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TRADE IMPACT FOR GOOD
Annual Report 2016
U N S D G s I T C
II INTERNATIONAL TRADE CENTRE
©shutterstock.com
ITC is the only international agency fully dedicated to the development
of small and medium-sized enterprises. Working with partners to
strengthen the competitiveness of SME exporters, we help to build vibrant,
sustainable export sectors that provide entrepreneurial opportunities,
particularly for women, young people and poor communities.
ANNUAL REPORT 2016 1
Trade impact
for good
2 INTERNATIONAL TRADE CENTRE
Contents
Foreword  4
The Global Goals are ITC’s goals 6
The global context 8
ITC INTERVENTIONS: DOING MORE, BETTER 12
Providing Trade and Market Intelligence 16
Building a Conducive Business Environment  24
Strengthening Trade and Investment Support Institutions 32
Connecting to International Value Chains 38
Promoting and Mainstreaming Inclusive and Green Trade 46
Supporting Regional Economic Integration and South-South links  58
CORPORATE RESULTS 66
Corporate governance 68
Evaluation and performance 70
Financial overview 72
Human resource management 75
Communication and outreach 77
Major ITC events 79
Partnerships  81
APPENDICES 92
APPENDIX I: 	 ITC focus areas and programmes 94
APPENDIX II: 	 ITC technical cooperation by region and focus area 96
APPENDIX III: 	 ITC country and regional projects and programmes by country 103
APPENDIX IV: 	 ITC needs assessment and project design in 2016 by region 110
APPENDIX V: 	 Profile of ITC staff 112
APPENDIX VI:	 Distribution of assignments by nationality and gender of experts, 2016  113
APPENDIX VII:	 Schedule of voluntary contributions to the ITC Trust Fund 117
ANNUAL REPORT 2016 3
Building peace and
sustainable livelihoods
through inclusive
tourism in Myanmar
Market power and value
addition deliver income
gains for Zambian
cotton farmers
40
60
Increased sales for
exporters and higher
prices for farmers in
Kenya’s avocado sector
Supporting international
sourcing and sales for
Tunisia’s textiles and
clothing sector
42
62
Alliances for a
more competitive
Caribbean
coconut industry
Facilitating China-Africa
trade and investment
for value addition and
job creation
44
64
In partnership with
INVESTING IN
TRADE PROMOTION
GENERATES REVENUE
Quantifying trade and
investment support
institutions’ impact on
trade performance and GDP
Bolstering Zimbabwe’s
infrastructure for standards
compliance and certification
34 36
ePing: Cooperating
to give SMEs real-time
information about
non-tariff measures
Case studies
Equipping SMEs with
the information they need
to access markets
20 22
Tackling non-tariff measures at
the regional level to improve the
business climate for trade
PROVIDING TRADE AND MARKET INTELLIGENCE
BUILDING A CONDUCIVE BUSINESS ENVIRONMENT
STRENGTHENING TRADE AND INVESTMENT SUPPORT INSTITUTIONS
CONNECTING TO INTERNATIONAL VALUE CHAINS	
SUPPORTING REGIONAL ECONOMIC INTEGRATION AND SOUTH-SOUTH LINKS
SheTrades:
Empowering
women entrepreneurs
in international markets
Empowering
hat-makers
in Haiti through
ethical fashion
Using trade to
create jobs
and build skills for
refugees
51 54 56
PROMOTING AND MAINSTREAMING INCLUSIVE AND GREEN TRADE
Leveraging WTO
commitments to boost
intraregional trade in
West Africa
28 30
4 INTERNATIONAL TRADE CENTRE
Foreword
For the trade and development community, 2016 merited
that over-quoted Dickensian phrase: ‘It was the best of
times, it was the worst of times.’
In the year after the world’s governments adopted the
Global Goals for Sustainable Development, international
trend lines for poverty, hunger, and child mortality continued
their welcome journey downward. The World Trade
Organization’s Trade Facilitation Agreement progressed
steadily towards entry into force as dozens of countries
ratified the accord and started to implement measures to
cut trading costs and border delays. In many major
economies it was the year in which solar or wind power first
became cheaper than electricity generated from fossil fuels,
a critical tipping point on the road to curbing climate change
in line with the Paris Agreement.
And yet, 2016 saw the open global economy – a key driver
of all of these positive trends – come under sustained
political attack on a scale unseen in decades. Opposition to
open markets drew support from substantial sections of the
electorate in several developed economies. Much of this
backlash was the product of years of inadequate domestic
policies to ensure that the gains from globalization were
widely shared. Yet the fact is that if protectionist rhetoric is
translated into reality, possibilities for trade-led growth will
diminish for developing countries while limiting the gains
from specialization and productivity everywhere.
Amid today’s tensions, one thing is clear: inclusive growth,
and making trade work for the 99%, is more important than
ever, in developed economies and developing ones alike.
The International Trade Centre (ITC) remains committed to
these objectives. Bringing countries and communities from
the margins to the mainstream of the world economy has
been the goal for which we have worked since our founding
in 1964. Empowering small and medium-sized enterprises
(SMEs) to connect to international value chains is essential
to translate trade into equitable increases in income and life
opportunities, since they employ the vast majority of the
workforce. Especially in least developed countries, small,
vulnerable economies and fragile states, inclusive trade will
be critical to achieving the broad-based growth and job
creation needed to achieve the Global Goals by 2030.
In the current political environment, ITC’s core goal – to enable
businesses to make the best possible use of existing levels
of market opening – is especially relevant. This report sums
up how ITC worked to make trade happen in 2016, delivering
close to $50 million of extra-budgetary expenditures on
technical assistance, capacity support and innovative analysis
despite a complicated funding context. Working together with
its partners in the public and private sectors, ITC leveraged
each dollar received into $14 in new trade for companies that
use ITC tools or are directly involved in ITC projects.
On the analytical front, the second edition of our annual
flagship report, the SME Competitiveness Outlook, shed
light on how non-tariff measures weigh on the exports of
smaller firms and yielded insights about how governments
could most effectively help SMEs overcome challenges
arising from standards and regulations as well as where the
business community could invest for further growth.
In terms of implementation, a dozen case studies from
across the six focus areas of our work serve to highlight
ITC’s solutions-oriented approaches, be it partnering with
governments and regional institutions to improve the
business climate for trade or empowering women
entrepreneurs to grow their companies and connect to
international markets. Three additional ‘ITC Innovates’
stories describe new initiatives that we anticipate will deliver
considerable results in the future. One of these, which
seeks to harness the power of mobile internet technology to
4
ANNUAL REPORT 2016 5
create income opportunities for refugees and asylum-
seekers, addresses one of the biggest humanitarian
challenges of our time. Like many of our more novel recent
approaches to solving longstanding problems, the refugee
skills initiative emerged from ITC’s Innovation Lab, which
has been living up to its objective of fostering a culture of
innovation across the organization.
One particular cause for pride in 2016 was the emergence of
visible dividends and multipliers from earlier ITC initiatives.
For example, SheTrades was launched in 2015; by the end
of last year, partner organizations from Nigeria to Finland to
Sri Lanka had signed on to its call for action, pledging to
connect 600,000 women entrepreneurs to markets – already
more than halfway to the original goal of bringing 1 million
women to market by 2020.
At the institutional level, ITC is committed to constant self-
improvement in order to better serve our clients. This is why,
over the past two years, we have been shifting to a
programme-based approach to conceptualizing and
organizing our interventions. The new approach promises
increased managerial effectiveness as well as a more
cohesive project portfolio in line with the Global Goals. To
this end, ITC’s internal structures have been reorganized to
better align institutional reporting lines with our core areas of
work with the goal of further enhancing operational
efficiency as we move to implement our ambitious project
pipeline. We also continued to make progress towards our
target of achieving gender parity at all professional levels.
Finally, because delivering for our clients requires resources,
we made major efforts in 2016 to increase and diversify our
funding sources.
In the face of unexpected reductions in voluntary contributions,
we continued to deliver trade impact for good, and drove
fundraising efforts that promise to bear fruit in 2017. We
hope that within these pages you will recognize the success
that we have achieved on the ground, and that you will see
continued value in investing in ITC as your partner for
inclusive trade and development.
Arancha González
Executive Director
1. E-commerce entrepreneurs at the Joint Advisory Group 2016 2. Launch of the SME Competitiveness Outlook 2016 3. Launch of the SheTrades
initiative, Nigeria 4. World Export Development Forum 2016, Colombo 5. Award-winners at TPO Network World Conference and Awards 2016,
Marrakesh 6. Trade for Sustainable Development Forum 2016, Geneva
2 3
5 6
6 INTERNATIONAL TRADE CENTRE
The Global Goals are ITC’s goals
The Global Goals for Sustainable Development represent a
universal, global development agenda for all United Nations
member states and development actors until 2030.
They consist of an integrated, interlinked set of 17 goals
supported by 169 targets in economic, social and
environmental development dimensions. ITC directly
supports 10 Global Goals.
ITC contributes to the Global Goals via its support to
small and medium-sized entreprise (SME) international
competitiveness for inclusive and sustainable growth through
value addition, trade, investment and global partnerships. It
has systems in place to monitor results and assists the
global community in tracking advances towards achieving
the Global Goals. A code of conduct guides ITC interventions.
SME international
competitiveness
Small and
medium-sized
enterprises
Trade and
investment
support
institutions
Policymakers
TRADE-RELATEDNEEDS
FOCUS AREAS
TRADE
Providing trade and
market intelligence
Building a conducive business
environment
Strengthening trade and
investment support institutions
Connecting to international
value chains
Promoting and mainstreaming
inclusive and green trade
Supporting regional economic
integration and South-South links
25% 19% 17% 30%9%
How ITC projects link to individual SDGs
ANNUAL REPORT 2016 7
GOAL 1
ƒƒ Reduce proportion of men, women and children of all ages living in poverty.
ƒƒ Create sound policy frameworks based on pro-poor and gender-sensitive
development strategies.
GOAL 2
ƒƒ Double productivity and incomes of small-scale food producers, in particular women.
ƒƒ Provide access to knowledge, markets and opportunities for value addition.
ƒƒ Ensure sustainable food production systems.
GOAL 4
ƒƒ Ensure youth and adults have relevant skills for employment, decent jobs
and entrepreneurship.
GOAL 5
ƒƒ Ensure women’s full and effective participation in business and trade
and equal opportunities.
ƒƒ Support women’s equal rights to economic resources.
ƒƒ Enhance use of enabling technology to promote the empowerment of women.
GOAL 8
ƒƒ Achieve higher levels of economic productivity through diversification, technological upgrading
and innovation.
ƒƒ Promote policies that support productive activities, decent job creation, entrepreneurship,
creativity and innovation.
ƒƒ Encourage formalization and growth of micro, small and medium-sized enterprises.
ƒƒ Implement policies to promote sustainable tourism that creates jobs and promotes local culture
and products.
ƒƒ Increase Aid for Trade support.
GOAL 9
ƒƒ Ensure a conducive policy environment for industrial diversification and value addition.
ƒƒ Increase access of SMEs to financial services and integration into value chains and markets.
GOAL 10
ƒƒ Achieve income growth of the bottom 40%.
ƒƒ Implement special and differential treatment for developing countries, in particular least
developed countries (LDCs), in accordance with World Trade Organization (WTO) agreements.
GOAL 12
ƒƒ Achieve sustainable management and efficient use of natural resources.
ƒƒ Support companies in adopting sustainable practices and integrating sustainability information
into their reporting cycles.
GOAL 16
ƒƒ Support effective, accountable and transparent institutions at all levels.
ƒƒ Ensure responsive, inclusive, participatory and representative decision-making.
ƒƒ Ensure participation of developing countries in the institutions of global governance.
GOAL 17
ƒƒ Ensure a universal, rules-based, open, non-discriminatory and equitable multilateral trading
system under the WTO.
ƒƒ Support significantly increased exports of developing countries, doubling the LDCs’
share of global exports by 2020.
ƒƒ Realize timely implementation of duty-free and quota-free market access on a lasting
basis for all LDCs.
8 INTERNATIONAL TRADE CENTRE
U N S D G s I T C
World trade growth remains subdued
World trade growth in 2016 remained sluggish. Global
exports of goods and services rose 2.3%, well below the
25-year average of 5.6%, and lower even than the 2.9% rate
registered the year before (all figures in volume terms). Exports
of commercial services continued to outstrip merchandise
trade growth, highlighting the increasingly important role
services are playing in supporting economic activity.
Global exports of goods and services are projected to
increase by 3.5% in 2017, though similar estimates have in
recent years been revised downwards in light of
disappointing growth in overall economic activity. Global
output growth in 2016 remained moderate at 3.1%, down
0.3 percentage points from 2015.
Developed economies saw merchandise export growth fall
by more than half in 2016 to 1.0% from 2.2% in 2015. This
was due to anaemic growth in the first quarter, partly caused
by a sharp drop in import demand from developing countries.
Developing countries recovered from a first-quarter decline to
post annual merchandise export growth of 1.8%.
