
business advocacy.
How ITC Can Help
World Tr@de Net is a set of informal national networks of
trade players in 51 developing and transition economies. Members
include business associations, governments, trade specialists, training
institutions and universities. They develop action-oriented country
plans for business advocacy on WTO issues. ITC supports them with
kick-off events, training materials, case studies, issue papers, a
newsletter and a web site. The continuous flow of information about the
business implications of the world trading system is improving
government-business dialogue and encouraging more business
participation in trade negotiations.
Business for Development regional workshops bring business
leaders and government negotiators together to debate issues that shape
national negotiating positions and contribute to building a business
advocacy culture.
JITAP, the Joint Integrated Technical Assistance Programme
of ITC, UNCTAD and WTO, helps 16 African countries develop trade policy
through inter-institutional committees, national reference centres and
enquiry points on multilateral trade issues, as well as training and
strategy development by sector.
The GATS Consultation Kit and related programmes help
service industry associations gather service firms’ input on services
trade issues and advise governments on negotiations on the WTO
agreement.
Today’s legal approaches aren’t keeping pace with the huge rise in international business.
While trade barriers are falling, legal barriers are not. The number of countries has more than tripled in the past 50 years. Businesses find themselves dealing with more individual countries, each with their own commercial laws and legal systems.
If there are more borders to cross, there’s also more cross-border business. During the last 15 years, world exports for goods have grown on average 6% a year.
Twenty years ago, people often associated business law with a particular nation. Today, they cannot afford to. A variety of international trade rules and practices — often outside the scope of national law — are shaping the way trade is conducted.
Where legal systems have not evolved, investors operate in a climate of uncertainty. In the last decade, many developing countries have become WTO members; yet few have ratified more than 30% of the world’s 200 most important trade treaties.
All business people know deals can go wrong, no matter how tightly negotiated. With more deals being done, more cases are finding their way to the courts. Countries that haven’t invested in alternatives to court trials are seeing backlogs of cases, with associated high costs and lost business opportunities.
New arbitration and mediation centres can lack experience and credibility in the business community.
With different business and legal cultures and practices across the world, small firms need help to export in terms they and their foreign business partners understand. Most cannot afford lawyers. Nor can they afford to isolate themselves from international trade.
We need new ways to facilitate business deals, settle disputes and create secure legal environments that attract foreign partners.
Solutions
Adopt common ground rules. Ratify trade treaties and adopt international model laws, which set out common, basic principles for international sales, arbitration, patents, trademarks, transport and other trade issues. Use model contracts to answer the most frequent questions that arise in negotiations and provide internationally recognized definitions of responsibilities. Harmonize commercial laws at the regional level to facilitate trade among neighbouring countries.
Fix bottlenecks. More disputes need to be resolved out of court. Arbitration and mediation centres may be the best current alternative.
How ITC Can Help
Lega Carta. Internet-based maps that tell, at a glance, whether a specific country has ratified the world’s 200 major trade treaties.
Juris International. The world’s biggest online collection of major legal instruments, free of charge, in English, French and Spanish.
Model contracts. A total of 150 model contracts for perishable goods, printing and publishing, and joint ventures — the contracts most requested by developing countries according to an ITC survey. The model contracts are free, in simple language and neutral, reflect cultural and legal diversity, based on pro-bono research and drafting by 50 legal experts from around the world.
Arbitration and mediation services. Improving in-country dispute settlement services through training and symposia.
Regional harmonization of trade laws. Support and advocacy, at the level of business lawyers, for regional efforts to harmonize trade laws and regulations.
Developing countries don’t fully exploit good business matches among their firms. Exporters still tend to focus on traditional markets in industrialized countries. These markets are highly competitive and difficult to enter, whereas for many developing country firms, neighbouring markets offer immediate opportunities.
ITC has been promoting South-South trade for over 30 years. The untapped potential is great among developing country firms. What is holding them back?
