Trade Support Responding to Shifting Markets

Managers of enterprises feel the effects of economic uncertainty in their home markets and struggle to interpret the changing economic climate and the direction change will take. For those fortunate to have effective trade support institutions (TSIs), finding a way forward is easier. The mandate of TSIs is to support the efforts of entrepreneurs and to find practical ways to help them compete effectively. As South-South trade grows regional, TSIs are taking up the challenge and finding ways to make a difference.

Export Development in the Caribbean

The Caribbean Export Development Agency (CE) has recognized the significance of shifting markets and has noted a change in focus, especially among the larger countries in the region, towards high value-added goods and services. Philip Williams,¹ CE's Executive Director, notes however that, 'The shift in market focus has been more difficult. Many Caribbean countries still look to traditional markets and preferential arrangements to develop and sustain exports. However, we are increasingly acknowledging the importance of the emerging markets - China, India, Brazil, South Africa, Russia and the new European Union member states.'

One-way free trade preference is being replaced, over time, by a two-way free trade arrangement which will eventually require regional countries to compete freely in the global marketplace. Significant European Union (EU) development assistance helps.

To avoid spreading itself too thinly, CE has refined its strategy² by considering national priorities of the 15 CARIFORUM States, selecting limited sectors and markets of immediate or potential strength, offering services most needed by small and medium-sized enterprises (SMEs) and encouraging networking and strategic alliances.

The priority sectors reflect a concentration on services but also support employment generation for women and the poor in rural areas. The priority sectors are: creative industries; health and wellness tourism; sports tourism; professional services; information and communications technology; alternative energy; handicrafts; and processed foods.

Mr Williams says, 'CE and other TSIs seek to provide technical expertise to SMEs to enter target markets - market intelligence, design, packaging, standards and quality, pricing and promotion. Trade fairs are useful for networking, benchmarking and learning from competitors, as well as meeting distributors and buyers.'

CE has developed tailor-made, sector-specific programmes, such as design for handicrafts, and has facilitated the formation of regional sector associations (for example, the Caribbean Music Industry Networking Organisation (CaMINO)³ and the Caribbean Audiovisual Network, or CAN⁴) to enable joint marketing.

Training in export marketing is now being offered with practical support for EU market entry. CE has also found it useful to establish, or join, national export councils to ensure better coordination and information exchange among development partners.

Trade and Investment in Brazil

As emerging economies come out of a period of turmoil, the Brazilian Trade and Investment Promotion Agency (Apex-Brasil) advocates that companies undergoing transition should enter into partnerships to achieve a better position in foreign markets. Apex-Brasil also suggests that companies review all their processes carefully, undertake continuous training and always search for new markets.

After conducting a study of the challenges for the trading and logistics sectors, the agency set up the Brasil Trading Project, which will involve local trading and logistics companies, SMEs and foreign buyers and which aims at establishing a bridge between local entrepreneurs and importers from various countries, and encouraging Brazilian businessmen and -women to expand exports. Apex-Brasil plans a training programme to strengthen trading and logistics companies and improve their relationships with suppliers.

The President of Apex-Brasil, Alessandro Teixeira, says, 'Apex-Brasil is partnering with the World Association of Investment Promotion Agencies (WAIPA) and the World Bank (IBRD), which recently developed a project to increase foreign direct investment in Brazil. 'The aim is to empower Brazilian states to promote opportunities and to establish local institutions to provide support to investors. Apex-Brasil will work to create a favourable trade and investment climate, focused on transparency, legal security and reliable information.'

Mr Teixeira is also President of WAIPA, which he plans to strengthen internally by promoting continuous interaction among associated investment promotion agencies, building capacity and ensuring consistent benchmarking exercises. Externally, dialogue with multilateral organizations will be enhanced in order to build new South-South relationships and increase opportunities for regional trade.

¹Disclaimer: The views expressed in this article are those of Philip Williams and do not necessarily represent those of Caribbean Export Development Agency..
²See further:Expanding Caribbean Business in the Global Marketplace, Our Strategic Approach.
³Strength in numbers - Caribbean music network organisation formed.
⁴Caribbean Audiovisual Network(CAN) is formally established.