Monitoring Trade Performance in the context of Aid for Trade

How ITC can contribute

Areas where ITC can contribute

1. Trade-related information & indicators

2. Analysis of trade performance

3. Qualitative evaluation on effectiveness of aid for trade

1. Trade-Related Information & Indicators

Trade Map A database and analytical web application covering the trade flows and indicators of trade

performance for 220 countries and territories

Market Access Map A database and analytical web application on customs tariffs applied by 185 countries and faced by

239 countries and territories. It includes ITC pioneered methodologies / calculations of ad valorem equivalent tariffs allowing protection levels to be aggregated for any product or country group

Investment Map A database and analytical web-based application that combines information on Foreign Direct

Investment (FDI), trade, market access and foreign affiliate company data to help in FDI promotion strategies. It can also be used to analyse performance in attracting FDI.

Trade Competitiveness Map An interactive web application ranking countries trade performance from a static and dynamic

perspective at a national or sectoral level across a wide range of trade related indicators

Trade-Related Indicators & Analysis: Examples of ITC Collaborations

World Tariff Profile A joint publication of ITC, WTO & UNCTAD profiling tariff structures of over 150

countries

Millennium Development Goals Tracking progress on market access for developing countries and LDCs

World Economic Forum Trade and market access indicators for the Global Enabling Trade Report 2008

World Bank Trade and market access indicators for the World Trade Indicators publication

and web site

2. How to Assess Trade Performance?

• Size of exports:– In absolute or relative terms (e.g. USD vs per capita)?

• Dynamism of exports:– Growth in absolute or relative terms?

• Extent of diversification of export portfolio:– Size of export portfolio in terms of products and markets?– Degree of concentration on top products and markets…?

• Composition of export portfolio: – Products for which world demand is strong and/or growing?– Commodities where country is a price taker and cost competition is critical? – Products that are strongly differentiated and less vulnerable to price shocks?– Products with high value addition, economies of scale ….?– Services?

• Destination markets for exports:– Slow growing vs fast growing?– Markets where buyer preferences are highly elaborated?– Stable vs risky…?

Export Diversification: products and marketsCountry Number of products

exportedNumber of product-

marketsNumber of markets

(unweighted average)

United States 4,931 226,732 46.0

China 4,871 253,890 52.1

India 4,582 118,372 25.8

Singapore 4,392 70,777 16.1

Taiwan (Province of China) 4,261 87,125 20.4

South Africa 4,245 54,073 12.7

United Arab Emirates 4,212 38,425 9.1

Rep. of Korea 4,208 78,793 18.7

Malaysia 4,177 53,218 12.7

Mexico 4,111 35,883 8.7

Thailand 3,993 67,335 16.9

(…)

Maldives 24 121 5.0

Wallis and Futuna 20 23 1.2

Sao Tome and Principe 13 19 1.5

Western Sahara 4 4 1.0

Exports per capita versus Growth of exports

Equatorial Guinea Qatar

United Arab Emirates

Cayman Islands

Mauritius

Chad

Timor-Leste

Cape Verde

Guinea-Bissau

-40

10

60

110

160

0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000

Exports per capita

High growthbut low exports per capita

Low exports per capitaand low growth

High exports per capitaand high growth

High exports per capitabut low growth

Average annual export growth rate (%, 2002-06)

Source: ITC's TradeMap.

Export portfolio of products: Size versus diversification

EritreaNepal

Equatorial GuineaTimor-Leste

Dominican Republic Tunisia

BrazilChina

Iran

Saudi Arabia

0

10

20

30

40

50

60

70

80

90

100

0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000

Number of exported products (HS 6-digit)

Small export portfoliobut High product diversification

Small export portfolioand Low product diversification

Large export portfolioand High product diversification

Large export portfoliobut low product diversification

Share of the top three products in total exports (%)

Chad

Angola

New Caledonia

Russian Federation

Mexico

India

Kuwait China

0

10

20

30

40

50

60

70

80

90

100

0102030405060708090100

Share of the top three export markets (%)

Share of the top three exported products (%)

High product diversificationLow market diversification

Low product diversificationHigh market diversification

Low product andmarket diversification

High product andmarket diversification

Export diversification: Products versus markets

Considerations when using trade indicators

• Partial view of reality: Aggregate value cannot be fully interpreted without examining what is happening at a more detail level

– An overall average performance may hide excellent performance in some sectors or regions & poor in others

– Role of multinational firms in country performance

• Interpretation is not always clear– Is “more” always “better” (e.g. export diversification)?

• Time dimension– Weak performance in absolute terms but growing rapidly

• Analysing the country’s performance relative to its `real` competitors– Situation relative to the world or countries that resemble you

e.g. export portfolio, economic and geographic situation (per capita income, size, landlocked, terrain), culture…..

• Can’t capture the value addition of exports– The same USD of exports may correspond to very different value addition

depending on the amount of intermediate goods imported e.g. assembly work vs full value chain taking place in the country

3. Deepening trade performance analysis with domestic survey

• Surveys of enterprises on:– Domestic supply conditions– Competitiveness– Socio economic impact of the sector

(job creation, gender, rural development etc)

• Interviews with local experts / stakeholders (ministries, industry associations, chambers of commerce / TPOs)

– Business environment conducive to export– Legal framework– Fiscal environment – Political environment

Evaluating Effectiveness of Aid for Trade – An infrastructure of partnerships in developing countries

ITC can mobilise its network to address questions around Aid for Trade e.g.: – How conducive is the environment for export in your country ?– To what extent has aid for trade in your country helped your exports?

ITC’s network includes:

– Policy Makers e.g. national ministries, trade negotiators etc– Trade Promotion and Trade Support Institutions – Industry Associations through ITC Sector Programmes – National Data Providers– Enterprises (Surveys on local supply conditions, NTMs etc)– Periodic Client Surveys