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					               Training Seminar for ECOWAS, EAC and
               SADC on: Market Analysis Tools for Trade Flow
               Analysis and Modeling
               Dakar, Sénégal – April 26th to 29th, 2010

               INDICATIVE AGENDA


               April 26, 2010
9:00 – 12:30   Morning session
                  Welcome and Overview: trade trends worldwide
               Coffee Break
                  Trade Information: issues and challenges
                  Products overview: definitions and identification
                  Identifying a target market: trade data and Trade Map


12:30 – 14:00 Lunch
14:00 – 17:00 Afternoon session
                  Identifying a target market: trade data and Trade Map
               Coffee Break
                  Practical Session: using Trade Map




               April 27, 2010
9:00 – 12:30   Morning session
                  Practical Session: debrief
               Coffee Break
                  Identifying target market: market access screening and Market Access Map


12:30 – 14:00 Lunch
14:00 – 17:00 Afternoon session
                  Identifying target market: market access screening and Market Access Map
               Coffee Break
                  Practical Session: using Market Access Map
               Training Seminar for ECOWAS, EAC and
               SADC on: Market Analysis Tools for Trade Flow
               Analysis and Modeling
               Dakar, Sénégal – April 26th to 30th, 2010

               INDICATIVE AGENDA


               April 28, 2010
9:00 – 12:30   Morning session
                  Practical Session: debrief
               Coffee Break
                  Preparing for multilateral or regional trade negotiations: overview


12:30 – 14:00 Lunch
14:00 – 17:00 Afternoon session
                  Multilateral and regional trade negotiations: market access considerations
                  Multilateral and regional trade negotiations: identifying sensitive products
               Coffee Break
                  Practical Session: Identifying sensitive products




               April 29, 2010
9:00 – 12:30   Morning session
                  Tariff reduction simulations: the context of WTO negotiations on NAMA and Agriculture
               Coffee Break
                  Tariff reduction simulations: Case study by ITC
                  Regional trade agreements impacts on developing countries – Case study by ITC


12:30 – 14:00 Lunch
14:00 – 16:00 Afternoon session
                  New project at ITC: Non Tariff Measures
               Coffee Break
                  New project at ITC: Standards Map
Training Seminar for ECOWAS, EAC and
SADC on: Market Analysis Tools for Trade
Flow Analysis and Modeling
Dakar, Sénégal – April 26th to 30th, 2010

Mathieu Lamolle



                                     Mr Mathieu Lamolle joined the Division
                                     of Market Development of ITC in October
                                     2007 as a Market Analyst. Mr Lamolle
                                     works in the Market Analysis and
                                     Research section and dedicates most of
                                     his working time to a new program of ITC
                                     called Trade for Sustainable Development
                                     – T4SD.

                                     Mr Lamolle has extensive experience in
                                     developing countries delivering training
                                     programs and providing technical advice
                                     on multilateral and regional market
                                     access issues and trade negotiations.

                                     Mr Lamolle has performed the masters’
degree in science of management at the Solvay Business School; he
participated in the executive program at the Tsinghua University in Beijing and
in the executive program at the World Trade Institute in Bern. Mr. Lamolle
speaks English, French and Spanish.
Introduction
Market Analysis Tools for Trade Flow Analysis and
Modelling




Mathieu Lamolle
Dakar, 26-29 April 2010




What is ITC?

The UN body for design of policy
                                                                              The forum to negotiate multilateral
recommendations to achieve
                                                                                       trade rules, monitor their
economic and social development
                                                                               implementation and handle trade
through trade and investment.
                                                                                                       disputes




                                      ITC works with local and regional
                                   institutions and businesspeople to build
• Mission                                        trade capacity.


  • ITC enables small business export success in developing
    countries by providing, with partners, trade development
    solutions to the private sector, trade support institutions
    and policy-makers




              Market Analysis Tools for Trade Flow Analysis and Modeling                                            1
      ITC Activities

                                                                                        ITC Development
     ITC Core Competencies                    ITC Clients    ITC Beneficiaries
                                                                                           Outcomes
    Business in Trade Policy                    Policy
                                                Makers
    Export Strategy                                                                  Export Impact for Good
                                                                  Micro,               Generating sustainable
                                                 Trade
                                                                Small and             incomes and livelihoods
    Trade Intelligence                          Support
                                                               Medium-Sized              especially for poor
                                              Institutions
    Trade Support Institution Strengthening                     Exporters            households, by connecting
                                                                                    enterprises to global markets
                                               Business
    Exporter Competitiveness                  Community




                 One                           One                               Many




      ITC Organisational chart




2                        Market Analysis Tools for Trade Flow Analysis and Modeling
MAR activities
                                                                 III. Capacity Building and
I. Market Analysis Tools      II. Tailored Analysis
                                                                      Training
                              Trade Competitiveness              Market Analysis and Research
Trade Map
                              Assessment                         Methodology
                                                                 Methodology for the
Market Access Map             Export Potential Assessment
                                                                 Preparation of Market Profiles

Investment Map                Export Opportunity Scan            Training–of–Trainers

                                                                 Mentoring for Tailored
Trade Competitiveness Map     Sector Competitiveness Scan
                                                                 Analyses

                              Customised analyses                Face-to-face and E-training

                                                                 Customised training




TIS activities
                              • Diagnosis of needs and existing capacities (national/regional)
I. Set up/Strengthen trade
                              • Operational plans for setting up information services
   information services
                              • Effective information processing, management, dissemination
                              • Selection and procurement of information material


                                              • Training Programmes
                             Policy Makers
                                            • Advisory Services
                                       TSIs
                                            • Support Services
                             Private Sector
                                              • Networking




II. Market Information        • Searching trade information efficiently
    Research                  • Methodology for the preparation of market profiles
    Methodologies             • Content Management Development




            Market Analysis Tools for Trade Flow Analysis and Modeling                            3
                                                                                                                                                                                         7
       Market Analysis Tools
     Cumulated number of user accounts
                                     +171% users since January 2009                                                                                                                             70,431
             Cumulative number of users registered from
             developing countries
                                                                                                                                                                                   67,257
                                                                                                                                                                    64,633
                                                                                                                                                       61,743
             Cumulative number of users registered from                                                                                   57,932
             developed countries or from ITC partner
             organizations                                                                                                   54,009
                                                                                                               50,292
             Cumulative number of non valid or expired accounts
                                                                                                  47,226
                                                                                     44,678
                                                                        41,463
                                                                                                                                 84,495 users registered in the
                                                           37,862
                                                                                                                                 Market Analysis Tools database
                                             34,389
                                                                                                                                 on 1st March 2010
                                30,843
                   27,834                                                                                                        On average, 3,807 accounts
     25,678                                                                                                                      were created each month since
                                                                                                                                 January 2009


                                                                                                                                                                    11,242         11,758       12,293
                                                                                                                                           9,983       10,599
                                                                                                   8,518        8,910         9,377
                                                            7,011        7,566       8,054
                                 5,757        6,379
      4,870         5,288

                     696          760          901           992         1,065       1,128         1,191        1,266         1,338        1,418        1,486        1,540          1,589        1,757
       630

    1-Jan-2009    1-Feb-2009   1-Mar-2009   1-Apr-2009    1-May-2009   1-Jun-2009   1-Jul-2009   1-Aug-2009   1-Sep-2009    1-Oct-2009   1-Nov-2009   1-Dec-2009   1-Jan-2010     1-Feb-2010   1-Mar-2010



                                               N.b.
                                               E-mails ending with @intracen.org have been excluded from the above statistics




      Market Analysis Tools
                 Countries with the most number of accounts created in Feb. 2010
                                                                                           Number of users                  Cumulative number of
                 Current month
                                                         Country                           registered during               users registered as of 1st              Cumulative rank
                     rank
                                                                                               Feb. 2010                           Mar. 2010
                       1                 Mexico                                                    1,004                              10,125                                 2
                       2                 Peru                                                        309                              14,247                                 1
                       3                 Turkey                                                      304                               2,930                                 7
                       4                 United States                                               205                               3,590                                 4
                       5                 Colombia                                                    192                               3,491                                 5
                       6                 India                                                       162                               2,602                                 8
                       7                 Egypt                                                        87                               3,858                                 3
                       8                 Spain                                                        86                               1,128                                 16
                       9                 Iran, Islamic Republic of                                    85                               1,533                                 12
                       10                Ecuador                                                      84                               2,593                                 9
                       11                Brazil                                                       77                               3,443                                 6
                       12                South Africa                                                 71                               1,796                                 11
                       13                Pakistan                                                     44                               1,257                                 14
                       14                Netherlands                                                  42                                 651                                 28
                       15                Indonesia                                                    41                                 905                                 23
                       16                Bulgaria                                                     39                                 167                                 62
                       17                France                                                       39                                 967                                 19
                       18                Uganda                                                       32                                 311                                 42
                       19                Bolivia, Plurinational State of                              31                               1,833                                 10
                       20                Thailand                                                     31                               1,082                                 17




4                                Market Analysis Tools for Trade Flow Analysis and Modeling
 Market Analysis Tools

Users profiles


                                                            Europe   Oceania
                                                             10%       1%

     Developed       LDC
     Countries        6%
                                                Africa
        12%
                                                15%

                                                                               America
                                                                                50%

                           Developing
                            Countries
                              82%
                                                     Asia
                                                     24%




 Trade is enormous...



$13,500,000,000,000
                      or $420,000 per second
   • Globalization has accelerated over the last 20 years
   • The volume of trade as a percentage of global GDP has more
     than doubled since 1960




                 Market Analysis Tools for Trade Flow Analysis and Modeling              5
    ... and it's more dynamic than the economy...
           13%
                                                 World Trade vs. GDP Growth
                                                                  1960-2007

           11%




           9%
                                GDP      Trade


           7%




           5%




           3%




           1%



                 1960-70 1970-80 1980-90 1991-94 1995-98   1999     2000   2001      2002   2003      2004     2005   2006    2007
           -1%

                                                                  Source: WTO




    ... but it's not immune to the downturn...
                    Annual Growth of Imports by Level of Development of Countries
                                                                  2002-2007
     30%



     25%


                                                                                Developed Countries    Developing Countries
     20%



     15%



     10%



     5%



     0%
                  2002                 2003                 2004                    2005                2006                  2007

                                                            Source: ITC Trade Map




6                  Market Analysis Tools for Trade Flow Analysis and Modeling
...although downturn is not uniform...
                     GDP and merchandise trade by region, 2005-07
                               Annual % change at constant prices




                                               Source: WTO




... and 2009 will be a tough year...
                                 Growth of trade volumes
 18                                       Annual % change


 15


 12


 9


 6


 3


 0

      1981    1984   1987    1990          1993          1996          1999       2002   2005   2008
 -3

                             Source: World Bank, Global Economic Prospects 2009




             Market Analysis Tools for Trade Flow Analysis and Modeling                                7
    … many attractive markets to choose from…
    • USA and EU: less dynamic but offering huge opportunities;
    • China: Tripling its size every five years;

    • The Asian network, especially Japan, Hong Kong, Singapore,
      Rep. of Korea, Chinese Taipei, Malaysia and Thailand;

    • Brazil, Mexico and India – large and fast-growing markets;
    • Medium-sized, high-growth markets: Turkey and South Africa;

    • Smaller economies with very dynamic markets, such as UAE,
      Qatar, Pakistan, Ghana, Algeria, Angola and Morocco.




                                   Source: ITC Trade Map




8           Market Analysis Tools for Trade Flow Analysis and Modeling
Trade liberalisation is commonplace




Market access issues are changing:
• Trade agreements proliferate...
       200
                           Number of Free Trade Agreements Notified to WTO
                                                                                     1958 – 2009
       180

       160

       140

       120

       100

        80

        60

        40

        20

        0
             1958
                    1960
                           1962
                                  1964
                                         1966
                                                1968
                                                       1970
                                                              1972
                                                                     1974
                                                                            1976
                                                                                   1978
                                                                                          1980
                                                                                                 1982
                                                                                                        1984
                                                                                                               1986
                                                                                                                      1988
                                                                                                                             1990
                                                                                                                                    1992
                                                                                                                                           1994
                                                                                                                                                  1996
                                                                                                                                                         1998
                                                                                                                                                                2000
                                                                                                                                                                       2002
                                                                                                                                                                              2004
                                                                                                                                                                                     2006
                                                                                                                                                                                            2008




                                                                                          Source: WTO




        Market Analysis Tools for Trade Flow Analysis and Modeling                                                                                                                                 9
     … tariffs tend to decrease…
                           Total Trade Restrictiveness Index – All Countries
                              Applied MFN Tariffs, All Products, By Level of Income
            12

                                                                                         2001   2007
            10



             8



             6



             4



             2



             0
                     Low            Med-low               Medium                 Med-High          High
                                        Source: World Trade Indicators, World Bank




     … which makes NTMs more important
                                              NTM Frequency
                                           By Level of Income, 2001
       45

       40

       35

       30

       25

       20

       15

       10

        5

        0
                   Low             Med-low                  Medium                   Med-High             High

                                        Source: World Trade Indicators, World Bank




10               Market Analysis Tools for Trade Flow Analysis and Modeling
Dramatic drop in communications costs...
• Reduction in costs of phone calls:
   • Cost of a 3-minute telephone call from NYC to London in 1960 was
     USD60.42. In 2000, it cost USD0.40 (in 2000 equivalent USD). In 2009,
     with VoIP the cost is close to zero

• Drop in the price of personal computers
   • The price of a computer and peripheral equipment in 1960 was
     USD1,869,009. In 2000, the price was USD1,000 (in 2000 equivalent
     USD). Today, Netbooks cost less than USD300

• Rise in the use of internet and mobile phones
   • Over 1.5 billion users worldwide, around 22% of global population
   • Users grew 305.5% between 2000-2008 (Internet World Statistics)




… and transport costs continue to go down!

    It costs one cent to ship a can of beer around the   And a USD6000 motorcycle can be
                          world…                               shipped for USD85…




     With the cost of a stamp you can ship a shirt




           Market Analysis Tools for Trade Flow Analysis and Modeling                      11
     Financial/Economic crisis:
     flourish or perish…




     Six mechanisms of contagion:
     •   Exports: exports are already slowing markedly in several developing
         countries
     •   Foreign investment: both portfolio and direct foreign investment have
         dropped dramatically in several countries as investors shy away from markets
         that are perceived to be riskier
     •   Exchange rate: the sudden withdrawal of foreign capital from several
         developing countries has caused dramatic falls in their exchange rate
     •   Interest rates: as foreign investors withdraw, risk premiums and interest
         rates have risen for developing countries on global capital markets
     •   Remittances: as jobs are lost, less emigrants are able to send money to their
         families
     •   Foreign aid: many countries expect that aid from rich countries will decline as
         governments reassess their fiscal priorities during a downturn.




12              Market Analysis Tools for Trade Flow Analysis and Modeling
Commodities prices drop
      Real prices of internationally traded commodity prices in developing countries
                                                                     CPI-deflated Indices, Jan. 2000=100
300
                                                                                                                                                                                    Energy


250



200



150

                                                                                                                                                                                            Food
100
                                                                                       Metals and
                                                                                        minerals
 50
  Jan-00                   Jan-01            Jan-02                 Jan-03                Jan-04                 Jan-05                 Jan-06                 Jan-07                Jan-08


                                                                   Source:World Bank, Global Economic Prospects 2009




2007-2009 Export Values from LDCs
                          45000
           USD Millions




                          40000


                          35000


                          30000


                          25000


                          20000


                          15000


                          10000


                           5000


                              0
                                  2007-Q1      2007-Q2        2007-Q3        2007-Q4         2008-Q1        2008-Q2        2008-Q3        2008-Q4        2009-Q1        2009-Q2        2009-Q3

                                                                                           All Products            Crude Oil



                 Source: ITC Trade Map
                 Reporting Countries: Australia, Bolivia, Brazil, China, Chinese Taipei, Colombia, El Salvador, EU27 (less Belgium), Iceland, Japan, Mauritius, Mexico, Singapore, Switzerland, Thailand,
                 Turkey, United States of America




                           Market Analysis Tools for Trade Flow Analysis and Modeling                                                                                                                       13
     The need for more market
     analysis




     Need for market and product diversification




                                   Source: World Bank




14         Market Analysis Tools for Trade Flow Analysis and Modeling
Need for market diversification




                                 Source: World Bank




Now look at some issues in marketing:
• Globalization requires and rewards best practices
   • Why is Toyota gaining market share in North America when General
     Motors is not?
   • How much of a cup of Starbuck’s coffee is spent on raw coffee beans?
     What do they spend the rest on?
   • How much of their revenue do top companies spend on marketing and
     market analysis?




     Capacity to undertake market analysis is the key




         Market Analysis Tools for Trade Flow Analysis and Modeling         15
     2007 Marketing Expense - U.S. Companies
                                                        Amount spent
                                       Percentage of
                                                        on marketing
                                         Revenue
                                                        (billion USD)
         Finance and Insurance              6.8             68.2

         Information                        10.5            59.2

         Other Services                     10.4            29.8

         Manufacturing                      7.8             120.1

         Retail Trade                       11.5            94.6

         All businesses                     8.9             1,073




     And bad market research can cost dearly…
                

        Wal-Mart's German Retreat
        The U.S. price-cutting retailer made a series of bad
        moves and has now sold its stores to the competition.
        Was a lesson learned?
        ….The retreat is hardly surprising given Wal-Mart's numerous
        missteps in Germany. Perhaps its most glaring was misjudging the
        German consumer and business culture. For instance, German
        Wal-Marts adopted the U.S. custom of bagging groceries, which
        many German consumers find distasteful because they tend not to
        like strangers handling their food…




16         Market Analysis Tools for Trade Flow Analysis and Modeling
So, why export market analysis?
• As just discussed…
   • trade is growing rapidly and is considered to be one of the most important
     sources of economic growth for developing and transition countries
   • efficient production is not sufficient anymore
   • successful firms/countries need to excel in marketing to identify the best
     opportunities in foreign countries and distinguish themselves from
     competitors

• Market analysis is the first, necessary, step to formulate a
  coherent export strategy




Developing an Export Strategy
                                                 Feedback loops


  A good market profile informs the export strategy


   What are the            What are           What are the
                                                                         What is a
   product and               the                target                                           How do we
                                                                       winning value
       firm                potential            market                                           get there?
                                                                       proposition?
   capabilities?           markets?            trends?

  • Product situation   • Importers         • Consumer Trends        • Business Model          • Market-led activities
  • SWOT                • Product groups    • Technology             • Cost/Benefit Analysis   • Supply-led actions
                        • Trade structure   • Regulatory trends      • Defined Value Prop.     • Cluster activities
                        • Tariffs           • Tariffs and Barriers       • Product / Service   • Investment needs
                        • Regulations       • Distribution               • Price
                                            • Promotion                  • Promotion
                                            • Pricing                    • Place
                                            • Value chain




             Market Analysis Tools for Trade Flow Analysis and Modeling                                                  17
     Export strategies require information

                                                 • Country, Segment
         Where will we play?
                                                 • Sector, Product, Process


         How will we win?                        • “Entry fee” (minimum to play)
                                                 • Differentiation

         Why will we win?                        • Sustainable Competitive Advantage


                                                 • Projected return
         What will it take?
                                                 • Investment and on-going costs




     Identifying (and describing) a product
     • Sample questions:
        • “What is the main application and function of the product?”

        • “What factors (tangible and augmented) constitute the product?”

        • “How flexible are these factors? Can they be altered to fit a market?”

        • "Can the product fit in a certain lifestyle? Differences by market?”

        • “How could the product be adapted/standardised to differentiate it to
          competition?”

                      . . . What is it we really are selling?




18             Market Analysis Tools for Trade Flow Analysis and Modeling
Identifying a target market
• Sample questions:
   • What is the consumption and production of this product around the world?

   • What are the fastest growing markets for my product?

   • Which countries are supplying those markets?

   • What is the position of our producers in those markets?

   • What are the access conditions for those markets?


            . . . Where should I focus further research?




Identifying routes to a market
• Sample questions:

   • How is this product distributed in the target markets?

   • What are the options for promoting this product?

   • What trade fairs should I attend? Who else has been attending?

   • What buyers should I focus on?



                     . . . How can I make a sale?




         Market Analysis Tools for Trade Flow Analysis and Modeling             19
     Register to access ITC’s
     Market Analysis Tools




     Free to users from developing countries
     Thanks to financial contributions from ITC's Global Trust Fund and the
     World Bank, as of the 1st January 2008, all users from developing
     countries and territories may access ITC's market analysis tools free
     of charge.



      http://www.intracen.org/mat




20            Market Analysis Tools for Trade Flow Analysis and Modeling
Free to users from developing countries




     Market Analysis Tools for Trade Flow Analysis and Modeling   21
     Trade information
     Issues and challenges
     Market Analysis Tools for Trade Flow Analysis and
     Modelling




     Mathieu Lamolle
     Dakar, 26-29 April 2010




            Why should you gather trade information?

                           Explore business opportunities

                      Spot evolution trends in foreign markets

                                Foresee other changes




              Develop and adopt new strategies




22             Market Analysis Tools for Trade Flow Analysis and Modeling
      Main Challenges


                                                        Disseminate the
                                                          information

                          Process and organise
                            information to be
                                  used
     Collect
    relevant
  information




Why seek trade information?
A lack of trade information may result in:

• Waste of time and energy

• Lack of productivity

• Losses of market share

• Missed opportunities to latch onto international supply chains




         Market Analysis Tools for Trade Flow Analysis and Modeling       23
     Obtaining the necessary information
     • Information must be:
       • Comprehensive
       • Up to date
       • Accessible
       • Accurate and trustworthy
       • In the required format
       • Functional
       • Cost-effective




     Take advantage of the Internet
     • Pros:
       • Communication:
          • Distance is not an issue
          • The World is your client….and your competitor

       • Time vanishes:
          • Immediate response is possible
          • Real time perspective of the market

       • Wealth of information available




24             Market Analysis Tools for Trade Flow Analysis and Modeling
However, keep in mind…
• Cons:
  • Source and content overload on the web
     • Not always easy to identify credible and pertinent information; ex.
       non-identified institutional attachment

  • Not all information on the web is free of charge.......
     • Highly value-added information must be paid for and is costly!

  • Visible vs. Invisible web




What market information is available?
• What is happening in a specific market at a specific
  moment?
  • Growth? Stability? Decline?
  • Main actors’ behaviour:
     • Are they investing?
     • Are they withdrawing?
     • Are they enhancing their presence?
  • What are the opportunities?
  • What are the risks?
  • How is demand evolving? (short, medium and long term)




        Market Analysis Tools for Trade Flow Analysis and Modeling           25
     Main Challenges


                                                             Disseminate the
                                                               information
                                  Process
                                    and
                                  organise
         Collect relevant       information
          information




     Managing sources effectively
     • Assessing the right source is key:
        • Save time and costs
        • Enhance usability of information
     • To process, analyse and organise adequately the information
       is key; collecting information is not difficult
     • Orient the user to become more independent




                         Having a method is the key




26            Market Analysis Tools for Trade Flow Analysis and Modeling
Organizing sources effectively
• Trade Stats:
  • production, consumption, trade flows (imports, exports),
    market size

• Market access conditions:
  • tariffs, regulations, local trade customs, etc.

