Opportunities may exist for expanding trade among developing countries. How an ITC technique can provide a stimulus.
ITC is increasingly involved in the promotion of trade cooperation among developing countries and economies in transition. As part of its technical cooperation in this process, it has adapted selected methodologies to assess the potential for South-South trade more effectively and to work with countries and enterprises in accessing their regional markets.
The approach comprises three stages. The first is the identification of import and export opportunities through statistical analyses of trade flows among countries in a given region and the rest of the world, providing data on products that the countries have to offer or need on a sector-by-sector basis and that in theory have intraregional trade potential.
The second stage is to undertake more detailed field research to establish what the target market needs, to identify the specific demand and supply characteristics by sector and to determine what the normative requirements are in the target market, thus confirming these opportunities through in-depth supply and demand surveys for the most dynamic product sectors.
The third stage is to disseminate this information to the target business enterprises for their use as well as to trade and business organizations, and at the same time to take steps to facilitate business. This phase thus involves translating these opportunities into business by bringing the potential importers and exporters together in a buyers-sellers meeting, and providing them with a forum to transact business.
This is followed up by complementary trade promotion activities, including support at the enterprise level in product and market development, marketing missions, trade fairs and training events.
This article reviews guidelines on how to undertake supply and demand surveys, using a methodology that has been tested and validated by ITC and that responds to the trade information needs of export and import enterprises in developing countries. This methodology is proposed to organizations that act as facilitators in the promotion of trade among developing countries.
Supply and demand surveys The simultaneous undertaking of supply and demand surveys in a selected group of countries for a particular product or product group serves two basic objectives:
* Assist countries in generating and expanding trade flows among themselves, and in laying the basis for further product development and diversification.
* Provide support to governments and private-sector agencies in making investment decisions and identifying possibilities for joint ventures and other forms of business cooperation between enterprises in different countries.
Two important steps precede this market research component.
Trade flow analysis:
The first step is to identify the products that, in theory, could be traded among countries in a given region. Such a product inventory is essential, as the results clearly demonstrate that the potential for trade among them exists and is quantifiable. This inventory is established by scanning the import and export trade between a group of countries and the rest of the world, or between the group and a set of its most significant trading partners, and thus determining the composition of their trade.
The assessment of trade potential is based on the assumption that if a set of countries within the group successfully exports a particular product under competitive conditions to the rest of the world and if a different set of countries within the group imports the same product from the rest of the world, supply and demand complementarity exists. The main output of such an analysis is, therefore, a list of "matching" products. Statistical data refer however to trade classification headings and not to products in the commercial sense, so detailed supply and demand surveys are required to confirm this potential for specific traded items. …