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    Trade Maps: Knowledge as Power and the Fast Fish


    © International Trade Centre, International Trade Forum - Issue 4/2004 

    Photo: ITC ITC training sessions for TradeMap and related tools give users from all over the world a head start.

    "For also knowledge itself", wrote English philosopher-statesman Francis Bacon in 1597, "is power."

    In March 2004, Zambia's Deputy Commerce Minister Geoffrey Samukonga had a practical take on how knowledge brings power. "Unless you know what are the opportunities, the barriers, the suppliers, the distributors, the prices and the competitors for the products you want to sell, you cannot develop an effective export strategy," he told his country's business community.

    In neighbouring Mozambique, the Export Promotion Institute's Director, Jose Fernando Jossias, had a linked message. "For decades in international trade the big fish have eaten the little fish," he said. "But now things are changing. Today it is the fast fish who eat up the slow ones." And the fast fish, in this context, are those who act quickly on market information.

    According to experts on global markets, in the 21st century knowledge and speed in using it will go hand in hand in determining which countries, and which companies, become leaders in world trade. They are the ones who will break away from a traditional but precarious dependence on a limited range of products and find new niche markets that can help turn a declining community in a remote corner of one of the poorest developing countries into a focus of social regeneration.

    Access to information in today's world, argues United Nations Secretary-General Kofi Annan, can help make all the difference between progress and poverty. Examples are the creation of booming cut-flower export industries in China, Ecuador and Kenya, the emergence from nowhere over the past decade of Guatemala as the world's top supplier of cardamom spice and its capture of a lucrative corner in the world market for dried limes, Tunisia's appearance in the 1990s as a major exporter of electronic components and South Africa's arrival on the scene at the turn of the 21st century as one of the world's largest exporters of transport equipment.


    Triumphs, but how frequent and at what cost?

    But such triumphs are relatively few and they have often come at a heavy price - in the shape of large payments to international consultancy firms for studies aimed at identifying new markets, in the time and energy of management staff in small businesses obliged to spend days, weeks and months in research, and sometimes in the ceding of business control, and a large slice of the profits, to multinational firms, who have the resources on tap. Few individual farmers or smaller businesses in Africa, Asia or Latin America can contemplate such financial or human investment. So, many have preferred to "wing it" - acting on instinct, intuition and a bit of information picked up from the media. Very occasionally, this has worked. But more often it has led to failure for farms and firms, disaster for entire communities and setbacks for national economies.

    "We needed a user-friendly, interactive tool, accessible from anywhere in the world, that could bring together statistics on who trades what with whom and for how much," says Friedrich von Kirchbach, Chief of ITC's Market Analysis Section. Mr von Kirchbach, an economist with a doctorate in international investment flows, joined ITC in the mid-1980s with the aim of developing an accessible trade database.

    Making trade transparent

    The project won enthusiastic support from ITC Executive Director J. Denis Bélisle. "I could see that something like this would not only be a tremendous resource for ITC client countries in Africa, Asia and Latin America," he says, "but could also make international trade almost totally transparent for the first time."

    Using market statistics from the United Nations COMTRADE database, which collates figures on imports and exports reported to the UN by the national customs organizations of member countries, Mr von Kirchbach and Christian Delachenal, a statistician and programmer specializing in international trade, created TradeMap. Launched in 1999, it covers more than 90% of world trade flows and enables users to trace national export and import performance for over 180 countries; international demand for over 5,300 products; and trade barriers in the form of tariffs or non-tariff barriers any country imposes across the entire range of its imports. For specific products, exporters can establish how competitive they are in the world - or an individual country - market, to see if rivals are beginning to encroach on their position and to spot potential for developing new markets. A targeted trawl through TradeMap data can, in the space of two or three minutes, show an exporter of dried apricots from Tajikistan that it is selling its product almost exclusively to a single, and depressed, market at well below the average world level, and at ten times below the price segment on which French exporters focus. With that information, the Tajik exporter is well on the way to establishing what needs to be done to penetrate higher-return markets. "If a user is quick to spot an opportunity, his firm, even if it is small, can grab it before a bigger market player has begun to move," says ITC Senior Market Analyst Stephan Blanc.

    Sometimes smaller countries with few financial resources and little information technology fail to report their detailed trade figures - normally derived from their customs organizations - back to COMTRADE. To ensure that this gap is covered, the ITC team developed a system of "mirror statistics" - calculating a country's exports from the import returns of its trading partners.