The answer is a mix of related facts and perceptions. First, it’s often believed that developing countries produce similar goods — mainly raw materials and commodities — and therefore don’t have trade complementarities. The lack of reliable trade information perpetuates this belief. In fact, from blankets to school textbooks and mobile phone operators, developing countries produce a wider range of goods and services than conventional wisdom would have us believe.
Second, there’s a notion that low gross domestic product levels reflect limited market potential. However, developing countries import — often at high cost — from developed countries.
Third, while trade between developing countries is currently growing by 10% a year, the pace could pick up if trade barriers between them fall. On average, trade barriers among developing countries are three times higher than those imposed by the developed world. For manufactured goods, they are six to eight times higher.
Fourth, countries do not usually have a trade promotion infrastructure to encourage bilateral and multilateral trade, such as reciprocal chambers of commerce or mutual recognition of standards and inspection procedures. Developing countries also lack basics such as reliable transport and telecommunications links, and corresponding banking facilities.
South-South trade can be a “training ground” for developing and transition economies to enter the global trading system. Establishing business links across borders in the South builds confidence and economies of scale that make it less risky to expand to a wider range of markets.
Solutions
Information to overcome misperceptions. Research and provide details of regional trade potential for national exports, availability of products and services to import from other developing countries and capacity of firms to deliver.
Trade promotion infrastructure. Promote links between trade support institutions, establish regional trade information networks and harmonize trade procedures.
Reduce trade barriers. Business and government can work together to identify barriers — such as tariff or quota restrictions — that hamper the growth of South-South trade. Negotiate for their removal in bilateral, regional and multilateral trade forums.
How ITC Can Help
The South-South Trade Promotion Programme raises awareness about trade potential in various sectors between developing countries, provides market analysis tools to identify opportunities and translates them into business deals by bringing together buyers and sellers within a region. Participants have struck new deals in sectors such as, pharmaceuticals, textbook publishing, automotive components andhumanitarian supplies, with each meeting generating millions of dollars in new business.
ITC strengthens trade promotion infrastructure with technical assistance on legal, trade finance, packaging and export quality management issues. ITC programmes and tools help improve trade promotion organizations’ performance and trade information services.
Supply and demand surveys on countries and products fill trade information gaps, encourage information exchange and help harmonize inspection and certification procedures.
A fundamental question for firms today is,“How can ‘e’ help me compete?”
From agriculture to industrial products, consumer goods and
professional services, information and communications technologies
(ICTs) matter. Firms can apply them to save costs when they conduct
market research, organize export processes, and manage payments and
customer relations.
Recognizing the potential of ICTs is one thing; applying them to boost
the bottom line is another. Faced with a sometimes bewildering choice
of e-business solutions, small exporters need to know which
applications will boost visibility, improve efficiency or enhance
products. They cover a wide range: developing a web site; using
business-to-business e-marketplaces; using mobile phones to manage
supply and distribution chains; and more.
ICTs also open up new opportunities to export e-related products and
services, such as computer components, software programming and
back-office services. But unless they’re informed and competent in
using ICTs, firms can’t take advantage of new opportunities.
In developing countries, where Internet connections are often limited
or expensive, it can be a major challenge to develop an e-culture and
apply “e” creatively to trade.
Putting “e” to work for trade doesn’t happen automatically: countries
need to manage the process. They need e-trade strategies that go beyond
the issue of connectivity and address business realities like trust,
costs and industry structures. They need the essentials such as access
to finance, roads, transport and energy.
With those foundations in place, ICTs can help developing country firms bridge the digital divide and leapfrog growth.
Solutions
E-readiness. If a country is e-ready in terms of its
population’s culture and skills, it’s more likely to apply ICTs
successfully to trade. Governments need to invest in e-literacy drives,
for example, by switching to e-government services.