• Market characteristics and trends:
  • Consumer habits, market reports, different types of prices,
    business opportunities, contacts, distribution channels, etc.




Main Challenges

                                                    Disseminate
                                                        the
                                                    information
                         Process and organise
                             information


   Collect relevant
    information




        Market Analysis Tools for Trade Flow Analysis and Modeling   27
      How to manage trade information efficiently?
      • Collection
          • Information is like plants: organised it's a garden;
            otherwise it's weed!
          • Not always found in an organized manner, processing is
            necessary
      • Processing
          • Adding Value to the information collected – turning
            information into decision-support tools.
      • Dissemination
          • Reactive, interactive or proactive approach




      3 approaches to information management
     Reactive




                Website/Portal
                •Databases, catalogs
                •Virtual Reference Desk
                •FAQs

                Information Centre/
                Library
                • Inquiry/Reply
                • Reference Desk
                • Circulation, Loan
                • CyberSpace




28                  Market Analysis Tools for Trade Flow Analysis and Modeling
3 approaches to information management



               Proactive
                           Alert systems
                           • Current Awareness
                           • Selective Dissemination
                           • E-mail alerts

                           Publications
                           • Bulletin: print, electronic
                           • Market briefs, reports
                           • Directories




3 approaches to information management
                                                           Interactive




                                                                         Discussion Forums
                                                                         • Users
                                                                         • Partners
                                                                         • Staff

                                                                         Regular
                                                                         Consultations
                                                                         • Direct Contacts
                                                                         • Surveys
                                                                         • Seminars
                                                                         • Awareness events




     Market Analysis Tools for Trade Flow Analysis and Modeling                               29
     Dissemination channels
     • Inquiry/Reply – Reference services
        • Centralisation of the requests
        • Via e-mails, telephone, walk-ins

     • Circulation/loan
     • Bulletin/Newsletter
        • Trade news
        • News of the TIS
        • New acquisitions




     Dissemination channels
     • Alert services
        • Critical information
        • Business news, new sources
     • Selective Dissemination of Information (SDIs)
        • Tailored service
        • Profiles of target users
     • Website
        • Access to databases
        • Web Index
        • Web forum
        • FAQ




30             Market Analysis Tools for Trade Flow Analysis and Modeling
Other dissemination channels
• Mass media – Newspapers, Radio, TV
• Internet RSS, XML feeds
• Internet chat
• Business news by mobile technologies (SMS)
• Promotional events




Selected alert services, RSS/XML, Chat
• UEPB
   • www.ugandaexportsonline.com/
• TDC Hong Kong
   • http://www.tdctrade.com/sme/newsflash/index.htm
• Dialog Alert Service
   • http://www.dialog.com/
• ProQuest sends alerts to users on user-selected topics
• Factiva provides alert services by user-defined strategies:
   • www.factiva.com (RSS feeds)
• Online Chat for Exporters Australian Trade Commission:
   • http://www.austrade.gov.au




         Market Analysis Tools for Trade Flow Analysis and Modeling   31
     Examples of information
     dissemination




32      Market Analysis Tools for Trade Flow Analysis and Modeling
International Market
Research
Useful information sources




      Market studies on the Internet
• ITC (TIRC, Product Map,…) http://www.intracen.org

• UNCTAD: Information on products in specific markets
  http://r0.unctad.org/infocomm/

• International Trade Association Federation www.fita.org

• Import Promotion Offices
   • CBI (Netherlands) http://www.cbi.nl

   • JETRO (Japan) http://www.jetro.go.jp

   • Strategies (Canada) http://strategis.ic.gc.ca




         Market Analysis Tools for Trade Flow Analysis and Modeling   33
          Price information
     • ITC
       • http://www.intracen.org/mns

     • UNCTAD
       • http://r0.unctad.org/infocomm/

     • World Bank: Commodity Price Data
       • http://www.worldbank.org/prospects/pinksheets/




          Specialized Press
     • Type
       • Industry publications (general)
       • Specialized newspapers
          • by sector/product
          • by region/country
          • by function (per ex: packaging, quality, etc.)

     • Pros
       • Inexpensive
       • Current




34            Market Analysis Tools for Trade Flow Analysis and Modeling
       Tariffs – Institutional Sources
•    Global
    • ITC: Market Access Map: http://www.macmap.org

    • International Customs Tariffs Bureau (http://www.bitd.org)

    • World Customs Organization (http://www.wcoomd.org/)

    • UNCTAD: Trade Analysis & Information System (TRAINS)
      http://www.unctad.org/trains




       Non-tariff measures: Institutional sources
• WTO Agreements
    • http://www.wto.org

• Market Access Database UE
    • http://mkaccdb.eu.int/

• CBI Access Guide
    • http://www.cbi.nl/accessguide




         Market Analysis Tools for Trade Flow Analysis and Modeling   35
          Sources for standards and regulations
     • International Organization for Standardization
       • http://www.iso.org

     • National Standardisation Bodies
       • http://www.wssn.net/

     • FAO/OMS - Codex alimentarius
       • http://www.codexalimentarius.net

     • ITC (Directory)
       • http://www.intracen.org




36          Market Analysis Tools for Trade Flow Analysis and Modeling
Products overview
Definition and identification
Market Analysis Tools for Trade Flow Analysis and
Modelling




Mathieu Lamolle
Dakar, 26-29 April 2010




Products overview: towards a definition
• Level of detail is important.
   • The more focused, the more useful it is for your clients, but the less
     flexible it is for you
       • Seafood vs. shrimp vs. frozen shrimp vs. prepared foods containing shrimp

• In the description: what the product is used for?
   • it might change the market entirely
       • Cashew can be a nut (kernel), a fruit (cashew apple), can produce
         industrial lubricant
       • Industrial vs. Household uses for glass




          Market Analysis Tools for Trade Flow Analysis and Modeling                 37
     What is the International nomenclature?
     • The Harmonized System (HS)
       • Is used as a basis for the collection of Custom duties and international
         trade statistics by almost all countries, representing about 98% of
         world trade
       • Developed by the World Customs Organisation – WCO
         (www.wcoomd.org)
       • Implemented late 1980s.
       • Harmonised different existing nomenclatures
       • Adopted by almost all countries in the world
       • Basis for all trade conversations internationally
       • Main revisions in 1996 and 2007




     Data classification
     • The Harmonized System (HS)
        • Is a numerical classification system of products
          used as a basis for international trade statistics by
          almost all countries.
        • is harmonized up to six digits (HS-6)                       HS-2

        • is standardised internationally - You can compare
          HS data between countries.                                  HS-4

        • Is broken down into 3 clusters:
            • HS-2: the chapter of the good (sector)
                                                                      HS-6
                • E.g. 09 = Coffee, Tea, Mate and Spices
            • HS-4: groupings within the chapter (sub-sector)
                • E.g. 0902 = Tea, whether or not flavoured
            • HS-6: product(s) within the grouping (product level)
                • E.g. 090210 = Green tea (not fermented)




38            Market Analysis Tools for Trade Flow Analysis and Modeling
Data classification
 • National Tariff Lines (NTL) codes
     • Classification of goods after the 6 digit level of the
       Harmonized System classification.
     • While the most detailed level of the HS is HS-6,                     HS-2

       National Tariff Lines can go up to 12 digits.
                                                                            HS-4
 • Why use the HS and NTL classification?
     • The HS classification is standardised internationally
                                                                            HS-6
     • The NTL classification is not standardised
       internationally.                                                     NTL
        Each country decides its own further classification
        after the Harmonized System. Hence, National Tariff
        Line codes can be different from a country to another.




Data classification
                 08               Edible fruit and nuts; peel of citrus fruit or melons.
    HS           08.04            Dates, figs, pineapples, avocados, guavas, mangoes
(International                    and mangosteens, fresh or dried.
  standard)
                 08.04.50         Guavas, mangoes and mangosteens.


                 Australia
                 08.04.50.00      Fresh or dried guavas, mangoes and mangosteens
                 Japan
                 08.04.50.01.1    Mangoes, fresh
    NTL
                 08.04.50.01.9    Guavas and mangosteens, fresh
   (NON
                 United States:
 standard)
                 08.04.50.80.00   Guavas, mangoes and mangosteens, dried
                 08.04.50.60.80   Guavas and mangosteens, fresh, if entered during the period
                                  from June 1 to August 31, of the following year, inclusive
                 08.04.50.40.40   Mangoes, fresh, if entered during the period from September 1,
                                  in any year, to the following May 31, inclusive




             Market Analysis Tools for Trade Flow Analysis and Modeling                            39
     Features of our product?

                                  Warranty
                                                                   Additional
             Shipping                 Efficiency                   Services
               and                                  Versatility
                            Packaging
             Handling
                                                             Quality
                         Brand           BASIC
                         Name           PRODUCT
                                                           Style            Post-sale
                                                                             service
                                        TANGIBLE
                “Ethical                PRODUCT
              Consumption”
                                        AUGMENTED
                                         PRODUCT




     Features of a product
     • The base product – the core
        • most elementary and generic definition of the content and use of
          the product
           • a shirt : a piece of clothing to cover the upper-body and protect against
             the elements
           • chocolate: the cocoa butter mixed with a few basic ingredients


     • The tangible factors – the physical features
        • physical attributes that the consumer can see, touch, want and
          need: design, form, style, brand name, versatility, efficiency
           • a shirt: a choice of colours, style, quality of the stitching, brand
             descriptors, versatility (easy-ironing, formal/informal), etc.
           • Chocolate: choice and content of ingredients, shapes and sizes,
             wrapping, etc.




40            Market Analysis Tools for Trade Flow Analysis and Modeling
Features of a product
• The Augmented characteristics – the "ethereal" features
   • Certification/quality control (in foreign markets)
       • a guarantee can help a new company to reassure local consumers about
         quality
   • Characteristic of the production process that carry special value:
       • Organic ingredients, environment-friendly, child labour-free, etc.
   • Transport and insurance
       • services such as transport, customs clearance, insurance,...
       • can be supported by the purchaser, by the exporter or be divided between
         these two parties
   • Packaging
   • Maintenance/guarantee




An example of product description…


            The cashew, Anacardium occidentale L., belongs to Anacardiacea or cashew
            family. Other important plants of this family are the mango (Mangifera indica)
            and the pistachio nut (Pistacia vera).
            The cashew tree is versatile. The cashew tree produces fruit and a by-product:
            the nutshell oil. The fruit consists of two parts: a pear-shaped stalk called the
            cashew “apple” and a greyish brown kidney-shaped nut (HS 08.01.31), which is
            attached to the lower end of the apple and contains a slightly curved white
            kernel (HS 08.01.32), wrapped in a thin brown skin or testa. The nutshell, which
            is smooth and oily, contains a toxic, resinous material from which is obtained the
            cashew nut shell liquid (CNSL).
            The apples go rotten within 24 hours of harvesting unless refrigerated while the
            nuts may be kept for about a year provided they are properly dried immediately
            after harvesting (maximum moisture 9%) to prevent mould and properly stored.
            Usually the nuts are sun dried and constantly turned over for several days until
            the kernels rattle in the shell……..

                   Source: ITC Market Profile on Cashew Nuts




          Market Analysis Tools for Trade Flow Analysis and Modeling                             41
     Online Sources of Trade/Market Information
     This is a compilation of identified online sources of information. The first part of the document
     concentrates on sources of general trade/market information often required for international
     trade. The second part is a list of useful links to websites of major international organisations,
     business links and institutions active in the field of market information and trade promotion.
          I.   Product Description
          II. Market Analysis
                   a. Screening the Market
                   b. Selecting Potential Markets
                   c.   Market Characteristics
          III. Distribution Channels
          IV. Packaging and Labelling
          V. Certification
          VI. Trade/Sales Promotion
          VII. Additional useful links


     I.        Product description
     Comprising product description, main applications and functions of products


     Purdue University Centre for New Crops and Plants Products
               http://www.hort.purdue.edu/newcrop/Indices/index_ab.html
               New Crop (New Crops Resource Online Program) is a website of the Purdue University
               providing new crop and specialty crop profiles.
               The CropINDEX enables users to identify a product by common or scientific name.
               From the New Crop home page, the information about a product can also be found
               using the keyword search (CropSEARCH).


     UNCTAD Info Comm (Market information in the commodities area)
               http://r0.unctad.org/infocomm/anglais/indexen.htm
               The Market Information in the Commodities Area of the UNCTAD is an international
               portal containing practical information on agricultural products, energy, metal minerals
               and beverages. The information provided on a specific commodity includes a general
               description of the crop and its characteristics, the information about the quality of the
               products and its uses, as well as useful information about the market, the marketing
               chain, the prices and economic policies associated with the product in question.
               The Info Comm portal is available in three languages, English, French and Spanish.




     Market Development Section of the International Trade Centre (DMD/MDS)




42                Market Analysis Tools for Trade Flow Analysis and Modeling
INTERNATIONAL TRADE CENTRE

        http://www.intracen.org/mds/
        Expertise in marketing and product development
        Focus on nine product sectors in agro-based and manufactured products by strategic
        direction, project management, technical backstopping and publications
        Information for producers, exporters, trade associations and public sector organizations


II.     Market Analysis
a.      Screening the Market
Analysis of world trade for agricultural produce, revealing the big players worldwide and relevant
trade patterns (if any) amongst other information:


ITC Trade Map
        http://www.trademap.org/
        Trade Map is an online database on trade flows in goods and services and tariff
        measures. It provides information about export trends, trade values, market share,
        market access information, international supply and demand, competitor performance
        and alternative markets. Trade Map is an important tool useful in analysing markets by
        identifying main competitors and barriers.


FAO Key Statistics on Food and Agriculture External Trade
        http://www.fao.org/es/ess/toptrade/trade.asp
        Provided by the Statistics Division of FAO, this website contains a database on world
        food and agriculture with an annual food supply assessment for all countries. In
        obtaining the data, the division works closely with member countries providing
        assistance and advice in data collection and analysis.
        This page provides information on import and export commodities and values, major
        importers and exporters of specific commodities, the share of the total agriculture
        imports and exports in the top and last 20 countries.


FAO Major Food and Agricultural Commodities and Producers
        http://www.fao.org/es/ess/top/country.html;jsessionid=0A21B51AF450F525F760A5732
        DA589AE?lang=en
        This page provided by the Statistics Division of FAO the, illustrate the production of 20
        most important food and agricultural commodities (ranked by value) in given countries
        for the year indicated.


FAO Commodities and Trade
        http://www.fao.org/ES/ESC/en/20953/21002/index.html
        The Commodities and Trade Division at FAO provides information on the situation of
        the world market and the outlook for the main agricultural commodities. It contains
        market studies, statistics, trends, commodity notes and information on trade policies
        characterising a specific commodity.


ITC Product Map
        http://langues.p-maps.org/pmaps/index.php?lan=english




            Market Analysis Tools for Trade Flow Analysis and Modeling                      43
     INTERNATIONAL TRADE CENTRE

             Product Map consists of 72 market analysis portals covering over 5000 products
             classified within 72 product clusters. Each portal offers trade statistics and market
             analysis tools for identifying global market trends and international trade opportunities
             for any product category. In addition, Product Map provides links to potential business
             contacts, to market research publications and to numerous sources of market
             intelligence.


     USDA Foreign Agricultural Services (FAS)
             http://www.fas.usda.gov/currwmt.asp
             The Current World Production, Market and Trade Reports of the USDA provide
             information about the supply, demand and trade estimates for US and other countries
             with the latest analyses and data on different agricultural commodities, including
             organic products.

     b.      Selecting Potential Markets
     Centre for the Promotion of Imports from Developing Countries
             http://www.cbi.nl/
             The website of the Centre for the Promotion of Imports from Developing Countries (CBI)
             offers market information, practical advice to exporters, importers and producers about
             marketing strategies, importing markets, export tools and support in trade development.


     European Commission – Export Helpdesk for Developing Countries
             http://exporthelp.europa.eu/
             The Export Helpdesk of the European Commission provides companies from
             developing countries with relevant market access information to facilitate the access of
             their products to the European Union.


     ITC Trade Map
             http://www.trademap.org/
             Trade Map is an online database on trade flows in goods and services and tariff
             measures. It provides information about export trends, trade values, market share,
             market access information, international supply and demand, competitor performance
             and alternative markets. Trade Map is an important tool useful in analysing and
             selecting markets by identifying main competitors and barriers.


     ITC Product Map
             http://langues.p-maps.org/pmaps/index.php?lan=english
             Product Map consists of 72 market analysis portals covering over 5000 products
             classified within 72 product clusters. Each portal offers trade statistics and market
             analysis tools for identifying global market trends and international trade opportunities
             for any product category. In addition, Product Map provides links to potential business
             contacts, to market research publications and to numerous sources of market
             intelligence.

     c.      Market Characteristics
     Identifying preferred product quality, import tariffs and prices of agricultural products across
     major markets


     ITC Market Access Map (custom tariffs and other measures applied by importing countries)


44               Market Analysis Tools for Trade Flow Analysis and Modeling
INTERNATIONAL TRADE CENTRE

         http://www.macmap.org/
         Market Access Map help exporters, importers, trade promoters and policy negotiators to
         identify custom tariffs and other measures and to compare themselves to their
         competitors. Market Access Map can also be useful for the simulation of the trade
         effects through tariff reductions. Data about import duties cover 178 importing countries
         and are applied to 239 countries and territories.


Centre for the Promotion of Imports from Developing Countries
         http://www.cbi.nl/
         The website of the Centre for the Promotion of Imports from Developing Countries (CBI)
         offers market information, practical advice to exporters, importers and producers about
         marketing strategies, importing markets, export tools and support in trade development.



Prices
Agribusiness Online
         http://www.agribusinessonline.com/prices/
         The AgrobusinessOnline website offers market intelligence and technical information
         services for agribusiness professionals worldwide.
         This particular page offers updated terminal price information in the United States,
         Canada, Mexico and Europe for a certain number of commodities (vegetables, fruit,
         oriental vegetables, onions and potatoes, flowers and herbs). Price reports are official
         prices reported by the U.S. Department of Agriculture.


FAO (International Commodities Prices)
         http://www.fao.org/es/esc/prices/PricesServlet.jsp?lang=en
         International Commodity Prices of the Commodities and Trade Division at FAO
         provides up-to-date price information on agricultural commodities. Some data are
         provided on a weekly basis, other with monthly observations. Monthly and annual
         averages are calculated from the weekly price information. Notes about individual
         commodities are also available (Commodity Notes).


World Bank Commodity Price Data (Pink sheet)
         http://web.worldbank.org/WBSITE/EXTERNAL/EXTDEC/EXTDECPROSPECTS/0,,cont
         entMDK:20268484~menuPK:556802~pagePK:64165401~piPK:64165026~theSitePK:4
         76883,00.html
         The World Bank Commodity and Price Data provides the summary of monthly
         commodity price data. The Pink Sheet for each month contains the data from the
         previous month.
         This page also offers the opportunity to receive email alerts for Commodity Price Data
         and contains the link to “Prospects for the Global Economy” publication.


FoodNet
         http://www.foodnet.cgiar.org/index.htm
         FOODNET is a market research program for East and Central Africa. The website is
         mainly focused on market analysis studies, market information and business
         development support services. The weekly market prices are available for Uganda,
         Tanzania, Kenya and Rwanda.




             Market Analysis Tools for Trade Flow Analysis and Modeling                     45
     INTERNATIONAL TRADE CENTRE

     III.    Distribution Channels
     Sources of information on major international trading centres and prevailing methods of
     operation including transportation
     Transport Information Service (TIS)
             http://www.tis-gdv.de/
             The Transport Information Service (TIS) provides users with practical information about
             the transport sector, which includes Cargo Information for about 190 products and
             technical information about containers and packaging.
             Searching for a specific product, users will find general information on the product itself
             (product information, packaging and transport) and information on the Risk factors and
             loss prevention (temperature, humidity, contamination, toxicity etc).


     IV.     Packaging and Labelling
             Information on packaging and labelling requirements for exporting (organic) agricultural
             produce to major markets around the globe; including environmental issues and draft
             legislations concerning the use of non-recyclable packaging
     Codex Alimentarius Commission
             http://www.codexalimentarius.net/web/standard_list.jsp
             On this page you can find the Codex Alimentarius Current Official Standards listed by
             year of adoption. It is also possible to search for official standards for a certain
             commodity with the quick search or the advanced search tools.


     EC Export Helpdesk for Developing Countries (Requirements)
             http://exporthelp.europa.eu/thdapp/taxes/MSServlet?languageId=EN
             This section of the EC Export Helpdesk for Developing Countries provides information
             on member states’ import requirements and taxes for the products entering the EU
             market. By selecting the product code, the country of origin and the country of
             destination, an exporter has access to information on taxes and requirements for this
             specific product in the importing country.


     Centre for the Promotion of Imports from Developing Countries
             http://www.cbi.nl/
             The website of the Centre for the Promotion of Imports from Developing Countries (CBI)
             offers market information, practical advice to exporters, importers and producers about
             marketing strategies, importing markets, market access requirements, export tools and
             support in trade development.


     ITC (Export Packaging)
             http://www.intracen.org
             ITC’s Integrated Export Packaging Information Kit (PACkit) provides practical
             information on products and their packaging needs, on the different packaging
             materials, packaging profiles of exporting countries and packaging profiles of importing
             countries.
             Export Product Profiles are available for Cut flowers, Hides and Skins, Fresh Fruits and
             vegetables, Dried fruit and vegetables; Importing Country Profiles for EU and USA;
             Exporting Country Profiles for Latvia and Zimbabwe and there are also Packaging
             Materials Profiles for Paper and Board and Plastics.



46               Market Analysis Tools for Trade Flow Analysis and Modeling
INTERNATIONAL TRADE CENTRE



Wikipedia (Food and Labelling Regulations)
       http://en.wikipedia.org/wiki/Food_labelling_Regulations
       This page illustrates the key features and requirements of food labelling primarily based
       on UK and EU regulations. It provides concrete information on standards used for the
       product description, the indication of the name of the product, the requirements for the
       Ingredients and Nutritional information, Medicinal claims, Date tagging, Place of origin,
       preservation etc.