Lower-than-expected GDP growth in major developing
countries such as China and Brazil, coupled with weak
growth in import demand in developed countries, were
major factors behind the slow trade growth. Alongside these
cyclical factors, the relationship between trade growth and
GDP growth has continued to weaken. Since the 1980s,
trade has typically grown 1.5 times faster than output, a ratio
that climbed to about 2-to-1 during the 1990s as the
disaggregation of manufacturing production across
countries and regions picked up speed. Since the financial
crisis of 2008–09, however, world trade and GDP have
grown at about the same rate, and 2016 was the first time in
15 years that trade grew more slowly than GDP. Economists
have suggested that part of the convergence is structural:
the result of shortening value chains as manufacturers can
increasingly source components at home instead of
importing them.
Furthermore, prospects that future trade growth will be
supported by major new trade initiatives have dimmed, as
strident anti-trade rhetoric weighs on policy in some leading
developed economies. Even long-established trade
agreements and customs unions may face adverse
pressures in the years to come. In this political context,
enabling developing countries to make more effective use of
the international market access they enjoy is one key to using
trade as an engine for development. Standards and
regulations play a critical role here.
Making trade a force for good: The role of
standards and regulations
Much of the criticism of trade stems from a misguided belief
that economic globalization is a zero-sum game. However, it
is clear that how the gains from trade are distributed among
and within countries matters, and that leaders in government
and business in many countries have neglected these
distributional consequences. Policymakers must now tackle
these issues head-on. While much of the necessary response
falls within the realm of domestic social policy, there is
considerable scope to make trade more of a force for good,
one that enhances economic wellbeing while protecting
consumers; a force that is economically empowering, socially
responsible and environmentally sustainable.
Standards and regulations play a key role both in making
trade happen in practice and in making it a force for good.
Without common standards, nuts made in one factory
would almost certainly fail to fit into bolts made in another
©shutterstock.com
The global context
ANNUAL REPORT 2016 9
and one computer would be unable to communicate with
another. Governments adopt regulations to protect
consumer safety and animal and plant health, so that
children’s car seats do not collapse under pressure and to
reduce the risk that imported fruit might unwittingly carry
diseases or pests that would decimate a country’s native
plant species. Businesses introduce standards into their
value chains to ensure product quality and protect their
brand reputations. Increasingly, companies and non-profit
organizations alike are developing non-mandatory
standards linked to a wide and growing array of social and
environmental objectives. Such ‘voluntary sustainability
standards’ originated primarily in the industrialized world,
but the trend is changing, with new measures frequently
headquartered in developing countries such as Brazil,
Colombia, India, Kenya and South Africa.
The 2016 edition of ITC’s annual flagship research report,
the SME Competitiveness Outlook, focused on the role
standards and regulations play in promoting these different
varieties of what ITC terms ‘good trade.’
Titled Meeting the Standard for Trade, it placed special
emphasis on examining how SMEs seeking to trade across
borders are affected – positively and negatively – by these
standards and regulations.
Because SMEs account for the majority of firms and jobs in
most countries, their ability to become more productive and
trade successfully tends to translate into income gains for
people in the poorer, more vulnerable segments of society –
and is thus crucial if trade is to regain widespread public
support as an engine of inclusive economic growth. SMEs
that neither import nor export tend to be less productive and
pay lower wages than firms that do either (or both).
Complying with standards and regulations is increasingly a
prerequisite for market entry. This can create commercial
opportunities for SMEs: when a given requirement is
associated with an international value chains, compliance
can open the door to privileged access to buyers within that
value chain. In such cases, standards and regulations can
help facilitate SME access to international markets.
Yet meeting standards and regulations generally implies
costs for SMEs. These costs in turn depend to a significant
extent on how the measures are designed, and on the
quality and affordability of the local technical infrastructure
for testing and certifying conformity with standards and
regulations. When standards are designed with little thought
for suppliers’ needs and technical institutions are weak,
compliance costs can quickly become prohibitive,
especially for smaller firms. Analysis in the SME
Competitiveness Outlook 2016 showed that this regulatory
burden hits small firms twice as hard as large firms: a 10%
increase in the regulatory burden cuts export revenue for
large firms by 1.6%, but by 3.2% for small firms. If small
firms’ margins are narrower, the impact on profitability will
be greater still.
FIGURE 1 Global trade growth: Medium- and short-term trends
Left Panel: (left axis) Index of world export volumes of goods and services where 2001=100. (right axis) Percentage change of year-on-year export volumes.
Source: IMF World Economic Outlook, October 2016.
Right panel: Quarter on quarter seasonally adjusted merchandise export growth volumes for developed and developing economies.
Source: World Trade Organization.
0%
-5%
-10%
-15%
5%
10%
15%
20%
Growth ratesIndex of world export volumes (2001=100) Index (2001=100)
20162002 2004 2006 2008 2010 2012 20142001 2003 2005 2007 2009 2011 2013 2015
Developed countries Developing countries
0
25
50
75
100
125
150
175
200
225
20162002 2004 2006 2008 2010 2012 20142001 2003 2005 2007 2009 2011 2013 2015
S.A. export growth in volume terms (%)
‐3.0
‐2.0
‐1.0
0.0
1.0
2.0
3.0
4.0
2012 2013 2014 2015 2016
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Developed countries Developing countries
Consumer
protection
Environmental
sustainability
Social
responsibility
10 INTERNATIONAL TRADE CENTRE
Encouraging good trade: An action plan
The SME Competitiveness Outlook 2016 highlights five ways
policymakers can ensure that standards and regulations
work for and not against SMEs, in turn fostering trade that is
socially inclusive and environmentally sustainable.
1.	Facilitate access to information: Obtaining information
on the plethora of mandatory and voluntary standards
and regulations can be costly, especially for smaller firms.
Trade and investment support institutions can help
address this challenge by disseminating relevant
information and directly responding to the needs of the
businesses with which they interact.
2.	Enable firms to comply with technical standards: For
firms considering whether to implement a standard or
regulation, the costs are tangible and immediate, while
the benefits lie in the future and can be hard to estimate.
Tools and training to help firms better understand these
trade-offs can help firms make better decisions.
Becoming part of a value chain can help suppliers
overcome financial barriers, as some lead firms share the
burden of certification and implementation costs.
(Though an inability to comply with standards can keep
SMEs out of such value chains in the first place.)
©shutterstock.com
Export Potential and Diversification
Assessment: Helping policymakers think
strategically about trade
ITC’s Export Potential and Diversification Assessment
(EPDA) draws on trade, tariff, output and geographic
data to evaluate countries’ potential to ramp up exports.
For products already in a country’s export basket, it
identifies new or underexploited markets; for
diversification purposes, it identifies promising product
lines and markets.
In the case of Egypt, to take one example, the analysis
reveals $1 billion worth of unrealized potential to export
glazed ceramic tiles to developing countries. It identifies
man-made carpets and pistachios as offering significant
possibilities to diversify the country’s export basket.
Understanding which products offer the highest export
potential allows policymakers to focus finite resources
and attention on reforms to sectors likely to yield the
greatest benefits to the economy in terms of increased
exports.
ANNUAL REPORT 2016 11
3.	Support technical infrastructure: For governments,
especially in developing countries, building the technical
infrastructure related to conformity assessment is
complex and potentially costly. Standards and regulations
are specific to certain sectors – a laboratory to test food
additives is very different from a crash-testing institute for
vehicles, or a financial regulatory institution – presenting
difficult decisions about how to allocate finite resources.
Countries would understandably want to align their
investments in technical infrastructure with sectors likely
to deliver the highest return in terms of increased exports.
To help countries make these decisions strategically ITC
has developed the Export Potential and Diversification
Assessment, which, as the name suggests, is a tool to
identify sectors and products with high export potential.
4.	Strengthen governance at home: One of the most
common causes of delays in administrative and
compliance procedures for exports is a lack of
coordination among organizations involved in trading
process, such as conformity assessment bodies and
border agencies. Rectifying this would help, as would
clearly demarcating the roles and responsibilities of all
institutions involved in national technical infrastructure.
5.	Leverage international mechanisms: Certifying goods or
services at home only facilitates trade if conformity
assessment bodies in foreign markets recognize the
certificate. Participation in mutual recognition agreements
for certification, or in efforts to harmonize standards and
regulation across borders, can be of enormous benefit to
lowering such obstacles and is an area in which
multilateral and regional fora can contribute greatly to
facilitating trade.
©shutterstock.com
1.6% 2.6% 3.2%
Increase in
regulatory burden Decrease in export values
Large firms Medium firms Small firms
10%
Regulatory burdens hit small firms hardest
©shutterstock.com
ITC interventions:
Doing more, better
14 INTERNATIONAL TRADE CENTRE
What ITC delivered in 2016
The figures below provide a snapshot of how ITC delivered
on its mandate in 2016. In the United Nations planning and
budgeting cycle, targets are set for two-year periods. The
figures below show some of ITC’s key results for the first half
of the 2016–2017 biennium. Some of the numbers relate to
indicators for assessing ITC’s performance against the
overarching goals defined in its Strategic Plan for 2015–17.
Others reflect ITC’s overall performance in terms of spurring
inclusive trade.
Strengthened integration of the business
sector into the global economy
Improved international competitiveness of enterprises
Empowering women in the global economy
Improved performance of trade and
investment support institutions (TISIs)
for the benefit of enterprises
233000
additional users of trade intelligence have
greater awareness of international trade as
a result of ITC support
(biennium target: 175 000)
170
TISIs indicated ITC support helped them improve
operational and/or managerial performance
(biennium target: 400)
6500additional enterprises were supported to improve their
international competitiveness or to meet buyers with
whom they subsequently transacted business
(biennium target: 14 000)
22 000
participants in ITC training courses
(biennium target: 20 000)
600 000
Signatories to the SheTrades initiative pledged
to connect 600 000 women entrepreneurs to
international markets by 2020
(2020 target: 1 million)
51%
of the 6 500 additional enterprises referenced above
were owned, operated and controlled by women.
(biennium target: 40%)
ANNUAL REPORT 2016 15
Key performance indicators
The below indicators track ITC’s delivery of technical assistance and work to enhance effectiveness.
Leveraging funding into trade
ITC has estimated the value of international business
transactions generated through its interventions in 2016.
The projection is based on three components: feedback
from users of ITC market intelligence tools; documented
business leads and deals; and additional exports generated
through the operational and managerial efficiency gains
achieved by the 18 TISIs that worked closely with ITC.
$85.4million
$685 million
ITC’s delivery
across all budgets
in estimated export and
investment value resulting from
ITC market intelligence, business
connections and support to TISIs
85% of country-specific
assistance went to priority countries
(target: 70%)
$201million
in pipeline projects laying foundation
for future growth (target: $175 million)
$78 million
97% of clients
$1$21
$1$14
XB funds raised for 2017 and beyond
(target: $95 million)
rated ITC services positively
(target: 80%)
Each dollar invested in ITC’s Business
Development Fund catalyzed
$21 in XB funding (target: $20)
ITC leverages each dollar in XB funding
into $14 of international export and
investment transactions
2017
16 INTERNATIONAL TRADE CENTRE
©shutterstock.com
Transparency in Trade
The Transparency in Trade Programme aims to improve the
trade and investment decisions of companies, notably small
and medium-sized enterprises (SMEs), trade and
investment support institutions (TISIs) and policymakers. In
particular, it assists SMEs in better targeting their products
towards the most promising markets and in diversifying and
adding value to their products. ITC has developed a suite of
online tools and databases to make global trade more
transparent and facilitate access to new markets.
Key results
$300 million in trade transactions
enabled by ITC market intelligence tools
600 000 registered users of ITC market
analysis tools; 3 500 downloads of mobile app
2.8 million visits to Trade Map: 1 visit
every 11 seconds – 28% increase over 2015
47new video tutorials on trade analysis;
over 1 500 enrollments
1 331 downloads of 2016 SME
Competitiveness Outlook following publication
in October
Highlights
ITC in 2016 started building a database covering all existing
and prospective trade agreements in the Asia-Pacific
region. Accessible through the Market Access Map tool, the
database will include tariff reduction schedules for 25
countries under different trade agreements. It will help
businesses and policymakers make sense of the so-called
‘noodle bowl’ of overlapping trade agreements in the region
and assist in trade-related decision-making.
A demonstration version of ITC’s new Export Potential Map
tool was launched in November at the World Trade
Promotion Organization Network World Conference and
Awards in Marrakesh, Morocco. More than 150 trade and
investment promotion leaders from around the world
expressed avid interest in using this new tool, which uses
ITC’s Export Potential and Diversification Assessment
methodology to spot sectors and markets with unused or
underutilized export potential. With a user-friendly interface
and innovative visualizations, the Export Potential Map
translates rigorous analysis into practical information about
trade opportunities.
A comprehensive export potential assessment identified
promising export sectors, both traditional and new, in
Ethiopia, Kenya, Mozambique and Zambia. Complemented
by interviews with stakeholders in each country, the analysis
will inform the design and implementation of the Partnership
for Investment and Growth in Africa (PIGA) project as it
seeks to boost trade and investment ties between China
and the four African countries.