E-trade strategy. Governments should implement a legal and
regulatory framework that promotes, rather than blocks, e-trade. Export
strategy-makers need to adopt an e-business vision and practical plans
to help the business community take up “e”, starting with advocacy to
raise awareness. To move from awareness to action, exporters need
technology applications that work in their local environment and
opportunities to learn from others. When integrating “e” in business,
they may not need the most expensive technology — just the most
appropriate.
To move to e-competence, exporters need training and information about e-business skills and issues such as trust and security.
How ITC Can Help
ITC helps demystify the ways ICTs can be applied to
increase exports, working with exporters and those who support them.
Through contributions to the World Summit on the Information Society
(WSIS), ITC helps bring the voice of exporters in developing countries
into the information society. ITC is using recommendations from the
WSIS Action Plan to redesign its e-related programmes.
“E” at ITC. Exporters can increase efficiency and sales
with tools such as Internet auctions for gourmet coffee, online market
analysis of winning export sectors, e-procurement training for
suppliers of relief items, online export readiness diagnostic tools and
more.
ITC provides information on e-trade opportunities with programmes such
as regional e-business forums and has produced over 70 articles on “e”
in its magazine, Trade Forum.
The E-trade Bridge Programme, currently in 27 countries,
integrates many of the tools above to help create e-competitive firms
and build capacities in the institutions that support them.
Clearing up grey areas in countries’ “green” economies will heighten export opportunities.
Environmental
products, services and technologies make up a US$ 475 billion market.
By 2010, it’s expected to reach US$ 640 billion, with a share of over
15% for developing and transition economies. Developing economies have
a competitive edge, with rich natural resources and their own clean
technology solutions that have emerged in response to local demand, and
which are likely to be of interest to other developing countries.
Exporters
also face many eco-challenges. From eco-friendly packaging to
organically-grown food, there’s growing pressure on exporters to “go
green”. Major international buyers are making “sustainability” a
requirement in their supply chains.
To compete, producers have
to show technological innovation, quality and service performance, and
flexibility in producing their goods and services. Weak environmental
support systems mean they usually face these competitive challenges
unaided.
From avocados to sports shoes, environmental protection
standards often act as market access barriers. Exporters from least
developed countries are particularly affected, yet most don’t
participate in setting standards. “Green” trade measures do have an
impact on a number of goods but it’s difficult to evaluate their effect
because little information is available about which goods are affected.
Trade developers of biodiversity products in developing
countries face challenges beyond the issue of market access. Lack of
information about market opportunities makes it difficult to find
investors and business partners. Adding value, establishing economies
of scale and managing resources in a sustainable way are other
challenges. Local communities, the traditional caretakers of
biodiversity resources, may not have the right business training or
skills.
There’s still too little awareness in the developing
world about environmental trade opportunities and solutions to “green”
export challenges. Institutional weaknesses and limited coordination
among national standards institutes, environmental protection agencies
and other advisory and certifying bodies leave gaps. The result is
shortfalls in analysing export markets, providing export support
services and conducting advocacy for the environmental sector.
Solutions
Strengthen environmental institutions such as standards
bodies and environment agencies, to enable them to collect and analyse
information about their national industry. A national “environmental
product and services inventory” can help the sector represent its
interests at strategy level.
Help exporters “green” their business through targeted
training and information programmes. Provide export support services to
communities in resource-rich areas. Ensure that they receive benefits
from trade in order to encourage a long-term view of profits and to
lead to sustainable growth.
Explore South-South trade opportunities to exploit
similarities in needs for environmental solutions for developing
country conditions, such as the use of solar power and flood management
services.
How ITC Can Help
Technical assistance to the environmental institutions that
also play a part in trade promotion. By raising awareness and improving
their coordination and research capabilities, ITC helps them to
advocate more effectively for integrating environmental aspects into
national strategy.
Export promotion of “green” products and services through
advisory services and market analysis of sectors including organic
food, spices and herbs; rubber; jute and coconut fibres; medicinal
plants; sustainably-produced wood products and artisanal products; and
environmental services and technologies.