V.     Trade/Sales Promotion
       Information on international fairs for (organic) agricultural produce, import promotion
       offices, potential importers/traders and useful addresses


eMarket Services
       http://www.emarketservices.com
       eMarket Services is a website devoted to knowledge and information about the use of
       electronic marketplaces for international business. The services offered by this website
       focus on small and medium size companies helping them to use e-marketplaces to sell
       their products. The following services are available on the eMarket Services portal: a
       directory of e-marketplaces around the world, case studies on the practical experience
       of companies, industry reports about the use of e-marketplaces for their businesses and
       basic information and reports on e-marketplaces and different e-business issues.


AllesHandel – AllTrade (e-marketplace)
       http://www.alleshandel.com/trade/index.php?catid=60015&offtype=Sell
       AllesHandel-allTrade is an international marketplace bringing together buyers and
       sellers from around the world.


VI.    Additional Useful Links
US Foreign Agricultural Services (FAS Online- Horticulture and Tropical Products Division)
http://www.fas.usda.gov/htp/comodlst.html
       The Horticultural and Tropical Products Division of the USDA Foreign Agricultural
       Services (FAS) provides reports and publications (schedule for 2005, FAS attaché
       reports, US trade data), Price information, production information and useful links for all
       the commodities listed.


 US Foreign Agricultural Services http://www.fas.usda.gov
       The website of the Foreign Agricultural Service (FAS) of the US Department of
       Agriculture (USDA) offers a variety of reports, market and trade data (statistical
       information, commodity specific reports), information on commodities, programmes and
       export opportunities, export regulations, quality requirements and other information
       supposed to help exporting US products abroad.
ACP-EU-TRADE.ORG http://www.acp-eu-trade.org
       This website deals with the trade relations between African, Caribbean and          Pacific
       (ACP) countries and the EU. It provides access to publicly available information    from a
       variety of sources on ACP-EU trade related issues. It is possible to access         recent
       studies and documents, reports and communications, regularly updated news           on the
       status of the current negotiations and links to relevant web sources.



           Market Analysis Tools for Trade Flow Analysis and Modeling                       47
     INTERNATIONAL TRADE CENTRE



     Japan           External          Trade            Organization          (Market           reports)
     http://www.jetro.go.jp/en/market/reports/food/
             This page of the Japan External Trade Organization (JETRO) provides Market Reports
             for many food commodities.


     International Trade Centre- Trade Information Reference Centre
             http://www.intracen.org/tirc/welcome.htm
             The ITC Trade Information Reference Centre is a major source of information in the
             field of international trade and related issues.


     AgraNet
             http://www.agra-net.com/portal/
             AgrNet provides information on agriculture and food policy, markets and trade. It offers
             a wide range of services including newsletters, conferences and seminars, yearbooks,
             studies and market research.


     Swiss Import Promotion Programme (Publications)
             http://www.sippo.ch/cgi/news/publications.asp?mode=6
             The Swiss Import Promotion Programme (SIPPO) provides a wide range of publications
             and guides useful for companies willing to export to the Swiss and the EU markets.

     Subject Directories
             Smaller databases where you can search by subject or topic for web sites. They are
             compiled by human information experts with evaluation and quality of information in
             mind.
             http://lii.org: 16+ thousand sites, annotated with descriptions, classified by subject, and
             searchable.
             http://infomine.ucr.edu/: 125+ thousand sites, annotated with descriptions, classified by
             subject, and searchable.
             http://www.academicinfo.net/: 25+ thousand sites, classified by academic disciplines,
             and browsable by discipline

     Meta search engines
             http://www.dogpile.com: Meta search engine compiling results from Google, Yahoo,
             Ask, Msn…
             http://www.copernic.com: Meta search engine compiling results from the web and from
             PC files.

     Specialised institutions
     Centre for the Promotion of Imports from Developing Countries
                 http://www.cbi.nl/
                 The website of the Centre for the Promotion of Imports from Developing Countries
                 (CBI) offers market information, practical advice to exporters, importers and
                 producers about marketing strategies, importing markets, export tools and support
                 in trade development.
     Business Library of the University of Berkeley



48               Market Analysis Tools for Trade Flow Analysis and Modeling
INTERNATIONAL TRADE CENTRE

          http://www.lib.berkeley.edu/BUSI/bbg18.html#companies
          This is one in a series of research guides produced by the Thomas J. Long
          Business & Economics Library at the Haas School of Business University of
          California, Berkeley.
          Only those Internet resources that offer free and substantive information in
          business and economics are listed in this guide.

      International/Regional institutions
      http://www.un.org: United Nations website
      http://www.wto.org: World Trade Organization website
      http://www.imf.org: International Monetary Fund website
      http://www.worldbank.org: World Bank website
      http://www.oecd.org: Organisation for Economic Co-operation and Development
      website
      http://europa.eu: European Union website
      http://wcoomd.org: World Customs Organizations website
      http://www.unido.org: United Nations Industrial Development website
      http://www.fao.org: Food and Agriculture Organization
      http://eurostat.eu.int/comm/eurostat: European statistical system
      http://unstats.un.org/unsd/comtrade: United Nations Statistics Division
      http://www.iccwbo.org: International Chamber of Commerce (INCOTERMS…)

Company directories
      http://www.importers.com/: Importers directory
      http://www.importexporthelp.com/dirimp.htm: Importers directory
      http://www.alibaba.com/: Importers/Exporters directory
      http://www.importersnet.com/index.htm:      International   Directories   of   Worldwide
      Importers
      http://www.worlddirectory.com/: Company directory
      http://www.europages.com: European company directory
      http://www.thomasnet.com/:: Company directories in North America and Europe.
      http://www.kompass.com: Company directory

Trade fairs
      http://www.auma-messen.de/: World Trade fairs search engine
      http://www.exhibitions-world.com/: Asian trade fairs search engine
      http://www.tradeshowweek.com/: Weekly overview of news, analysis of industry trends,
      and numerous articles
      http://www.tradeshowbiz.com/: North American trade fairs search engine




         Market Analysis Tools for Trade Flow Analysis and Modeling                      49
     Identifying a target market
     Trade data and Trade Map
     Market Analysis Tools for Trade Flow Analysis and
     Modelling




     Mathieu Lamolle
     Dakar, 26-29 April 2010




     Identifying a target market
         1. Preliminary Scan
            • What markets are significant?                           Eurostat
            • Consumption, production and trade data                  UNIDO
            • Trends                                                    FAO


         2. Attractive Markets
            • Key importers, growth and trends                       TradeMap
            • «Proximity» markets (Geo., cultural, etc.)             Comtrade
                                                                      Eurostat
            • Current importers

         3. Market Access
            • Relative tariffs applied by different                  TradeMap
               importers                                         Market Access Map
                                                                   Product Map
            • Where do we benefit from preferences?




50             Market Analysis Tools for Trade Flow Analysis and Modeling
Trade data and Trade Map
•   Where does the data come from?
    • National Authorities
    • COMTRADE, produced by the United Nations Statistics Division database
•   What is Trade Map’s geographical coverage?
    • Information for over 220 countries and territories using data reported by 160
      countries and territories
    • We have data for non-reporting countries using mirror statistics
•   What is Trade Map’s product coverage?
    • For the Harmonized System
        • over 5,300 products at the 6 digit level
    • For the National Tariff Line
        • up to 30,000 products for 90 countries (~84% of world trade)
•   What is Trade Map’s time horizon?
    • Yearly, quarterly and monthly data




www.TradeMap.org




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                                          account


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                                         analysis tools




           Market Analysis Tools for Trade Flow Analysis and Modeling                          51
     If your product is cashew nuts




       If you want to search for                     You might want to
         new export markets...                            know...




     World Importers of 080132 Cashew nuts

                                                            Growth
     Countries
                                                             rates

                      Value          Quantity



                                                                           Global
                                                                           market
                                                                           share



                 Unit Value                                          Tariff Barriers




52           Market Analysis Tools for Trade Flow Analysis and Modeling
Relative export performance




                       World exporters of cashew nuts




Competition in specific markets




      Market Analysis Tools for Trade Flow Analysis and Modeling   53
     Current markets for competitors




     Trade data over five years




54         Market Analysis Tools for Trade Flow Analysis and Modeling
National Tariff Line product data
    Mangoes imported by Japan – National Tariff Line data




                                   At the 9 digit level




Suppliers of mangoes to Japan




                   9 digit level
                   information




       Market Analysis Tools for Trade Flow Analysis and Modeling   55
     Identify interesting markets
          All markets
                                                                     Most interesting markets
       Argentina                  1. Size of markets
                                                                         Current        Market
       Brazil
                                  2. Dynamism of                         markets      opportunities
       Cambodia
                                     markets                        1. China
       Denmark
                                                                                      2. India
                                  3. Openness of
       Egypt
                                     markets                                          3. UK
       France
                                  4. Tariff advantage               4. Indonesia
       Germany
                                     in markets                                       5. Russia
       Hungary
                                                                                      6. Brazil
       Indonesia                  5. Other criteria:
                                     Distance, NTBs…                (…)               (…)
       (…)




     How to identify attractive markets?
                          Market attractiveness index


     Size of import          Dynamism of           Openness of                 Tariff advantage
        markets                markets              markets                      in markets

                                                                                • Average tariff
                            • Growth               • Tariff applied to            applied to 5 top
                              differential:          country                      competitors in
     • Share of market
                              market growth        • Cost of                      the market
       in world exports
                              minus world            compliance with              minus tariff
                              growth                 rules of origin              applied to
                                                                                  country




56                 Market Analysis Tools for Trade Flow Analysis and Modeling
World demand

                                                                         Growth
     Countries
                                                                          rates
                                               Quantity
                               Value

                                                                                          Global
                                                                                          market
                                                                                          share




                      Unit Value
                                                                                     Tariffs




            Top 5 attractive markets for Cambodian
            Shrimps and prawns
                World Growth                           Tariff
   Markets                                  Tariff                    Cambodia’s main
                share  Rate                          advantage
(Rank in world)                                                         competitors
                 (%) (% p.a.)               (%)        (%)
1. Spain                 3.2           62     0.0         4.3    China, Denmark, Belgium
2. Canada                3.6           23     0.0         0.0    Thailand, China, Viet Nam
3. Denmark               7.6           12     0.0         0.5    Greenland, Canada, Iceland
4. Japan                16.6           6      0.0         3.2    Thailand, Viet Nam, China
5. United States        31.4           7      0.0         1.2    Thailand, China, Viet Nam
9. Viet Nam              1.0       119       10.0       38.6     China, USA, Malaysia
13. Indonesia            0.0           51     0.0         5.0    Singapore, China
15. Hong Kong            0.5           26     0.0         0.0    China, Japan, Thailand
17. Malaysia             0.1           60     0.0         0.4    Viet Nam, Netherlands, India
27. Philippines          0.0       164        5.0         0.0    Singapore, Japan, Indonesia




                Market Analysis Tools for Trade Flow Analysis and Modeling                         57
     Identifying a target market
     Market access screening and MAc Map
     Market Analysis Tools for Trade Flow Analysis and
     Modelling




     Mathieu Lamolle
     Dakar, 26-29 April 2010




     How do we screen market access conditions?
         1. Preliminary Scan
            • What markets are significant?                           Eurostat
                                                                      UNIDO
            • Consumption, production and trade data
                                                                        FAO
            • Trends

         2. Attractive Markets
            • Key importers, growth and trends                       TradeMap
            • «Proximity» markets (Geo., cultural, etc.)             Comtrade
                                                                      Eurostat
            • Current importers

         3. Market Access
            • Relative tariffs applied by different                  TradeMap
               importers                                         Market Access Map
                                                                   Product Map
            • Where do we benefit from preferences?




58             Market Analysis Tools for Trade Flow Analysis and Modeling
Market Access
• Information on market access conditions allows exporters to:

   • Evaluate the competitiveness of the product with respect to suppliers
     from other countries under different tariff schemes

   • Select markets/market segments in which the product has the best
     prospects

   • Adapt, where necessary, the product to conform to the target market’s
     import regulations




Types of tariffs
• Ad valorem tariffs:
   • levied on the basis of the value
   • Eg: 20% of the value of the imported product (>87% of tariffs, majority of
      countries)


• Specific tariffs:
   • levied on the basis of volume or weight
   • Eg: $2 per kilogram or per litre (Switzerland, USA, EU, Japan)




          Market Analysis Tools for Trade Flow Analysis and Modeling              59
     Specific tariffs change relative prices
        Before Border
                                                                            After the border
              The Rolex watch                      The Rolex is now
              has a price about                      priced some 10
             20 higher than the                     times more than
             Swatch, but is also                   the Swatch, but is             =7% ad valorem
                20 times the                        still 20 times the               equivalent
                                      At Border            quality.
                   quality.
                                           $70              =140% ad valorem
                                                                 equivalent
                                         specific
                     $1000
                                          tariff                                  $1070
                                                                                  Rolex
                     Rolex                 per
                                          watch
                                                                          $120
                                                                         Swatch
        $50 swatch




     Types of tariffs
     • Ad valorem tariffs:
        • levied on the basis of the value
        • Eg: 20% of the value of the imported product (>87% of tariffs, majority of
           countries)


     • Specific tariffs:
        • levied on the basis of volume or weight
        • Eg: $2 per kilogram or per litre (Switzerland, USA, EU, Japan)


     • Combined tariffs:
        • containing both ad-valorem and specific rates
        • Eg: 10% of the value + $2 per kilogram (Japan, EU, Canada)




60               Market Analysis Tools for Trade Flow Analysis and Modeling
Compound tariffs
  Tariff of 10% and $2/kg

• Beluga Caviar : 500 $/kg
       Tariff:
        10% Ad Valorem                $50 Tariff

       + $2/kg Specific                $2 Tariff
                                                         Tariff = $52
                                                         AVE = 10.4% of Price
• Lumpfish Caviar : 10 $/kg
       Tariff:
       10% Ad Valorem                   $1 Tariff

       + $2/kg Specific                 $2 Tariff
                                                           Tariff = $3
                                                           AVE = 30% of Price




Types of tariffs
• Mixed tariffs:
   • minimum or maximum of two kinds of tariffs
   • Eg: Min or Max (10%, $2/kg) (Canada, EU, Japan)




         Market Analysis Tools for Trade Flow Analysis and Modeling             61
     Mixed tariffs
       Max. 10% or $2/kg

     • Beluga Caviar: 500 $/kg
            Tariff:
            10% Ad Valorem                  $50 Tariff
            Or $2/kg Specific                $2 Tariff         Tariff = $50
                                                               Tariff = 10% of Price

     • Lumpfish Caviar: 10 $/kg
            Tariff:                                            Tariff = $2
            10% Ad Valorem                  $1 Tariff          Tariff = 20% of Price

            Or $2/kg Specific               $2 Tariff




     Types of tariffs
     • Mixed tariffs:
        • minimum or maximum of two kinds of tariffs
        • Eg: Min or Max (10%, $2/kg) (Canada, EU, Japan)


     • Variable tariffs:
        • levied on the basis of the composition of the products
        • Eg: $5/unit if lead content of paint > 2%
        •      $0.88/kg on magnesium content+20% of the value




62            Market Analysis Tools for Trade Flow Analysis and Modeling
Types of tariffs
• Mixed tariffs:
   • minimum or maximum of two kinds of tariffs
   • Eg: Min or Max (10%, $2/kg) (Canada, EU, Japan)


• Variable tariffs:
   • levied on the basis of the composition of the products
   • Eg: $5/unit if lead content of paint > 2%
   •      $0.88/kg on magnesium content+20% of the value


• Tariff quotas:
   • a two tiered tariff. A lower in-quota tariff is applied to the first Q units of
     imports and a higher over-quota tariff is applied to all subsequent
     imports.




MAcMap includes ad valorem equivalents
• Ad Valorem Equivalents – AVE:
   • Are a common measure of the effect of the different types of tariff on
     the product, as if they were all ad valorem.
   • Are calculated for specific, mixed, compound or variable tariffs and
     anti-dumping rates and countervailing duties
   • Are calculated by:
                AVE =       Particular Tariff per Unit
                                     Unit Value
   • Allow for regional or sectoral tariffs to be added
   • Allow for comparison of effective levels of protection across countries.
• The total AVE is the sum of all individual ad valorem
  equivalents




          Market Analysis Tools for Trade Flow Analysis and Modeling                   63
     Common types of trade agreements
     •   Economic Complementation Agreement: reduces trade restrictions
         between partner countries

     •   Free Trade Zone/Agreement/Area: eliminates trade barriers within the
         zone (FTA, RTA, etc.)

     •   Customs Union: free trade zone + common external tariff

     •   Common Market: customs union + free flow of factors of production within
         region (capital, labour, etc.)

     •   Economic Union: unification/harmonization of economic policies:
         monetary policy, fiscal policy, regulatory regimes…




     Proliferation of FTAs
                  Number of free trade agreements 1960 – 2007




                                   Source: World Trade Organization




64              Market Analysis Tools for Trade Flow Analysis and Modeling
European trade policy
                                EU existing trade regimes (as of end 2004)
               GSP
                                                                                                                                                                                                Bilateral
                                                        LDC                              Nepal                                          Sri Lanka
             Afghanistan
                                                                                                                                                                              Albania                  Andorra
                                                                                                                 Malaysia
                                                                                    Bangladesh
             Cambodia                ACP                                                                                                Armenia
                                                                                                                                                                   Mexico
                                                                                                                                                                                                                   Macedonia
   Yemen                                                                     Maldives                           Georgia
                            Cape Verde                    Lesotho                                                                                                                 Croatia
                                                  Togo
     Bhutan               Samoa                                                                                                        India                 South Africa                              Bulgaria
                                                         Botswana
                      Ethiopia                                                                                   Argentina
                                         Ctrl. Afr. Rep.             Senegal                                                                                                  Bosnia
   Laos          Sao Tome                                                                                                                                            Chile                         Romania
                                                  Zambia
               Tuvalu            Angola                            Burkina Faso                              Myanmar
          Tonga                                                                                                                    Honduras             CACM
                              Madagascar                           Benin
          Kiribati                                                                                                             El Salvador
                                         Solomon Isl.                                                                                               Guatemala
       Sudan              Eq. Guinea                         Uganda                                                                Nicaragua                                                                                U.S.
                                                                         Malawi                                                                    Costa Rica                                EEA
     Vanuatu                           Mali
     Comoros              Haiti
                                                      Gambia
                                                                   Guinea-Bissau
                                                                                                        Arrangement for
                                            Burundi                                                                                                                                                        Norway
     Somalia
                        Rwanda       Tanzania
                                                             Niger                                      Sustainable Dev.                                   Pakistan                          Iceland                        New Zealand
                                                                     Mauritania                                                                                                               Liechtenstein
     Eritrea                                                                                                                                    Bolivia
                          Chad
       Liberia                       Sierra Leone        Djibouti      Mozambique                                                                                                                                              Hong Kong
                                                                                                                                        Ecuador                      EFTA                            Switzerland
                                           Zimbabwe                                                Kenya                        Venezuela Peru               Andean
         Seychelles                                            St. Lucia
                                                                                                                                        Colombia
            Nauru
                                                                               Barbados                                                                     Community                                                          MFN
                                        Namibia                                                                                                                                        Korea, Rep.       Australia
            Cook Isl.                Swaziland     Congo Dem.Rep.                             Jamaica
                                                                                                                        Cuba
                                                                                                                                       Kyrgyzstan
                                                                                                                                                             U.A.E                                                             WTO
                                          Trinidad                                          Guyana               Qatar                                                                    Canada
                   Palau                                Mauritius                                                               Indonesia                                                                     Taiwan
                                                                                    St. Vincent                                                                Thailand
                   Micronesia                   Ghana         Grenada                                                                   Bahrain
                                                                                                                 Uruguay
                       Marshall Isl.                Ivory Coast                      Nigeria                                                                       Macao      Singapore      Brunei
Tokelau                                                                                                                                         Kuwait                                                     Japan
                                                                               Papua              Oman
   Bermuda                    Montserrat                       Belize                                                        Mongolia
                                                 Niue                      St. Kitts                         Moldova                                                          Israel
                                                                                                                                           Morocco
                                                                                                                                                           Egypt
                                                                                                                       Panama                                                Turkey
              Uzbekistan                                                           China
                                                                                               Philippines                                                  Tunisia                                        Yugoslavia
                                                                                                                 Paraguay
                           Belarus                                                                                                             Jordan
                                                                                                                                                                                                         Korea, Dem. Rep.
          Russia                               Kazakhstan           Iran                                                                                 Syria                   Palestine
                                                                                                   Brazil                                                       Algeria
 Libya                                                                              Vietnam                                                             Lebanon
              Saudi Arabia         Gibraltar                       Greenland                                    Iraq                                                                                        East Timor
                                                                                                                          Tajikistan
     Aruba
                                                Turkmenistan
                                                                                                 Ukraine                                                                          Euromed
                                                                                   Anguilla                                                                                                                        Non-MFN
                      Azerbaijan




Implications
• On average, a developing country is a member of 5 regional
  trade agreements (Global Economic Prospects, Trade Regionalism and
         Development, World Bank, 2005)


• It is difficult to keep up-to-date on what tariffs are applied and
  faced by your country and your competitor countries

• It is key to have more clarity and transparency on what tariffs
  and rules of origin apply to specific products in specific
  markets




                              Market Analysis Tools for Trade Flow Analysis and Modeling                                                                                                                                                   65
     Practical Session – Identifying a target market
     A. IDENTIFYING A PRODUCT
     Identify the product you want to focus on
     1. Provide the harmonised system (HS) code for both the product group and product in
        question
           Note: To avoid ambiguities throughout your market profile, it is important to ensure that the
                 description and corresponding trade classification, or tariff code is correct.

           4-digit HS:                                     6-digit HS:

     2. Provide a definition and description of your selected product
           Note: This information should contain the following: origin of the product, means of
                 production/cultivation, etc.
           Note: It can be useful to draw a list of tangible and intangible elements that are specific to your
                 product


     (Insert Text)




     3. What is the main application and function of this product?
           Note: Describe briefly how your product can be commercially exploited. Are there any by-products
                 to the production/manufacture of the product? . What function will it have in foreign markets?


     (Insert Text)




66               Market Analysis Tools for Trade Flow Analysis and Modeling
INTERNATIONAL TRADE CENTRE


B. IDENTIFYING A TARGET MARKET – MARKET
   OVERVIEW
Review the global consumption and production trends for this product
4. What is the global production of this product? Which are the main producing
   countries?
 Note: To make your data and information clear, do not hesitate to use print screens from the
                                 various sources available


(Insert Table)




5. What is the global consumption of this product? Which are the main consuming
   countries?


(Insert Table)




6. Are there any major trends regarding global consumption or production of this
   product?


(Insert Table)




            Market Analysis Tools for Trade Flow Analysis and Modeling                   67
     INTERNATIONAL TRADE CENTRE


     B. IDENTIFYING A TARGET MARKET – GLOBAL TRADE
     Analyze world trade for your selected product.
     7. How much in total of this product is imported in the world?
             US$         ____________

             Quantity: ____________ tons/units

     8. How much in total of this product is exported to the world?
             US$ :       ____________

             Quantity: ____________tons/units

     9. Approximately how many countries import and export the selected product?


     (Insert Table)




     10. Does the unit value vary significantly for your product from country to country? If
         yes, account for the reasons that could explain the disparities above
     Text.




