International Trade Centre Market Analysis and Research section A presentation to: Virtual Institute Study Tour for Colombian Students By: Helen Lassen Date: October 2009 What is ITC? The UN body for design of policy recommendations to achieve economic and social development through trade and investment. • Mission The forum to negotiate multilateral trade rules rules, monitor their implementation and handle trade disputes ITC works with local and regional institutions and businesspeople to promote exports and trade. 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 4 EXPORT IMPACT FOR GOOD We want developing countries to derive sustainable social, environmental and economic impact from their exports IMPACTS MDG Goals ITC OUTPUTS Economic growth & related distribution of wealth Job creation EXPORT IMPACT FOR GOOD Equal access for women, youth & poor communities Social Social, Economic & Environmental Sustainability ITC – 100% AID FOR TRADE 5 ITC Core Competencies Activities ITC Clients ITC Beneficiaries Policy Makers Business and Trade Policy Export Impact for Good Export Strategy Trade Intelligence Trade Support Institution Strengthening Exporter Competitiveness One ITC Development Outcomes Trade Support Institutions Small and Medium-Sized Exporters Business Community One Generating sustainable incomes and livelihoods especially for poor households, by connecting enterprises to global markets Many WORKING TOGETHER – UNCTAD, WTO, ITC Research & Policy Rules of Trade Business & Exports 6 Challenges & Opportunities • Global economic weakness • Reinforcing support for export market and product diversification and working against protectionism by promoting information transparency in trade, market access & investment • Reinforcing alignment of trade policies to business priorities • Millennium Development Goals • Ensuring programs respond to: market access, poverty, gender, environment etc • Climate change & environmental sustainability • Increasing transparency on new trade opportunities & combating new NTMs • Multilateral trade liberalization • Reinforcing with business & policy makers the need to complete DDA ITC Resources Biennium Income 2000-2009 ($ millions) Expenditure 2008 ($ millions) $66 100% $70 160 131.8 140 $ $60 138.8 124.1 120 $50 $40 $30 $29 44% 80 40 $10 20 72.3 66.9 75.9 76.0 52.4 60 $20 31.9 51.8 55.9 41.3 62.8 RB XB Total 35.1 0 $0 RB • • 93.7 100 $37 56% XB 2000-01 Total RB & XB 2002-03 Estimated XB income for 2010-11 biennium: $75.5 million Seeking 17 new RB posts + 2 reclassifications: $4.9 million 7 2004-05 2006-07 2008-09 ITC Organisational Chart Market Analysis and Research Scope & Competencies 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 Training–of–Trainers Trade Competitiveness Map Sector Competitiveness Scan Mentoring for Tailored Analyses Customised analyses Face to face and E-training Face-to-face E training Customised training 8 Research & Development Improving trade transparency through collaborations Global Enabling Trade Report MDG Gap Task Force ITC C collaborating with World Economic Forum ITC collaborating with UN agencies World Trade Indicators World Tariff Profile ITC collaborating g with WTO and UNCTAD ITC collaborating with the World Bank ITC's Market Analysis Tools Enhancing the transparency of global trade with statistics on trade, market access and FDI 9 Access ITC’s Tools – Free to Developing Countries & Partners Convert Data into Actionable Analysis Free Access to users based in developing countries and developing country representatives based in developed countries thanks to financial contributions from the ITC Global Trust Fund and the World Bank Features of the data presented in the tools: • Global – nearly all countries are included, especially developing countries • Detailed – where possible data is available for products at the most detailed national level • Current – monthly, quarterly and current year trade data is available for many countries • Meaningful – we have calculated various indicators to make it easy for you to analyse the data. Indicators include: trends, market shares, real protection levels and rankings Features of our web-based analysis interfaces: • Easy to navigate – use menus, tables or maps to search for information • Facilitate comparisons – compare data of alternative suppliers, markets or products • Easy to analyze – present data in bubble graphs, tables or maps 10 Registration statistics to MAT tools (oct.09) 67,200 Total users 219 Total number of countries & territories represented Developed Countries 