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Title: ITC's%20Market%20Analysis%20Tools%20and%20trade%20analysis


1
Introduction
  • ITC's Market Analysis Tools and trade analysis

2
What is ITC?
  • Mission
  • 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

3
ITC activities
One
4
ITC organisational chart
5
MAR activities
I. Market Analysis Tools
II. Tailored Analysis
III. Capacity Building and Training
Trade Map
Trade Competitiveness Assessment
Introduction to Market Analysis
Market Access Map
Export Potential Assessment
Preparation of Market Profiles
Investment Map
Export Opportunity Scan
TrainingofTrainers
Trade Competitiveness Map
Sector Competitiveness Scan
Mentoring for Tailored Analyses
Customised analyses
Face-to-face and E-training
Customised training
6
Workshop objectives
  • Understand some of the main trends in the current
    global trade environment
  • Introduce ITC's Market Analysis Tools and become
    knowledgeable in their use
  • Gain an insight into how these tools can
    facilitate trade analysis

7
Some trends...
  • ...of the current trading environment

8
Trade is enormous...
Trade in goods in 2007
13,700,000,000,000
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

9
...and it's more dynamic than the economy...
World Trade vs. GDP Growth 1960-2007
Source WTO
10
... but it's not immune to the downturn...
Annual Growth of Imports by Level of Development
of Countries 2002-2007
Source ITC Trade Map
11
...although downturn is not uniform...
GDP and merchandise trade by region,
2005-07 Annual change at constant prices
Source WTO
12
... and 2009 will be a tough year
Growth of trade volumes Annual change
Developing country exports
World trade
Source World Bank, Global Economic Prospects 2009
13
Global trade patterns are changing...
  • Trade flows within regions account for a higher
    share of world trade than flows between regions
  • Asia Pacific EU trade more within the region
  • However many regions trade more with other
    regions than internally Africa, South and
    Central America, Middle East and CIS

14
...with developing countries gaining ground...
Share of Global Trade by Level of Development
of Total Trade
Source ITC analysis based on world trade
statistics
15
...and "south-south" trade growing fast...
Top 25 markets for developing countries
Source ITC Trade Map
16
but mostly intra-region
Asia Pacific
Intra-Trade 1121bn or 55 of S-S Trade
66bn
50bn
45bn
109bn
256bn
Latin America
10bn
Africa
Intra-Trade 126bn or 6 of S-S Trade
Intra-Trade 27 bn or 1 of S-S Trade
7bn
8bn
16bn
109bn
Middle East and Arab
6bn
12bn
Intra-Trade 62bn or 3 of S-S Trade
Total 2007 S-S Trade 2157 billion
Source ITC
17
The mix of products traded is changing...
Global trade by type of commodity of total trade
Source ITC Trade Map
18
... but not all sectors are equally successful
Top export industries for high-performance developing countries (but not from struggling developing countries) Top export industries for struggling developing countries (but not from struggling developing countries)
Electrical, electronic equipment Cotton
Machinery, boilers, etc. Wood and art of wood, wood charcoal
Precision instruments Other made textile articles, worn clothing
Plastics and articles thereof Fish, crustaceans, mulluscs
Organic chemicals Edible vegetables, roots tubers
Articles of iron and steel Edible fruits, nuts, melons
Copper and articles thereof Raw hides, skins, leather
Furniture, lighting, prefab buildings Cereals
Toys, games, sports requisites Cocoa cocoa preparations
Ships, boats Coffee, tea, mate and spices
Footwear, gaiters, parts thereof Nickel and articles thereof
The best performing exports from developing
country exporters tend to be manufactured
products, as opposed to commodities
19
partly due to commodities prices
Real prices of internationally traded commodity
prices in developing countries CPI-deflated
Indices, Jan. 2000100
Energy
Food
Metals and minerals
SourceWorld Bank, Global Economic Prospects 2009
20
Trade in services grows quickly...
Trade in Services as of GDP 1975 2007
Source World Development Indicators, World Bank
21
...significantly due to FDI...
  • In spite of quick growth in traded value, over
    the past 30 years the share of services,
    excluding Mode 3 (commercial presence), in global
    trade has been quite stable around 20
  • BUT, Mode 3 is not captured in current trade in
    services statistics
  • FDI data shows that more than half of FDI flows
    are in the services sector
  • FDI keeps on growing globally...