     11. Which countries are the largest importers of the product? What is the value of their
         imports?


     (Insert Table)




68                   Market Analysis Tools for Trade Flow Analysis and Modeling
INTERNATIONAL TRADE CENTRE

12. Which countries are the largest exporters of this product? What is the value of their
    exports?


(Insert Table)




13. Does your country already export this product? Who are the main customers?


(Insert Text and or Table)




14. Have imports by the leading global importer grown or declined over the past 5 years?
      In value:         _______% p.a.

      In quantity:      _______% p.a.

15. Is there a difference between the leading importer’s growth rate in value and growth
    rate in quantity? Explain what this difference could mean.


(Insert Text)




            Market Analysis Tools for Trade Flow Analysis and Modeling               69
     INTERNATIONAL TRADE CENTRE

     16. Have exports by the leading exporter grown or declined over the past 5 years?
           In value:         _______% p.a.

           In quantity:      _______% p.a.

     17. Is there a difference between the leading exporter’s growth rate in value and growth
         rate in quantity? Explain what this difference could mean.


     (Insert Text)




70               Market Analysis Tools for Trade Flow Analysis and Modeling
INTERNATIONAL TRADE CENTRE



B. IDENTIFYING A TARGET MARKET – SELECTING A
   TARGET MARKET
Identify attractive potential markets. Choose several markets that could be
interesting for your selected product.
18. Which are three interesting markets for exporting this product?
Note: Do not choose these markets only on the basis of size of the importing market and
growth, but also on proximity, cultural similarities, etc.


(Insert Text)




19. Who would be your main competitors in these countries and why?
        Note: Click on each country, and identify five countries who you feel are your competitors and
              explain why. You should formalise this opinion not only based on all the indicators provided
              in TradeMap (Unit Values, annual growth, trends and tariff and non-tariff barriers), but also
              on your prior knowledge of the situation.


(Insert Text)




Select a target market
20. Identify the tariffs for the import markets you identified as attractive in the last
    section
Note:    Check up Tariff regime description, applied tariff, and total ad valorem tariff.
Source: MacMap


(Insert Text or Table)




              Market Analysis Tools for Trade Flow Analysis and Modeling                              71
     INTERNATIONAL TRADE CENTRE

     21. What are the trade regimes that your country faces with the three potential importing
         markets?
     Note: Search here to see all the trade regimes (MFN tariff and preferential regimes) applied
     by one country to any other country and the corresponding rules and certificates of origin. If you
     select only an importing country, you will see all the trade regimes applied by that country to the
     rest of the world. If you select only an exporting country, you will see all the trade regimes faced
     by that country when it exports to the rest of the world


     (Insert Text or Table)




     22. Do you have market access advantages/disadvantages vis a vis your competitors?


     (Insert Text)




     23. Taking into consideration the trade patterns that you observed in the last section and
         the market access considerations that you just reviewed, which of these countries
         should you select as a target market for this Market Profile and why?
     Note: Explain your choice based on the data provided in the last questions. If you already
     export to this country but think that exports could be greater, explain why you think this is




     (Insert Text)




72               Market Analysis Tools for Trade Flow Analysis and Modeling
INTERNATIONAL TRADE CENTRE



C. UNDERSTANDING A TARGET MARKET – TARGET
   MARKET CHARACTERISTICS
Consumption, production and key trends
24. What is the consumption and production of this product in the target market?


(Insert Text and/or Table)




25. If applicable, is a certain form of the product preferred in your target market, and
    why? Are there opportunities for differentiating the product?
      Note: The reasons for these preferences could be for consumption, and/or industrial purposes,
            etc.
      Note: Does the product need to be differentiated to be more attractive in a target market?


(Insert Text and/or Table)




26. Is there expected growth in consumption/demand for the product?


Insert Text and/or Table)




            Market Analysis Tools for Trade Flow Analysis and Modeling                             73
     INTERNATIONAL TRADE CENTRE

     27. What are the main trends in consumer preferences?


     (Insert Text)




     Market characteristics
     28. What type of standards and/or regulations would the exporter be confronted to in the
         selected market?
     Note: Depending on the nature of the product, the exporter may be confronted to certain
     specific standards, such as hazardous material, organic standards, sanitary and phyto-sanitary
     measures, technical specifications, safety standards, etc.


     (Insert Text and/or Table)




     29. Browse through the various sources provided in the guide to market profiles, and
         provide a price for your selected product in the target market (where available, try to
         provide CIF, wholesale and retail prices for the product, based on its different levels
         of differentiation)?



     (Insert Text and/or Table)




     30. Has price varied significantly in recent years, or has remained stable?
           Note: CIF (Cost, Insurance and Freight) prices quoted by competitive parties constitute extremely
                 valuable information if they can be obtained. When import statistics are reliable and the
                 product being studied is homogeneous, unit value of imports might be used as rough
                 indicators of CIF prices.




     (Insert Text and/or Table)




74               Market Analysis Tools for Trade Flow Analysis and Modeling
INTERNATIONAL TRADE CENTRE

31. Provide a brief description of the type of packaging that may be used for your
    product?



(Insert Text)




32. Provide details on the different types of packaging and labelling regulations?
      Note: This includes information such as the technical description of the product, languages to be
            used, etc.




(Insert Text)




33. Are there any environmental issues and draft legislations concerning the use of non-
    recyclable packaging?


(Insert Text)




            Market Analysis Tools for Trade Flow Analysis and Modeling                             75
     INTERNATIONAL TRADE CENTRE



     D. IDENTIFYING ROUTES TO A TARGET MARKET
     Distribution and Promotion options
     34. Outline the existing channels of distribution
           Note: Identify the most appropriate distribution channel that exporters can use on the ground


     (Insert Text and/or Table)




     35. Are the major national and international trading centres?



     (Insert Text and/or Table)




     36. How do existing exporters prefer to work?
           Note: For example, many exporters prefer to work with sales agents based in the importing
                 country, who act on the behalf of the exporter, find an importer, negotiate prices and
                 contractual terms, present samples and have them tested, etc.


     (Insert Text)




     37. Which type of transportation is preferable for your selected product and why?
           Note: Explain the types of transport that are most appropriate for your product (air, sea, raod). Are
                 there any specific requirements related to your product that you should be aware of
                 (refrigeration, perishable nature of the product, time constraints, etc.)


     (Insert Text)




76               Market Analysis Tools for Trade Flow Analysis and Modeling
INTERNATIONAL TRADE CENTRE

38. Are exporters expected to know about any specific trading practices when dealing
    with the potential target market?
      Source: Incoterms website, Market Studies


(Insert Text)




39. How would you advise exporters to promote their products?


(Insert Text)




40. Provide the details (names and contacts) of international fairs for your product/group
    of products
(Insert Text and/or Table)




41. Provide a list of import promotion offices


(Insert Text and/or Table)




            Market Analysis Tools for Trade Flow Analysis and Modeling               77
     INTERNATIONAL TRADE CENTRE



     E. OTHER USEFUL INFORMATION
     42. Provide a list of potential selected importers/traders


     (Insert Text and/or Table)




     43. Provide a list of selected periodicals


     (Insert Text and/or Table)




     44. Are there any other addresses you feel you should add?



     (Insert Text and/or Table)




78               Market Analysis Tools for Trade Flow Analysis and Modeling
Identifying a target market
Market access screening and MAc Map
Market Analysis Tools for Trade Flow Analysis and
Modelling




Mathieu Lamolle
Dakar, 26-29 April 2010




Market Access Map
• Wide geographical coverage:
   • tariffs applied by 169 countries to the products exported by over 200
     countries and territories
• Wide coverage of instruments:
   • ad-valorem tariffs; specific tariffs; tariff quotas and antidumping duties
• Preferences:
   • Covers most bilateral and regional agreements
   • Rules of Origin and Certificates of origin also included for most
     agreements
• Analytical flexibility:
   • Permits any analysis: by region, by economic sector or by measure




          Market Analysis Tools for Trade Flow Analysis and Modeling              79
     MAcMap: Sources of Data
     • Market Access Map is continuously updated. Data is sourced
       from:
        • Tariff data reported to the UN Tariff and Market Access Database (UN
          TARMAC) of ITC and UNCTAD
        • Tariff quota data from WTO (agricultural notification of tariff quota) and
          national sources for bilateral and regional tariff quota agreements
        • Notifications from member countries of the WTO
        • ITC collection directly from some countries
        • Trade data from national sources, IDB (integrated database), WTO
          and the COMTRADE database of the United Nations Statistics Division
          (UNSD).




     MAcMap home page




                                       Type your registered e-
                                          mail address and
                                       password, and click on
                                                „login‟




                                                  http://www.macmap.org




80             Market Analysis Tools for Trade Flow Analysis and Modeling
Quick Search module




                 Quick Search of tariffs
                 – easy for companies




                                                                  Mandatory fields




Quick Search: Chose your product



Fill the search boxes with the first
   few letters of the data you're
             looking for



                                                                 Select your desired level of
                                                                    information: HS-6 or
                                                                     National Tariff Line




                                                         Hit „Enter‟ or „Tab‟ to confirm
                                                                 your selection




                Market Analysis Tools for Trade Flow Analysis and Modeling                      81
                                                                           Read
                                                                           carefully,
                                                                           key
                                                                           information
                                                                           here!!




                                             Click „print report‟
                                             to see the full list
                                                of countries




                                                                     The rest of the
                                                                    regimes can be
                      Chose more                                         seen by
                      records per                                    clicking on the
                      page to see                                        numbers
                    the entire list in
                      one screen




82   Market Analysis Tools for Trade Flow Analysis and Modeling
                             When in doubt, click on
                             Glossary for definitions
                                 and concepts




Glossary




                                           Search
                                           Search
                                          Búsqueda
                                        alphabetically
                                        alphabetically
                                          alfabética




      Market Analysis Tools for Trade Flow Analysis and Modeling   83
                  Quick Search: Trade regimes, rules of origin




                                                                             See trade
                                                                           regimes that a
                                                                          country applies
                                                                            or faces and
                                                                           rules of origin
                                                                          for many trade
                                                                            agreements




                  Quick Search: Trade regimes, rules of origin



        There
      might be
       several
     applicable                                                                  Click on „print
        trade                                                                    report‟ to see
      regimes                                                                       all trade
       for one                                                                  regimes in one
     product in                                                                      page
      any one
     importing
       country

                                                                          Review the
                                                                           Review the
                                                                        certificates of
                                                                           certificates
                                                                        origin and the
                                                                         and/or rules of
                                                                              of origin
                                                                       rules originby in
                                                                            this link
                                                                           clicking on
                                                                             their link




84                 Market Analysis Tools for Trade Flow Analysis and Modeling
Example of a rule of origin




Example of a certificate of origin




       Market Analysis Tools for Trade Flow Analysis and Modeling   85
     Compare tariffs module




                                                                    Which
                                                                countries offer
                                                                   the best
                                                                market access
                                                                  for cocoa
                                                                   beans?




     Compare tariffs module


                        Scroll through the
                            importing
                            countries
                        alphabetically….
                                 or




86         Market Analysis Tools for Trade Flow Analysis and Modeling
Compare tariffs module

    Click on the heading
   “level of protection” to
   sort by those offering
       the lowest tariff

                                                                            … or click on
                                                                             the map




Compare tariffs: Market Access Map




                              If you leave your mouse
                                                          Trade = Exports + imports
                               on a given country, the
                                                          Overall trade taking place,
                               applied tariff and trade
                                                             NOT trade balance
                                       appear…




          Market Analysis Tools for Trade Flow Analysis and Modeling                        87
     To recap…
     • At the end of this step you should have:
        • An overview of the global market for your product:
            • Consumption
            • Production
            • Global trends
        • Identified three-five attractive target markets to pursue further research:
            • Market relative attractiveness
            • Screening
        • An overview of the trade characteristics of the target market:
            •   Importers
            •   Exporters
            •   Volume and price trends
            •   Market Access conditions




88              Market Analysis Tools for Trade Flow Analysis and Modeling
                     Practical Session – Market Access Map
Before logging into the Market Access Map application, take a moment to look around the site, as there are a number of
pages that could prove useful in your analysis.

We suggest you visit the “Glossary” “User Guide” “Methodology” “Useful Links” and “Data Availability” (all located under
the menu item “Reference Material”). In the Glossary you will find a number of tariff terms explained. The Data
Availability page explains how often the data in Market Access Map is updated and the Useful Links page has links to
other information sources, for example on non-tariff barriers.



QUICK SEARCH – TARIFF SEARCH

1   Practice selecting an importing country. Select “France”
       Note: When you first enter the Market Access Map application, the Quick Search Tariff Search module will be
             open. Next to the heading “Select Importing Country” type only the first three letters of the country name
             i.e. “fra” in the selection box. Notice how those countries starting with the letters “fra” appear in the drop-
             down menu box below. Select the “France” by clicking on it in the drop-down box. It will appear in full in
             the selection box. If you simply type the full name of a country but forget to then select the match from the
             drop-down menu, the database will not recognise what you have typed.


2   Practice selecting a product at the 6-digit level of the Harmonised System product
    nomenclature and then at the most detailed level - the national tariff line. Choose the
    product “cloves”
       Note: In the selection box next to the heading “Select a Product”, type the product “cloves”. Wait a few moments
             for the system to load the product nomenclature, then click on the matching product that appears in the
             drop-down menu box below.

2.1 What is the HS-6 digit code for the product “cloves”?
       HS 6 Code : ______________________

2.2 List the national tariff line codes that the France uses to describe “cloves”?
       Code 1: ______________________

       Code 2: ______________________

       Code 3: ______________________

       Code 4: ______________________

       Code 5: ______________________

       Code 6: ______________________
       Note: Just below the Importing Country selection box, you will notice two small buttons. The one for HS Level 6
             is automatically pre-selected. Select instead the button for “National Tariff Line Code”. Then re-type
             “cloves” into the product selection box.


3   Find the tariff that an importing country applies to a particular product.

3.1 What tariff rates and trade regimes does the Netherlands apply to the product “Fresh cut roses
    and buds…” originating from Tanzania?
       Trade Regime Description:              ______________________Tariff Rate: __________________

       Trade Regime Description:              ______________________Tariff Rate: __________________




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         Note: Change the importing country to “Netherlands”, Click on the small circle next to the heading “National
               Tariff Line Code”. Next, select the exporting country as “Tanzania”. Type the product code into the product
               selection box. Wait for the product to load in the drop-down box. Then click on it. Click “Proceed”


3.2 What is the highest tariff rate applied by the Netherlands to imports of Fresh cut roses
    originating from the world?

         Trade Regime Description: _____________________                     Highest Tariff Rate: __________________
________________________________________________________________________________________________
         Note: Click on “New Search” . Select the importing country as “Netherlands”. Select the product code. Leave the
               exporting country blank. Then click “Proceed”. You will see a table with all the possible tariffs applied by
               the Netherlands to imports of this product. By clicking on the numbers in the top right-hand corner of the
               table, you can view the other pages of the table.


3.3 What tariff rate does the Netherlands apply to Fresh cut roses from Turkey?
________________________________________________________________________________________________
         Note: Select “show all” from the drop-down menu “Records per Page” located just above the last column. This
               will show you all the records in one page. Now click on the column heading “Trade Regime” – you will
               notice that the table will be re-sorted with the “Preferential tariff for Turkey” displayed in the second row.
               Note that by clicking on any column heading in the Market Access Map tables, the data will be re-sorted
               according to that criterion.


TRADE REGIMES & RULES OF ORIGIN

4     Look up the trade regimes that a country applies or faces with its trading partners:
         Note: Click on the tab “Trade Regimes and Rules of Origin”.

4.1 To which countries (or groups of countries) does Saudi Arabia offer preferential tariffs?
________________________________________________________________________________________________
________________________________________________________________________________________________
         Note: In the selection menu, select Saudi Arabia as the importing country. Do not select an exporting country.
               Click “Proceed”.

4.2 What is the name of the trade agreement that Saudi Arabia has with Tunisia?
________________________________________________________________________________________________
         Note: In the table showing the trade regimes applied by Saudi Arabia to its trading partners, click on each of the
               preferential trade regimes in the first column (the text will be hyperlinked). Scroll through the members of
               each trade regime until you find Tunisia as a member (don’t forget that some tables may have more than
               one page). If you wish to read more about the preferential trade agreements and the rules of origin, go to
               the middle column entitled “Rules of Origin” and click on the hyperlinked text “Agreement …” if it is
               available.

4.3 Kenya applies two types of tariffs to goods imported from Mauritius. The first is MFN. What other
    trade regime does Kenya apply to goods from Mauritius?
         Trade Regime:       ____________________________________________
         Note: In the selection menu, select “Kenya” as the importing country. Select “Mauritius” as the exporting country.
               Click “Proceed”. The two agreements will be listed in the first column. For details of the members of the
               preferential agreement, click on the words “Preferential tariff for…” or click on the “Protocol” in the middle
               column to read the agreement.




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COMPARE TARIFFS

5     Compare the tariffs that different markets apply to a product exported by your country
      or compare the tariff rates applied by one importing country to all possible suppliers:

5.1 What is the highest tariff faced by Mexican avocados and which country applies this tariff?
        Country: _________________________ ; Tariff the country applies to Mexico: _________ %
        Note: Click on the tab “Compare Tariffs”. Select “Mexico” as the exporter. Select the product “080440 avocados,
              fresh or dried”. You can find the product by either typing the product code or name, then select the match
              that appears in the drop-down menu. Click “Proceed”. You get a table showing all importing countries
              starting with “Albania”. If you click on the heading of the last column “Level of Protection”, the table will be
              sorted showing countries applying the lowest rate of protection first. If you click on the heading of the
              column a second time, the table will be sorted showing countries applying the highest rate of protection
              first.

5.2 What tariff rate does Zimbabwe apply to Mexican avocados?
        Tariff that Zimbabwe applies to Mexico: _________ %
        Note: Click on the column heading “Importing Country”. The table will be sorted showing those countries starting
              with the letter “A”. Click on the same column heading again and the table will be sorted showing those
              countries starting with the letter “z”. You will find all the column headings are clickable and that the table’s
              contents can easily be sorted according to that criterion.

5.3 What tariffs do the countries Bolivia, Brazil, Paraguay, Argentina and Uruguay apply to “wooden
frames for paintings, photographs, mirrors or similar objects” (441400) from Viet Nam?
         Tariff : Bolivia____ Brazil ____ Paraguay____ Argentina______ Uruguay____________
        Note: Click on the tab “Compare Tariffs”. Select “Viet Nam” as the exporter. Select the product “441400-
              Wooden frames for paintings, photographs, mirrors or similar objects”. Click “Proceed”. You will see a
              table showing all possible importing countries. In the top right hand corner of the page you will see a map
              symbol. Click on it. This will show all the tariffs applied to Viet Nam by various importers. Viewing the data
              this way will make it very easy to see the tariffs in one view that the south American countries apply to this
              product from Viet Nam.

5.4 Which 14 countries in Africa apply a tariff rate of 10% to Vietnamese wooden frames (441400)?
         List the countries:   __________________________________________________________

        Note: As in the question above, look at the continent of Africa and put your mouse over each of the countries
              coloured in blue to see the rate they apply and the country name (if it is not already shown on the map).
              Some countries are very small so you will need to magnify the size of Africa and move the continent of
              Africa to the middle of your screen. To manipulate the map and zoom in to Africa, use the “+” symbol and
              click and drag the map with your mouse (or you can use the “north south, west, east” arrows just above
              the “+” symbol). Practise manipulating the map until you can see the borders between the countries in
              west Africa and southern Africa clearly.

5.5 Of the top 10 world importers of tomatoes (code 070200):
    a) which importer offers your country the best market access?
    b) With which importer would your country stand to gain the most from a free trade agreement?
        a): ______________________________________________________________________________

        b): ______________________________________________________________________________



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        Note: You will need to use two modules to complete this exercise. To find the top importers in the world
              tomatoes, open the Trade Flows module. Select your country as the exporter. Select the product “070200
              Tomatoes…”. Do not select an importer. Click “Proceed”. When the table of countries and tariffs appears,
              you will see how much your country exports of this product to the world. At the bottom of the page, you’ll
              see a menu option “Show top 20 Exporters / Importers in the world for the product …..” From the options
              select “importers” and the product “070200-Tomatoes”. Click “Proceed”. You should see a list of the top 20
              importers of tomatoes in the world. Make a note of the top 10. Now open again the Compare Tariffs
              module. Select your country as the exporter and the product as “070200- Tomatoes”. Click “Proceed”. To
              view the tariffs applied by the top 10 importers, you can select each of them from the drop-down menu
              “View Country”, which is located directly above the first column of the table .

5.6 Of the top 20 world exporters of “cans, iron or steel, capacity < 50 litres” (Code: 731021):
    a) which exporter faces the best market access conditions to your country?


        a): ______________________________________________________________________________



        Note: As in the previous case, you will need to use two modules to complete this exercise. To find the top
              exporters of “731021- cans, iron or steel, capacity < 50 litres” , open the Trade Flows module. Select your
              country as the importer. Select the product “731021- Cans…”. Do not select an exporter. Click “Proceed”.
               When the table of countries and tariffs appears, you will see how much your country exports of this
               product to the world. At the bottom of the page, you’ll see a menu option “Show top 20 Exporters /
               Importers in the world for the product …..” From the options select “exporters” and the product “731021-
               Cans”. Click “Proceed”. You should see a list of the top 20 exporters of cans in the world. Now open again
               the Compare Tariffs module and follow the same procedure as for question 5.3




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EXERCISES USING ADVANCED FUNCTIONS

DETAILED ANALYSIS – APPLIED TARIFFS


6     Practice selecting many importing countries, products and exporting countries.
        Note: Click on the “Detailed Analysis” module. It will expand to reveal three sub-modules “Applied Tariffs”,
              “Bound Tariffs” and “Tariff Simulations”. Open the “Applied Tariffs” sub-module by clicking on it. It will
              become yellow. Applied tariffs are the tariff rates applied by a customs administration on imported goods.

               You can select several countries using             or you may select all countries using:          ; (Do not
               select any country groups at this stage).


               Similarly you can select several products using “Add” or all products using “Add All”.


7     Practice alternating the “views” of your results after selecting several importers,
      several products and several exporters.
        Note: Select the following importing countries: Germany; Japan; United States of America
              Select the product chapters. “09 Coffee, tea, maté and spices” and “18 Cocoa and cocoa preparations”.
              You can select simply by double clicking for example on “09 Coffee, tea, maté and spices” in the box
              containing the full HS product nomenclature.
              Select the following exporting countries: Brazil; Ghana; India.
               Click “Proceed”.