12% Europe Oceania 10% 1% LDC 6% Africa 15% America 50% Developing Countries 82% Asia 24% Users Repartition between Developing Countries, LDC and Developed Countries Geographical Repartition of user registered in MAT portal Capacity Building … 2004 – 2009 World + 8000 people trained 83 countries 320 workshops 11 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. charge http://www.intracen.org/marketanalysis 12 13 Free to users from developing countries Some trends trends... ...of the current trading environment 14 $13 700 000 000 000 $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 More dynamic than the economy World Trade vs. GDP Growth 13% 1960-2007 11% 9% GDP Trade 7% 5% 3% 1% 1960-70 1970-80 1980-90 1991-94 1995-98 1999 2000 2001 -1% Source: WTO 15 2002 2003 2004 2005 2006 2007 ... 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 Source: ITC Trade Map ...although downturn is not uniform... GDP and merchandise trade by region, 2005-07 Annual % change at constant prices Source: WTO 16 2007 ... and 2009 will be a tough year Growth of trade volumes Annual % change 18 Developing country exports 15 12 9 6 3 World trade 0 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 -3 Source: World Bank, Global Economic Prospects 2009 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 g • However many regions trade more with other regions than internally: Africa, South and Central America, Middle East and CIS 17 ...with developing countries gaining ground... Share of Global Trade by Level of Development % of Total Trade Source: ITC analysis based on world trade statistics ...and "south-south" trade growing fast... Top 25 markets for developing countries # 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Imports 2007 5,186 1,126 1,108 573 422 277 197 166 139 111 98 88 80 80 76 63 62 52 49 37 35 34 27 21 17 16 Importers TOTAL EU(27) United States of America China Japan Hong Kong (SARC) Republic of Korea Singapore India Chinese Taipei Canada Malaysia Thailand Mexico Australia R Russian i F Federation d ti Brazil Turkey Indonesia South Africa Philippines Saudi Arabia Argentina Pakistan Switzerland Colombia 18 Growth 2003-07 101% 112% 71% 158% 77% 68% 134% 109% 446% 102% 113% 109% 112% 149% 122% 323% 216% 215% 156% 219% 80% 191% 263% 156% 90% 197% Share in Total 100.0% 21.7% 21.4% 11 1% 11.1% 8.1% 5.4% 3.8% 3.2% 2.7% 2.1% 1.9% 1.7% 1.5% 1.5% 1.5% 1 2% 1.2% 1.2% 1.0% 1.0% 0.7% 0.7% 0.7% 0.5% 0.4% 0.3% 0.3% Source: ITC Trade Map …but mostly intra-region… Asia Pacific Intra-Trade: $ 1’121bn or 55% of S-S Trade $ 66bn $ 50bn $ 45bn $ 109bn Latin America $ 256bn $ 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 SS-S Trade: $2’157 billion Source: ITC The mix of products traded is changing... Global trade by type of commodity % of total trade 80% Agricultural Mining Manufacturing 70% 60% 50% 40% 30% 20% 10% 0% 2001 2002 2003 2004 Source: ITC Trade Map 19 2005 2006 2007 ... but not all sectors are equally successful Top export industries for highperformance developing countries Top export industries for struggling developing countries (but not from struggling developing countries) (but not from struggling developing countries) Electrical, electronic equipment Cotton Machinery boilers, Machinery, boilers etc. etc Wood and art of wood, 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 Trade in services grows quickly... Trade in Services as % of GDP 12 1975 – 2007 11 10 9 8 7 Source: World Development Indicators, World Bank 20 2007 2005 2003 2001 1999 1997 1995 1993 1991 1989 1987 1985 1983 1981 1979 1977 1975 6 ...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... …which is ever more important FDI as % of World GDP 1985 – 2007 5.0% 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% Source: World Development Indicators, World Bank 21 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986 1985 0.0% Market access issues are changing: • Trade agreements proliferate... Number of Free Trade Agreements Notified to WTO 200 1958 – 2009 180 160 140 120 100 80 60 40 20 2008 2006 2004 2002 2000 1998 1996 1994 1992 1990 1988 1986 1984 1982 1980 1978 1976 1974 1972 1970 1968 1966 1964 1962 1960 1958 0 Source: WTO … tariffs tend to decrease… Applied MFN Tariffs, All Products, By Level of Income 12 2001 2007 10 8 6 4 2 0 Low Med-low Medium Source: World Trade Indicators, World Bank 22 Med-High High … making NTMs the major obstacles to trade NTM Frequency By Level of Income, 2001 45 40 35 30 25 20 15 10 5 0 Low Med-low Medium Source: World Trade Indicators, World Bank 23 Med-High High