22
which is ever more important
FDI as of World GDP 1985 2007
Source World Development Indicators, World Bank
23
Market access issues are changing
  • Trade agreements proliferate...

Source WTO
24
reducing tariffs
Applied MFN Tariffs, All Products, By Level of
Income
Source World Trade Indicators, World Bank
25
and making NTMs more important
NTM Frequency By Level of Income, 2001
Source World Trade Indicators, World Bank
26
Business environment matters
Source World Bank Doing Business Report 2009
27
...because it affects trade, inter alia
Source World Trade Indicators 2008, World Bank
28
Register to access ITCs Market Analysis Tools
29
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
30
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31
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32
Free to users from developing countries
33
Trade Map
  • A web-based trade flow analysis tool

34
Introduction
  • An exporter of pineapples is looking to diversify
    its client baseWhich country should be targeted?
  • A shoe exporter needs an overview of trade
    barriers he/she would face for exports to
    Malaysia
  • A trade mission needs to know our top export
    products to Germany
  • Where could you import automotive components
    from? Who are the largest suppliers in your
    region?
  • What is the current trade between your country
    and the United States?

Initial answers to these questions and many more
are easily found in Trade Map
35
Trade Map
  • Online application to produce reports on
    international trade flows
  • Every product (HS-6) to and from (almost) every
    country
  • Based on probably the largest trade flow database
    in the world
  • User-friendly interface, report-ready outputs
  • Flexibility for customising reports, analysis
  • Graphic presentation of outputs to facilitate
    analysis

36
Key characteristics
  • Where does the data come from?
  • National Authorities
  • COMTRADE, produced by the United Nations
    Statistics Division database
  • What is Trade Maps geographical coverage?
  • Information for over 220 countries and
    territories using data reported by 160 countries
    and territories
  • Data for non-reporting countries is spawned from
    mirror statistics
  • What is Trade Maps 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 Maps time horizon?
  • Yearly, quarterly and monthly data

37
Data classification
  • 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

38
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) - You can
    compare HS data between countries.
  • Is broken down into 3 clusters
  • HS-2 the chapter of the good (sector)
  • 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)

39
Data classification
  • National Tariff Lines (NTL) codes
  • Classification of goods after the 6 digit level
    of the Harmonized System classification.
  • National Tariff Lines go from 8 digits to 12
    digits.
  • Why use the HS and NTL classification?
  • The HS classification is standardised
    internationally
  • The NTL classification is not standardised
    internationally.
  • Each country decides its own further
    classification after the Harmonized System.
    Hence, National Tariff Line codes can be
    different from a country to another.

More and more specific
40
Data classification
08 Edible fruit and nuts peel of citrus fruit or
melons. 08.04 Dates, figs, pineapples, avocados,
guavas, mangoes and mangosteens, fresh or
dried. 08.04.50 Guavas, mangoes and mangosteens.
HS (International standard)
Australia 08.04.50.00 Fresh or dried guavas,
mangoes and mangosteens Japan 08.04.50.01.1 Mangoe
s, fresh 08.04.50.01.9 Guavas and mangosteens,
fresh United States 08.04.50.40.40 Mangoes,
fresh, if entered during the period from
September 1, in any year, to the following May
31, inclusive 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 08.04.50.80.00 Guavas, mangoes and
mangosteens, dried
NTL (NON standard)
41
Market Access Map
  • Information on tariffs and other market access
    conditions

42
Market Access
  • Information on market access conditions allows
    exporters to
  • Evaluate the competitiveness of the product
    relative 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 markets import regulations

43
Types of tariffs
  • Ad valorem tariffs
  • Levied on the basis of the value
  • Used by most countries more than 87 of tariffs
    worldwide are ad valorem