               Notice that your results screen has three tabs across the page, “Products”, “Importers” and “Exporters”.
               The “Products” tab is highlighted yellow. These tabs display the same data from different standpoints.




               Notice that the table shows all the products you selected in the first two columns. Although you selected
               the products at the HS-2 level, you now see the detailed tariff line codes and the corresponding tariffs for
               all the products included in this chapter. If you would like to see the tariffs aggregated at the HS-2, 4 or 6
               digit level, go to the “Product View” box located immediately above columns one and two.


               Notice that the title of the table is “Tariffs applied by Germany to products originating from Brazil”.
               Notice also that in the middle of the screen you have the headings “Selected Importers” and “Selected
               Exporters”.




               You can change the importing country and exporting country using the drop down boxes above the title of
               the table. Change the importing country to “United States of America” and the exporting country to “India”.
               Notice that the title of the table doesn’t change until you click on “Show Results”. The title of the table
               should change to Tariffs applied by United States of America to products originating from India.




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8     Comparing tariffs for a multiple selection of importers, products and exporters.
         Note: Select Mexico, the United Kingdom and Japan as “Importing Countries”. Select the products: “620342
               Men/boys trousers and shorts…” and “611030 Pullovers, cardigans…”. Select Malawi and Botswana as
               “Exporting Countries”. Click “Proceed”.


         8.1    Which importer (out of Mexico, the UK and Japan) charges the highest tariffs to
                “pullovers” originating in Botswana? What is the highest tariff applied?

         Note: When your results appear, the “Products” tab will be highlighted yellow indicating it is open. Stay in this
               tab. Compare the tariffs applied by the different importers to all the products by changing the “importing
               country” in view and clicking on “Show Results” each time.

         Importing Country applying the highest tariff to “pullovers” from Botswana:_____________________

         Highest Tariff Rate:_________%



         8.2    Would your answer to question 8.1 be different if the “pullovers” originated in Malawi?

         Note: Change the “Selected Exporter” to “Malawi” and view the tariffs applied by the different importing countries
               by changing the country in view and clicking on “Show Results” each time.

         Importing Country applying the highest tariff to “pullovers” from Malawi:_______________________

         Highest Tariff Rate:_________%



         8.3    What is the name of the trade regime applied by the United Kingdom to imports of the
                selected products originating in Botswana, that grants Botswana the lowest tariff?

         Note: Change the “Selected Importers” to “United Kingdom” and the “Selected Exporter” to “Botswana”. Click on
               “Show Results”. The name of the tariff preferences will appear in the column entitled “Trade Regime
               Description”

         Name of trade regime that provides Botswana with the lowest tariff:_______________________




9     Comparing ad valorem tariffs, specific tariffs and ad valorem equivalents.
         Note: Select Switzerland and the Netherlands as the “Importing Countries”. Select the products: “180100 Cocoa
               beans”; “180610 Cocoa powder, containing added sugar or other sweetening matter”; and “180632
               Choc&food prep cntg cocoa in blocks,slabs/bars,not filld,not over 2 kg”. Select Ghana and Brazil as the
               “Exporting Countries”. Click “Proceed”.


         9.1    What ad valorem preferential tariff does Switzerland apply to cocoa beans from Ghana?

         Note: When your results appear, the “Products” tab will be highlighted yellow indicating it is open. Stay in this
               tab. You’ll also notice that in the middle of the screen you will have the headings “Selected Importers” with
               the Netherlands in view and “Selected Exporters” with Brazil in view. Change the importer to “Switzerland”
               and the exporters to “Ghana” from the drop down menus. Then click “Show Results”. You’ll see that the
               page refreshes with a new title “Tariffs applied by Switzerland to products originating from Ghana”. You’ll
               also notice that the product descriptions are written in French. This is because you are viewing the product
               codes and descriptions at Switzerland’s national tariff line. Now find the product “180100 cocoa beans”
               and look in the column applied tariffs.

         Ad valorem preferential tariff applied by Switzerland to cocoa beans from Ghana: ______________%



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    9.2    Looking at Switzerland’s national tariff line codes, to which of the following two
           products from Ghana does Switzerland apply the highest specific tariff ?:

           “18063211 “Chocolat et autres préparations alimentaires contenant du cacao, présentés en
           tablettes, barres ou bâtons, d'un poids <= 2 kg, non fourrés : excédant 6 %” ; and

           “18063212 Chocolat et autres préparations alimentaires contenant du cacao, présentés en
           tablettes, barres ou bâtons, d'un poids <= 2 kg, non fourrés : excédant % mais n'excédant pas 6%”


    Note: Make sure you have the Product View selected as “NTLC product level”. Click on the column heading
          “Trade Regime Description”. This will sort the table showing the GSP preferences first, followed by the
          MFN tariffs. Find the respected product codes and then look in the column applied tariffs. A specific tariff is
          a tariff that is not expressed as a percentage of the value of the product but rather as specific charge e.g.
          $2 per unit or $1 per kg.

    Of the two products 18063211 and 18063212, Switzerland applies the highest specific tariff to product
    ______ at a level of :________________CHF/ton



    9.3    Looking still only at the preferential tariffs for GSP countries, name the product
           (18063211 or 18063212) to which Switzerland applies the highest total ad valorem
           equivalent tariff?

    Note: Look at the last column of the table. This contains the total ad valorem equivalent tariff, that is, the ad
          valorem equivalent of the specific tariff (plus the ad valorem tariff if there is also an ad valorem tariff in
          operation).

    Of the two products 18063211 and 18063212, Switzerland applies the highest total ad valorem
    equivalent tariff to product ______ at a rate of :____________%



    9.4        What could be a possible explanation for the differences in your answers to question
               9.2 and 9.3?

    _________________________________________________________________________________

    _________________________________________________________________________________

    9.5        Of the two exporters, Brazil and Ghana, which country faces the highest equivalent
               level of protection for exports of “180610 Cocoa powder” to Switzerland?
    Note: To analyse the information most easily, change from the “Products” tab to the “Exporters” tab. Change the
          product to “180610 Cocoa powder” and the Importers to “Switzerland” from the drop down menus. Then
          click “Show Results”. You’ll see that the page refreshes with a new title “Tariffs applied by Switzerland to
          "(180610) Cocoa powder, containing added sugar or other sweetening matter". You’ll see that both Brazil
          and Ghana receive a GSP preferential tariff from Switzerland.

    Of the two countries Brazil and Ghana, Switzerland applies the highest total ad valorem equivalent
    tariff to country ______ at a rate of :____________%



     9.6       Given both Brazil and Ghana face an identical specific tariff for cocoa powder exports
               to Switzerland, why do they face a different total level of protection?

     ________________________________________________________________________________

     ________________________________________________________________________________


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10 Understanding tariff quota information.


       10.1 What is the outside quota rate and the inside quota rate applied by the European Union
            to goat meat from Australia?

       Note: Select any European Country (for example the United Kingdom) as the “Importing Country”. Select the
             products: “020450 Goat meat, fresh, chilled or frozen” Select Australia as the “Exporting Country”. Click
             “Proceed”. When the results appear, find the tariff line codes corresponding to “0204501100 Fresh or
             chilled goat carcases”

       The European Union applies to “0204501100 Fresh or chilled goat carcases and half-carcases“ an
       outside tariff quota rate of : ______% plus _________EUR/ton. The specific outside tariff quota rate
       has an ad valorem equivalent of_____%. So the total ad valorem equivalent tariff of the outside tariff
       quota rate (OTQR) is _______%

       The European Union applies to “0204501100 Fresh or chilled goat carcases and half-carcases“ an
       inside tariff quota rate of:____________ %



       10.2 Explain the quota administration mode for this tariff quota?

       Note: Go to the column entitled “Quota administration Mode” and click on the abbreviation “FC“. This will take
             you to a page explaining tariff quotas and the different modes of administering them.


        The quota administration mode FC for this product means _________________________________.




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DETAILED ANALYSIS – BOUND TARIFFS


11 Practice viewing the bound tariffs of several countries.
      Note: Open the “Bound Tariffs” sub-module by clicking on it. It will become yellow. Select the following countries
            as “Importers”: Brazil, Costa Rica, Cuba, Chile, Uruguay and Venezuela. Select all products using the
            “add all” button. Click “Proceed”.


      11.1 What is Brazil’s highest bound tariff rate?

      Note: When your results appear, the “Products” tab will be highlighted yellow, indicating it is open. Stay in this
            tab. Brazil’s bound tariffs will also be those in view. Just above the first column of the table you will see a
            small heading “Product View” and a drop-down box beside it. Select the option “NTLC product level” (if
            you have access to this level of detail – if not choose the HS-6 level) and wait for the table to refresh
            showing bound tariffs at the national tariff line (or at the HS-6 level). In the table, click on the column
            heading entitled “Bound Tariffs”. This will sort the table to display the highest rates first.

      Tariff rate = __________________%


      11.2 What are the highest and lowest bound tariff rates for the other countries you selected?

      Note: To change the country in view, select another country from the drop-down box next to the heading
            “Selected Importers”. Click “Show Results” to refresh the table each time. Click on the column heading
            entitled “Bound Tariffs”. This will sort the table to display the highest rates first. If you click the heading a
            second time it will display the lowest rates first.

      Brazil highest rate:_____________%                          Costa Rica highest rate:_____________%
      Brazil lowest rate: _____________%                          Costa Rica lowest rate: _____________%

      Cuba highest rate:_____________%                            Chile highest rate:_____________%
      Cuba lowest rate: _____________%                            Chile lowest rate: _____________%


      Uruguay highest rate:____________%                          Venezuela highest rate: _____________%
      Uruguay lowest rate: ____________%                          Venezuela lowest rate: _____________%




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DETAILED ANALYSIS – TARIFF SIMULATIONS

       Note: This module will be most likely used by policy analysts or individuals involved in trade negotiations. In
              Market Access Map it is possible to simulate tariff reductions on applied or bound tariffs. Tariff reduction
              negotiations in the WTO relate to bound tariffs, however it may be useful to simulate reductions of applied
              tariffs particularly in the context of the negotiations of regional or bilateral trade agreements.


12 Simulate a tariff reduction on applied tariffs using the Linear and Swiss formulae.
       Note: Click on the “Tariff Simulations” sub-module. The screen will require you to select buttons indicating
             whether you wish to simulate a reduction on “Applied” or “Bound” tariffs and “All” products, “Agricultural”
             products or “Non Agricultural” products. Leave the default option as “All” ans select “Applied Tariffs”. Click
             “Proceed”. Select “Spain” as the “Importer”: Click “Proceed”. Select the product “030613 Shrimps and
             prawns, frozen…”. Click “Proceed”. Select: “Canada”; “China”; and “Mozambique” as “Exporters”. Click
             “Proceed”. Click on the “Select” button next to the heading “The formula and cuts you wish to use”. Select
             the Linear formula and Swiss simple formula by clicking in the boxes to the left of each of these titles. A
             tick will indicate that the formula is selected. Type “20” into the empty box next to the words “reduction
             rate” for the Linear formula. This means we will be testing a 20% reduction of Spain’s applied tariffs. Type
             also “20” into the empty box next to the words “coefficient for all sector (a)” for the Swiss simple formula.
             Click “Proceed”. Next to the heading “The trade regimes you wish to include” select “All regimes” from the
             drop-down menu. This means we will be applying the reduction formulae to all tariffs, not only the MFN
             rates. Click “Proceed”.


       12.1 For the detailed product “0306131010 Frozen shrimps and prawns ….” Which formula
            reduces the tariff faced by Canada the most?

       Note: When your results appear, the “Products” tab will be highlighted yellow indicating it is open. Change to the
             “Exporters” tab by clicking on it. Above the drop-down box for “Selected Products” click on the small circle
             for NTLC Level. Then select the product code “0306131010” from the drop-down product menu. Click
             “Show Results”. The table will refresh. In the first column you will see your selected exporting countries.
             Just above the column entitled “Trade Regime description” you will see the small heading “Tariff details”. If
             the word “hide” is selected in the drop-down box, change this to “show”. The table will now show you what
             the tariffs were before the reduction and the simulated reduced rates after using both reduction formulae.

       The formula that reduces the (MFN) tariff faced by Canada the most: __________________



       12.2 For the product “0306131010 Frozen shrimps and prawns ….” considering only the
            preferential tariff for GSP countries, which formula reduces most the tariff China faces?
       The formula that reduces the (GSP preferential) tariff faced by China the most:_________________


       12.3 What does this tell you about the effects of the Linear and Swiss formulae?


       ________________________________________________________________________________


       Note: Look at the initial MFN tariff faced by Canada and the initial GSP preference faced by China (before the
             reduction). If you calculate the Swiss formula reduction of 4.5 percentage points (i.e. 12 – 7.5) for Canada
             as a percentage of the initial tariff 12%, you will see that it equates to a real reduction of 37.5% (i.e. 4.5/12
             =37.5%). Now look at the initiate tariff faced by China (look at the GSP preference only). If you calculate
             the Swiss formula reduction amount of 0.73 percentage points (i.e. 4.2 – 3.47) for China as a percentage
             of the initial tariff 4.2% you will see that it equates to a real rate of reduction of 17.38% (i.e. 0.73/4.2 =
             17.38%). So the Swiss formula has the effect of reducing higher tariffs by a greater proportion than lower



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  98                        Market Analysis Tools for Trade Flow Analysis and Modeling
              tariffs. When applied to a number of countries it is able to change the relative market access conditions of
              the countries, unlike the linear formula, where relative positions remain unchanged.


13 Simulate a tariff reduction on the bound agricultural tariffs of the European Union.
      Note: Click the button “New Search”. Click the button “Cancel”. This will return you to the first menu screen. Next
            to the heading Tariffs, select the button “bound”. Next to the heading “Products”, select the button
            “Agricultural”. Click “Proceed”. Select “European Union” as the “Importer”: Click “Proceed”. Select the
            products “240290 Cigars etc” and “120991 Seeds…” and “070420 Brussels sprouts…”. Click “Proceed”.
            Click on the “Select” button next to “The formula and cuts you wish to use”. Select the “Swiss simple
              formula” and type “20” into the empty boxes for the “coefficient for agricultural sectors”. Select also “Tiered
              Approach” and type the following Tariff Ranges, formulae and reduction coefficients:

              Range 1: “0” to < “30” apply “Linear formula” with a reduction coefficient of “35” %
              Range 2: “30” to < “60” apply “Linear formula” with a reduction coefficient of “45” %
              Range 3: “60” to < “90” apply “Linear formula” with a reduction coefficient of “50” %
              Range 4: For tariffs greater than or equal to “90” % apply “Linear formula” with reduction coefficient of 60%


              Click “Proceed”. Check that all your selections are made on the main selection page. Click “Proceed”.


      13.1 For the product “240290 Cigars, Cheroots ….” Which formula reduces the European
           Union bound tariff the most? What is the tariff before and after the reduction?

      Note: When your results appear, the “Products” tab will be highlighted yellow indicating it is open. The title of the
            table will be “Simulated Reduction of Bound Tariffs of European Union”. Just below this title, you will see a
            small heading “Tariff Details” with a drop down box set to “hide”. Change this to “Show”. Look to the left of
            this to the small heading “Product View”. Make sure the drop-down box is set to “HS6 product level”. The
            table will now show you what the tariffs were (at the HS6 level) before the reduction as well as the
            simulated reduced rates after using both reduction formulae.

      The formula that reduces the EU‟s bound tariff for cigars the most: __________________

      The average ad valorem tariff before the reduction: _____________%
      (note: the average ad valorem tariff is indicated by the abbreviation “AV Avg”)

      The average ad valorem tariff after the reduction: ______________%



      13.2 For the product “120991 Seeds …..” Which formula / reduction approach reduces the
           European Union bound tariff the most? What is the average tariff before the reduction
           and after the reduction using this formula?
      The reduction approach that reduces the EU‟s bound tariff for „seeds‟ the most: __________________

      The formula used on this tariff was the _____________ formula with a reduction coefficient of _____%
      (Note : To see the tariff bands used and the reduction coefficient for each band, scroll to the bottom of the page)

      The average tariff before the reduction: _______________%

      The average tariff after the reduction: _________________%


      13.3 For the product “070420 Brussels sprouts…..” How do you compare the effect on the
           original bound tariff of 12% using the Swiss formula with a reduction coefficient of 20%
           compared with the effect of the Linear formula with reduction coefficient of 35%?
      _________________________________________________________________________________

      13.4 If you wish to apply various tariff reduction and also set a tariff ceiling at 100% (being the
           maximum final tariff after tariffs have been reduced), how would you do this using

  Market Access Map - Practical Exercises

                             Market Analysis Tools for Trade Flow Analysis and Modeling                                     99
               Market Access Map? If the final tariff after applying the reduction formula is still higher
               than 100%, what final tariff would be shown in Market Access Map?
        __________________________________________________________________________________________




14 Practice simulating a tariff reduction on bound tariffs on non-agricultural products.
        Note: Click the button “New Search” at the bottom of the page. This will return you to the selection screen for
              simulating another reduction on applied tariffs. Click the button “Cancel”. This will return you to the first
              menu screen. Next to the heading Tariffs, select the button “ bound”. Next to the heading “Products”,
              select the button “Non Agricultural”. Select the country, products and reduction formulae you wish to
              examine. You may even test your own formula by clicking on the box for “User defined formula” and typing
              the formula into the blank field using arithmetic symbols.




  Market Access Map - Practical Exercises

  100                       Market Analysis Tools for Trade Flow Analysis and Modeling
COUNTRY ANALYSIS

      Note: In this module you can create a variety of tariff and trade reports on a country specific basis.



15 Compare the average tariffs applied by different countries.

      15.1 What are the average tariffs applied by France, Japan and the USA to: all products;
           agricultural products; and industrial products?

      Note: Open the “Country Analysis” module by clicking on it. It will become yellow. Select the country “France”
            from the drop-down list of countries. Click on the button located next to the heading “Average tariff applied
            by the country”. Click “Proceed”. The average tariffs applied by France to imported products will be
            displayed. To view other countries, it is not necessary to perform a new search. Just select the new
            country from the drop-down list and click on the button “change”.

      The average tariff applied by:

      France:     all products = _____%;        agricultural products = _____%;         industrial products = _____%;

      Japan:      all products = _____%;        agricultural products = _____%;         industrial products = _____%;

      USA:        all products = _____%;        agricultural products = _____%;         industrial products = _____%;



16 Practice creating some of the other report options in the Country Analysis module.


       16.1      How much tariff revenue did Mauritius collect in Mauritius Rupee in 2002 and what did
                 this represent as a percentage of Mauritius’ total national tax revenues? Explain the
                 evolution over time of Mauritius’ tariff revenues as a percentage of total tax
                 revenues? At what year did it reach a maximum?

       Note:      Select the country “Mauritius” and select the report “income generated from current tariffs”. Click
                 “Proceed”. You will see that the year in view is “1989”. You can change this by selecting another year
                 from the drop down menu.


       Tariff revenue collected in 2002 in Mauritius Rupee was:__________(million) representing _____%
       of total national tax revenues.
       ______________________________________________________________________________
       ______________________________________________________________________________




  Market Access Map - Practical Exercises

                           Market Analysis Tools for Trade Flow Analysis and Modeling                             101
TRADE FLOWS

17 Obtaining trade flow information

        17.1 What was the value of the Netherlands’ imports of fresh cut flowers (product code
             060310) from Kenya in 2004?

        Note: Open the “Trade Flows” module by clicking on it. It will become yellow. Select the country “the
              Netherlands” as the “importer”. Select “Kenya” as the “partner” country. Select the product “060310 cut
              flowers and flower buds….fresh”. Click “Proceed”.

        Value of the Netherlands‟ imports of fresh cut flowers from Kenya :___________US$ thousand



        17.2 Name three other countries that export more fresh cut flowers than Kenya

        Note: At the bottom of the page you will see the sentence “Show top 20 “exporters” in the world for the
              product…”. From the drop-down box select the product “060310 cut flowers…” Click “Proceed”.

        Country 1 :______________________
        Country 2 :______________________
        Country 3 :______________________



GENERAL QUESTION


18 The following questions are designed to test your understanding of tariff issues

        18.1 Based on your understanding, how do specific tariffs affect the level of protection faced
             by different countries? How does this compare with ad valorem tariffs?

        Note: To learn more about tariff terminology, Market Access Map provides a “Glossary”, located in the reference
              material menu item in the Market Access Map web site. You can reach the glossary quickly from the
              database by selecting from the drop-down list of “Quick Links” located at the top left on every page in the
              database.

        _________________________________________________________________________________

        _________________________________________________________________________________

        _________________________________________________________________________________

        _________________________________________________________________________________


        18.2 When calculating the average level of protection applied by a particular country to a
             group of products (for example at the HS2 or HS4 or HS6 digit level), there are different
             ways to calculate the average tariff. These methods include a simple average or trade-
             weighted average. How do you think these different methods would affect the level of
             protection?

        _________________________________________________________________________________

        _________________________________________________________________________________

        _________________________________________________________________________________

        _________________________________________________________________________________

  Market Access Map - Practical Exercises

  102                       Market Analysis Tools for Trade Flow Analysis and Modeling
Multilateral and regional
trade negotiations
Market Analysis Tools for Trade Flow Analysis and
Modelling




Mathieu Lamolle
Dakar, 26-29 April 2010




                                                                    2



Preparing for multilateral and regional
trade negotiations
  WTO Principles

  Obligations and Derogations

  Trade and Tariff Negotiations

  Trade Preferences in WTO

  Article XXIV – Customs Unions and FTAs




       Market Analysis Tools for Trade Flow Analysis and Modeling       103
                                                                             3



      WTO Principles

       Non-discrimination
          • Most Favored Nation (MFN - Art I) except
                –   Enabling Clause
                –   Free Trade Areas
                –   Government Procurement
                –   Measures permitted by WTO Agreements as CVD/ADD
          • National Treatment (Art III) except
                – Subsidies to Domestic Producers
                – Government Procurement
       Protection by Tariff
       Transparency




                                                                             4



          Obligations and Derogations




       Acceptable principles subject to adjustment derogations, exceptions

       Codified principles (Rules: rights and obligations)

       What WTO Members must do

       What WTO Members may do




104         Market Analysis Tools for Trade Flow Analysis and Modeling
                                                                             5



What WTO Members must do

Adhere to the most-favoured-nation (MFN) principle;
   • Non-discrimination
Adhere to the principle of national treatment;
   • Non-discrimination
Refrain from maintaining or introducing quantitative restrictions;
and
Adhere to bound commitments contained in the schedules of
concessions;




                                                                             6



What WTO Members may do

  Take certain safeguard measures;

  Take anti-dumping measures to offset the damage caused by dumping;

  Take countervailing measures to offset the adverse effects of subsidies;

  Negotiate a “Waiver” to some of their obligations;

  Give preferential treatments to certain partners;

  Use the exceptions provisions.