    Alongside TradeMap, Mr von Kirchbach's team has developed four other tools:
    • Country Map, for business analysts in firms and governments, allows users to assess a nation's trade performance as a whole and sector by sector and to calculate potential trade between two individual countries through a simulation model.
    • Product Map, for companies, focuses on clusters of export goods, providing price information, insight into market trends, links to other market intelligence sources and product studies and to companies and organizations.
    • Market Access Map provides highlights for individual product import barriers, including anti-dumping regimes and preferential arrangements.
    • Investment Map, launched at the recent United Nations Conference on Trade and Development (UNCTAD) summit in São Paulo, targets the investment community with data on country foreign direct investment volumes and flows, to identify promising opportunities.

      The launch of TradeMap in Abu Dhabi is helping the government to promote non-oil exports. (Photo: ITC) 

    Training is part of the package

    Although use of these tools is largely self-intuitive, training gives users a head start. "I wouldn't have missed this sort of introduction," said Omani market analyst Aiman Ambusaidi during a recent session at ITC headquarters in Geneva. Roberto Cordón, who came to ITC as market analyst and training consultant in 2002, has seen his activities blossom. "When I first arrived, we had ten courses programmed. Now we're up to 40 and we're training more than 1,000 people a year. Demand is growing all the time."

    Exposure to TradeMap and its cousins, says Mr Cordón, quickly wins converts. "When we set up an introductory seminar in Guatemala City in 2003," he recalls, "only 18 people turned up for the first session, and most told us beforehand they would have to leave after a couple of hours. At the lunch-break, they were all still there. And when we resumed in the afternoon there were 27 people. Participants called friends, telling them they had to see this thing. By the time we finished the seminar, we had 45 people."

    There are now paid subscribers for ITC's market analysis services in 128 countries, many of them accessing through a local portal set up by the government or private business and trade promotion bodies. Information from the services is often cited by major global institutions in their own studies - the World Bank, the International Monetary Fund, WTO, the World Economic Forum, UNCTAD and even the World Health Organization which has recommended the use of ITC tools to countries seeking suppliers of low-cost ingredients for the medication used in treating AIDS.

    In Oman, where TradeMap has been available through the government-financed Centre for Investment Promotion (OCIP) for three years, businesses were quick to pick up on the window it provides on global trade in the Gulf state's traditional exports - fish, dry dates and marble - and in some new areas, says OCIP Senior Market Analyst Faris Nasser. "Before it existed, it was difficult to find such detailed information easily. We use Country Map extensively to prepare briefs for trade delegations."
    In Abu Dhabi, where TradeMap was launched in 2003, Chamber of Commerce and Industry Deputy Director-General Ahmed Hassan Al Mansouri says it helps the government in its pursuit of a national objective - breaking the economy's dependence on oil and promoting non-oil exports.

    Major powers see value

    Of course, web-based information sources and strategy tools cannot provide the full answers and need to be complemented by good business sense. Yet not only developing countries have seen the value of TradeMap. Major powers seeking to boost their own trade performance or to find suppliers of scarce products also turn to it. Team Canada Inc., Canada's trade promotion centre, provides access to it across the country by arrangement with the ITC. "This strategic market intelligence is vital to Canada's exporting companies and trade professionals," said CanadExport, the government's trade journal. The United States' overseas assistance body USAID, by agreement with ITC, provides access to the service through its network in developing countries. And in the Netherlands, the Centre for the Promotion of Imports from Developing Countries (CBI) recently asked ITC to help it identify, through the Maps, untapped opportunities in the 25 nations of the European Union. Multi-donor funding, as well as specific help from the Swiss State Secretariat for Economic Affairs (seco) and the World Bank, also contributed to developing project activities.

    Building awareness

    Awareness of the tools has begun to spread to countries still unfamiliar, for various reasons, with ITC services. In a special unit of the Market Analysis Section, Bastiaan Bijl and a team of young economists handle between 2,000 and 3,000 queries a year from firms seeking potential markets for new products or suppliers of items scarce in their home countries. Late in 2003, there was a sudden flood of inquiries from Libyan firms as the long-isolated country signalled its intention of rejoining the international mainstream. One recent handwritten request came from the commercial manager of a company in Iraq seeking information about any trading companies that are dealing with items such as rice, sugar, milk, detergent and soap. Says Mr Bijl: "We can't tell him exactly which firms to go to, but on the basis of what we find in TradeMap we can certainly point him in the right direction." All that sounds fine, said Sonja Trotman of the Barbados Investment and Development Corporation at a recent ITC seminar. "But tell us about some concrete results."  Mr Bijl recalls an experience in up-country Tanzania in 2003. "I had spent a day presenting TradeMap to an audience of small business people. A local enterprise producing banana wine was using recycled beer bottles and looking for labelling machinery. The next day when I visited their factory, they were all smiles because with the help of ITC's Market Analysis Tools they had identified a labelling machine supplier in South Africa and already placed the order. 'We made a good deal for just what we need, it should be here next month,' they told me. Now that," says Mr Bijl, "was fast work."

    Writer: Robert J. Evans