The SAI Platform, a sustainability initiative backed by more
than 90 international food and beverage companies with
combined annual turnover in the hundreds of billions of
dollars, has based its new Farm Sustainability Assessment
©shutterstock.com
Providing trade and market intelligence
ITC INTERVENTIONS: DOING MORE, BETTER
ANNUAL REPORT 2016 17
online tool on ITC’s Standards Map, which contains
information on more than 230 voluntary standards. The new
tool will help SAI Platform members meet their sustainable
sourcing targets and provide their thousands of suppliers
with information about complying with sustainability criteria
and avoiding duplication in sustainability assessments.
The second edition of ITC’s flagship research publication
was launched in October. SME Competitiveness Outlook
2016: Meeting the Standard for Trade contains analysis and
practical recommendations for policymakers, SME
managers and standard-setters on how to enable SMEs to
meet standards and regulations – often a prerequisite for
participating in international value chains – in order to drive
growth and job creation.
ITC market intelligence tools are global public goods that
continue to provide up-to-date trade information to
businesses, researchers and journalists around the world.
Based on ITC’s annual user survey, the tools helped
generate around $300 million in trade transactions in 2016
(see case study).
Non-Tariff Measures
The Non-Tariff Measures (NTMs) Programme brings the
concerns of SMEs about regulatory and procedural trade
obstacles to the attention of policymakers and other
stakeholders, enabling concrete, specific responses. It
increases the transparency of NTMs through company-level
data collection and dissemination and provides thought
leadership through applied research and analysis, thus
contributing to evidence-based policymaking and reduced
trade costs.
Key results
NTM surveys in 13 developing
countries
18 000 trade-related regulations
for 90 countries documented in Market
Access Map tool
Highlights
ITC’s NTM Surveys (www.ntmsurvey.org) and trade
obstacles alert mechanisms in 2016 channelled views from
more than 5,700 SMEs in 13 developing countries to
decision-makers. The surveys and alerts provide evidence
about trade obstacles that businesses encounter on the
ground; related stakeholder consultations in Benin,
Comoros, the Dominican Republic, Ecuador, Ethiopia,
Jordan, Kyrgyzstan, Mali, Nepal, the Philippines, the
Seychelles and Uganda, as well as at the regional level in
West Africa, explored practical ways to remove these
obstacles.
ITC NTM analysis informed the work of a Philippines
government technical committee on simplifying trade
procedures as well as ITC-backed sector export strategies
in Nepal. It has in some instances already led to tangible
changes on the ground, exemplified by the partial removal
of an export ban on scrap metals in Mauritius after
businesses reported it to the country’s trade obstacles alert
mechanism.
In addition, a business survey across the 28 European
Union (EU) member states shed light on the NTM-related
barriers EU companies encounter when exporting to and
sourcing from developing countries. Based on input from
more than 8,000 EU firms – of which four out of every five
1. National roundtable on non-tariff measures, Uganda 2. ITC Market Access Map booth, Central Asian Trade Forum 2016, Kazakhstan
21 3
ITC INTERVENTIONS: DOING MORE, BETTER
18 INTERNATIONAL TRADE CENTRE
were SMEs – the survey yielded insights that in turn will
serve as a benchmark for comparison for the challenges
reported by businesses based in those developing
countries.
Transparency, research and analysis efforts continued in
2016. New ITC country publications for Thailand, Indonesia
and Egypt brought the NTM series total to 28.
By year’s end, information on more than 18,000 regulations
on exports and imports applied by 90 countries was
available online through the Market Access Map tool. For
certain countries, such as Jordan and Bangladesh, this
data was complemented by information on administrative
procedures related to exporting and importing.
In November, ITC, the World Trade Organization and the
United Nations Department of Economic and Social Affairs
jointly launched a new regulatory alert system, called ePing,
that will notify users when countries announce changes to
their health and safety standards or technical regulations for
products of interest to them (see case study). The goal is to
keep users informed about regulatory changes and to give
businesses an opportunity to signal potential trade irritants
to national authorities so they can be swiftly resolved.
While ITC’s NTM survey work has thus far concentrated on
trade in goods, it will soon extend to services after the
finalization and testing in 2016 of a methodology to capture
barriers experienced by operators in the information
technology, transport and logistics and tourism sectors.
Competitive Intelligence
The ITC Competitive Intelligence Programme delivers
training and advisory services and develops online solutions
to strengthen the capacity of TISIs in developing economies
to provide clients with the real-time customized intelligence
they need to improve operational performance and compete
more effectively on international markets. It also assists
SMEs to define their information needs, identify
opportunities and anticipate risks.
Key results
Trade information portal created in
Zimbabwe
Enabled TISIs in 3 African countries to
make market data more accessible to clients
Highlights
In Zimbabwe, ITC set up a national Trade Information Portal
(tradezimbabwe.com), drawing on inputs from a network of
trade-related institutions. The portal provides the country’s
business community with up-to-date news and intelligence
on foreign markets and their requirements, covering issues
ranging from customs procedures, export guidelines and
trade agreements through to information about business
opportunities and useful contacts. The portal functions as
an online international showcase for Zimbabwean
companies, goods, services and local business
opportunities. In addition, tradezimbabwe.com hosts the
online European Business Information Centre, an online
service platform containing Europe-specific information
services for manufacturers and exporters interested in
European markets. The platform also serves to connect
1. Trade Investment Facilitation Mechanism meeting, Egypt 2. Roundtable on non-tariff measures, Nepal
1 2
ANNUAL REPORT 2016 19
European entrepreneurs to Zimbabwean companies,
products and opportunities.
In Tunisia, ITC laid the groundwork for establishing a
monitoring cell to provide business intelligence on trends,
risks and opportunities in online trade. Once it comes online
in early 2017, the service, which will operate through the
country’s Centre de Promotion des Exportations (CEPEX),
will enable better decision-making and expand access to
markets for Tunisian SMEs that sell goods and services over
the internet.
In the Bahamas, ITC was chosen by the Caribbean
Development Bank to build a trade information portal in
coordination with the country’s Ministry of Financial Services
and the Bahamian Chamber of Commerce. The portal will
serve as a one-stop shop to meet the informational needs of
local entrepreneurs seeking to internationalize their
operations and should thus contribute to helping the country
diversify away from its current overreliance on tourism and
off-shore services. It will also be a bridge for foreign
entrepreneurs to build links to Bahamian suppliers of goods
and services.
Finally, in Kenya, the United Republic of Tanzania, and
Zambia, ITC accompanied a project on promoting
intraregional trade with training for TISIs on how to collect
and present market data for their clients. Kenya’s Export
Promotion Council has deployed its new expertise to
regularly circulate information on mango trade to
stakeholders in the sector. The Zambia Development
Agency in February created a competitive intelligence portal
for its honey sector to help industry actors make better
business decisions.
2016 Funders
Core funders
Canada, China, Finland, Germany, India, Ireland,
Sweden
Project-specific funders
Caribbean Development Bank, Denmark, European
Union, European Feed Manufacturers’ Federation
(FEFAC), Germany, Humanist Institute for Cooperation
with Developing Countries (HIVOS), Islamic Centre for
Development of Trade, Japan, PepsiCo, Russian
Federation, Sime Darby, Switzerland, Stichting IDH
Sustainable Trade Initiative, Sustainable Agriculture
Initiative (SAI) Platform, United Kingdom, United States,
UN Development Programme (UNDP), UN Environment
Programme (UNEP)
SME Trade Academy in Libya: Developing entrepreneurship in a fragile state
In the second half of 2016 ITC partnered with Expertise
France, the French international technical cooperation
agency, to develop and launch a pilot Arabic-language
course for young Libyan entrepreneurs. The youth-oriented
course provides an understanding of entrepreneurship as
a way to overcome difficult economic conditions.
In light of the country’s political instability, the six-week
course was rolled out in collaboration with municipalities
and seven universities in cities such as Tripoli, Misrata and
Benghazi. The local partners complemented the online
courses with in-person information and coaching.
Despite electricity shortages and repeated bouts of
insecurity, 1,074 young people, over a quarter of them
women, self-enrolled in the course, of whom 303
successfully completed it and received a digital certificate.
Course participants came from 40 locations all over Libya
(see map).
The goal of this pilot project was to confirm that e-learning,
backed by local coaching, can be an effective approach
for capacity building in Libya. Based on the positive initial
results, Expertise France has announced further funding
while including the project in a larger European Union-
funded programme for sustainable economic
development in Libya. Thanks to this support, Expertise
France and ITC will in 2017 and 2018 expand the SME
Trade Academy’s Libya-focused offerings to a 100-hour
curriculum accompanied by online tools for entrepreneurs
starting businesses in Libya, and in doing so contribute to
the country’s economic recovery.
Zawiya
Tripoli
Misrata
Sirte
Nalut
Gharyan
Bani Walid
Hun
Ghat
Sabha
Kufra
Jalu
Tobruk
Benghazi
Ajdabiya
300 100 50 10 1
20 INTERNATIONAL TRADE CENTRE
1
CASE STUDY
ePing: Cooperating to give
SMEs real-time information
about non-tariff measures
The challenge
For companies around the world, meeting technical
regulations and product standards is an increasingly
important part of doing business, whether internationally or
at home. With manufacturing production increasingly
fragmented across countries and regions, standards play a
critical role in insuring that components made in one factory
fit where they belong in another. Meanwhile, consumer
expectations for product safety, quality and sustainability
have steadily increased. ITC’s Market Access Map tool now
counts more than 13,000 regulations and conformity
assessment procedures that come under World Trade
Organization (WTO) rules for Sanitary and Phytosanitary
(SPS) measures and Technical Barriers to Trade (TBT).
The growing number of such non-tariff measures (NTMs)
makes trading more complex, in particular for small and
medium-sized enterprises (SMEs) in developing countries.
These firms often struggle to make sense of the plethora of
health and safety requirements, product regulations, testing
and certification procedures and other such measures
necessary for market entry.
ITC business surveys conducted in more than 60 countries
reveal that over 50% of the trade obstacles encountered by
businesses relate to SPS and TBT measures.
Meanwhile, the number of NTMs continues to grow. Each
year, governments notify the WTO of more than 3,500 TBT
and SPS measures, in line with transparency obligations for
policies that may affect international trade. The notifications
are supposed to give trading partners advance notice to
understand and comment on impending policy changes.
However, SMEs already struggling to cope with existing
NTMs are ill-equipped to digest these new flows of
information.
The response
ITC joined hands with the United Nations Department of
Economic and Social Affairs (UNDESA) and the WTO to set
up ePing, an online alert mechanism for new SPS and TBT
notifications. After signing up (registration is free), users
receive daily or weekly alerts on new WTO notifications in
sectors and markets of interest to them. SMEs are thus
better equipped to share any concerns about prospective
market requirements with their own national authorities and
ultimately to understand and comply with measures that
eventually enter into force.
More broadly, by enabling real-time debate on specific
product requirements, the online tool supports timely and
effective engagement among private sector and public
stakeholders on SPS and TBT issues.
The ePing system complements ITC’s suite of online trade
and market intelligence tools, which accessibly present data
on trade, investment, tariffs, NTMs, private standards and
government procurement. In addition to the real-time alerts,
companies can use ePing to search for older SPS and TBT
notifications for sectors and markets they operate in.
The results
Prior to its global launch on 8 November, the ePing
mechanism was tested in countries including Australia,
Canada, Nepal, the Philippines and Uganda. User feedback
has been positive, with government officials and business
representatives praising the system for enhancing
transparency around NTMs and enabling companies to
prepare for policy change.
‘ePing is a useful platform for our exporters and
stakeholders to readily access new trade challenges that
affect their products and markets,’ said Nora Terrado,
undersecretary for the Philippines’ Department of Trade and
ANNUAL REPORT 2016 21
Industry. ‘This tripartite project has certainly improved
accessibility and transparency on prevalent NTMs for SMEs
participating in the global trade without additional costs to
them.’
‘ePing provides timely information on technical regulations
in fisheries for my members,’ added Ovia Katiti Matovu,
head of the Uganda Fish Processors and Exporters
Association and a user of the new system. ‘I am now able to
receive and share information with my members on
changes in technical regulations notified to the WTO, as well
as to engage in discussions on the chat forum relating to
various notifications of concern.’ She said that the
mechanism made it easy for her to communicate about
NTMs with members of the business association she leads.
The future
Together with its partners, ITC will work to integrate ePing
with other types of trade information and alerts. A key
priority will be making the ePing system more accessible
internationally, notably through partnerships with local
institutions to translate the notifications into languages
beyond English, French, and Spanish. Customized
ePing interfaces could be built into national trade
intelligence portals.
1. ©shutterstock.com 2. ePing launch at the World Trade Organization, Geneva 3. ePing web platform ©shutterstock.com
2
Partners
United Nations Department of Economic and Social Affairs, World Trade Organization
3
‘ePing is a useful platform for our exporters
and stakeholders to readily access new trade
challenges that affect their products and markets.
This tripartite project has certainly improved
accessibility and transparency on prevalent NTMs
for SMEs participating in the global trade without
additional costs to them. ’
Nora Terrado, Undersecretary, Department of Trade
and Industry, the Philippines
22 INTERNATIONAL TRADE CENTRE
CASE STUDY
Equipping SMEs with
the information they need
to access markets
The challenge
Even in the information age, the kinds of information that
businesses need when trying to sell into new markets can
be hard to find. Data on international demand trends and
information about tariff levels and requirements – like health
and safety standards in target markets – tends to be
fragmented, unavailable or expensive. Voluntary sustainability
standards are increasingly de facto requirements to enter
some lucrative market segments. Even before companies
can grapple with the costs of certification they must
understand which standards are relevant in a given market
and what they would need to do to comply.