44
Ad valorem tariffs
E.g. Australian tariff of 5 on imported wine
(22.04.21.20.70)
Tariff per unit Price Rate
45
Types of tariffs
  • Ad valorem tariffs
  • Levied on the basis of the value
  • Used by most countries more than 87 of tariffs
    worldwide are ad valorem
  • Specific tariffs
  • Levied on the basis of volume or weight
  • Users of specific tariffs include ( of MFN
    tariff lines) Switzerland (79.8), Thailand
    (21.9), Russia (12.2), Argentina (12.1),
    Belarus (11.9), USA (8.2), EU (4.6)

46
Specific tariffs change relative prices
E.g. Switzerland's tariff on beef of CHF18 / kilo
(02.01.30)
47
Types of tariffs
  • Ad valorem tariffs
  • Levied on the basis of the value
  • Used by most countries more than 87 of tariffs
    worldwide are ad valorem
  • Specific tariffs
  • Levied on the basis of volume or weight
  • Users of specific tariffs include ( of MFN
    tariff lines) Switzerland (79.8), Thailand
    (21.9), Russia (12.2), Argentina (12.1),
    Belarus (11.9), USA (8.2), EU (4.6)
  • Combined tariffs
  • Contain both ad valorem and specific rates
  • Eg 10 of the value 2 per kilogram (Japan,
    EU, Canada)

48
Compound tariffs
E.g. USA tariff on chocolate of 4.3 and USD528 /
ton (18.06.32.08)
  • Chocolate from Switzerland USD 6,356 / ton
  • Chocolate from Brazil USD 3,181 / ton

Tariff 4.3 Ad Valorem USD273 Tariff
USD528/ton Specific USD528 Tariff
Tariff 4.3 Ad Valorem USD137 Tariff
USD528/ton Specific USD528 Tariff
49
Types of tariffs
  • Mixed tariffs
  • Minimum or maximum of two kinds of tariffs
  • Eg Min or Max (10, 2/kg) (Canada, EU, Japan)

50
Mixed tariffs
e.g. Japanese tariff on shoes Max. of 30 or
JPY4,300 Yen / pair
  • Manolo Blahnik shoes USD1,000 /pair
  • Clark's shoes USD30 /pair

Tariff the maximum of 30 Ad Valorem USD300
Tariff Or JPY4,300/pair (USD36) Specific USD36
Tariff
Tariff the maximum of 30 Ad Valorem USD9
Tariff Or JPY4,300/pair (USD36) Specific USD36
Tariff
51
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 USD5/unit if lead content of paint gt 2 on
    toys
  • USD200/unit on fridges if cooling system is not
    CFC-free

52
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 USD5/unit if lead content of paint gt 2 on
    toys
  • USD200/unit on fridges if cooling system is not
    CFC-free
  • 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.

53
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 and compared
  • Allow for comparison of effective levels of
    protection across countries.
  • The total AVE is the sum of all individual ad
    valorem equivalents

54
Common types of trade agreements
  • Partial Scope Agreement reduces trade
    restrictions between partner countries for a few
    products
  • 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)
  • Economic Union unification/harmonization of
    economic policies monetary policy, fiscal
    policy, regulatory regimes

