The export challenge

The first ever official visit of the Executive Director of the International Trade Centre, Arancha Gonzalez to Pakistan, early this month was projected by the government as some kind of endorsement of its economic policies by the ITC whose mandate is far narrower as it is solely concerned with facilitating developing and transition economies to promote global trade.
The ITC actually looks at how procedures and controls governing the movement of goods across national borders can be improved to reduce associated cost burdens and maximise efficiency while safeguarding legitimate regulatory objectives. Business costs may be a direct function of collecting information and submitting declarations or an indirect consequence of border checks in the form of delays and associated time penalties, forgone business opportunities and reduced competitiveness. ITC's trade facilitation is largely used by institutions which seek to improve the regulatory interface between government bodies and traders at national borders.
The WTO, in an online training package, has defined trade facilitation as "the simplification and harmonisation of international trade procedures", where trade procedures are the "activities, practices and formalities involved in collecting, presenting, communicating and processing data required for the movement of goods in international trade".
The facilitation also includes trade finance and the procedures applicable for making payments (eg via a commercial banks). Occasionally, the term trade facilitation is extended to address a wider agenda in economic development and trade to include improvement of transport infrastructure, the removal of government corruption, the modernization of customs administration, the removal of other non-tariff trade barriers, as well as export marketing and promotion.
The World Trade Report 2015 provides an overview of the various trade facilitation definitions from academia as well as various international organisations, contrasting them with the scope of the WTO Trade Facilitation Agreement (TFA) concluded in December 2013. The WTO TFA has become the new baseline for trade facilitation, with many countries striving to implement measures going beyond those included in this Agreement in order to maintain a competitive advantage in global markets. Notably, most countries have focused their trade facilitation efforts on establishing electronic single windows and other paperless trade systems to further reduce trade costs.
So, to appreciate the real reason of Ms Gonzalez's visit to Islamabad one needs to read her assessment that Pakistan is poised to register growth above five per cent for the first time in nearly a decade along with what she had to say about the state of our export sector for which she has all the expertise and internally vetted data.
Pointing out that the average export-to-GDP ratio for countries at Pakistan's income level is 20 per cent she lamented that in the case of Pakistan it was only 10 per cent. It is mainly because of depressed exports which have declined to $18 billion last year from $25 billion in 2014 that the pressure on Pakistan's balance of payment has increased steeply. The depressed export performance has also seriously affected country's ability to shift towards greater value addition, create job opportunities and expand productive sectors of the economy due mainly to reduced interface with global trade.
As the ITC director advised, for ramping up Pakistan's integration into the global economy the government would have to make investments in hard and soft infrastructure and, crucially, in tying the two together as well. Of course, as she said, while better roads, ports, electricity, and broadband internet access remain a prerequisite for international competitiveness, the gains would be far greater if they work in tandem with a more supportive policy environment, a deeper regional integration, lower trading costs, and institutional support for businesses to overcome obstacles keeping them from accessing digital and physical markets.
The ITC Director has further advised the Pakistan government to swiftly implement the WTO's TFA that she believed would help simplify border procedures and reduce customs clearance times and costs. This would enable Pakistani traders - especially the smaller enterprises that are disproportionately weighed down by expensive trading costs - to reap the full gains of the country's investments in ports and highways. Upgrading the country's truck fleet, expediting transit procedures and improving the efficiency of logistics services would also enable Pakistan to capitalize on its role as a transit country for goods from Central Asia en route to world markets using in particular the China-Pakistan Economic Corridor (CPEC).
One hopes that the relevant government functionaries had paid full attention to what Ms Gonzalez had to say and noted the advices she had offered during her short visit on how best to go about boosting exports. Indeed, this was most certainly the purpose of her visit and not merely to endorse the economic policies of the government which are inherently anti-export.
ITC is the successor to the International Trade Information Centre, which the General Agreement on Tariffs and Trade(GATT) established in 1964 "for the purpose of assisting the export promotion efforts of the developing countries" by providing them "with information on export markets and marketing, and to help them develop their export promotion services and train the personnel needed for these services."
In an effort to streamline the United Nations' export promotion efforts, an agreement was reached between the GATT, which at that time and in contrast to its successor, the WTO, was part of the United Nations system, and the newly established UNCTAD, to merge the activities of the two organisations by creating a joint subsidiary. The agreement was reached in 1967 and the International Trade Centre was officially established on 1 January 1968.
ITC offers numerous different services to its beneficiaries. In doing so it differentiates between three groups of target beneficiaries: Policymakers, trade-support institutions, and enterprises. Some services are specifically designed for one of these groups while others have a universal character. Services are being developed depending on requests of beneficiary countries or donors.
Since the latest major restructuring between 2006 and 2009, ITC itself categorizes its services in five thematic clusters called "business lines": Export Strategies, Business and Trade Policy, Trade Support Institution Strengthening, Exporter Competitiveness, and Trade Intelligence. In addition to falling into one of these business lines, each of ITC's services can be categorised according to the way it is being provided, ie, as a publication, trade intelligence database, capacity building (ie, training), or advisory service.
For illustration purposes, capacity building in the area of exporter competitiveness could represent training to enterprises about how to overcome technical barriers to trade and a database in the area of trade intelligence could represent an online database for international trade in goods and services.
Thanks to the support from donors to ITC Trust Fund and the European Commission (EC), ITC created a suite of market analysis tools including Trade Map, Market Access Map and Standards Map to help users investigate the trade related information of over 220 countries and territories. Since 1 January 2008, the market analysis tools suite became a Global Public Goods and all users from least developed and developing countries and territories have been able to access the tools free of charge.
An interactive online database on international trade statistics presents indicators on export performance, international demand, alternative markets and the role of competitors from both the product and country perspective. Trade Map is considered one of the world's biggest trade databases as it covers trade flows (mirror and direct) of over 220 countries and territories and 5,300 products defined at the 2, 4 or 6-digit level of the Harmonised System. Users can choose to see the data either with pre-calculated trade indicators (eg growth, market shares, average unit values, etc) or in times-series (eg monthly, quarterly and yearly) from 2001 onward.
In 2012, Trade Map, in collaboration with Kompass, included "company contact information" module to help companies identify trading partners in 64 countries. Trade Map sources yearly data from UN COMTRADE and collects monthly data directly from national statistics bureaus or customs authorities.
Market Access Map, also known as "MAcMap" presents a comprehensive information on the different types of barriers that affect international trade such as applied customs tariffs (eg Most Favored Nations tariffs, preferences granted under trade agreements), ad valorem equivalents, tariff rate quotas, trade remedies, rules of origin, certificate of origin, bound tariffs of WTO members and Non-Tariff Measures (NTMs). Market Access Map is used to find information on market requirements and trade policymakers to prepare for trade negotiations.