The costs and time associated with such intelligence-
gathering weigh heavily on small and medium-sized enterprises
(SMEs), especially those in developing countries, which tend to
be less internationally competitive in the first place. As a result, it
becomes harder than it should be for SMEs to buy or sell across
borders and connect to value chains.
Moreover, even when firms are able to internationalize,
prices may fall if they end up contributing to a supply glut.
With better knowledge of market demand and price trends,
SMEs would be able to make better trade-related decisions.
The response
Making trade information available to businesses in
developing countries has been ITC’s raison d’être since its
founding. Starting in 1999, ITC created a suite of online
market intelligence tools that are completely free for users in
developing countries. These global public goods – Trade
Map, Market Access Map, and Standards Map – hold data
from more than 190 countries and make it easy to visualize
through tables, graphs and maps. Some of the data in the
tools – on non-tariff measures, ad valorem equivalent tariffs
and tariff quotas – cannot be found elsewhere; ITC experts
calculate the statistics and share them with other
international agencies.
ITC market intelligence tools help users – exporters,
importers, journalists, researchers, and others – navigate
the constantly changing landscape of international trade
and regulations. For instance, a would-be exporter can use
Trade Map to discover which markets for her SME’s
products have been the most dynamic in recent years and
access contact information for importers in those markets.
She can then advance to Market Access Map to see
whether her country benefits from preferential tariff access
to a target market and to understand the tariff rates and
non-tariff measures that would apply to her products. Finally,
Standards Map would allow her to identify any relevant
sustainability standards and determine whether they might
be worth adopting.
A parallel component of ITC’s work is to train
representatives from businesses, governments, trade and
investment support institutions (TISIs) and the media in the
use of the market intelligence tools, contributing to better
analysis and a fact-based understanding of trade.
In 2016, the number of registered users of ITC market
intelligence tools surpassed 600,000, with over 3.2 million
online visits.
The results
In 2016, ITC market intelligence tools helped generate
around $300 million in trade transactions, based on
businesses’ responses to ITC’s annual survey of users.
One such business was Maneks Dis Ticaret, an Istanbul-
based trading company dealing in iron and steel products,
cement and metallic ores. Yilmaz Manisali, its director of
business development, said that the up-to-date trade data
in ITC tools, especially Trade Map, had helped the company
make profitable business decisions, bolstering sales while
minimizing costs.
‘ITC tools have been instrumental for us in the planning
stage – they have allowed us to identify our target markets
1
ANNUAL REPORT 2016 23
1. Export Potential Map tool ©shutterstock.com 2.3 Market Access Map workshops, Oman and Ethiopia
32
where we later enjoyed considerable sales,’ Manisali said.
He explained that ITC tools had not only helped the
company increase export revenues by targeting the right
markets, they had made it possible to reduce shipping
costs. ‘We have studied export-import routes of certain
products and through this information were able to establish
trading routes in the opposite direction of busy lines, thus
allowing us to have very reasonable freight rates,’ he said.
Providers of business advisory services also use ITC tools
to help their clients overcome obstacles to accessing
foreign markets.
‘ITC tools are of great use in our export service’, said Lorena
Zamudio Benitez, general manager at Dragon Pacific
International, a company based in Mexico’s Michoacán state
that provides consulting services to exporters. ‘They help us
evaluate potential markets and to find tariffs and non-tariff
measures; and with this information we can advise our clients
which products to promote abroad.’
A manager at Bors Dis Ticaret, a medium-sized Turkish
exporter of baby clothes and home furniture, said ‘ITC’s
market analysis tools are like a compass for us. They
provide highly detailed information for our sector and guide
us to make the right decisions at the end of the day.’
Feedback on ITC’s market intelligence training work has
been similarly positive. In Viet Nam in 2016, ITC trained
some 50 trainers affiliated with the Viet Nam Chamber of
Commerce and Industry and the Foreign Trade University in
the use of the tools, who in turn ran courses around the
country for more than 600 representatives from businesses
and the government. According to a participant survey 42%
of the businesses increased exports following the training,
while slightly higher proportions connected to new clients or
markets either for exporting or importing.
The future
ITC’s suite of global public goods in trade intelligence is set
to expand. ITC experts are constructing what will be the
world’s most comprehensive database on preferential rules
of origin associated with bilateral and regional free trade
agreements (FTAs). Businesses, especially SMEs, often
struggle to understand these rules and related
administrative procedures, with the result that they cannot
utilize the market access negotiated in an FTA. The new
database, which will be operational by the end of 2017, will
give users visibility and practical guidance on origin-related
rules and procedures.
Following avid interest in the Export Potential Map at its
demonstration launch in late 2016, ITC is preparing a wider
rollout in 2017. Information about potential for trade in services
and for building export-oriented regional value chains is being
added to the methodology to give clients a complete picture of
promising sectors for export growth and diversification.
Funders
European Union, Germany, Japan, Russian Federation, Switzerland
‘ITC tools have been instrumental for us in the
planning stage; they have allowed us to identify
our target markets where we later enjoyed
considerable sales.’
Yilmaz Manisali, Director of Business Development, Maneks Dis Ticaret,
an Istanbul-based trading company
24 INTERNATIONAL TRADE CENTRE
Trade Development Strategy
The Trade Development Strategy Programme enables
partner country decision-makers to identify priorities, set
policy directions and act to further integrate their economies
into international trade and investment. Through the design
and management of sector, national and regional strategies,
the programme aims to achieve higher levels of market-led
trade performance, especially of small and medium-sized
enterprises (SMEs), to improve growth, job creation and
living standards.
Key results
9 strategy solutions delivered in 7
countries
Established 13 public-private dialogue
platforms to manage, monitor and measure
strategy implementation
Supported strategy implementation in
4 countries
Highlights
In 2016, ITC worked with Myanmar to manage the
implementation of the country’s National Export Strategy
(NES), developed with ITC’s technical assistance two years
earlier. Some 96 projects, implemented by a wide range of
international development partners, public and private
sector actors, have contributed to meeting the NES’s
objectives of spurring export-led growth and job creation in
high-potential sectors. Ten sector-focused committees
established with ITC support worked with Myanmar’s Trade
and Business Promotion Task Force to coordinate
implementation and ensure alignment with the strategy. ITC
also provided support to trade strategy design and
management initiatives in Cambodia, Ethiopia, Kenya,
Mauritius, Nepal and the United Republic of Tanzania.
In Liberia, following consultations with more than 200
policymakers, trade and investment support institutions
(TISIs) and enterprises, ITC helped the government develop
a plan to diversify its export portfolio into the tourism and
wooden furniture sectors. This work built on the 2014
National Export Strategy that ITC helped the country
develop. Aimed at driving economic transformation through
value-addition, these two new sector strategies set out a
series of actions at the policy, institutional, enterprise and
market partner levels to boost productive capacity and
upgrade infrastructure to trigger latent potential for greater
domestic and international trade.
©shutterstock.com©shutterstock.com
Building a Conducive Business
Environment
©shutterstock.com
ITC INTERVENTIONS: DOING MORE, BETTER
ANNUAL REPORT 2016 25
In Ukraine‘s southern regions of Kherson, Mykolaiv and
Odessa, ITC brought together government authorities and
fruit and vegetable producers to remodel traditional value
chains and market linkages and revive the competitiveness
of local SMEs. More than 150 stakeholders, including 44
women, charted a roadmap to create and capture more
value. This roadmap is now being implemented by national
authorities with support from ITC.
In Qatar, which wants to cut its reliance on oil and gas, ITC
facilitated consultations among public- and private-sector
leaders to identify sectors with high export development
potential. This work also looked at the investment
requirements, business climate reforms and support
services required to stimulate entrepreneurship and realize
that potential. The resulting Strategic Trade Development
Roadmap details quick-win actions aimed at creating
employment opportunities through diversified trade within
the region and around the world.
Trade Facilitation
The Trade Facilitation Programme works with policymakers
in developing and least developed countries to implement
trade facilitation reforms aimed at reducing the cost of doing
business. It also partners with logistics operators and other
trade facilitation stakeholders to ensure that SMEs are able
to understand and comply with customs and other border
requirements.
Key results
6 countries ITC worked with ratified the
WTO Trade Facilitation Agreement
11 countries assisted to estimate needs
for technical and financial assistance to
implement TFA obligations
2 000 women in Burundi, Tanzania,
and Uganda joined ITC-backed network for
informal cross-border traders
Highlights
ITC contributed to the design and adoption of policy
recommendations for implementing the World Trade
Organization (WTO) Trade Facilitation Agreement (TFA) in
Curaçao, Dominica, Haiti, Saint Vincent and the Grenadines,
Suriname and the West African Economic and Monetary
Union (WAEMU). The WAEMU work was notable for the
consensus ITC helped the 15-member bloc reach on
implementing the TFA at a region-wide level (see case study).
A central plank of this assistance was the establishment of
inclusive inter-agency and public-private dialogue
processes to ensure that business perspectives factor into
the design of cross-border reforms, and that SMEs in
particular are empowered to understand and comply with
border requirements. In some cases this support involved
setting up or strengthening national trade facilitation
committees (NTFCs). These committees are required under
the TFA and bring together stakeholders such as border
agencies, logistics service providers and traders. They play
an important role in designing and monitoring trade
1.2. Site visit: Wood furniture producer, Liberia
21
ITC INTERVENTIONS: DOING MORE, BETTER
26 INTERNATIONAL TRADE CENTRE
facilitation implementation. ITC worked to ensure that the
private sector, especially SMEs, were represented on
NTFCs. ITC assisted Botswana, Côte d’Ivoire, Guinea,
Senegal, Tajikistan and Ukraine in establishing or
strengthening such committees.
Three countries ITC had supported on TFA-related issues –
Afghanistan, Dominica and Senegal – ratified the TFA in
2016. In addition, ITC helped 11 countries estimate needs
and develop project proposals for the technical and
financial assistance they require to implement so-called
‘Category C’ obligations under the TFA.
To enhance the impact of its trade facilitation interventions,
ITC developed a network of partnerships with leading public
and private stakeholders, including the United Nations
Conference on Trade and Development (UNCTAD), the
United Nations Economic Commission for Europe (UNECE),
the United Nations Economic and Social Commission for
Asia and the Pacific (UNESCAP), Brazil’s Ministry of
Development Industry and Foreign Trade and the World
Economic Forum. Cooperative work has ranged from
technical training to the publication of materials on TFA
implementation.
In Burundi, Uganda and the United Republic of Tanzania,
more than 2,000 women informal cross-border traders
joined an ITC-backed network that serves as a vehicle for
disseminating knowledge about cross-border procedures,
increasing their ability to trade more safely and to formalize
and grow their businesses.
Supporting Trade Negotiations
The ITC Supporting Trade Negotiations Programme assists
business associations to articulate private-sector views and
influence policymakers to ensure that trade negotiations,
national policies and regulatory reforms reflect business
perspectives. The key aim is to contribute to policy
coherence and a more conducive business environment.
Key results
Supported Sudan’s preparation of
Memorandum of Foreign Trade Regime and
Legal Action Plan for WTO accession
Supported the Comoros in revamping
investment code
Assisted Tonga in drafting National Trade
Policy Framework
Highlights
In least developed countries (LDCs) acceding to the WTO,
ITC works to build capacity among businesses, TISIs and
governments to understand – and prepare to seize – the
opportunities presented by membership in the global trade
body. In 2016, ITC supported Sudan’s efforts to re-launch its
WTO bid by assisting the government to draft its
‘Memorandum of Foreign Trade Regime.’ This document, a
mandatory step in the accession process, was submitted to
the WTO Secretariat.
ITC also helped Sudan draft a legal action plan and an initial
offer of services market-opening commitments. In addition,
ITC worked to raise awareness about the implications of
membership within the Sudanese business community. In
1
1.2. Site visit: Fruit and vegetable farm, Qatar 3. A market in the Comoros
2 3
ITC INTERVENTIONS: DOING MORE, BETTER
ANNUAL REPORT 2016 27
Comoros, ITC worked with the government to bring its
investment code into alignment with international best
practices and prospective WTO obligations.
ITC in 2016 built on earlier work aimed at tackling non-tariff
measures (NTMs) impeding intraregional trade in the auto-
parts and beverage sectors within the Central European
Free Trade Agreement (CEFTA, see case study). ITC worked
with member governments and the CEFTA Secretariat to
overhaul competition laws and regulations as well as to curb
anti-competitive practices by private operators.
In the Organization of Eastern Caribbean States (OECS),
ITC followed up on earlier work with the OECS Commission
to complete a regulatory assessment of key services
sectors and produce a list of potential market-opening
commitments in its negotiations with trading partners.
In coordination with the Pacific Islands Forum Secretariat,
ITC assisted Tonga to draft a preliminary National Trade
Policy Framework based on extensive public-private sector
consultations aimed at aligning Tonga’s policies with
enterprise supply chains.