Eco-trade information through specialized databases for
eco-standards; new process and production requirements; green
packaging; eco-labelling; prices of environmentally-preferable
products; and supply sources for environmentally-supportive products,
technologies and services. ITC’s online market analysis tools, Trade
Maps, highlight environmental trade barriers on countries’ exports.
Women entrepreneurs can be invisible to trade and development policy-makers.
Many women entrepreneurs — whether they manage large, small or micro businesses — don’t participate in the business circles that decision-makers know and consult. A majority of women entrepreneurs are isolated in marginal economic areas such as micro and informal enterprises; in some countries, they account for up to 70% of such businesses.
And trade organizations — ministries, chambers of commerce, export programmes, associations — don’t reach out specifically to women, expecting women’s organizations to bridge the gap. Existing export assistance, when available, may not come to their attention or match their needs. For example, many women entrepreneurs work in the services sector, while export assistance tends to focus on trade in goods.
Cultural traditions can also hold women back from playing a more prominent role in economic life. This can take the form of informal dissuasion from working outside the home or the laws in some countries, which forbid women from inheriting property and thus preclude them from any but the smallest business activities.
While women in business face challenges common to all small firms — such as access to credit, contacts and training — their problems are magnified by lack of access to the networks that can help them compete in global business.
Yet, ITC’s experience shows that when women have the opportunity to develop their businesses, countries can benefit tremendously. Many women exporters are not just businesswomen, but “social entrepreneurs” as well. Through their experiences, they prove that a commitment to development goes hand-in-hand with their drive for export growth. It makes good business sense and good development sense to encourage women to build their businesses.
Solutions
Networking. Target businesswomen’s groups in membership drives for chambers of commerce, and trade and professional associations. Encourage networking between government officials, international experts and women entrepreneurs. Link groups of businesswomen to enhance communication and cooperation on trade issues.
Finance. Move beyond micro-credit. Encourage credit agencies to evaluate women exporters’ credit risks appropriately, and train women to apply for credit.
Training. Inform women exporters about export training, and ensure they have access. Identify participants through businesswomen’s associations.
Visibility. Publicize cases of successful women exporters. Develop awards programmes to encourage women who excel in international trade.
Social support. Evaluate gender-specific needs for trade-related support, from mobile health clinics to maternity leave and childcare.
Technology. Pool resources to integrate ICTs (information and communications technologies) to run businesses more efficiently and reach new markets.
How ITC Can Help
ITC integrates women in trade development programmes and improves their access to trade support and business information. ITC invites businesswomen’s associations (details of which it has gathered into a directory) to seminars on exporting services — boosting women’s participation from 4% to 20%. ITC is providing its market analysis tools free, for a year, to the Organization of Women in International Trade, with training for national chapters.
ITC’s Executive Forum on National Export Strategies in 2004 is researching more systematic gender integration in export strategies. The Programme for Building African Capacity for Trade, with Canada’s Trade Facilitation Office, helps women’s associations in sub-Saharan Africa to link to trade networks and gain skills in export management.
ITC carries out gender assessments for projects, notably in the area of poverty reduction. ITC helps women entrepreneurs in the crafts, textiles and clothing, agro-business and services sectors to better exploit business opportunities using ICTs.
ITC raises awareness and challenges perceptions of businesswomen’s role in economic and social development through publications and case studies specifically treating women’s issues.
Trade does provide economic benefits, but they may not reach the poorest people.
Trade can work at three basic levels to boost a country’s growth and
reduce poverty. First, the right policies encourage trade expansion in
general, which helps generate income and provides a resource base for
development. Second, governments can promote exports specifically in
sectors that maximize jobs and income. Third, they can help the poorest
people – those who hardly participate in the formal economy – to become
active participants in export activities.
Developing countries can face challenges at all these levels.
In many countries, the problem starts at the top. Policy-makers
responsible for preparing development strategies do not often pay
enough attention to integrating trade in their strategies. While
there’s a lot of rhetoric about how trade acts as an engine for growth,
strategies still hamper, rather than promote, trade in many developing
countries. And also, few blueprints exist that show countries how to
reduce poverty through trade.