        Market Analysis Tools for Trade Flow Analysis and Modeling               105
                                                                              7



      Trade and Tariff Negotiations

      Negotiations aim, by modalities to be agreed, to reduce or as
      appropriate eliminate tariffs, including the reduction or elimination
      of tariff peaks, high tariffs and tariff escalation, as well as non-
      tariff barriers, in particular on products of export interest ;

      Product coverage shall be comprehensive and without a priori
      exclusions ;




                                                                              8



      Trade and Tariff Negotiations

      The negotiations shall take into account the special needs and
      interests of developing and least-developed country participants,
      including through less than full reciprocity in reduction
      commitments, in accordance with the relevant provisions of
      Article XXVIII bis of GATT 1994.




106           Market Analysis Tools for Trade Flow Analysis and Modeling
                                                                          9



Trade Preferences in WTO

The principle of non-discrimination is one of the central pillar of
the GATT. The original text of the GATT did not allow for
preferences in favour of developing countries, the only exception
to the MFN principle was the provision for reciprocal free trade
within customs unions and Free-Trade Areas - FTA (GATT Article
XXIV).




                                                                         10



Trade Preferences in WTO

A permanent legal basis for trade preferences was then created
through the adoption of the Enabling Clause at the Tokyo Round :
differential and more favourable treatment may be accorded to
developing countries; it allows for preferential tariff treatment, and
more favourable treatment concerning non-tariff measures on
products from developing countries.




        Market Analysis Tools for Trade Flow Analysis and Modeling            107
                                                                                 11

      Article XXIV
      Customs Unions and Free-Trade Areas



         GATT Article XXIV allows countries to grant special treatment to
         one another by establishing a customs union or a free-trade area,
         provided that:
                  1. Duties and other trade restrictions would be eliminated
         on « substantially all the trade » among members ;
                  2. The elimination of internal barriers would occur « within
         a reasonable length of time » ;
                  3. Duties and other barriers to imports from non-member
         countries would « not on the whole be higher or more restrictive
         » than those preceding the establishment of the customs union or
         free-trade area.




108          Market Analysis Tools for Trade Flow Analysis and Modeling
   Multilateral and regional
   trade negotiations (continued)
    Market Analysis Tools for Trade Flow Analysis and
    Modelling




    Mathieu Lamolle
    Dakar, 26-29 April 2010




                                                                                       EU
                                                                                                           USA
                                                                                                                               Trade agreements in Africa
                                                                          Iraq                         EFTA


                                                   MauritaniaL                       Morocco                                               Eq. Guinea
                                                                                                                                                                                                     are not part
                                                                                                                                                                     CAEMC
                                              AlgeriaL                                                                                   Chad                                          Somalia       of any RTA
                                                                                                                                                                                                     within Africa
      Turkey                                                Tunisia
                                                                                                                                                 Central Afr. Rep.                     Sao Tome      (or information
                                                                                                                                                                                                     is not available)
    Israel                                          Egypt                                                  COMESA
                       UAE                                                                                                                                                             La             French overseas
                                    Jordan                        Libya                                                                                                                               department
                                                                                                                                                                                       Reunion
              Kuwait                                                                          Uganda
                        Agadir                       Sudan
                                                                                    Eritrea        Rwanda
          Oman
                                                  DjiboutiL                                                                                                      LiberiaE                                      A
      Bahrain                                                              IOC                         Burundi                                                                         ECOWAS
                       Syria                                                           Ethiopia                                                                                                                F
                                  Lebanon                                                                            EAC                         Cape
   Saudi Arabia                                                                                             Kenya                                                                                              R
                                                                         ComorosIL                                                               VerdeE
                  Yemen
     Qatar                      Palestine                                                                                                                 GambiaE
                                                                                                                                                                                                               I
                                                                                                                    Tanzania                                                Senegal
                Somalia                                  Zambia
                                                                          Madagascar
                                                                                                                                                 Sierra
                                                                                                                                                                                                               C
                                                                                                                                                                                      Togo
League of                                                                    Mauritius            Malawi                                         Leone                  Niger                                  A
Arab States
                                                                             SeychellesSM                            South Africa                                    Côte           Burkina
                                                              Zimbabwe                                                                                  Ghana
                               Pakistan
                                                                                                                                    SACU                             d’Ivoire       Faso
                                                                                                   SwazilandM                                                                    Guinea
                                                                      D.R.CongoSM
                                                                                                                                                                      Benin      -BissauE
                                                                                                                 Lesotho                             Nigeria
                                                                                               Namibia
                                                                         AngolaS                                                                                            MaliE
                                                     SADC                                      Botswana
                                                                                                                                                                                WAEMU




                                                                                                       M
                CAEMC Central African Economic and Monetary Community                                       indicates that the country is a party to COMESA but not yet applying preferential tariff
                                                                                                       I
                IOC    Indian Ocean Commission                                                                         -- // --                        IOC                     -- // --
                                                                                                       S
                SACU   Southern African Customs Union                                                                  -- // --                       SADC                    -- // --
                                                                                                       E
                WAEMU West African Economic and Monetary Union                                                        -- // --                       ECOWAS                  -- // --
                                                                                                       L
                EAC     East African Community                                                                        -- // --                 League of Arab States         -- // --
                COMESA Common Market for Eastern and Southern Africa
                SADC   Southern African Development Community                                                         Partial scope agreements                                  Interim EPA (Only the EU
                ECOWAS Economic Community of West African States                                                                                                                 applies preferential rates)
                                                                                                                      Free Trade agreements
                                                                                                                      Agreements with countries outside Africa
Market Analysis and Research, ITC –Sep 2009




                         Market Analysis Tools for Trade Flow Analysis and Modeling                                                                                                                                      109
      Trade agreements and negotiations in OIC countries




      “Trade Paradox”
      Share of Africa in the world trade is reducing

                             Growth rate
                       average annual % change          Market share in world trade (%)
          Regions                (%)

                       1980-2003         2004-2008       1980     2003      2004      2008
       World                       5.8           14.4     100      100       100          100
       Asia                        8.5           15.7    15.9      28.1      27.3     26.2
       EU-15                       6.0           11.8    37.1      38.7       32      35.2
       Latin America               5.5           17.6     5.4         5       5.5         4.9
       North America               5.5           10.3    14.4      13.3      13.4     15.6
       Africa                      1.5           21.5     6.0       2.3       2.9         2.3
       Middle East                 1.4           22.2    10.4       3.9       5.4         4.2

       ITC calculations, Trade Map




110             Market Analysis Tools for Trade Flow Analysis and Modeling
Possible explanations: Non-Tariff Measures?
   Most difficult import markets, perception of Ugandan exporters




Data source: ITC, company-level survey in Uganda, 2008




    Competition? Regional integration is correlated with
    the level of complementarity among economies
                                                   Share of intra-regional
                              Complementarity
               Region                                 exports in total
                                  Index
                                                    exports of the region

          EU-15                      79.0                   56.4
          EU-27                      81.2                   65.6
          ASEAN                      64.1                   25.4
          MERCOSUR                   40.8                   14.9
          CARICOM                    40.3                   14.6
          SADC                       35.2                    11
          CEMAC                      7.0                      .
          UEMOA                      32.5                   14.1
          COMESA                     26.9                   5.8
          ECOWAS                     18.0                   10.7

                        ITC calculations, data of 2008




         Market Analysis Tools for Trade Flow Analysis and Modeling          111
      Multilateral an regional
      trade negotiations
      Market Analysis Tools for Trade Flow Analysis and
      Modelling




      Mathieu Lamolle
      Dakar, 26-29 April 2010




      Market access considerations in trade
      negotiations

      Market Access specific analyses in the context of bilateral and regional
      negotiations:

        • Impact assessment of trade liberalisation and potential impact of trade
          preferences on developing countries and their economic and development
          prospects

        • Application of quantitative analytical techniques to simulate the impact of
          liberalization both under the WTO and regional agreements.




112           Market Analysis Tools for Trade Flow Analysis and Modeling
Market access considerations in trade
negotiations

Market Access specific analyses in the context of bilateral and regional
negotiations:

  • Capacity building programme in support of bilateral and regional
    negotiations
  • Example: technical support to the negotiation of Economic Partnership
    Agreements between ACP countries and the European Union:
         •   Implication of the business sector and civil society
         •   Preparation of national lists of sensitive products
         •   Harmonization of national lists into a regional perspective
         •   Finalisation of regional negotiation offer and preparation of
             liberalization schedule




Market Access Indicators
                                                                  Proportion of total
                                                                  Developed Market
                                                                  Economies imports
                                                                  (by value) from
                                                                  Developing and
                                                                  Least Developed
                                                                  Countries,
                                                                  admitted free of
                                                                  duty for All Product
                                                                  Categories
                                                                  (Excluding arms
                                                                  and oil)




        Market Analysis Tools for Trade Flow Analysis and Modeling                       113
      Market Access Indicators
                                                           Proportion of total
                                                           Developed Market
                                                           Economies
                                                           imports (by value)
                                                           from Developing
                                                           and Least
                                                           Developed
                                                           Countries, as
                                                           compared with
                                                           Africa , admitted
                                                           free of duty for All
                                                           Product
                                                           Categories
                                                           (Excluding arms
                                                           and oil)




      Market Access Indicators
                                                           Average tariffs
                                                           imposed by
                                                           MDG_Developed
                                                           Regions on All
                                                           Product
                                                           Categories
                                                           (Excluding arms
                                                           and oil) from
                                                           Developing and
                                                           Least Developed
                                                           Countries, as
                                                           compared with
                                                           Africa




114       Market Analysis Tools for Trade Flow Analysis and Modeling
Non-Tariff Measures

Non-tariff measures - NTMs:

  • Designed to meet specific policy but affecting the trade and development
    of other countries
  • Perceived as the major obstacles to trade in the context of multilateral
    and regional trade liberalisation
  • Various difficulties to assess NTMs and barriers to trade:
          •   Lack of common definition
          •   No agreed taxonomy
          •   Inadequate data
          •   No agreed methodology for quantification




Non-Tariff Measures

Pilot project on non-tariff measures:

• UNCTAD mandated a Group of Eminent Persons on Non-Tariff Barriers
  (GNTB) to explore potential remedies

• A multi-agency collaboration of ITC & UNCTAD together with World Bank,
  FAO, UNIDO, WTO, OECD & donors.

• Overall objective is to provide more transparency on non-tariff measures
  and barriers to trade

• The ultimate objective is to roll out a broader project to collect, analyse and
  disseminate NTMs on a global basis




        Market Analysis Tools for Trade Flow Analysis and Modeling                  115
      Non-Tariff Measures

      Pilot project on non-tariff measures:

      • Seven pilot countries are currently taking part in the project: Uganda, Brazil,
        Chile, India, Philippines, Thailand and Tunisia

      • This project aims to:
          • Test and validate a new classification of NTMs and a new data collection
            methodology
          • Survey companies at national level to capture NTMs perceived
          • Collect, classify and disseminate NTMs & national regulations
          • Collect, classify and disseminate international norms & regulations




      Non-Tariff Measures
      Problems related to the separating line between NTMs and NTBs:

      •   Determining whether developing countries’ exports are affected by NTBs or
          not, and analyzing:

          •   To what extent have NTB concerns become a serious determinant of
              international trade barriers?
          •   Which are the most affected sectors?
          •   Which countries make most intensive use of NTBs?
          •   What types of trade barriers are most commonly used in this context?




116             Market Analysis Tools for Trade Flow Analysis and Modeling
Non-Tariff Measures
Problems related to the separating line between NTMs and NTBs:

•   Example: Matching International Standards against US National Standards
    for Tomato juice (200950) Criteria: Strength of juice and intensity of the
    colour red, required by national and international standards

                  International Standard: CODEX STAN 49-1981

                                      Versus

       USA national standard: §156.145 of Regulation Code - Food & Drug




          International Standard                       US national standard
         Organoleptic Properties:           The strength and redness of colour is not less
                                            than the composite colour produced by
         The product shall have the         spinning the Munsell colour discs in the
         characteristic colour,             following combination:
         aroma and flavour of
                                            - 53 % of Disc 1 — red(5R 2.6/13—glossy finish)
         tomato juice.
                                            - 28 % of Disc 2 — yellow (2.5 YR 5/12--glossy
                                            finish)
                                            - 9.5 % of Disc 3 — black (N 1--glossy finish)
                                            - 9.5 % of Disc 4 — grey (N 4—mat finish)




         Market Analysis Tools for Trade Flow Analysis and Modeling                           117
      Multilateral an regional trade
      negotiations – Sensitive products
      Market Analysis Tools for Trade Flow Analysis and
      Modelling




      Mathieu Lamolle
      Dakar, 26-29 April 2010




      Sensitive products: National level
      • Countries can exclude a share of their products from
      multilateral, regional and bilateral negotiations.

      • Systematic approach required: all decisions should be
      based on the criteria - identified in advance, and including
      all relevant dimensions (economic, social and political).

      • Representatives of all stakeholders should be involved       Simultaneous
      (e.g. Chambers of commerce, private sector, agricultural       account of
      associations, employee‟s associations, NGO).                   each interest
                                                                     and position
      • It should also take into account country‟s position in the
      multilateral negotiations, existing RTAs and potential
      agreements.




118           Market Analysis Tools for Trade Flow Analysis and Modeling
Sensitive products: Regional implications
• In case of an RTA between two regions, a national exclusion list is just an initial
step towards negotiating a regional list of excluded products. So, the national
exclusion list will have to take into consideration:

   - Exclusion lists of the countries of the home region
   - Exclusion list of the partner region
     (can be extrapolated from partner‟s existing RTAs)

• Necessary to make some concession to the countries of the home region:
 Common regional position for the exclusion list is crucial!




ITC‟s Contribution
• ITC was mandated to conduct regional workshops on Market Access and
Trade Negotiations, and to operate specific technical assistance missions
on sensitive products based on

   - Specific in-house expertise
   - Databases and Market Access Tools

• ITC participated in the finalisation of national list of sensitive products for
several regional and bilateral trade agreements/negotiations (Burkina
Faso, Cameroon, Democratic Republic of Congo, Madagascar, Papua
New Guinea).




        Market Analysis Tools for Trade Flow Analysis and Modeling                      119
       ITC Approach and Methodology: Role of ITC
         • To animate discussions for each product or group of similar products and
           provide recommendations

         • To reach an agreement on the exclusion or not of each product

         • To stress the links between RTA negotiations and WTO context

         • To provide corrections in the country data sets when necessary




       ITC Approach and Methodology: Criteria
      Criteria used to determine sensitive products :

         • Those products which generate the highest customs revenue
         • Those sensitive products which have the highest MFN rates highly protected
         • Those products which have an impact on food security
         • Those products which compete with domestic industries or future
           potential/strategic industries  „infant industry‟
         • Those products which generate a high level of employment
         • Those sectors with high adjustment costs and poor capital mobility
         • Those products which could lead to an erosion of intra-regional preferences
         • A combination of criteria




120            Market Analysis Tools for Trade Flow Analysis and Modeling
ITC Approach and Methodology: Phases
Discuss products in four phases:

     1. Products generating most of the fiscal revenues

     2. Products with highest MFN rates

     3. Products more important in terms of employment and food security

     4. Products not yet discussed, a priori less protected and not sources of
        high fiscal revenues




ITC Approach and Methodology: Effects i/ii
Main pillars of the discussions when determining if a product should be
considered as sensible or not :

   • Effects on consumers (economic and social effects)
         – Lower imports and the consumption price
         – Improve the consumer saving
         – Consider the effects on the employment
         – Reduce the prices for products affecting education and health

   • Effects on domestic producers
         – Import-competing industries – Elimination of the less competitive
           industries that can not compete with the partner export
         – Improve the competitiveness of the export industry by reducing the
           input price and the production cost




       Market Analysis Tools for Trade Flow Analysis and Modeling                121
      ITC Approach and Methodology: Effects i/ii
      • Overall effects
           – Loss of government revenue
           – Import tax must be replaced by internal tax e.g. value added tax
           – Reduce the price of the machinery needed for the development process
           – Positive for infrastructure development

      • Effects on regional trade
            – Erosion of the intra-regional preferences
            – Trade diversion
            – Affect the future of the regional competitiveness




      ITC Approach and Methodology: Process
      • Appropriation of the work by the technical officers, and so by the country itself:
        the list of sensitive products is the fruit of their own efforts, ITC just animate.

      • Analysis is as detailed as possible, and with last updated databases –
        providing current view.

      • Working line by line and product by product : no automatic groupings
       (otherwise loss of information, increased risks of mistakes in determining the level of
           sensitiveness of a product).

      • No product is left behind: all are discussed (around 5200 lines).

      • Duration of the working session is short (3 / 4 days): this allows to cover a
        maximum of countries in a minimum of time and be quickly ready to set-up a
        regional position for the negotiations.




122           Market Analysis Tools for Trade Flow Analysis and Modeling
ITC Approach and Methodology: Results

• Discussions for each product of the relevance of criteria described before, and
  selection or not in the “exclusion basket”, with ITC experts technical support
  and recommendations

• The establishment of the list is made in Excel, and the workbook is projected
  in conference room. A summary worksheet gives automatically the information
  of the process of the work :
     … products discussed out of a list of … products,
     representing …% of trade flow with the partner country/region,
     and …% of reduction in tariff revenues, etc.




ITC‟s Approach and Methodology: Conditions
   Working conditions / constraints :

  • To provide a database including most updated trade and tariffs information
    (national tariff lines or at least HS6 level), employment statistics, imports and
    exports data for each product and with main partners

  • To work at the most detailed level (at each product / tariff line) with a team of
    national technical officers and negotiators, representatives from Ministry of
    Trade, Planning, Finances and Customs, representatives from the Statistical
    Office, and specially the Private Sector and Civil Society.




        Market Analysis Tools for Trade Flow Analysis and Modeling                      123
      ITC Approach and Methodology: Background


      Example of a possible outcome:



      Products to be liberalized                 Products for exclusion
      • IT sectors                               • Sensitive sectors
      • Medicines and chirurgical tools          • Strategic sectors
      • Educational tools (e.g.books)            • Special products
      • Inputs needed to produce exportable
      products
      • Machinery needed for the production
      and the development process




124          Market Analysis Tools for Trade Flow Analysis and Modeling
Tariff reduction simulations
Context of WTO negotions on NAMA and
Agriculture




Mathieu Lamolle
Dakar, 26-29 April 2010




Case study by ITC for CARIFORUM countries
A high degree of coordination is required between the Cariforum
countries…
   • Doha Development Agenda
   • CARIFORUM Economic Partnership Agreement with the European Union
   • CARICOM Common External Tariff

While there is a wide diversity within the region…
   • Most countries are part of the SVE Group
   • One country is an LDC (Haïti)
   • One country is not WTO member (The Bahamas)
   • Cariforum WTO members have different binding coverage and one country
     falls under paragraph 6 of NAMA (Suriname)
   • National interests may diverge between countries (agriculture, nama,
     services…)




       Market Analysis Tools for Trade Flow Analysis and Modeling            125
          Approach and methodology
      •    Analysis of tariff structure, binding coverage, policy space and
           flexibilities of modalities for tariff reduction for all CARIFORUM
           countries

      •    Identification of sensitive / special products (consideration of
           CARIFORUM EPA list of sensitive products)

      •    Formulation of different scenarios of simulations for tariff reductions
           required to fulfill the Draft Modalities requirements

      •    Identification of optimal negotiating positions for each of the
           simulations and discussion about the best options to retain




      Market access analysis and trade negotiations
      The SVE proposal to WTO negotiations – NAMA (as of July 2008)

      • All duties shall be bound on an ad valorem basis

      • Modality based on level of current bound tariff average, defining an overall
        binding target average

      • Flexibility is granted on the methodology applied to reach the overall binding
        target average (no formula-based modality) and in the use of a basket of
        exclusion for sensitive products

      • Analysis of tariff structure / binding coverage / policy space in order to identify
        how make best use of flexibilities of the modalities in tariff reductions

      • Preparation of specific scenarios for tariff reductions and impacts assessment
        (linear tariff reduction – linear reduction of policy space – varying tariff reduction
        rates…)




126             Market Analysis Tools for Trade Flow Analysis and Modeling
Market access analysis and trade negotiations
The SVE proposal to WTO negotiations – Agriculture (as of July 2008)

• Tiered formula approach on all final bound tariffs

• Flexibilities granted for groups of products for which tariff reduction rates are
  deviated from the tiered approach but in a lesser proportion (1/2, 1/3, or 2/3):

       – Sensitive Products: the modalities have fixed a maximum per cent of tariff
         lines that can be designated as sensitive, guided by the criteria such as
         preserving fiscal revenues, protecting infant industries and those
         important in terms of employment, food security…

       – Special Products: the modalities have fixed a maximum per cent of tariff
         lines that can be designated as special, guided by criteria of food security,
         livelihood security and rural development.