In Pakistan, ITC contributed to enhancing the long-term
capacity of the country’s Competition Commission,
internally through the creation of a dedicated department to
training and research and externally through a partnership
to run courses on competition policy with the National
University of Science and Technology.
4
2016 Funders
Core funders
Canada, China, Finland, Germany, India, Ireland,
Sweden
Project-specific funders
Enhanced Integrated Framework, European Union,
Finland, France, Germany/Deutsche Gesellschaft für
Internationale Zusammenarbeit (GIZ) GmbH, Italy,
Qatar, Standards and Trade Development Facility,
Switzerland, UN Conference on Trade and Development
(UNCTAD), UN Industrial Development Organization
(UNIDO), Western NIS Enterprise Fund	
5
4. Workshop on Ukraine’s export strategy 5. Workshop on cross-border trade procedures, Burundi
28 INTERNATIONAL TRADE CENTRE
CASE STUDY
Tackling non-tariff measures at
the regional level to improve the
business climate for trade
The challenge
Decades of progressive market-opening have lowered tariff
barriers around the world, with the result that non-tariff
measures (NTMs) now loom larger as a source of trade
frictions.
NTMs cover a wide range of policies such as technical
regulations, sanitary and phytosanitary measures (SPS),
quantitative restrictions, various fees and charges,
certification requirements and other conformity assessment
issues. Many of these policies are designed to protect
consumer safety and the health of humans, plants and
animals. Conforming to the demands of NTMs can imply
significant costs for traders – costs that weigh particularly
heavily on small and medium-sized enterprises (SMEs) in
developing countries.
Streamlining NTMs has become a major component of
national trade policy agendas, including in bilateral and
regional integration initiatives. Despite significant progress,
important challenges remain, in particular the harmonization of
procedures for the enforcement of NTMs, which themselves
can be a substantial source of uncertainty, costs and delays.
The response
ITC works to address NTMs on multiple fronts. Transparency
tools such as Market Access Map provide information on
the requirements of thousands of mandatory and private
standards. Business surveys reveal how companies in
developing countries encounter NTM-related obstacles
when seeking to trade across borders and shed light on
whether those competitiveness-sapping obstacles are the
result of bureaucratic procedures or the content of the
measures themselves. The survey results can in turn be
analysed to identify how regulatory and border agencies
can remove inefficiencies that inhibit small firms in priority
sectors from participating in the world economy but
contribute little to achieving public policy goals. ITC works
with governments and regional institutions to design and
implement solutions to smooth trade flows.
Building on the NTM surveys, ITC developed a three-step
methodology to address regulatory and procedural
obstacles to trade at the regional level. First, it works with
regional institutions and national governments to identify
priority sectors, regulations and value chains for intervention
based on the potential benefits that would result from
region-wide reforms. Next, they examine the underlying
causes of regulatory and procedural obstacles. The final
step is to design and implement plans to address regulatory
and procedural obstacles.
The results
In response to relatively low levels of intraregional trade and
investment, ITC has been working in regions including the
Central European Free Trade Agreement (CEFTA), the Arab
states, and the Economic Community of West African States
(ECOWAS) to identify and eliminate non-tariff barriers.
In the CEFTA bloc over a 16-month period, ITC mobilized
private-sector lead firms and suppliers in the auto-parts and
beverage sectors to identify burdensome trade barriers and
articulate their concerns in a manner conducive to designing
policy and regulatory reforms to address them. Public-
private dialogue forged an informed consensus among
CEFTA stakeholders – companies and governments – on
what the most cumbersome NTMs were and how to
address them. (In the beverage sector, these included
discriminatory excise duties and the lack of mutual
recognition of quality certificates; in the auto sector, complex
customs documentation requirements were a particular
source of problems.)
CEFTA parties in 2016 introduced a raft of trade facilitation
procedures aimed at resolving these issues, pledging to
accord mutual recognition to each other’s legislation and
trade-related documentation and to eliminate the main
1
ANNUAL REPORT 2016 29
NTMs identified in early 2017. These reforms promise to
make trade procedures in the region more transparent and
predictable, reducing trade costs and making it easier for
companies to do business across borders within the region
and internationally.
In the Southern Mediterranean region, business survey
results and a regional roundtable on NTMs have informed
ITC’s work to foster economic integration across Algeria,
Egypt, Israel, Jordan, Lebanon, Morocco, the State of
Palestine, Tunisia and Turkey. The EuroMed Trade Helpdesk
was beta tested throughout 2016 ahead of a formal 2017
launch. Its online portal provides economic operators with
information about trade statistics, customs procedures,
business contacts, and tariff and non-tariff policies across
the region while serving as a venue to share news and
information about trade-related events. In addition, a
problem-solving network of officials from trade and other
ministries of the participating governments will work to increase
transparency and promote intraregional trade and investment.
Alongside this work, ITC partnered with the League of Arab
States and national institutions to address key NTM-related
challenges identified through the business surveys. These
included a lack of accredited laboratories to certify that
products meet health and safety regulations; issues around
the issuance and recognition of trade-related documents;
and uncertainty about customs procedures. Thematic working
groups produced a set of recommendations to promote
region-wide harmonization of product quality and food safety
measures as well as conformity assessment procedures.
In ECOWAS, where surveyed businesses indicated that
trade within the region faced border surcharges and taxes
not encountered in trade with the rest of the world, ITC and
the African Development Bank jointly organized a high-level
regional roundtable on NTMs in June. At the gathering,
delegates from across the region agreed to tackle these
border costs. They also agreed on action to tackle other
NTMs identified in the surveys, such as quality requirements
and testing for agricultural products; difficulties getting
certificates of origin proving that manufactured goods are
made in the region; and a level of regulatory and procedural
obstacles to trade that is generally high compared to the
rest of the world.
The future
CEFTA parties have agreed on the recommendations for
NTM-related policy reforms for the auto-parts and beverage
supply chains, and are now in the process of implementing
them. ITC and CEFTA will build on this by working with GIZ,
the German technical cooperation agency, to address NTMs
along other value chains in the region.
In the Arab states, ITC will continue to shed light on NTMs
and work with governments and regional institutions to
implement the action plans to address rules of origin,
product quality and food safety.
In the ECOWAS region, the recommendations from the NTM
work fed into regional integration projects that will start
implementation in 2017, such as a regional trade barriers
alert system.
Funders
Canada, China, Finland, Germany, Ireland, Sweden, India,
European Union, United Kingdom, United States, Germany/GIZ
1. ©shutterstock.com 2. Training on non-tariff measures, Bangladesh 3. National roundtable on non-tariff measures, Philippines
32
30 INTERNATIONAL TRADE CENTRE
CASE STUDY
Leveraging WTO commitments
to boost intraregional trade
in West Africa
The challenge
Trading with one’s neighbours can be an important driver of
value addition and job creation irrespective of a country’s
level of development. But across much of the developing
world – especially in Africa – levels of intraregional trade are
low compared to those in Europe and North America. In the
West African Economic and Monetary Union, a regional
economic community comprising Benin, Burkina Faso, Côte
d’Ivoire, Guinea-Bissau, Mali, Niger and Togo, trade among
the bloc’s members in 2014 accounted for a mere 13% of
their total international commerce.
This situation is not for want of regional policy initiatives in
favour of integration. Like other regional economic
communities within Africa, the WAEMU countries (often
referred to by their French acronym, UEMOA) have taken
important steps to establish a common external tariff and
customs code with the ultimate goal of establishing a single
regional market.
Despite significant progress, however, companies in the
region have struggled to trade more with each other across
borders. A major reason for this is high trading costs.
According to the World Bank Doing Business – Trading
Across Borders indicators, conducting trade transactions in
the WAEMU region is 15% more expensive than the world
average and almost four times costlier than in advanced
economies. Weak physical infrastructure, together with the
high expenses and long delays associated with cross-
border operations, discourages intraregional trade.
To address these challenges, WAEMU members in 2013
launched an ambitious trade facilitation programme with a
view to ease intraregional goods trade by simplifying and
harmonizing cross-border procedures and requirements.
After World Trade Organization (WTO) members adopted
the Trade Facilitation Agreement (TFA) in Bali in December
2013, the WAEMU secretariat and its member governments
decided to accelerate those efforts.
The response
Since early 2014, ITC has supported the WAEMU secretariat
and its member states’ pursuit of a regionally harmonized
and coordinated implementation of the TFA, with a view to
achieving economies of scale while establishing a more
predictable trading environment across the region. This has
involved working towards region-wide consensus among
public and private sector stakeholders from all WAEMU
member states on modalities for implementing the TFA.
Under the TFA, developing countries need to divide their
future obligations into three categories: Category A
commitments, which they already implement or will do so
immediately upon the agreement’s entry into force;
Category B commitments, for which they require additional
time; and Category C commitments, for which they require
both time and technical or financial assistance.
While most governments will implement the TFA at the
national level, ITC worked with WAEMU on an alternative
path: implementing selected Category B and Category C
measures region-wide, backed by a coordinated effort to
raise the technical and financial assistance WAEMU
members require.
Even for individual governments, categorizing TFA
obligations and quantifying technical assistance needs is
not straightforward as many developing countries have
sought and received external technical assistance for the
process. For the WAEMU bloc, ITC developed a conceptual
framework to help the secretariat and member states
identify measures suitable for a coordinated approach.
TFA obligations will be implemented regionally if they meet
the following criteria: one, a majority of WAEMU countries
place them in categories B or C; two, implementation would
require the regional legal framework to be amended; three,
they support the ‘corridor’ framework for regional integration;
and four, if money and resources could be saved by
implementing regionally instead of at the national level.
1
ANNUAL REPORT 2016 31
Starting in June 2014, ITC supported the WAEMU secretariat
to assess members’ TFA compliance, identifying gaps as well
as best practices. They then assessed common technical
and financial needs for TFA implementation in the region,
developing detailed project proposals for the implementation
of Category C measures in six of the bloc’s eight countries.
Region-wide implementation is not appropriate for all TFA
measures, so ITC proposed a four-tiered scheme for the
degree of cooperation on each obligation. The most basic
tier, regional cooperation, involves information sharing
across the WAEMU. The next level, regional harmonization,
would include the development of WAEMU-wide guidelines
leaving individual countries to determine when and in what
order to implement measures. Regional coordination,
the third level, would give the WAEMU secretariat region-
wide oversight to ensure synchronous implementation.
Only for the top tier would there be full regional
implementation, with the WAEMU secretariat directly
responsible for implementing measures on behalf of
member governments.
The results
WAEMU members have reached consensus both on the
principle of regional TFA implementation and on a set of
measures to implement in a harmonized manner. At a March
2016 regional event organized by ITC in Dakar, public- and
private-sector stakeholders from all WAEMU countries agreed
on nine TFA measures for coordinated implementation. These
include the TFA rules on publishing border procedures on the
internet so that businesses can easily find them, establishing
enquiry points for traders and ensuring border agency
coordination. Other measures selected include the TFA’s
rules for how customs authorities manage risks related to
goods transit and procedures for determining ‘authorized
economic operators’ who qualify for speedier border clearance.
Following the regional workshop, the WAEMU adopted a
series of recommendations including one to establish, with
ITC support, a regional trade facilitation committee – a
region-wide analogue of the national committees required
under the TFA – to coordinate and oversee the implementation
of the chosen measures.
The future
ITC will work to support the creation of national and regional
trade facilitation committees, governance structures that will
facilitate the implementation of the TFA at both levels. In
particular, it will seek to ensure adequate private-sector
participation on those committees so that the problems
businesses encounter on the ground factor into policy
reforms. ITC will also build a strong network of trade
facilitation experts within the region to ensure sustained
support for smooth border processes.
In addition, ITC will work with the WAEMU secretariat to
replicate across the bloc best practices identified during the
TFA compliance assessment. One example of such
practices is electronic certificates of origin; currently, some
members of the bloc still issue physical certificates for
traded merchandise.
WAEMU’s collective approach to TFA implementation could
ultimately be emulated by other regional economic communities.
32
1.– 3. ©shutterstock.com
Funders
Canada, China, Finland, Germany, Ireland, Sweden, India, Qatar, UNCTAD
32 INTERNATIONAL TRADE CENTRE
U N S D G I T C
Strengthening Trade and Investment
Support Institutions
The Strengthening Trade and Investment Support Institutions
(TISIs) Programme aims to improve the managerial and
operational performance of TISIs so that they can better
assist small and medium-sized enterprises (SMEs) to
internationalize. Its AIM for Results approach helps TISIs
assess, improve and measure their performance. Other
interventions work to foster dialogue among TISIs, to support
the creation of new organizations when needed and to
strengthen particular aspects of individual or groups of TISIs.
Key result
100% of TISIs surveyed would recommend
ITC support to peer institutions
90% of TISI participants said ITC e-learning
courses taught them new operational and
managerial skills they can apply in their
institutions
$280 million in estimated additional
exports resulting from ITC’s intensive support
to 18 TISIs
Highlights
In 2016, the programme provided case studies and
research, institutional assessments, capacity building,
networking and business generation support to more than
800 institutions. As a result of a September workshop in
Zanzibar, managers from 15 TISIs from East Africa,
Mauritius and Nepal reported improvements in member
management and revenue generation. The Zanzibar
National Chamber of Commerce, Industry and Agriculture
(ZNCCIA) reports that while only 55% of its mostly SME
members paid their dues in 2015, 74% did so in 2016. The
Computer Association of Nepal put the segmentation
practices taught during workshop into practice, allowing its
members to sign up online for different levels of
membership and support based on their needs.