55
Proliferation of FTAs
Number of Free Trade Agreements 1960 2007
Source World Trade Organization
56
EU existing trade regimes
China
Maldives
Qatar
Bahrain
U.A.E
Afghanistan
Djibouti
Bangladesh
Kuwait
Saudi Arabia
Oman
Ethiopia
Macao
Benin
Yemen
Sudan
Senegal
Somalia
Togo
Australia
Nepal
Congo Dem.Rep.
Bhutan
New Zealand
Eq. Guinea
Angola
Honduras
Chad
Gambia
Mauritania
Kiribati
Burkina Faso
Panama
Laos
United States
Canada
El Salvador
Myanmar
Guinea-Bissau
Cape Verde
Samoa
Georgia
Sao Tome
Sierra Leone
Japan
Guinea
Cuba
Guatemala
Pakistan
Hong Kong
Ctrl. Afr. Rep.
Mali
Malawi
Niger
Tuvalu
Armenia
Eritrea
Nicaragua
Taiwan
Cambodia
Vanuatu
Argentina
Singapore
Korea, Rep.
Mongolia
India
Lesotho
Costa Rica
East Timor
Brazil
Mozambique
Paraguay
Sri Lanka
Madagascar
Zambia
Uganda
Bolivia
Liberia
Rwanda
Norway
Burundi
Comoros
Venezuela
Peru
Uruguay
Tanzania
Iceland
Haiti
Solomon Isl.
Ecuador
Liechtenstein
Grenada
Kenya
Guyana
Belize
Jamaica
Gabon
Colombia
Greenland
Bahamas
Barbados
Dominica
Trinidad
Suriname
Nigeria
Fiji
Switzerland
Guam
Tonga
St. Kitts
St. Lucia
St. Vincent
Papua NG
Congo
Montserrat
Albania
Namibia
Mexico
Chile
Dominican Rep.
Antigua
Croatia
Nauru
Swaziland
Palau
San Marino
Ukraine
Macedonia
South Africa
Ivory Coast
Kyrgyzstan
Botswana
F. Polynesia
Andorra
Mauritius
Ghana
Cook Is.
Bosnia
Vietnam
Micronesia
Cameroon
Seychelles
Zimbabwe
Marshall Is.
Brunei
Philippines
Tokelau
Turkey
Moldova
Antartica
Cayman Is.
Malaysia
Egypt
Jordan
Bermuda
Thailand
Serbia
Israel
Libya
Tunisia
Indonesia
Azerbaijan
St. Piere.
Aruba
Am. Samoa
Belarus
Morocco
Mayotte
Kosovo
Iran
Iraq
Russia
Turkmenistan
Uzbekistan
Gibraltar
Niue
St. Helena
Palestine
Syria
Algeria
Montenegro
Tajikistan
B.I.O.T.
Turks
Kazakhstan
Anguilla
Cocos Is.
Norfolk Is.
McDonald Is.
Pitcairn
Wallis
Lebanon
Netherlands Antilles
Bouvet Is.
N. Mariana Is.
New Caledonia
Christmas Is.
Falkland Is.
S. Sandwich Is.
EAC East African Community EBA Everything but
arms EEA European Economic Area SGP Sistema
General de Preferecias Euro-Med Euro-Mediterranean
Partnership Belarus and Myanmar (LDC) are
temporarily suspended from the GSP regime
57
Implications
  • Almost every country in the world is member to an
    ever increasing number of trade agreements
  • Every trade agreement has its own rules of origin
  • It is difficult to keep up-to-date on what
    tariffs are applied and faced by your country and
    your competitor countries
  • It is confusing to understand what are the best
    conditions you face to access one specific market
  • It is key to have more clarity and transparency
    on what tariffs and rules of origin apply to
    specific products in specific markets

58
Features of MAcMap
  • 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

59
MAcMap sources of data
  • Market Access Map is continuously updated. Data
    is sourced from
  • Applied tariff data is collected by ITC directly
    from national customs institutions
  • Tariff quota data from WTO (agricultural
    notification of tariff quota) and national
    sources for bilateral and regional tariff quota
    agreements
  • Trade data from national sources, IDB (integrated
    database), WTO and the COMTRADE database of the
    United Nations Statistics Division (UNSD).