• Alternative option for SVEs is to meet an overall average cut of 24 % of the final
  bound tariffs (no use of tiered approach)




NAMA bound tariff average target for SVEs
    Current bound tariff
                                        New bound tariff average
      average (BTA)


       50% < = BTA                              [28-32] %


   30%< = BTA < 50%                             [24-28] %


    20%< = BTA < 30%                               18 %


                            A minimum line-by-line reduction of 5 percent
                            on 95 percent of all non-agricultural tariff lines
        BTA < 20%
                            or bind at the overall average that would result
                            from that line-by-line reduction




         Market Analysis Tools for Trade Flow Analysis and Modeling                      127
      Analysing the countries’ Tariff Structure for NAMA products
      Dispersion of bound versus applied tariffs
      E.g.: Trinidad & Tobago’s
      Tariff Structure for NAMA
      products




      Simulations of tariff reductions
      Four simulations were used, as follows:
          a) Apply to all tariff lines a uniform tariff reduction rate of X%:
             New_Bound = Tbound * (1-X%) ;

          b) Protect sensitive products by excluding them from reduction; the rest of the
             tariff lines are subject to uniform tariff reduction of coefficient Y%:
             New_Bound = Tbound * (1-Y%)

          c) Protect sensitive products by excluding them from reduction; apply to all
             other tariff lines a uniform rate of policy space reduction (Z%):
             New_Bound = Tapplied + [(Tbound-Tapplied)*(1-Z%)]

          d) Protect sensitive products by excluding them from reduction and preserve a
             minimum policy space of A% on all remaining products; apply varying tariff
             reduction rate of Wpp to remaining tariff lines policy space:
             New_Bound = Tbound - Wpp




128          Market Analysis Tools for Trade Flow Analysis and Modeling
 Simulation of tariff reductions – e.g. Barbados
 Simulation 1: New_Bound = Tbound * (1-X%)
                           No. of bound             No. of bound                                     No. of applied
                                                                                         New
              Target       tariffs lines in          tariff lines       Reduction                      tariff lines
 Scenario                                                                              average
             average       the basket of           subject to tariff    rate (X%)                     affected by
                                                                                      bound tariff
                             exclusion               reduction                                         reduction

   S1         28%                 0                     4595                62           27.6%            393

   S2         30%                 0                     4595                59           29.8%            381

   S3         32%                 0                     4595                57           31.3%            364



Simulation 2: New_Bound = Tbound * (1-Y%)
                           No. of bound             No. of bound                                     No. of applied
                                                                                         New
 Scenario     Target       tariffs lines in          tariff lines       Reduction                      tariff lines
                                                                                       average
             average       the basket of           subject to tariff    rate (Y%)                     affected by
                                                                                      bound tariff
                             exclusion*              reduction                                         reduction
   S1                                                                                                      298
              28%               237                     4358                65           27.8%
   S2                                                                                                     246
              30%               237                     4358                62           29.9%
   S3                                                                                                     236
              32%               237                     4358                59           32.0%




 Simulation of tariff reductions – e.g. Barbados
Simulation 3: New_Bound = Tmaxapplied + [(Tbound-Tmaxapplied)*(1-Z%)]
                           No. of bound             No. of bound                                     No. of applied
                                                                                         New
              Target       tariffs lines in          tariff lines      Reduction                       tariff lines
 Scenario                                                                              average
             average       the basket of           subject to tariff   rate (Z%)                      affected by
                                                                                      bound tariff
                             exclusion*              reduction                                         reduction

    S1        28%                237                    4358               76           27.8%              0

    S2        30%                237                    4358               73           29.6%              0

    S3        32%                237                    4358               69           31.9%              0

Simulation 4: New_Bound = Tbound - Wpp
                                              No. of bound
                       No. of bound                                                                  No. of applied
                                               tariff lines         Varying
             Target    tariffs lines in                                             New average        tariff lines
 Scenari                                       subject to        reduction rate
            average    the basket of                                                 bound tariff     affected by
   o                                              tariff            (Wpp)
                         exclusion*                                                                    reduction
                                               reduction
   S1                                                              See Table                               0
             28%            374                  4221               below              27.3%
   S2                                                              See Table                               0
             30%            374                  4221               below              29.4%
   S3                                                              See Table                               0
             32%            374                  4221               below              31.7%




            Market Analysis Tools for Trade Flow Analysis and Modeling                                                129
      Simulation of tariff reductions –
      CARIFORUM SVE countrties
      Overview of results across CARIFORUM countries:

         • Simulation1 : a baseline to explore tariff reductions, with highest number of
           applied tariffs affected for all countries (St Vincent & the Grenadines has the
           lowest number of affected applied tariffs among CARIFORUM states)

         • Increased reduction rates from Simulation 1 to Simulations 2 and 3

         • For all countries, Simulation 4 preserved the largest basket of exclusion

         • For all countries, Simulation 3 & 4 preserved all applied tariff lines from tariff
           reduction

         • The smallest size of the basket of exclusion is identified for Dominican
           Republic in simulation2 and 4

         • The largest size of the basket of exclusions is identified for St Vincent and the
           Grenadines in simulation 2 and for Barbados in simulation 4




      Identification of a negotiating position in
      Agriculture
      Draft Modalities applying to CARIFORUM SVE countries:

      A tiered formula is to be used for reduction of final bound tariffs on a
      line by line basis;

      Flexibilities are granted in the form of Sensitive Products and Special
      Products;

      An alternative option in the case of SVEs is not to apply the tiered
      formula but simply meet an overall average cut of 24 % of the final
      bound tariffs (§121 of July 2008 draft modalities).



                                                                       12




130           Market Analysis Tools for Trade Flow Analysis and Modeling
    Tiered formula: reduction rates for SVE countries
                   Tariff bands                                              Reduction rate



             0% < FBT or AVE <= 30%                                                  23.3 %



             30% < FBT or AVE <= 80%                                                  28 %



            80% < FBT or AVE <= 130%                                                 32.7 %



               130% < FBT or AVE *                                                 [34-38.7] %



                 * FBT or AVE: Final Bound Tariff or Ad-Valorem Equivalent




    Analysing the countries’ Tariff Structure for
    Agriculture
    E.g.: Trinidad & Tobago

                                                               700
                                                                                                   635

                                                               600
                                   No. of bound tariff lines




                                                               500


                                                               400


                                                               300


                                                               200


                                                               100
                                                                     54    45
                                                                                        7                    2
                                                                0
                                                                     0    ]0-30]      ]30-80]    ]80-130]   ]130+

                                                                                      Bands




           Market Analysis Tools for Trade Flow Analysis and Modeling                                               131
      Entitlement for a basket of Special Products
      and Sensitive Products
      Special Products                             Sensitive Products

      Up to 10-18% of tariff lines can be          Sensitive product entitlement based on
      selected as special products, guided by      modalities:
      indicators of food safety, livelihood        For SVE countries: between 5.3% &
      security and rural development               8% of tariff lines
                                                   For SVE countries with more than 30%
      Up to 6% of lines can have no tariff cut,    of tariff lines in the top band: between
      but all special products must be             8% & 10.7% of tariff lines;
      reduced by 10-14%;                           For SVE countries with tariff lines
      Two groups of Special Products:              bound at HS6 digit level: between 8%
          • Special Products 1 (6%) with no        & 10.7% of tariff lines;
            reduction                              Reduced reduction rate for sensitive
          • Special Products 2 (8%) with           products (deviation from tiered formula)
                                                   linked to Quota Expansion
            varying reductions in order to         Commitments (e.g. the greater the
            achieve a target of 10 -14%            deviation, the greater the tariff quota
            reduction on all special products;     expansion will be required).




      Simulations of tariff reductions
      Three types of scenarios were envisaged in the simulations:

          a) Apply to all tariff lines a tariff reduction rate of K%, according to the tiered
             formula:
             New_Bound = Tbound * (1-K%) ;

          b) Apply no reduction rate for tariffs of Special Products 1, apply reduction
             rates to Sensitive Products and Special Products 2 that deviate from the
             tiered formula (as per the modalities), and apply tiered formula for the
             remaining lines:
             New_Bound = Tbound * (1-K%) ;

          c) Apply a uniform reduction rate on policy space to reach 24% average
             reduction (paragraph 121 of modalities):
              New_Bound = Tmax_applied + [(Tbound – Tmax_applied) * (1-Z%)]




132           Market Analysis Tools for Trade Flow Analysis and Modeling
Simulation of tariff reductions – e.g. Jamaica
Apply to all tariff lines a tariff reduction rate of K%, according to the tiered formula:
                                                   No of bounds to
  No of            No of                                                             No of applied tariff
                                 No of Special       which tiered       Average
 Sensitive        Special                                                             lines affected by
                                   Products 2         formula is       reduction
 Products Products 1                                                                      reduction
                                                       applied
     0                0                0                 765             32.7%                14

Apply no reduction rate for tariffs of Special Products 1, apply reduction rates to Sensitive Products and
Special Products 2 that deviate from the tiered formula (as per the modalities), and apply tiered formula for the
remaining lines:
               No of        No of       Reduction       Overall                                             No of applied
  No of                                                                No of bounds to       Average
              Special      Special       Rate for     average cut                                             tariff lines
 Sensitive                               Special                         which tiered        reductio
              Products     Products                   for Special                                            affected by
 Products                               Products 2                    formula is applied        n
                 1            2                        Products                                               reduction
    51            46           61          15%           10.0%                607             29.0%               0

Apply a uniform reduction rate on policy space to reach 24% average reduction (paragraph 121 of modalities):
                                                      No. of bound                                 No. of
                                       No. of bound                    Policy
                                                       tariffs which                Average    applied tariff
                                       tariffs in the                  space
             Description                                are subject                   tariff        lines
                                         basket of                   reduction
                                                          to tariff                reduction    affected by
                                       exclusions [                     (Z%)
                                                         reduction                               reduction
 Uniform reduction of policy space
 designed to reach 24% average
                                            302              463        43%          24.3%             0
 reduction, while protecting
 sensitive products




  Simulation of tariff reductions –
  CARIFORUM SVE countrties
  Overview of results across CARIFORUM countries:

       • Simulation of tiered formula : a baseline to show the extent of tariff reduction
         possible with the tiered formula for SVEs

       • Simulation of tiered formula showed highest number of applied tariffs
         affected for all countries

       • Paragraph 121 of modalities: for all countries, no applied tariffs are affected,
         only policy space is reduced (Simulation of paragraph 121 shows that St
         Lucia would have thelowest reduction in policy space, while Dominican
         Republic would face the highest reduction)




              Market Analysis Tools for Trade Flow Analysis and Modeling                                                     133
      Using the excel files to review and
      deepen the analyses
      •   A set of worksheets with all data and results of the simulations made
          for NAMA and Agriculture tariff reductions:

           – Worksheets for simulations of tariff reductions on NAMA products

           – Worksheets for simulations of tariff reductions on Argiculture products




           Workfile demonstration (Guyana)




          Description of the scenarios
          • Simulation scenarios were based on latest WTO modalities (May 2008)
                 – Agricultural products: tiered approach and basket of sensitive
                   special products
                 – NAMA products: formula approach

          • Assessment of Swiss formula implications for NAMA products using two
            alternatives for the coefficient and two alternatives for the mark-up for the
            consolidation of the basis rate

          • Assessment of the implications for Tunisia of the modalities for agricultural
            products in terms of market access, internal support and export subsidies
                – Reduction formula based on bounds
                – Distinguishes between developed and developing through reduction
                  coefficients.
                – Sets a ceiling tariff

          • Flexibilities available in the form of special and sensitive products.




134             Market Analysis Tools for Trade Flow Analysis and Modeling
Role of tariff reduction simulations
   • Bring the simulations closer to realty

   • Enhanced relevance of the analyses for the negotiations

   • Increased transparency on the modalities potential impacts on each
     country

   • Integrate information obtained from countries in the simulations (e.g.
     revised lists of sensitive products, different priorities for safeguarding
     policy space…)




  Concluding remarks

• RTA s have an ambiguous impact
   - can be positive
   - or negative
   - or most often – mixed

• Calculating of the overall impact requires a holistic approach and complex
  modelling




        Market Analysis Tools for Trade Flow Analysis and Modeling                135
      Regional trade agreements’
      impacts on developing countries
      Market Analysis Tools for Trade Flow Analysis and
      Modelling




      Mathieu Lamolle
      Dakar, 26-29 April 2010




        Regional trade agreements’ impacts on
        developing countries

       • RTA impacts on developing economies are ambiguous


       • Simulations are often required to estimate interrelated effects


       • Strong influence of preference erosion in the short run


       • Impact on multilateral negotiations and the role of flexibilities




136          Market Analysis Tools for Trade Flow Analysis and Modeling
Case study by ITC - Tunisia
•Tunisia requested ITC to estimate the impact of trade liberalisation on the
Tunisian economy, welfare and fiscal revenues
    - Including all bilateral negotiations, the multilateral negotiations, and
      existing agreements.
    - Resulting in a clear impact assessment for each sector, and suggesting a
      sectoral strategy.
    - Clearly indicating the most beneficial positions for Tunisia both in the
      context of the WTO negotiations, and negotiations with the EU.

• Trade situation highlights
     - A large share of the trade with EU already liberalised
    - Complex interdependence of multilateral negotiations and negotiations
       with EU, especially with regards to agriculture and subsidies.




 Description of the scenarios
 • Simulation scenarios were based on latest WTO modalities (May 2008)

 •Agricultural products: tiered approach and basket of sensitive special
 products

 •NAMA products: formula approach



Scenario 1: WTO without exclusion list
• Agriculture: tiered formula (without exclusions)
• NAMA: coefficient a = 8 four developed countries and z =24.5 for
  developing countries (no flexibilities)




        Market Analysis Tools for Trade Flow Analysis and Modeling               137
      Scenario 2(a): WTO with exclusions
      • Agriculture: tiered formula with list of exclusions for all countries
      • NAMA: coefficient a = 8 four developed countries and x =20 for developing
        countries (no flexibilities)
      • Flexibilities: no reduction on 6.5% of lines not exceeding 7.5% of country’s
        trade in NAMA products.



       Scenario 2(b): WTO with exclusions
      • Agriculture: tiered formula with list of exclusions for all countries
      • NAMA: coefficient a = 8 four developed countries and x =20 for developing
        countries
      • Flexibilities: «less than formula cut» (50%) on 13% of lines not exceeding
        15.5% of country’s trade in NAMA products.




      Scenario 4: WTO Agriculture
       • Agriculture: tiered formula with list of exceptions for all countries
       • NAMA: no reduction

      Scenario 5: Tunisia without exclusions
       Tunisia
       • Agriculture: tiered formula with list of exceptions for all countries
       • NAMA: no reduction
       Rest of the World: Scenario 3
       • Agriculture: tiered formula with list of exclusions for all countries
       • NAMA: coefficient a = 8 four developed countries and x =20 for developing
         countries
       • Flexibilities: «less than formula cut» (50%) on 13% of lines not exceeding
         15.5% of country’s trade in NAMA products.




138           Market Analysis Tools for Trade Flow Analysis and Modeling
       Scenario 6: EUROMED without exclusions
        Total liberalization of the agricultural sector between Euromed
        countries and the European Union

        Scenario 7: EUROMED with exclusions
        Total liberalization of the agricultural sector between the Euromed
        countries and the European Union with lists of exceptions of
        EUROMED identical to the lists of WTO with a threshold of 5%
        based on the criterion of the highest tariff rates.

       Scenarion 8: WTO with EUROMED
         WTO: Scenario 3
         Euromed: Scenario 7




     Overal effect of scenarions on the economy of Tunisia in 2016
                                                                                                                                              OMC
                                                                                                                                   Eurom
                                                                                                    OMC       OMC                           Tunisie
                                                        +Reductio    OMC                 OMC                           Euromed       ed
                             Libéralisa                                                           Tunisie    Tunisie                           avec
                                           + Taxes à       n du      sans     OMC       Tunisie                           sans      avec
                               tions                                                                avec       avec                          listes;
                                          l‘exportati    soutient   listes   Agricul      sans                           listes    listes
                             bilatérale                                                            listes;   listes;                          flex b
                                              on        domestiqu   d‘exce   ture (4)    listes                        d‘excepti   d‘exce
                                  s                                                                 flex a    flex b                            (3)
                                                             e       ption                 (5)                          ons (6)     ption
                                                                                                      (2)       (3)                          +Euro
                                                                                                                                     (7)
                                                                                                                                            med (8)

PIB (volume)                   0.03         -0.82         -0.37      1.53     0.71       1.64      0.70       1.24       3.78       2.74     3.24


Bien être                      -1.20        -0.96         -1.23     -0.91     -1.03      -0.75     -0.84      -0.86      -1.36     -1.28     -1.05


Terme de l'échange             -1.42        -1.39         -1.57     -1.92     -1.55      -1.91     -1.81      -1.86      -1.83     -1.69     -2.22

Taux de change effectif
                               -0.87        -0.75         -0.64     -0.95     -0.59      -0.88     -0.76      -0.84      -1.48     -1.27     -1.21
réel
Exportation totale
                               7.28          6.29         7.22       7.52     7.79       7.83      7.24       7.50      11.69      10.14     9.46
(volume)
Importation totale
                               6.72          6.61         6.65       6.99     7.21       7.28      6.73       6.97      10.80       9.37     8.79
(volume)

Salaire réel des qualifiés     -1.50        -1.19         -1.87     -0.88     -1.59      -0.82     -1.20      -1.02      -1.02     -1.03     -0.81

salaire réel des non-
                               -1.20        -0.96         -1.23     -0.91     -1.03      -0.75     -0.84      -0.86      -1.36     -1.28     -1.05
qualifies
Rendement réel du
                               -0.74        -0.95         -0.98     -0.63     -0.78      -0.63     -0.93      -0.79      -0.08     -0.33     -0.48
capital
Rendement réel de la
                               -1.71        -1.21         -1.18     -1.44     -1.24      -1.11     -0.52      -1.00      -3.74     -3.23     -2.25
terre
Rendement réel des
                               -4.41        -5.86         -4.74     -3.92     -4.57      -4.04     -4.32      -4.10      -4.82     -4.27     -4.20
ressources naturelles




                        Market Analysis Tools for Trade Flow Analysis and Modeling                                                                     139
      Sectoral Effects in 2016                                                                 OMC Tunisie avec listes; flex b
                                                                                                            (3)
                                                                                                                                 OMC Tunisie avec listes; flex b (3)
                                                                                                                                         + Euromed (8)
                                                  Riz                                                       90.72                              120.87
                                                  Blé                                                       7.84                                20.45
            Secteurs agricoles                    Autres céréales                                           6.77                                9.19
                                                  Fruits et légumes                                         -0.23                               -2.12
                                                  Autre produits agricoles                                  4.03                               -10.62
                                                  Plantation a base de fibres                               0.13                                1.19
                                                  Autre récolte                                             0.68                                -5.28
                                                  Animaux vivant                                            0.91                                -0.80
                                                  Pêche                                                     -1.02                               -0.30
                                                  Viande                                                    0.08                                -4.17
        agroalimentaires




                                                  Huile et graisses végétales                               14.60                               25.32
           Industries




                                                  Produits laitiers                                         31.57                               21.26
                                                  Riz Traité                                                20.65                               35.27
                                                  Sucre                                                     10.07                               10.13
                                                  Autres produits agroalimentaires                          3.06                                8.80
                                                  Tabac et boisson                                          -1.26                               -1.68
                                                  Hydrocarbure et Produit minier                            -0.21                               -0.27
                                                  Textile                                                   -1.96                               0.33
            Industries non agroalimentaires




                                                  Habillement                                               10.68                               11.88
                                                  Cuire                                                     9.43                                10.32
                                                  Papier et Publication                                     -2.70                               -3.13
                                                  Produit pétrolier et de charbon                           -3.08                               -3.19
                                                  Produits chimique, Caoutchouc et plastique                -2.82                               -2.84
                                                  Métaux                                                    -3.50                               -3.28
                                                  Véhicules a moteurs                                       -4.38                               -4.33
                                                  Autres équipements de transport                           -0.29                               0.13
                                                  Equipement électronique                                   1.64                                1.98
                                                  Autre produits manufacturiers                             1.49                                2.24




             Results summary (Estimation up to 2020)

        • Overall estimated impact is positive, with gains in terms of
               – GDP (+1.05 to 1.56%)
               – industrial production (+2.92% to 3.21%)
               – exports (+8.81% to 9.25%)

        •                                      Estimated negative impacts on employment, exchange terms and household
                                              income

        • Agricultural liberalisation is expected to have a positive impact on world prices
          of agricultural and food products, so Tunisia will have the opportunity to
          strengthen its position and market share

        • Simulations point out the potential negative impact of multilateral liberalisation
          of NAMA products if Tunisia economy keeps the same specialisation scheme of
          its industries.




140                                                Market Analysis Tools for Trade Flow Analysis and Modeling
  Major recommendations

• Do not oppose an ambitious reductions in NAMA negotiations while trying
  to retain flexibility on sensitive products (available for developing countries).

• Follow active policies in the agricultural negotiations with aim of achieving
  reductions in domestic support, especially in the EU (G20).

• Develop a new specialization in the sectors (positive impact of the Doha
  Round in terms of strengthening the competitive position of Tunisia in the
  food industries and engineering industries).

• Way forward: Incorporate into the study the different projections of XI and
  XII Plans




        Market Analysis Tools for Trade Flow Analysis and Modeling                    141
      ITC Project on Non-Tariff Measures
      Understanding the non-tariff obstacles to trade exporters and
      importers experience when trading their goods

       Market Analysis Tools for Trade Flow Analysis and Modelling




      Mathieu Lamolle
      Dakar, 26-29 April 2010




      NTMs – Why a concern for exporters?
      Particular challenges for exporters (and importers) in developing and
      least developed countries:

      •Products need to comply with a wide range of NTMs, including technical
      regulations and customs procedures.
      •NTMs vary across products and countries, and can change quickly.
      •Impediments companies face in relation to NTMs and their compliance are
      often linked to efficient procedures and facilities within their own country,
      and to a lack of information.
      •National policy makers often lack a clear picture of what the business
      sector currently perceives as predominant obstacles to trade.