In 2016, 10 TISIs were benchmarked according to the AIM
for Results methodology: Rwanda Development Board,
Gambia Investment and Export Promotion Agency, Maroc
Export, Canada Global Affairs, Mongolia National
Chamber of Commerce and Industry, ZimTrade, ASEPEX
(Agence sénégalaise de promotion des exportations,
Senegal), Ghana Export Promotion Authority, ITHRAA
(Public Authority for Investment Promotion and Export
Development, Oman), and Pacific Islands Trade  Invest.
For two of these – Maroc Export and ZimTrade – the
exercise was a re-benchmarking following their graduation
from the AIM for Results project. It demonstrated that both
agencies had registered significant performance
improvements, with scores moving from below average to
first in class for the region.
©shutterstock.com
Strengthening Trade and Investment
Support Institutions
ITC INTERVENTIONS: DOING MORE, BETTER
ANNUAL REPORT 2016 33
In 2016, ITC worked intensively with 18 TISI clients, leading
to operational and managerial efficiency gains estimated to
result in $280 million in additional exports. It substantively
engaged with a further 105 TISIs, helping them remedy
specific weaknesses such as business-to-business (B2B)
capacity and other business generation activities. ITC also
reached additional clients through e-learning modules,
webinars, the tisibenchmarking.org platform and an
associated newsletter.
Feedback from clients demonstrates a high level of
satisfaction with ITC’s TISI performance improvement
support as 100% of surveyed beneficiaries said they would
recommend ITC services to other organizations.
In November ITC co-hosted, with Maroc Export, the 11th
Trade Promotion Organization Network World Conference
and Awards (WTPO) in Marrakesh, Morocco. More than 200
policymakers, business leaders and representatives from
over 80 trade and investment promotion organizations from
around the world attended the gathering.
1. Designing a performance roadmap with Mongolia’s National Chamber of Commerce and Industry 2. Workshop participants explore how to multiply
their TISIs’ impact, Zanzibar
21
2016 Funders
Core funders
Canada, China, Finland, Germany, India, Ireland,
Sweden
Project-specific funders
Caribbean Development Bank (CDB), One UN,
Saint Lucia
18
105
171
550+
Intensive
Multi-year engagement following
the AIM methodology
Substantive
Workshops, due diligence,
advisory support, etc.
Technical
Webinars, e-learning, conferences, self-service
benchmarking, technical publications
Light Touch
engages a large audience through newsletters,
media, publications, blogs, speaking opportunities
FIGURE 2 TISI clients approach and key outputs in 2016
34 INTERNATIONAL TRADE CENTRE
CASE STUDY
Quantifying trade and investment
support institutions’ impact on
trade performance and GDP
The challenge
Trade and investment support institutions (TISIs) such as
chambers of commerce, business associations and export
promotion agencies play a critical role in enabling
businesses to access the information and networks they
need in order to succeed in international markets. For
smaller companies, especially in developing countries,
building expansive in-house capacity on trade-related
matters is unfeasible, making TISIs that much more
important. Nevertheless, TISIs around the world face
increasing demands from their stakeholders, especially
cash-strapped governments, to demonstrate that they are
providing value for money.
For the kinds of work TISIs do, precisely quantifying the
effects of their support to business clients is a challenge,
exacerbated by the difficulty of attributing each of the
different services they provide to particular impacts in terms
of increased trade and investment.
In addition to complicating their efforts to justify their
stakeholders’ investments and fees, these attribution issues
are part of a more fundamental challenge for TISIs: the
ability to understand the impact their various services
generate is a prerequisite for improving resource allocation
and shaping their service portfolios. Recognizing these
challenges, the network of European Trade Promotion
Organizations (ETPO) asked ITC to coordinate an impact
study to help them demonstrate the value they deliver.
ITC was well placed to answer the call, having for years
worked with TISIs in developing and transition economies to
support them in assessing, improving, and measuring their
effectiveness and resource efficiency. The three-step
process is dubbed ‘AIM for Results’.
The response
ITC invited a team of economists from the University of
Geneva to conduct the study. The study team used data
from three separate trade promotion organization (TPO)
surveys, two conducted by the World Bank in 2005 and
2010 and a 2014 survey conducted by ITC in partnership with
members of the ETPO network. In total, the database covered
94 countries with a special focus on 14 European TPOs.
The team developed an econometric methodology to
compare different TPOs and measure the impact of
changes in export promotion budgets on exports and GDP
per capita. It also identified the TPO characteristics –
whether governance, activities, funding level or funding
source – that lead to the highest returns.
In partnership with
INVESTING IN
TRADE PROMOTION
GENERATES REVENUE
1
of ADDITIONAL EXPORTS
spent on generates
$1
$87
EXPORT
PROMOTION
INCREASE IN GDP
$384

additional
ANNUAL REPORT 2016 35
The results
The resulting report, Investing in Trade Promotion Generates
Revenue, provided powerful evidence about how funding for
TPOs can increase exports and GDP.
The study estimated that each additional dollar spent on
helping companies to develop and improve their exports
can generate $87 worth of additional exports and a $384
boost to GDP. It broke new ground in academic literature on
the topic by showing that export promotion can have
positive spinoffs in terms of higher productivity, even in
non-exporting sectors.
In addition, the study showed that the managerial and
operational practices of TPOs matter for countries’ exports
as well as their broader economic performance. For
instance, practices such as having private-sector
representation on TPO boards; charging fees for services;
concentrating on a limited number of sectors and target
markets; and focusing on established exporters tend to be
associated with higher returns both in terms of exports and
GDP. The results also showed that investing in country
branding and small and medium-sized enterprises (SMEs)
can help drive more rapid GDP growth.
Walter Koren, chief executive officer of Advantage Austria,
the country’s trade promotion agency, said the study
‘supports and strengthens our strong belief that trade
promotion organizations provide a very high return on
investment, help to develop a national economy and do
contribute significantly to GDP growth.’ Maroc Export,
Morocco’s trade promotion agency, has asked ITC to
conduct a similar study looking at its overall impact on
Morocco’s exports as well as at how different export
promotion programmes affect export results.
The future
The Investing in Trade Promotion Generates Revenue report
will be used as a reference to encourage further research.
ITC is committed to carrying out similar impact studies in
other regions and to working with independent research
organizations to develop and apply rigorous methodologies
to measure the value created by trade and investment
promotion organizations. The results of those studies will
shed light on policies and practices that agencies could put
in place to maximize their impact.
By continuing to collaborate with the research community
on impact measurement, ITC aims to enhance the impact of
its work to strengthen trade and investment promotion
organizations. This in turn bolsters the extent to which these
critical TISIs are able to contribute to SME trade success,
and through it to broad-based growth and job creation.
1. Investing in Trade Promotion Generates Revenue report 2.3. Workshop on improving performance measurement, Costa Rica
Funders
Finland, Germany
2 3
36 INTERNATIONAL TRADE CENTRE
CASE STUDY
Bolstering Zimbabwe’s
infrastructure for standards
compliance and certification
The challenge
The ability to meet standards and technical regulations in
value chains and target markets has become a critical
determinant of whether businesses can succeed in
international trade.
However, for the vast majority of companies, especially
small and medium-sized enterprises (SMEs), compliance
and conformity certification cannot happen in isolation. A
well-functioning ecosystem of institutions and technical
infrastructure is vital for companies to seize the international
market opportunities presented by standards compliance.
This ecosystem ranges from national standards bodies,
which develop and promote standards; to testing and
inspection laboratories that verify whether products are
indeed compliant; certification bodies; and an array of
technical regulatory agencies. The work of these bodies is
critical for supporting enterprises to apply relevant
standards, meet export market regulations and prove to
trading partners that their products comply.
In many developing countries, however, quality-related
technical institutions are often limited by insufficient
resources, know-how and equipment. Testing facilities are
inadequate and conformity-assessment bodies are
frequently unrecognized in international markets. This
imposes high costs and burdensome, time-consuming
procedures on businesses that wish to obtain certification.
This in turn hampers trade and limits its potential
contribution to growth and socioeconomic development.
Zimbabwe is one such country. It faces multiple obstacles to
realizing its goal of expanding international trade and
making optimal use of opportunities afforded by regional
integration initiatives and the interim Economic Partnership
Agreement with the European Union. One of these is the
limited capacity of the country’s quality-related support
institutions. Without inspection, testing and certification
services that are accepted in export markets, whether within
the region or further afield, exporters are unable to
demonstrate compliance with relevant standards and
technical regulations, with the result that for them market-
opening agreements exist largely on paper.
Another hindrance for would-be exporters is that Zimbabwe’s
regulatory authorities often lack the technical capacity to
develop and implement technical regulations and standards
in line with the World Trade Organization (WTO) Agreements
on Sanitary and Phytosanitary Measures (SPS) and Technical
Barriers to Trade (TBT). The resulting misalignment with
regional and international standards also curbs Zimbabwean
companies’ ability to access foreign markets.
The response
ITC has worked to enhance the capacities of Zimbabwe’s
quality infrastructure, from its national standards body, the
Standards Association of Zimbabwe (SAZ), to the
laboratories that test and certify its export products,
particularly agricultural goods.
Trainers within Zimbabwean government departments for
research, agriculture, health and biotechnology were
equipped to educate SMEs about standards and complying
with European Union import requirements, in particular
European Commission directives setting out maximum safe
limits for residual levels of pesticide and veterinary
antibiotics in food products. In addition, officials from the
relevant ministries received training on WTO rules for health
and safety standards and technical regulations to equip
them to better help SMEs access foreign markets.
ITC worked with the SAZ to improve its certification schemes
for key international management standards. These
schemes certify entire companies as having world-class
management processes, whether for their quality
management system (ISO 9001), environmental
management practice (ISO 14001), or workplace health and
safety (OHSAS 18001). Having well-regarded management
system certificates serves as a credible signal that
1
ANNUAL REPORT 2016 37
companies can deliver high-quality goods and services and
improves their standing in the eyes of potential buyers at
home and abroad.
In addition, ITC trained testing and certification laboratories
to meet an international standard that recognizes their
competence to conduct tests and measurements for the
purposes of accreditation (ISO 17025). When laboratories
have this accreditation, it increases the acceptance of
certificates they issue for Zimbabwean products in export
markets. ITC also supported the acquisition of new testing
equipment by the SAZ’s main testing facility.
The results
Since it started working with ITC, the SAZ has been able to
ramp up the pace of certification. In 2016 it certified 125
companies to ISO 9001 quality management standards, 21
to ISO 14001 environmental management standards and 13
to OHSAS 18001 occupational health and safety
management standards. Ten firms were certified to HACCP/
ISO 22000, an international standard that builds on Hazard
Analysis and Critical Control Points (HACCP), a widely used
process for safe food production that is a prerequisite for
entering several major markets. The SAZ’s laboratories have
doubled their sample testing capacity, thus sharply
increasing the number of products and companies that can
receive certification every month.
In addition, SAZ-affiliated laboratories have expanded the
range of tests they can conduct, allowing them to meet
client needs they were previously unequipped to serve.
Their main laboratory now houses analytical instruments for
gas chromatography mass spectrometry and high
performance liquid chromatography. This makes it possible
to separate and identify the different components of a
sample and thus to detect dangerous fungal toxins and
measure the detailed nutritional content and residual
antibiotic or pesticide levels in potential food exports.
SAZ laboratories are already recognized by the Southern
African Development Community’s region-wide
accreditation system as competent to carry out chemical
tests on water in accordance with ISO 17025. This is poised
to expand to include mycotoxins, poisonous chemical
products produced by fungi that can be present in food
crops. The SAZ’s increased testing capacity will help
Zimbabwean food products become more competitive
within and beyond the country’s borders.
Finally, the project helped the SAZ achieve operational
efficiencies through the use of software to track information
related to standards.
The future
ITC will build on these results in partnership with institutions
like the SAZ and the Ministry of Commerce and Industry with
the goal of strengthening Zimbabwe’s quality infrastructure
and in turn expanding and diversifying the country’s export base.
An initial priority will be to reinforce the capacities of the
inspection agencies and four testing laboratories related to
plant and veterinary health; biotechnology; and food and
drug safety.
Funder
European Union
1. ©shutterstock.com 2.3. Standards Association of Zimbabwe laboratory after refurbishment 4. Fruit and vegetable market, Zimbabwe
2 3 4
38 INTERNATIONAL TRADE CENTRE
U N S D G I T
Connecting to
International Value Chains
Value Added to Trade
The Value Added to Trade Programme focuses on enhancing
the ability of small and medium-sized enterprises (SMEs) to
meet market requirements and integrate into local, regional
and global value chains. It works to make them more
competitive by improving sector and enterprise-level capabilities,
strengthening the ecosystems in which SMEs operate at each
step of the value chain and building public-private dialogue
platforms for wide-scale transformational change.