In addition, export sectors that could do most to reduce poverty aren’t
always included in national export strategies. To reduce poverty, it is
the pattern of growth generated through trade that matters. Therefore,
growth must also occur in sectors where small producers can be
integrated into the value chain of products and services.
Finally, poor communities do not usually have the business skills
necessary to break into global trade. When it comes to seizing new
business opportunities, poor people can suffer the disadvantages of
little or no education, business training or connections to those who
can help them start or expand a business in the formal economy.
Solutions
Mainstream trade into poverty reduction strategies. Governments have to start thinking about trade and poverty reduction together.
Promote “pro-poor” export sectors. Identify and promote
sectors, or “niches” in sectors, with good export potential, to which
poor producers can bring their productive capacities.
Target poor communities for export assistance. Facilitate
business groupings between members of poor communities to overcome the
disadvantages of acting alone. Also encourage matchmaking between
experienced exporters and poor communities.
Provide key trade support services. Small-scale producers
have the will and capacity to do business, but they need good-quality
public services — trade and market information, export training and
networking opportunities — to integrate into markets.
How ITC Can Help
The Export-led Poverty Reduction Programme demonstrates,
through pilot projects, ways to integrate poor communities into trade.
The focus is on linking them with export chains of the products and
services that they can supply. These include low capital-intensive
sectors such as community-based tourism, light manufacturing, textiles,
leather and agricultural products.
ITC and local partners help producers organize themselves into groups
for business training and assistance. ITC also builds awareness of
their business development needs with trade support institutions and
governments.
ITC helps develop promising sectors, using powerful
analytical tools to identify sectors with demand potential,
supplemented by expertise in markets of interest to poor producers,
such as commodities, textiles and services.
LDC businesses need help overcoming supply constraints to spur export growth.
Over a period when the world economy has generally been growing and
diversifying, the share of least developed countries (LDCs) in world
trade has shrunk to the present 0.4%, down from 0.7% in 1985. Despite
schemes to improve market access for LDC exports – such as Canada’s
Market Access Initiative or the European Union’s Everything But Arms
initiative – most countries remain unable to tap into new
opportunities.
Why? To boost LDCs’ participation in the world economy, market access
is necessary, but it’s not enough. LDCs depend heavily on primary
commodities and low value-added exports, which have seen steady price
falls. Higher-value goods and services that match the more profitable
trade opportunities are not the norm in LDCs, and neither is the
capacity to develop them.
Severe “supply-side” constraints block business development. Often,
LDCs’ policies are not supportive of trade, nor is trade integrated in
their overall development strategies. They have limited capacity to
formulate strategies that diversify exports in response to changing
demand. LDCs lack trade support services in key areas such as trade
financing, quality management, trade information and marketing, which
can help firms compete in the international marketplace. Weak physical
infrastructure to support trade — roads, ports, energy and
telecommunications — is a handicap to growth. Finally, enforcement of
the rule of law and greater transparency to reduce corruption often
remain problem areas for business.
Despite the major challenges LDC exporters face, some have succeeded in
exploiting new business opportunities through entrepreneurship and
perseverance. Their successful exports range widely, from back-office
services to perfume essences and tourism. Governments and bilateral and
international agencies must work together to improve the environment
for more entrepreneurs to emerge and grow.
Solutions
Boost supply capacity. Identify economy-wide linkages that
impact on the production and movement of goods and services. Raise
awareness with policy-makers to support measures that integrate policy
reform and financial and technical assistance for export growth.
Emphasize priority sectors. Research international market
trends and focus resources on a few sectors with potential for adding
value. Activities that yield results include improving processing and
design, exploiting niche markets and new markets such as those in the
services sector.
Improve trade support services. Expand the range and
quality of services in areas such as trade information, export
packaging, finance and legal issues. Support marketing efforts by
helping exporters participate in marketing missions and trade fairs, or
by organizing buyer-seller meetings.