60
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61
Investment Map
  • For an improved identification of
    opportunities for FDI attraction

62
What is it?
  • An interactive tool that combines statistics on
    FDI, international trade, tariffs and information
    on foreign affiliates for better investment
    targeting and promotion
  • A joint undertaking
  • Between the United Nations Conference on Trade
    and Development (UNCTAD) and the International
    Trade Centre (UNCTAD/WTO)
  • In partnership with
  • Multilateral Investment Guarantee Agency (MIGA)
  • World Association of Investment Promotion
    Agencies (WAIPA)

63
Main features
  • Integrates data on
  • FDI flows and stocks
  • Trade flows
  • Tariffs
  • Information on activities of foreign affiliates
    in developing countries
  • Presents data and analyses in multi-functional
    dimensions and graphs
  • Links to other related resources
  • UNCTAD World Investment Directory and Investment
    Compass
  • World Bank and third party indicators on business
    environment
  • World Bank privatisation database

64
Geographic coverage
  • Total FDI flows and stocks for around 80
    countries and territories
  • FDI flows and stocks partially classified by up
    to 150 industries (ISIC rev 3)
  • covering goods and services in approximately 60
    developing and transition economies
  • Trade and tariff data covering over 180 countries
    and territories
  • Information on the location, sales, employment
    and parent company for around 74,000 foreign
    affiliates in developing countries

65
Sources of Data
  • Foreign Direct Investment UNCTAD and ITC
  • Trade data Trade Map (ITC)
  • Tariffs Market Access Map (ITC)
  • Activities on Foreign Affiliates Dun
    Bradstreet Database

66
Data limitations
  • FDI
  • International reporting practices (IMF BOPMV
    OECD,2004) are not followed uniformly
  • Countries that report often do so with
    considerable time lag
  • FDI data are affected by
  • Identification of ultimate owner
  • Valuation problems of FDI stocks
  • Round-tripped investment and transhipped
    investment
  • Foreign affiliates
  • Data on foreign affiliates vary from country to
    country
  • Data available ONLY for developing countries
  • Dependant on quality of business registration
    information

67
Data limitations
  • Different data classifications
  • FDI data cannot always be allocated accurately to
    a given industry or a given country
  • Investment flows may fall under multiple
    activities
  • Foreign affiliates are based on the United States
    nomenclature, US SIC87.
  • Its conversion to the ISIC nomenclature can only
    be approximative
  • Trade data (HS 6 digit level) are converted into
    the ISIC classification.

68
Measuring FDI
  • FDI flows
  • Are the total amount of FDI undertaken over a
    given period of time (quarter, year), and they
    comprise
  • Net sales of shares with the parent company (10
    participation threshold)
  • Net intra-company loans (short- and long- term)
    with the parent company
  • Reinvested earnings of a foreign affiliate in the
    host country
  • Sources Central Banks and/or Statistical offices

69
Measuring FDI
  • FDI stocks
  • Are the total accumulated value of foreign-owned
    assets at a given time, and they comprise
  • The value of the share of their capital and
    reserves belonging to foreign companies
  • The net indebtedness with the parent companies
  • Sources Balance sheets or enterprise surveys

70
Measuring FDI
  • Stocks and flows are related over time
  • Stockt Stockt-1 Flowt
  • Flowt Stockt Stockt-1

71
Measuring FDI
  • Flows are named according to the OWNERSHIP or
    Origin of the money, not the direction of the
    flow
  • INflows FOREIGN money
  • OUTflows DOMESTIC money

72
Structure of tool
  • Module 1 Identify industries for inward
    investment
  • Foreign Direct Investment e.g. inflows, stocks,
    changes, etc
  • Foreign affiliates e.g. number of affiliates,
    number of employees, leading parent company and
    investor country, addresses, etc
  • International Trade e.g. exports, imports,
    changes, etc
  • Tariffs Maximum, minimum and average tariff
    faced and applied, etc
  • Module 2 Identify competing locations
  • Similar information for competing locations for a
    specific industry
  • Module 3 Identify investor countries
  • Similar information for the main investor
    countries for a specific industry
  • Module 4 Analyse investor profile
  • Similar information classified per industry for
    any specific investor country

73
When in doubt... http//www.intracen.org/MAT
  • Contains
  • Video tutorials
  • User guides
  • FAQs

74
Workshop evaluation
  • http//www.intracen.org/mas/usersfeedback.htm
  • And click on Online Survey
  • Or go directly to http//www.intracen.org/eSurvey/
    survey.aspx?surveyid193
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