Key Results
Targeted sector development projects created
1,200 jobs
Over $20 million worth of additional
exports generated
Over 560 companies benefited from
ITC technical assistance
Highlights
During 2016, ITC worked both to transform trade capacity
across entire economic sectors and to upgrade individual
aspects of value addition.
A single-funder portfolio of projects operating in
Bangladesh, Kenya and Uganda to upgrade capabilities
and exports in sectors ranging from information technology
(IT) services to avocados has increased exports by an
estimated $20 million and created 1,254 new full and part-
time jobs. Firms’ exports grew by an average of 71.4%; they
broke into 33 new export markets and struck deals with 165
new clients. The Kenyan avocado industry (see case study)
and Bangladesh’s IT and IT-enabled services sector
registered some of the best performances.
In the Caribbean region, ITC worked closely with coconut
producers, agro-processors, buyers and supporting
institutions to lay the groundwork for boosting productive
capacity and efficiency, product quality and value addition
across the sector (see ITC Innovates story).
Better product packaging can be critical to a company’s
efforts to move up the value chain. In the United Republic
of Tanzania, ITC worked with the country’s Small Industries
Development Organization to invest $250,000 in
establishing a multi-purpose packaging facility. This will
allow local food and beverage sector SMEs to purchase
world-class packaging material up to 40% more cheaply
than they could when their low order sizes meant that
conventional packagers demanded unaffordable rates.
Improved quality and branding are also critical to add and
capture value, both in goods and services. In Myanmar, ITC
assisted public- and private-sector stakeholders to
encourage economically inclusive and culturally respectful
tourism in the country’s Kayah state (see case study). In
Nepal, ITC assisted the pashmina sector to develop its first
official branding guidelines and register the Chyangra
Pashmina trademark. In Sri Lanka, ITC concluded a project
to improve fruit and vegetable quality that has seen
European Union health and safety alerts related to food
imports from Sri Lanka decrease by about 40% since 2013.
In Zambia, ITC brought in international designers to help
small-scale honey producers develop attractive labels,
©shutterstock.com
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
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The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD
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The International Trade Centre (ITC) Annual Report 2016-TRADE IMPACT FOR GOOD

  • 1. TRADE IMPACT FOR GOOD Annual Report 2016 U N S D G s I T C
  • 2. II INTERNATIONAL TRADE CENTRE ©shutterstock.com ITC is the only international agency fully dedicated to the development of small and medium-sized enterprises. Working with partners to strengthen the competitiveness of SME exporters, we help to build vibrant, sustainable export sectors that provide entrepreneurial opportunities, particularly for women, young people and poor communities.
  • 3. ANNUAL REPORT 2016 1 Trade impact for good
  • 4. 2 INTERNATIONAL TRADE CENTRE Contents Foreword 4 The Global Goals are ITC’s goals 6 The global context 8 ITC INTERVENTIONS: DOING MORE, BETTER 12 Providing Trade and Market Intelligence 16 Building a Conducive Business Environment 24 Strengthening Trade and Investment Support Institutions 32 Connecting to International Value Chains 38 Promoting and Mainstreaming Inclusive and Green Trade 46 Supporting Regional Economic Integration and South-South links 58 CORPORATE RESULTS 66 Corporate governance 68 Evaluation and performance 70 Financial overview 72 Human resource management 75 Communication and outreach 77 Major ITC events 79 Partnerships 81 APPENDICES 92 APPENDIX I: ITC focus areas and programmes 94 APPENDIX II: ITC technical cooperation by region and focus area 96 APPENDIX III: ITC country and regional projects and programmes by country 103 APPENDIX IV: ITC needs assessment and project design in 2016 by region 110 APPENDIX V: Profile of ITC staff 112 APPENDIX VI: Distribution of assignments by nationality and gender of experts, 2016 113 APPENDIX VII: Schedule of voluntary contributions to the ITC Trust Fund 117
  • 5. ANNUAL REPORT 2016 3 Building peace and sustainable livelihoods through inclusive tourism in Myanmar Market power and value addition deliver income gains for Zambian cotton farmers 40 60 Increased sales for exporters and higher prices for farmers in Kenya’s avocado sector Supporting international sourcing and sales for Tunisia’s textiles and clothing sector 42 62 Alliances for a more competitive Caribbean coconut industry Facilitating China-Africa trade and investment for value addition and job creation 44 64 In partnership with INVESTING IN TRADE PROMOTION GENERATES REVENUE Quantifying trade and investment support institutions’ impact on trade performance and GDP Bolstering Zimbabwe’s infrastructure for standards compliance and certification 34 36 ePing: Cooperating to give SMEs real-time information about non-tariff measures Case studies Equipping SMEs with the information they need to access markets 20 22 Tackling non-tariff measures at the regional level to improve the business climate for trade PROVIDING TRADE AND MARKET INTELLIGENCE BUILDING A CONDUCIVE BUSINESS ENVIRONMENT STRENGTHENING TRADE AND INVESTMENT SUPPORT INSTITUTIONS CONNECTING TO INTERNATIONAL VALUE CHAINS SUPPORTING REGIONAL ECONOMIC INTEGRATION AND SOUTH-SOUTH LINKS SheTrades: Empowering women entrepreneurs in international markets Empowering hat-makers in Haiti through ethical fashion Using trade to create jobs and build skills for refugees 51 54 56 PROMOTING AND MAINSTREAMING INCLUSIVE AND GREEN TRADE Leveraging WTO commitments to boost intraregional trade in West Africa 28 30
  • 6. 4 INTERNATIONAL TRADE CENTRE Foreword For the trade and development community, 2016 merited that over-quoted Dickensian phrase: ‘It was the best of times, it was the worst of times.’ In the year after the world’s governments adopted the Global Goals for Sustainable Development, international trend lines for poverty, hunger, and child mortality continued their welcome journey downward. The World Trade Organization’s Trade Facilitation Agreement progressed steadily towards entry into force as dozens of countries ratified the accord and started to implement measures to cut trading costs and border delays. In many major economies it was the year in which solar or wind power first became cheaper than electricity generated from fossil fuels, a critical tipping point on the road to curbing climate change in line with the Paris Agreement. And yet, 2016 saw the open global economy – a key driver of all of these positive trends – come under sustained political attack on a scale unseen in decades. Opposition to open markets drew support from substantial sections of the electorate in several developed economies. Much of this backlash was the product of years of inadequate domestic policies to ensure that the gains from globalization were widely shared. Yet the fact is that if protectionist rhetoric is translated into reality, possibilities for trade-led growth will diminish for developing countries while limiting the gains from specialization and productivity everywhere. Amid today’s tensions, one thing is clear: inclusive growth, and making trade work for the 99%, is more important than ever, in developed economies and developing ones alike. The International Trade Centre (ITC) remains committed to these objectives. Bringing countries and communities from the margins to the mainstream of the world economy has been the goal for which we have worked since our founding in 1964. Empowering small and medium-sized enterprises (SMEs) to connect to international value chains is essential to translate trade into equitable increases in income and life opportunities, since they employ the vast majority of the workforce. Especially in least developed countries, small, vulnerable economies and fragile states, inclusive trade will be critical to achieving the broad-based growth and job creation needed to achieve the Global Goals by 2030. In the current political environment, ITC’s core goal – to enable businesses to make the best possible use of existing levels of market opening – is especially relevant. This report sums up how ITC worked to make trade happen in 2016, delivering close to $50 million of extra-budgetary expenditures on technical assistance, capacity support and innovative analysis despite a complicated funding context. Working together with its partners in the public and private sectors, ITC leveraged each dollar received into $14 in new trade for companies that use ITC tools or are directly involved in ITC projects. On the analytical front, the second edition of our annual flagship report, the SME Competitiveness Outlook, shed light on how non-tariff measures weigh on the exports of smaller firms and yielded insights about how governments could most effectively help SMEs overcome challenges arising from standards and regulations as well as where the business community could invest for further growth. In terms of implementation, a dozen case studies from across the six focus areas of our work serve to highlight ITC’s solutions-oriented approaches, be it partnering with governments and regional institutions to improve the business climate for trade or empowering women entrepreneurs to grow their companies and connect to international markets. Three additional ‘ITC Innovates’ stories describe new initiatives that we anticipate will deliver considerable results in the future. One of these, which seeks to harness the power of mobile internet technology to 4
  • 7. ANNUAL REPORT 2016 5 create income opportunities for refugees and asylum- seekers, addresses one of the biggest humanitarian challenges of our time. Like many of our more novel recent approaches to solving longstanding problems, the refugee skills initiative emerged from ITC’s Innovation Lab, which has been living up to its objective of fostering a culture of innovation across the organization. One particular cause for pride in 2016 was the emergence of visible dividends and multipliers from earlier ITC initiatives. For example, SheTrades was launched in 2015; by the end of last year, partner organizations from Nigeria to Finland to Sri Lanka had signed on to its call for action, pledging to connect 600,000 women entrepreneurs to markets – already more than halfway to the original goal of bringing 1 million women to market by 2020. At the institutional level, ITC is committed to constant self- improvement in order to better serve our clients. This is why, over the past two years, we have been shifting to a programme-based approach to conceptualizing and organizing our interventions. The new approach promises increased managerial effectiveness as well as a more cohesive project portfolio in line with the Global Goals. To this end, ITC’s internal structures have been reorganized to better align institutional reporting lines with our core areas of work with the goal of further enhancing operational efficiency as we move to implement our ambitious project pipeline. We also continued to make progress towards our target of achieving gender parity at all professional levels. Finally, because delivering for our clients requires resources, we made major efforts in 2016 to increase and diversify our funding sources. In the face of unexpected reductions in voluntary contributions, we continued to deliver trade impact for good, and drove fundraising efforts that promise to bear fruit in 2017. We hope that within these pages you will recognize the success that we have achieved on the ground, and that you will see continued value in investing in ITC as your partner for inclusive trade and development. Arancha González Executive Director 1. E-commerce entrepreneurs at the Joint Advisory Group 2016 2. Launch of the SME Competitiveness Outlook 2016 3. Launch of the SheTrades initiative, Nigeria 4. World Export Development Forum 2016, Colombo 5. Award-winners at TPO Network World Conference and Awards 2016, Marrakesh 6. Trade for Sustainable Development Forum 2016, Geneva 2 3 5 6
  • 8. 6 INTERNATIONAL TRADE CENTRE The Global Goals are ITC’s goals The Global Goals for Sustainable Development represent a universal, global development agenda for all United Nations member states and development actors until 2030. They consist of an integrated, interlinked set of 17 goals supported by 169 targets in economic, social and environmental development dimensions. ITC directly supports 10 Global Goals. ITC contributes to the Global Goals via its support to small and medium-sized entreprise (SME) international competitiveness for inclusive and sustainable growth through value addition, trade, investment and global partnerships. It has systems in place to monitor results and assists the global community in tracking advances towards achieving the Global Goals. A code of conduct guides ITC interventions. SME international competitiveness Small and medium-sized enterprises Trade and investment support institutions Policymakers TRADE-RELATEDNEEDS FOCUS AREAS TRADE Providing trade and market intelligence Building a conducive business environment Strengthening trade and investment support institutions Connecting to international value chains Promoting and mainstreaming inclusive and green trade Supporting regional economic integration and South-South links 25% 19% 17% 30%9% How ITC projects link to individual SDGs
  • 9. ANNUAL REPORT 2016 7 GOAL 1 ƒƒ Reduce proportion of men, women and children of all ages living in poverty. ƒƒ Create sound policy frameworks based on pro-poor and gender-sensitive development strategies. GOAL 2 ƒƒ Double productivity and incomes of small-scale food producers, in particular women. ƒƒ Provide access to knowledge, markets and opportunities for value addition. ƒƒ Ensure sustainable food production systems. GOAL 4 ƒƒ Ensure youth and adults have relevant skills for employment, decent jobs and entrepreneurship. GOAL 5 ƒƒ Ensure women’s full and effective participation in business and trade and equal opportunities. ƒƒ Support women’s equal rights to economic resources. ƒƒ Enhance use of enabling technology to promote the empowerment of women. GOAL 8 ƒƒ Achieve higher levels of economic productivity through diversification, technological upgrading and innovation. ƒƒ Promote policies that support productive activities, decent job creation, entrepreneurship, creativity and innovation. ƒƒ Encourage formalization and growth of micro, small and medium-sized enterprises. ƒƒ Implement policies to promote sustainable tourism that creates jobs and promotes local culture and products. ƒƒ Increase Aid for Trade support. GOAL 9 ƒƒ Ensure a conducive policy environment for industrial diversification and value addition. ƒƒ Increase access of SMEs to financial services and integration into value chains and markets. GOAL 10 ƒƒ Achieve income growth of the bottom 40%. ƒƒ Implement special and differential treatment for developing countries, in particular least developed countries (LDCs), in accordance with World Trade Organization (WTO) agreements. GOAL 12 ƒƒ Achieve sustainable management and efficient use of natural resources. ƒƒ Support companies in adopting sustainable practices and integrating sustainability information into their reporting cycles. GOAL 16 ƒƒ Support effective, accountable and transparent institutions at all levels. ƒƒ Ensure responsive, inclusive, participatory and representative decision-making. ƒƒ Ensure participation of developing countries in the institutions of global governance. GOAL 17 ƒƒ Ensure a universal, rules-based, open, non-discriminatory and equitable multilateral trading system under the WTO. ƒƒ Support significantly increased exports of developing countries, doubling the LDCs’ share of global exports by 2020. ƒƒ Realize timely implementation of duty-free and quota-free market access on a lasting basis for all LDCs.
