The ITC’s Road Map for Success cont’d

Part 2 of 2

The ITC has published The Policy Road Map for Export Success in an attempt to help governments and the private sector of developing countries gain an understanding of the factors that affect the international business environment. This is a continuation of my article on ITC’s Policy Road Map for Export Success. The first part can be found here.

Chapter 3 of the road map looks at elements that influence producer costs while Chapter 4 looks at factors that influence the price that is faced by consumers and user industries in the foreign market. Chapter 5 brings everything together to compile a final road map that attempts to give some idea of the timing for implementation of the various processes involved in international competitiveness and export success.

Here are additional key findings from the rest of the book:

  • Competitiveness requires an enabling environment for business, including political stability and functioning institutions. The judicial system needs to be transparent, respected and accessible. Contracts have to be enforceable. Registration of business and foreign investment should be facilitated.
  • Reforms to build international competitiveness often require reforms of tax systems and rates as stable, transparent and moderate corporate tax rates help to induce foreign investment and build competitiveness.
  • Physical infrastructure has been identified as one of the main areas needed to lift international competitiveness, especially for landlocked countries. While such projects tend to be long term, the construction process itself creates jobs and income for poorer workers, similar to economic stimulus packages.
  • There is a need to monitor developments in international trade and trade policy. Governments also need to take an active role in international trade negotiations at the multilateral and regional levels to advance their interests in opening markets for their export.

The book is a useful and comprehensive tool for policymakers to objectively look at their country’s export environment in order to build the proper roads to success. While much of this can be achieved through national efforts, developing countries would benefit from international support through organizations such as the ITC in the design and implementation of these trade programs.

Download the road map here:

Related articles on the ITC:

The ITC’s Road Map for Success

Part 1 of 2

The International Trade Centre (ITC) is the joint agency between the World Trade Organization and the United Nations. It is dedicated to helping SMEs enter global markets by expanding trade opportunities and fostering sustainable development. Having worked with SMEs for 50 years, the ITC is familiar with the unique needs of SMEs and has vast experience in improving their international competitiveness and connecting them with markets. Additionally, the ITC hopes to bridge the divide between policymakers and the private sector.

In an attempt to help governments and the private sector of developing countries gain an understanding of the factors that affect the international business environment, the ITC has published The Policy Road Map for Export Success. The publication outlines a specific set of guidelines and frameworks for any country wishing to build a national export strategy while taking into account their local setting.

The road map brings together research, analysis, and experience gathered by countries that have successfully implemented trade policy and regulations. Specifically, it provides a diagnostic methodology to determine the factors that affect competitiveness in order to assist in policy recommendations. While the guide is mainly targeted to policymakers, business and private sector organizations can also use it to assess the impact of regulations to the competitiveness of their business and identify areas where they can influence trade policy.

Here are some key findings from Chapters 1 & 2:

  • There needs to be a national diagnostic study that will serve as a blueprint for a country. This study covers questions that identify weaknesses of the domestic economy and gauges whether a country’s market is ready for foreign investment. There are questions on trade and infrastructure which point out national policies affecting the allocation of resources such as tariffs and non-tariff measures. The diagnostic study should also cover the political and institutional frameworks affecting the country.
  • To aid in export competitiveness, a national competitiveness council must also be formed in which the private sector has access to.
  • Exporters need to be responsive to trends in demand for their exports in foreign markets. Trade ministries should be able to provide analyses of market patterns.
  • International competitiveness is based on costs of production relative to those of their competitors as well as the services involved in getting their goods and services to the final consumer.

Download the road map here:

 Related articles on the ITC:

ITC publishes business guide on new WTO trade facilitation agreement by ITC Communications

Following the approval of the Agreement on Trade Facilitation at the World Trade Organization’s (WTO) Ninth Ministerial Conference in Bali, Indonesia, earlier this month, the International Trade Centre (ITC) has published a guide for businesses and policymakers in developing countries explaining the operational elements and benefits of the agreement.

‘It is important that traders understand from the start what new measures will come into force, so that they can make plans accordingly,’ said Arancha González, ITC’s Executive Director. ‘Understanding the rules will also allow businesses to use them to reduce the costs of trading’

The agreement, which will cut red tape and ease and simplify customs formalities, is expected to increase global GDP by US$ 1 trillion and create 21 million jobs, according to the Peterson Institute for International Economics. Meanwhile, the Organisation for Economic Cooperation and Development (OECD) suggests that the agreement could reduce trade transaction costs in developing countries by 13%-15.5%, thereby increasing the competitiveness of developing country exporters.

ITC welcomed the approval of the agreement, calling it an important tool in raising the competitiveness of small and medium-sized enterprises (SMEs) in developing countries. ‘Effective trade facilitating procedures are critical for exporting SMEs as they allow them to connect to and move up value chains,’ Ms. González said.

The guide, which is available free of charge via ITC’s web site, explains the provisions of the agreement in clear and jargon free language, with a focus on what businesses need to know from an operational perspective if they are to use the new rules as a platform to increase trade and decrease the cost and time of exporting.

The guide will help SMEs and trade support institutions understand the commitments taken by their governments and assist them in the identification and prioritization of capacity building needs. ‘The Business Guide will help developing countries determine their implementation needs and will allow capacity building providers, including ITC, to better focus our assistance,’ Ms. González said.

Articles in plain language
For instance, the guide explains how the article on ‘Advance rulings’ aims to address problems with inconsistent classification of goods by customs officials and the uncertainty it creates for traders. ‘Advance rulings are binding decisions by customs…on the classification and origin of the goods in preparation for importation or exportation. Advance rulings facilitate the declaration and consequently the release and clearance process, as the classification has already been determined in the advance ruling and is binding to all customs officers for a period of time,’ the guide explains. It goes on to list in jargon-free language the obligations and the procedure imposed on customs authorities related to advance rulings.

Reducing the on-the-spot decision making authority of individual customs agents thanks to advance rulings will also reduce bribery, the guide says. Corruption continues to be a key problem for developing-country exporters, who identified it as a major constraint on exports in a recent survey conducted by ITC.

The last chapter of the guide describes how the agreement will be implemented, including the special and differential treatment provisions that developing countries may invoke. Developing countries will be able to link the implementation of the commitments to technical assistance and support from donors. WTO member states will have to explicitly apply for delays for each commitment, which will need to be approved by the WTO and the implementation schedule published.

ITC has offered to provide technical assistance to developing countries in the implementation of the agreement: ‘The earlier all the commitments are implemented in a country, the larger the benefits to their SME exporters,’ Ms. González said.

The guide will be shortly available in French and Spanish as well.

Please click here to download the PDF