How ITC Can Help
The Integrated Framework, a programme of six development
agencies, coordinates technical assistance in the least developed
countries. It encourages them to include a trade dimension in national
development strategies such as Poverty Reduction Strategy Papers. ITC
helps countries enhance their supply capacity, strengthen the trade
promotion infrastructure, review export market opportunities and
develop specific export strategies for labour-intensive sectors.
ITC has identified higher-value market niches for LDC
exports, in areas such as business services, medicinal plants, tourism
and organic products. It helps countries and sectors assess and improve
their competitive advantages in these and other sectors.
ITC improves trade promotion infrastructure by building
institutional capacity to provide export training and advice in areas
such as trade financing, product development, quality standards and
marketing.
New business realities demand new partnerships for effective trade strategies.
Export
strategies are the key to helping a critical mass of firms succeed, not
just the individual companies that make it despite the odds. The
strategies must focus on more than trade promotion and embrace
development if countries are to increase exports. This shift implies
new partnerships, as well as changed roles for traditional partners.
First,
business and government need to work more closely. Partnership balances
the public sector’s power to create better business conditions with the
private sector’s ability to create jobs and exports.
Often
business and government don’t trust each other and have different
goals. They do, however, have a common goal in wanting economic
prosperity. Governments should lead strategy development. But as the
“doer” of trade, business needs to become a more involved and informed
trade development partner.
Second, trade development
strategists must reach out to new players. Why? From environmental
trade barriers to technological compatibility, new trends affect trade.
National standards bodies, communications technology entities, banks
and investment institutions, labour organizations, women entrepreneurs’
groups, environmental industry groups, arbitration and mediation
centres, and educational institutions are just a few of those that
offer keys to competitiveness, as the topics in this publication have
shown. Bringing them into a broader trade support network helps
countries use export development as a stepping-stone to economic growth.
Third,
for partnerships to work, they need to be anchored in mutually agreed
strategies, with realistic priorities, targets, responsibilities and
means to achieve them. Strategies are a basis for building confidence
among partners. They provide a baseline to monitor results. By
formalizing them, there is also a better chance for continuity.
Strategies can suffer from short political cycles or turnover in
business leadership. The departure of a key official can spell the
decline of a strategy. Whether partnerships are based on export
councils, industry clusters, incubators, legislation or other
arrangements depends on local circumstances; but vibrant partnerships
are essential to making export strategies succeed.
Solutions
Closer business-government partnership. Build trust through
regular dialogue on export-related issues, such as trade negotiation
positions and infrastructure to help businesses meet quality standards
and assess new market opportunities.
More informed business sector. At national and sector
levels, analyse the impact of trade policy on business, to advise
government. Be proactive in communicating with government agencies.
Networking with competitiveness players. Trade strategists
should consult more broadly, including with public and private sector
institutions dealing with finance, industry development and research.
Use communications technologies to help networking activities.
Methodologies for strategies. These help set priorities in a transparent manner and provide a road map.
How ITC Can Help
The Executive Forum on National Export Strategies
consolidates public-private partnerships in demand and supply-side
issues, and operational and developmental issues. Countries must
participate as business-government teams to network with others and
research “best practices”.
ITC helps with sectoral strategies, bringing together public and private sector partners and providing tools to develop and implement them jointly.
The World Conference of Trade Promotion Organizations (TPOs)
is a networking event organized by TPOs every two years and
co-sponsored by ITC. TPO leaders share experiences in using trade
promotion tools and identify ways to develop trade in a fast-changing
environment. The World TPO Awards, inaugurated in Malta in October
2004, recognize the best TPOs according to their peers’ judgement.
Since 1964, the International Trade Centre (ITC) has helped the
business sectors of developing and transition economies to develop
exports. Our ultimate goal is to help these countries to achieve
sustainable human development through export growth with an emphasis on
competitiveness.