142          Market Analysis Tools for Trade Flow Analysis and Modeling
NTMs – Why important for ITC?
Greatest challenge to developing exports from client’s
country/company

Unprompted, Combined Mentions, ITC Client Survey 2008




NTMs – Why important for ITC?
Greatest challenge to developing exports from client’s
country/company

ITC Client Survey 2008




        Market Analysis Tools for Trade Flow Analysis and Modeling   143
                                                                               5


      Multi-agency collaboration on NTMs and
      ITC’s focus
      •Multi-agency collaboration on NTMs initiated by UNCTAD in 2006, with
      the objective to increase transparency and understanding on NTMs through
      the systematic collection, classification and dissemination of NTM data.
      •New NTM classification on goods (November 2009), tested in pilot
      phase (2008-2009) in 7 countries (company surveys and collection of
      official NTM data) – UNCTAD/ITC.
      •2010 & beyond: Collection, classification and dissemination of NTMs
      data as global public good (under UNCTAD’s coordination; also in
      collaboration with World Bank)

      Focus of ITC (2010 and beyond):
      •Company surveys on NTMs to identify major impediments to trade
      experienced by exporters and importers (based on new NTM classification);
      •Contribution to UNCTAD’s collection of offical NTM data for selected
      countries




      ITC project on NTMs - Objectives

      ITC aims
      •To understand the non-tariff obstacles to trade exporters and importers
      experiences and to define strategies and solutions that meet the specific
      needs of the business sector
      •To provide exporters and importers, trade support institutions and policy
      makers with relevant information on the NTMs they need to comply with,
      including those that the business sector experiences as obstacles to trade




144          Market Analysis Tools for Trade Flow Analysis and Modeling
ITC project on NTMs – 2010-2012
Implementation of representative company surveys in 27 countries
(9 per year)
•Upon request by the country and in close coordination with local
stakeholders;
•Output: Country report, shared and discussed in the framework of a
national stakeholders’ workshop; workshop shall initialise local dialogue
and follow-up actions (e.g. SPS capacity building through ITC‘s
programme on Quality Management);

Contribution to UNCTAD’s collection and classification of official
NTM data for selected countries
• Including major importing countries such as China, EU, Hong Kong, as
well as selected survey countries;
•Final output: official data disseminated as global public good through
new web application developed by UNCTAD/ITC/World Bank




ITC’s collaboration on NTM survey

•Survey implementation in close cooperation with national
stakeholders;
•Pilot collaboration with WTO Trade Policy Review on 4 countries
(2010). Goal: to test in how far surveys can provide business
perspective on NTM related issues to TPR
•Collaboration with Columbia University/SIPA on 2 countries
(2010): A group of students provides additional desk and field
research activities
•ITC country projects: Survey results will provide inputs to
    • ITC’s Trade Competitive Assessment
    • ITC’s work on export quality management




       Market Analysis Tools for Trade Flow Analysis and Modeling           145
                                                                                           9



      NTM company-level surveys - Goal

      •Goal of NTM survey is to provide the basis for a profound analysis of
      the issue of NTMs from the business sector perspective
          oIdentify pattern of the most « problematic » NTMs by sector, NTM
          category and partner country – need for concrete policy making
          oIdentify national procedures and infrastructure which need to be
          strengthened in order to better support the business sector
          oIdentify potential gap in understanding specific measures applied for
          specific products – lack of access to relevant information


      •Who will benefit: Exporters, importers, trade support institutions,
      policy makers




                                                                                          10



      3. NTM company surveys – Methodology

      •Survey methodology developed by ITC further to pilot surveys in 7 countries;s
      •Global survey methodology across countries, ensuring cross-country analysis
      and at the same time allowing adjustment to local requirements;
      •Representative sample of exporting companies at the national and sector
      level; taking into account sector and company size;
      •Large-scale coverage of importing companies;
      •Coverage of different geographical regions;
      •Interview are carried out in a 2-step approach:
           o Phone screen interviews to identify companies that experience obstacles
             to trade (representative sample per export sector and size); interview
             duration: 6-8 minutes
           o In-depth face-to-face interviews with the companies that face obstacles to
             trade; interview duration: 30-40 minutes
           o Interview are carried out in a 2-step approach:
      •Interviews are implemented by local survey specialist; 2-days training of well
      skilled face-to-face interviewers (e.g. PHD students in economics)




146           Market Analysis Tools for Trade Flow Analysis and Modeling
                                                                                                                                          11



NTM company surveys - Implementation
                                                                                                        4. Results
        1. Survey                        2. Interview               3. Data Analysis                  Dissemination
       Preparation                          Period                     and Report                      and the way
                                                                                                         forward

                                                                                                      In collaboration &
  In collaboration with                                            In collaboration with           coordination with local
  national stakeholders              In collaboration with                                         stakeholders, other ITC
                                                                  local NTM specialist or
   (Ministry of Trade;              local survey specialist
                                                                     research institute                  sections and
    Export Promotion
                                                                                                    international partners
      Agency, etc.)



 • Sectoral and                     • Phone screen                • Data analysis by               • Dissemination of
   geographical coverage              interviews with               products & sectors,              country report as
 • Sample size calculation            exporters and                 partner countries,               public good in the
 • Identification of sample           importers                     types of NTMs and                framework of a
   frame                            • Face-to-face                  procedural obstacles             national stakeholders’
 • Face-to-face training of           interviews with             • Additional desk                  workshop – to initiate
   interviewers                       exporters and                 research                         discussions and
                                      importers                   • Preparation of in-depth          definition of next steps
                                    • If required,                  country report                 • Dissemination of
                                      complementing                                                  survey data through
                                      interviews with other                                          web application
                                      stakeholders                                                   developed in
                                    • Data digitalisation                                            collaboration with
                                                                                                     UNCTAD




ITC NTM survey countries 2010
                              Land-
Country         Region        locked LDC Framework                                               Status
Hong Kong       Eastern       No      No ITC-WTO Trade Policy                                    Interviews ongoing
                Asia                     Collaboration                                           (Mar-Apr 2010)
Peru            South         No      No - Collaboration with Ministry of Trade & Export         Interviews ongoing
                America                  Promotion Agency Prom Peru;                             (Feb-Apr 2010)
                                         -ITC Priority Country;
                                         -Collaboration with Columbia University;
Sri Lanka       Southern No           No -Collaboration with Department of Commerce &         Interviews ongoing
                Asia                     Institute of Policy Studies for Sri Lanka;           (Feb-Apr 2010)
                                         -ITC-WTO pilot collaboration on Trade Policy Review;
                                         -Collaboration with Columbia University
Burkina Faso    Western       Yes     Yes -Request from Department of Commerce;                  Interviews ongoing
                Africa                    -ITC-WTO pilot collaboration on Trade Policy Review;   (March-Apr 2010)
                                          -Contribution to LLDC report 2010
Morocco         Northern      No      No -ITC Enact Programme in collaboration with Ministry     Survey preparation
                Africa                    of Trade                                               (Interviews start in Apr 2010)
Paraguay        South         Yes     No Country Request; collaboration with Ministry of         Survey preparation
                America                   Trade                                                  (Interviews start in Apr 2010)
Uruguay         South         No      No In coordination with Ministry of Foreign Affairs        Survey preparation
                America                                                                          (Interviews start in Apr 2010)
Malawi          East Africa   Yes     Yes Request from the Ministry of Trade                     Initialisation
                                                                                                 (Interview period: July - August 2010)

 Decision pending: Egypt, Jordan, Cameroon, Rwanda




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         Ongoing NTM surveys                                        (as of 31/03/2010)



                                                                                                          Response
                                                                Percentage of                             Rate
                                                                companies                      Status     (reference:
                   Nr of phone                                  facing NTBs/    Nr of face-to- (completed completed
                   screen                              Response procedural      face           or         phone
      Country      interviews  Status                  Rate     obstacles       interviews     scheduled) screens)
      Hong Kong    1600        1000 completed          12%      33%             110           59          5.2%
      Peru         990         573 completed           24.4%    28.8%           215           61          10.6%
      Sri Lanka    around 500  574 completed           13%      50%             230           112         54.6%
      Burkina Faso around 320  Interwies started 29/03 n.a.     n.a.            150           n.a.        n.a.
      Morocco      1080        Initialisation          n.a.     n.a.            215           n.a.        n.a.
      Paraguay     500         Initialisation          n.a.     n.a.            110           n.a.        n.a.
      Uruguay      1140*       Initialisation          n.a.     n.a.            250           n.a.        n.a.
      * initial
      estimation




                                                                                                                  14



         Summary Outputs 2010
              • Survey report pilot country Uganda (survey in 2008 to 2009) is
                available
              • 2010 survey reports Burkina Faso, Hong Kong, Morocco, Paraguay,
                Peru, Sri Lanka, Uruguay available in second half of 2010
              • Contribution to UN General Assembly report 2010 on landlocked
                developing and least developed countries (Burkina Faso and
                Paraguay)
              • Pilot collaboration with WTO Trade Policy Report (Hong Kong, Sri
                Lanka, Burkina Faso)
              • Strengthening of ITC in-house collaboration (e.g. in the area of SPS
                and TBT with ITC Quality Management programme)
              • In coordination with UNCTAD and WB, official NTM data collected,
                classified and disseminated for a number of countries (including China,
                Hong Kong, EU, Turkey, as well as survey countries). Minimum: SPS
                and TBT regulations applied by a country.
              • Contribution to the development and launching of NTM data
                dissemination tool (UNCTAD/ITC/sWB collaboration)




148                Market Analysis Tools for Trade Flow Analysis and Modeling
                                                                    15




If you have any question or comment, or would like to receive the
   detailed survey methodology, please contact:

                          NTM@intracen.org




    Market Analysis Tools for Trade Flow Analysis and Modeling           149
      ITC new tool: Standards Map
      Enhancing transparency and increasing opportunities

       Market Analysis Tools for Trade Flow Analysis and Modelling




      Mathieu Lamolle
      Dakar, 26-29 April 2010




      Standards Map & ITC‟s Trade for Sustainable Development
      (T4SD) programme
      T4SD is a partnership-based effort to enhance transparency on voluntary sustainability
                    standards and increase opportunities for sustainable trade


      The main goal of the T4SD project is to develop a web-based tool – Standards Map – that
      centralises and disseminates information on voluntary sustainability standards and related
      research results to strengthen the capacity of producers, exporters and buyers to participate
      in sustainable production and trade.
      T4SD will:

          • Systematically integrate comprehensive information on voluntary sustainability
          standards;
          • Provide research data that complements this information, such as impact assessment,
          market data, and best practices examples;
          • Allow information tailoring through customised front ends addressing users‟ specific
          needs, ensuring direct access to relevant information and intuitive web navigation.



                                                                                                      2




150                Market Analysis Tools for Trade Flow Analysis and Modeling
                                                                                                                          3




What is a voluntary sustainability standard?


                                                         Standards affecting trade




              Voluntary schemes                                                       Mandatory schemes



                                                                                           Consumer                    Food
Quality                Sustainability               ….                                     protection                  safety

            Process                                                                                     Technical
          management
                                        Packaging                                    ….                 requirements




                                                                                                                              4




                 Market Analysis Tools for Trade Flow Analysis and Modeling                                                       151
       What is a voluntary sustainability standard?

      Definition:
      While there is no internationally recognized definition for them, voluntary sustainability standards are
      established systems that contain technical specifications used to ensure that materials, products, processes
      and services meet social, economic and environmental requirements.

      As these standards are voluntary, there is no legal obligation to comply with them on the part of the buyer,
      producer or exporter.

      Examples:




                                                                                                                     5




      Objectives of this session – Information needs assessment


               Information and                   Availability of support
                support needs                        and information
            What is the information                     What kind of
             and support that you                 information/support is                          GAP
                     need?                           available to you?                 1. Identify the needs for
            Why do you need the                  What does it help you to               additional support and
                information and                              do?                               information
                    support?                      Who provides you with                  2. Address the gap of
                What should the                       information and                    information needs vs.
              information entail?                         support?                      information availability
            When do you need the                   When do you get the                   3. Develop a concept
                information and                       information and                        for provision of
                    support?                              support?                             information
            How do you need the                  How (in which form) do
                information and                  you receive support and
                    support?                            information?




                                                                                                                     6




152                 Market Analysis Tools for Trade Flow Analysis and Modeling
   Objectives of this session - Questions for certified producers
   and exporters


     Awareness               What were your sources of information – who provided the
                             information? How did you learn about voluntary standards? What
                             information has been provided?
   Consideration
                             • What was or is most important information for decision making
                               on certification? What are critical factors to make certification a
     Selection                 success?

                            What were main challenges in getting certified? What was
   Implementation
                            particularly difficult in the process of getting certified? Where
                            would you like to receive additional support?

       Impact
                             • What are the positive and negative impacts of certification? How
                               did it change your work, your business, your revenues, your
                               overall situation?




                                                                                                       8

   Health, safety and sustainability standards are not new…


1700 BC King Hammurabi’s code

                                             Builders, innkeepers or farmers were responsible
                                                for negligence that caused harm to local
                                                citizens…

                                             “If a builder has built a house for a man, and has not




                   Market Analysis Tools for Trade Flow Analysis and Modeling                         153
                                                                            9



      Health, safety and sustainability standards are not new…




                                                                           10


      …but it has become a critical issue as concerns for rate of
      depletion of natural resources and wide disparities in well being




154           Market Analysis Tools for Trade Flow Analysis and Modeling
                                                                                                    11




             Ten trends, many implications…




                                                                                                    12

1. Consumers increasingly concerned about how products
   produced




                                                                                           The
                                                                                         80-20-10
                                                                                         Rule*…


*Based on data from Eurobarometer Report: « Attitudes of European citizens towards the
environment”, March 2008




                     Market Analysis Tools for Trade Flow Analysis and Modeling                          155
                                                                                                                                  13



       1. Consumers increasingly concerned about how products are
       produced

          About 60% of U.S. consumers say they have “a more favorable
          opinion of companies that support causes” and 76% of consumers
          polled said that they would switch over to a particular brand or
          retailer that supports a good cause, especially if price and quality
          are the same.
                                                                                      Berkowitz, Caron, Hartley, Rudelius. 2000




        Trust in manufacturers has become fundamental to choice. More
        than 70% of consumers across Europe, Asia and North America
        would refuse to buy products from companies they do not trust.
                                                                                                                 Edelman, 2006




                                                                                                                                  14

      2. Certified sustainable voluntary standards are growing
         beyond the „niche‟ market category
                                                Indicative world sales of selected sustainability coffee
                                                                       standards
                                                                                               Common Code for the Coffee
                                       140000
                                                                                               Community

                                       120000                                                  UTZ Kapeh and Utz Certified
                                                                                               (renamed in March 2007)
                Coffee (metric tons)




                                       100000                                                  Fairtrade


                                        80000                                                  Smithsonian Bird Friendly


                                        60000                                                  Rainforest Alliance

                                        40000                                                  Organic

                                        20000                                                  Starbucks Coffee and Farmer
                                                                                               Equity (C.A.F.E.) Practices
                                            0
                                                                                               Nespresso AAA Sustainable
                                                2000200120022003200420052006200720082009       Quality Program®

      Source: Reinecke/Manning/von Hagen (forthcoming)            Year




156                                     Market Analysis Tools for Trade Flow Analysis and Modeling
                                                                                                                 15

2. Certified sustainable voluntary standards are growing
   beyond the „niche‟ market category
Seven of the largest food retailing chains in Europe accounted for 76 percent
of fresh fruit and vegetable sales and 70 to 90 percent of fresh produce
imports from Africa (FAOSTAT data, World Bank Report - Building Competitiveness in Africa‟s Agriculture, 2009)




 Source: GlobalGap, 2009




                                                                                                                 16

2. Certified sustainable voluntary standards are growing
   beyond the „niche‟ market category




              Market Analysis Tools for Trade Flow Analysis and Modeling                                              157
                                                                                              17



      3. Large „mainstream‟ players are leading this expansion
                                                         Expected availability of certified
      The Dutch chocolate brand Verkade shifted to       cocoa in 2009 and 2010
      100% Fairtrade cocoa and sugar sourcing in
      2009 (1.500 tonnes of Fairtrade cocoa a year).

      Ahold, Cargill, Heinz Benelux, Mars, Nestlé and
      Ecom are participating in the development of a
      Utz Certified cocoa standard.

      Kraft Foods is the largest buyer of Rainforest
      Alliance coffee and cocoa beans worldwide

      Cadbury is using certified Fairtrade cocoa.
      Procurement of Fairtrade cocoa produced in
      Ghana expected to triple from around 5,000
      tonnes to15,000 tonnes annually.


                                                         Source: Cocoa Barometer 2009




                                                                                              18



      3. Large „mainstream‟ players are leading this expansion
      Chocolate manufacturers and their consumer labels in 2009




                          Source: Cocoa Barometer 2009




158              Market Analysis Tools for Trade Flow Analysis and Modeling
                                                                               19



3. Large „mainstream‟ players are leading this expansion
Cocoa traders in 2009




                 Source: Cocoa Barometer 2009




                                                                               20



4. Increasing co-opetition exists among multiple standard setting
organizations

  • Benchmarking of 4C and Rainforest Alliance coffee standard:
  The 4C Association and the Rainforest Alliance initiated a new
  collaboration through a benchmarking process. Rainforest Alliance
  certification is equivalent to 4C certification (not the other way round).
  Producers that comply with Rainforest Alliance standards for coffee
  now have access to buyers of 4C compliant coffee (source: 4C
  website).

  • Benchmarking between Utz Certified and EurepGAP: The Utz
  Certified coffee standard is officially benchmarked against EurepGAP's
  coffee code. The Utz Kapeh Code of Conduct contains 100% of the
  EurepGAP 'coffee reference code' and includes additional social
  criteria.




         Market Analysis Tools for Trade Flow Analysis and Modeling                 159
                                                                                            21

      5. Mandatory standards are being „inspired‟ by voluntary
      standards?

       Global Gap and EC Regulations

      The Council Regulation 852/2004 relating to hygiene of foodstuffs entered
       into force in 2006. It deals with issues such as general requirements for
       primary production, technical requirements, HACCP (Hazard Analysis at
       Critical Control Points), for food handling and processing, registration/approval

       of food businesses and national guidelines for good practice. Detailed
       measures specified under this regulation resemble a combination of private-
       sector standards, such as EurepGAP and the BRC Technical Standard, but
       they are mandatory – not voluntary – requirements.




      6. Producers and exporters are engaging in sustainable
      production and trade at very different speeds

       Cocoa production 2008                                    Coffee production 2007/08




            Source: State of Sustainability Initiatives, 2009




160                 Market Analysis Tools for Trade Flow Analysis and Modeling
                                                                              23

6. Producers and exporters are engaging in sustainable
production and trade at very different speeds
                                          Global GAP Certified producers
                                          worldwide (approx. as of 11/2009,
                                          source: GlobalGAP annual report):

                                          • Germany: 8.200
                                          • Italy: 16.900
                                          • Spain: 16.500
                                          • Brazil: 550
                                          • Chile: 2.050
                                          • Guatemala: 500
                                          • South Africa: 1.900
                                          • Burkina Faso 323
                                          • Cameroon: 2
                                          • Ghana: 148
                                          •Kenya 606 (in 2007)
                                          • Mozambique 2
                                          • China: 272
                                          • Thailand 920
                                          •Vietnam: 70




                                                                              24

7. Growing attention by standard setting bodies and support
organizations to increasing role of smallholders

• It is estimated that smallholders produce up to 70% of organic products
imported into Europe. (2nd IFOAM International workshop on smallholder
certification, Feb. 2002)

• More and more best practice guidelines are being developed to
improve access to certification to smallholders: FSC 2009, Global GAP
2009.

• Just over 12,500 smallholder tea farmers have become the first-ever
group to achieve Rainforest Alliance certification in Dec 2009 (source:
RA website/News)




          Market Analysis Tools for Trade Flow Analysis and Modeling               161
                                                                                                                                      25

       8. Is it worth it? Cost-benefit analysis is still work-in-progress
           The farmer’s view…




                                                                                                                                      26

       8. Is it worth it? Cost-benefit analysis is still work-in-progress
           The farmer’s view…
        Results of a pilot study comparing 4 voluntary standards performance in the coffee
        sector in South America and Africa – Farmer Income

                                                                                           Average net income
      Gross revenue and cost of production




         Source: Daniele Giovannucci and Jason Potts (2008), COSA: Preliminary Analysis of Sustainability Initiatives in the Coffee
         Sector




162                   Market Analysis Tools for Trade Flow Analysis and Modeling
8. Is it worth it? Cost-benefit analysis is still work-in-progress…


             Supply-Demand relationship in sustainable coffee sector (2006)
                             Estimated Volume certified vs Volume Traded (000 bags)




     Source: Volcafé


                                           Source: Bernard Killian, Incae




 8. Is it worth it? Cost-benefit analysis is still work-in-
 progress…
  Organic products – Case Study in Tanzania

  Organic products fetch a higher price than conventional products.
  But “Who will get this money?” and “Will the farmers get a fair share?” –




        Source: SIDA, Grolink and AgroEco (2008): Organic Exports - A Way to a Better Life?




              Market Analysis Tools for Trade Flow Analysis and Modeling                      163
      8. Is it worth it? Cost-benefit analysis is still work-in-
      progress….
       GlobalGap – Perceived benefits in Kenya…




                                    Source: USAID


                                                                                                                                     29




                                                                                                                                    30

      8. Is it worth it? Cost-benefit analysis is still work-in-progress
         The environment view…
      Results of a pilot study comparing 4 voluntary standards performance in the coffee
      sector in South America and Africa – Environment impact




       Source: Daniele Giovannucci and Jason Potts (2008), COSA: Preliminary Analysis of Sustainability Initiatives in the Coffee
       Sector




164                 Market Analysis Tools for Trade Flow Analysis and Modeling
                                                                                                                              31

8. Is it worth it? Cost-benefit analysis is still work-in-
progress…
 The community view…
 Results of a pilot study comparing 4 voluntary standards performance in the
 coffee sector in South America and Africa – Contribution to community
 sustainability by certification initiative

                                                           Factors considered




 Source: Daniele Giovannucci and Jason Potts (2008), COSA: Preliminary Analysis of Sustainability Initiatives in the Coffee
 Sector




8. Is it worth it? Cost-benefit analysis is still work-in-
progress…
 The buyer view…
 From 1995 through 2005, while making key sustainability investments and
 achieving large-scale Rainforest Alliance certification, Chiquita increased
 productivity by 27% and decreased costs by 12%.




   Source: UN global compact 2007




              Market Analysis Tools for Trade Flow Analysis and Modeling                                                           165
                                                                                               33

      9. Increasingly so, entire value chains, not just companies,
         compete




                                                                                               34
      10. Leading to a shift of roles: From buyer-seller transactions to
      creating „collaborative advantage‟


         “Don‟t do it unless you have to…”
            “Seeking collaborative advantage is a seriously resource-consuming activity
              so is only to be considered when the stakes are really worth pursuing.”
                                                                 (Huxham and Vangen, 2005)




         "The creation of a sustainable product chain does not rely only on the technical
         feasibility of ecological and social improvements, including the management of
         related material and information flows. A major challenge also lies in the
         management and co-ordination of the relationships between the partners in the
         chain.
                                                          (Goldbach 2002,2003; Seuring 2004)




166              Market Analysis Tools for Trade Flow Analysis and Modeling
                                                                                            35


To recap: Ten trends, many implications…
1.Consumers are increasingly concerned about how products are produced
2.Certified sustainable voluntary standards are growing beyond the „niche‟ market
category
3.Large „mainstream‟ players are leading this expansion
4.Increasing co-opetition exists among multiple standard setting organizations
5.Mandatory standards are being „inspired‟ by voluntary standards?
6.Producers and exporters are engaging in sustainable production and trade at very
different speeds
7.Growing attention by standard setting bodies and support organizations to increasing
role of small-holders
8.Is it worth it? Cost-benefit analysis is still work-in-progress
9.Increasingly so, entire value chains, not just companies, compete
10.Leading to a shift of roles: From buyer-seller transactions to creating „collaborative
advantage‟




                                                                                            36




          What are the Implications?

          For producers?
          For exporters?
          For buyers?
          For NGOs?
          For development organizations?
          For governments?

          FOR YOU???




            Market Analysis Tools for Trade Flow Analysis and Modeling                           167
                                                                             37




      For more information about Standards Map or
      about the Trade for Sustainable Development
      Program of ITC, please contact:
      Joe Wozniak, Programme Manager: wozniak@intracen.org
      Mathieu Lamolle, Market Analyst: lamolle@intracen.org
      Oliver von Hagen, Market Analyst: hagen@intracen.org




168             Market Analysis Tools for Trade Flow Analysis and Modeling
Seminar Evaluation
http://www.intracen.org/mas/usersfeedback.htm
And click on Online Survey


Or go directly to http://www.intracen.org/eSurvey/survey.aspx?surveyid=193




           Market Analysis Tools for Trade Flow Analysis and Modeling        169

				
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