  • 10. 8 INTERNATIONAL TRADE CENTRE U N S D G s I T C World trade growth remains subdued World trade growth in 2016 remained sluggish. Global exports of goods and services rose 2.3%, well below the 25-year average of 5.6%, and lower even than the 2.9% rate registered the year before (all figures in volume terms). Exports of commercial services continued to outstrip merchandise trade growth, highlighting the increasingly important role services are playing in supporting economic activity. Global exports of goods and services are projected to increase by 3.5% in 2017, though similar estimates have in recent years been revised downwards in light of disappointing growth in overall economic activity. Global output growth in 2016 remained moderate at 3.1%, down 0.3 percentage points from 2015. Developed economies saw merchandise export growth fall by more than half in 2016 to 1.0% from 2.2% in 2015. This was due to anaemic growth in the first quarter, partly caused by a sharp drop in import demand from developing countries. Developing countries recovered from a first-quarter decline to post annual merchandise export growth of 1.8%. Lower-than-expected GDP growth in major developing countries such as China and Brazil, coupled with weak growth in import demand in developed countries, were major factors behind the slow trade growth. Alongside these cyclical factors, the relationship between trade growth and GDP growth has continued to weaken. Since the 1980s, trade has typically grown 1.5 times faster than output, a ratio that climbed to about 2-to-1 during the 1990s as the disaggregation of manufacturing production across countries and regions picked up speed. Since the financial crisis of 2008–09, however, world trade and GDP have grown at about the same rate, and 2016 was the first time in 15 years that trade grew more slowly than GDP. Economists have suggested that part of the convergence is structural: the result of shortening value chains as manufacturers can increasingly source components at home instead of importing them. Furthermore, prospects that future trade growth will be supported by major new trade initiatives have dimmed, as strident anti-trade rhetoric weighs on policy in some leading developed economies. Even long-established trade agreements and customs unions may face adverse pressures in the years to come. In this political context, enabling developing countries to make more effective use of the international market access they enjoy is one key to using trade as an engine for development. Standards and regulations play a critical role here. Making trade a force for good: The role of standards and regulations Much of the criticism of trade stems from a misguided belief that economic globalization is a zero-sum game. However, it is clear that how the gains from trade are distributed among and within countries matters, and that leaders in government and business in many countries have neglected these distributional consequences. Policymakers must now tackle these issues head-on. While much of the necessary response falls within the realm of domestic social policy, there is considerable scope to make trade more of a force for good, one that enhances economic wellbeing while protecting consumers; a force that is economically empowering, socially responsible and environmentally sustainable. Standards and regulations play a key role both in making trade happen in practice and in making it a force for good. Without common standards, nuts made in one factory would almost certainly fail to fit into bolts made in another ©shutterstock.com The global context
  • 11. ANNUAL REPORT 2016 9 and one computer would be unable to communicate with another. Governments adopt regulations to protect consumer safety and animal and plant health, so that children’s car seats do not collapse under pressure and to reduce the risk that imported fruit might unwittingly carry diseases or pests that would decimate a country’s native plant species. Businesses introduce standards into their value chains to ensure product quality and protect their brand reputations. Increasingly, companies and non-profit organizations alike are developing non-mandatory standards linked to a wide and growing array of social and environmental objectives. Such ‘voluntary sustainability standards’ originated primarily in the industrialized world, but the trend is changing, with new measures frequently headquartered in developing countries such as Brazil, Colombia, India, Kenya and South Africa. The 2016 edition of ITC’s annual flagship research report, the SME Competitiveness Outlook, focused on the role standards and regulations play in promoting these different varieties of what ITC terms ‘good trade.’ Titled Meeting the Standard for Trade, it placed special emphasis on examining how SMEs seeking to trade across borders are affected – positively and negatively – by these standards and regulations. Because SMEs account for the majority of firms and jobs in most countries, their ability to become more productive and trade successfully tends to translate into income gains for people in the poorer, more vulnerable segments of society – and is thus crucial if trade is to regain widespread public support as an engine of inclusive economic growth. SMEs that neither import nor export tend to be less productive and pay lower wages than firms that do either (or both). Complying with standards and regulations is increasingly a prerequisite for market entry. This can create commercial opportunities for SMEs: when a given requirement is associated with an international value chains, compliance can open the door to privileged access to buyers within that value chain. In such cases, standards and regulations can help facilitate SME access to international markets. Yet meeting standards and regulations generally implies costs for SMEs. These costs in turn depend to a significant extent on how the measures are designed, and on the quality and affordability of the local technical infrastructure for testing and certifying conformity with standards and regulations. When standards are designed with little thought for suppliers’ needs and technical institutions are weak, compliance costs can quickly become prohibitive, especially for smaller firms. Analysis in the SME Competitiveness Outlook 2016 showed that this regulatory burden hits small firms twice as hard as large firms: a 10% increase in the regulatory burden cuts export revenue for large firms by 1.6%, but by 3.2% for small firms. If small firms’ margins are narrower, the impact on profitability will be greater still. FIGURE 1 Global trade growth: Medium- and short-term trends Left Panel: (left axis) Index of world export volumes of goods and services where 2001=100. (right axis) Percentage change of year-on-year export volumes. Source: IMF World Economic Outlook, October 2016. Right panel: Quarter on quarter seasonally adjusted merchandise export growth volumes for developed and developing economies. Source: World Trade Organization. 0% -5% -10% -15% 5% 10% 15% 20% Growth ratesIndex of world export volumes (2001=100) Index (2001=100) 20162002 2004 2006 2008 2010 2012 20142001 2003 2005 2007 2009 2011 2013 2015 Developed countries Developing countries 0 25 50 75 100 125 150 175 200 225 20162002 2004 2006 2008 2010 2012 20142001 2003 2005 2007 2009 2011 2013 2015 S.A. export growth in volume terms (%) ‐3.0 ‐2.0 ‐1.0 0.0 1.0 2.0 3.0 4.0 2012 2013 2014 2015 2016 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Developed countries Developing countries Consumer protection Environmental sustainability Social responsibility
  • 12. 10 INTERNATIONAL TRADE CENTRE Encouraging good trade: An action plan The SME Competitiveness Outlook 2016 highlights five ways policymakers can ensure that standards and regulations work for and not against SMEs, in turn fostering trade that is socially inclusive and environmentally sustainable. 1. Facilitate access to information: Obtaining information on the plethora of mandatory and voluntary standards and regulations can be costly, especially for smaller firms. Trade and investment support institutions can help address this challenge by disseminating relevant information and directly responding to the needs of the businesses with which they interact. 2. Enable firms to comply with technical standards: For firms considering whether to implement a standard or regulation, the costs are tangible and immediate, while the benefits lie in the future and can be hard to estimate. Tools and training to help firms better understand these trade-offs can help firms make better decisions. Becoming part of a value chain can help suppliers overcome financial barriers, as some lead firms share the burden of certification and implementation costs. (Though an inability to comply with standards can keep SMEs out of such value chains in the first place.) ©shutterstock.com Export Potential and Diversification Assessment: Helping policymakers think strategically about trade ITC’s Export Potential and Diversification Assessment (EPDA) draws on trade, tariff, output and geographic data to evaluate countries’ potential to ramp up exports. For products already in a country’s export basket, it identifies new or underexploited markets; for diversification purposes, it identifies promising product lines and markets. In the case of Egypt, to take one example, the analysis reveals $1 billion worth of unrealized potential to export glazed ceramic tiles to developing countries. It identifies man-made carpets and pistachios as offering significant possibilities to diversify the country’s export basket. Understanding which products offer the highest export potential allows policymakers to focus finite resources and attention on reforms to sectors likely to yield the greatest benefits to the economy in terms of increased exports.
  • 13. ANNUAL REPORT 2016 11 3. Support technical infrastructure: For governments, especially in developing countries, building the technical infrastructure related to conformity assessment is complex and potentially costly. Standards and regulations are specific to certain sectors – a laboratory to test food additives is very different from a crash-testing institute for vehicles, or a financial regulatory institution – presenting difficult decisions about how to allocate finite resources. Countries would understandably want to align their investments in technical infrastructure with sectors likely to deliver the highest return in terms of increased exports. To help countries make these decisions strategically ITC has developed the Export Potential and Diversification Assessment, which, as the name suggests, is a tool to identify sectors and products with high export potential. 4. Strengthen governance at home: One of the most common causes of delays in administrative and compliance procedures for exports is a lack of coordination among organizations involved in trading process, such as conformity assessment bodies and border agencies. Rectifying this would help, as would clearly demarcating the roles and responsibilities of all institutions involved in national technical infrastructure. 5. Leverage international mechanisms: Certifying goods or services at home only facilitates trade if conformity assessment bodies in foreign markets recognize the certificate. Participation in mutual recognition agreements for certification, or in efforts to harmonize standards and regulation across borders, can be of enormous benefit to lowering such obstacles and is an area in which multilateral and regional fora can contribute greatly to facilitating trade. ©shutterstock.com 1.6% 2.6% 3.2% Increase in regulatory burden Decrease in export values Large firms Medium firms Small firms 10% Regulatory burdens hit small firms hardest
  • 16. 14 INTERNATIONAL TRADE CENTRE What ITC delivered in 2016 The figures below provide a snapshot of how ITC delivered on its mandate in 2016. In the United Nations planning and budgeting cycle, targets are set for two-year periods. The figures below show some of ITC’s key results for the first half of the 2016–2017 biennium. Some of the numbers relate to indicators for assessing ITC’s performance against the overarching goals defined in its Strategic Plan for 2015–17. Others reflect ITC’s overall performance in terms of spurring inclusive trade. Strengthened integration of the business sector into the global economy Improved international competitiveness of enterprises Empowering women in the global economy Improved performance of trade and investment support institutions (TISIs) for the benefit of enterprises 233000 additional users of trade intelligence have greater awareness of international trade as a result of ITC support (biennium target: 175 000) 170 TISIs indicated ITC support helped them improve operational and/or managerial performance (biennium target: 400) 6500additional enterprises were supported to improve their international competitiveness or to meet buyers with whom they subsequently transacted business (biennium target: 14 000) 22 000 participants in ITC training courses (biennium target: 20 000) 600 000 Signatories to the SheTrades initiative pledged to connect 600 000 women entrepreneurs to international markets by 2020 (2020 target: 1 million) 51% of the 6 500 additional enterprises referenced above were owned, operated and controlled by women. (biennium target: 40%)
  • 17. ANNUAL REPORT 2016 15 Key performance indicators The below indicators track ITC’s delivery of technical assistance and work to enhance effectiveness. Leveraging funding into trade ITC has estimated the value of international business transactions generated through its interventions in 2016. The projection is based on three components: feedback from users of ITC market intelligence tools; documented business leads and deals; and additional exports generated through the operational and managerial efficiency gains achieved by the 18 TISIs that worked closely with ITC. $85.4million $685 million ITC’s delivery across all budgets in estimated export and investment value resulting from ITC market intelligence, business connections and support to TISIs 85% of country-specific assistance went to priority countries (target: 70%) $201million in pipeline projects laying foundation for future growth (target: $175 million) $78 million 97% of clients $1$21 $1$14 XB funds raised for 2017 and beyond (target: $95 million) rated ITC services positively (target: 80%) Each dollar invested in ITC’s Business Development Fund catalyzed $21 in XB funding (target: $20) ITC leverages each dollar in XB funding into $14 of international export and investment transactions 2017
  • 18. 16 INTERNATIONAL TRADE CENTRE ©shutterstock.com Transparency in Trade The Transparency in Trade Programme aims to improve the trade and investment decisions of companies, notably small and medium-sized enterprises (SMEs), trade and investment support institutions (TISIs) and policymakers. In particular, it assists SMEs in better targeting their products towards the most promising markets and in diversifying and adding value to their products. ITC has developed a suite of online tools and databases to make global trade more transparent and facilitate access to new markets. Key results $300 million in trade transactions enabled by ITC market intelligence tools 600 000 registered users of ITC market analysis tools; 3 500 downloads of mobile app 2.8 million visits to Trade Map: 1 visit every 11 seconds – 28% increase over 2015 47new video tutorials on trade analysis; over 1 500 enrollments 1 331 downloads of 2016 SME Competitiveness Outlook following publication in October Highlights ITC in 2016 started building a database covering all existing and prospective trade agreements in the Asia-Pacific region. Accessible through the Market Access Map tool, the database will include tariff reduction schedules for 25 countries under different trade agreements. It will help businesses and policymakers make sense of the so-called ‘noodle bowl’ of overlapping trade agreements in the region and assist in trade-related decision-making. A demonstration version of ITC’s new Export Potential Map tool was launched in November at the World Trade Promotion Organization Network World Conference and Awards in Marrakesh, Morocco. More than 150 trade and investment promotion leaders from around the world expressed avid interest in using this new tool, which uses ITC’s Export Potential and Diversification Assessment methodology to spot sectors and markets with unused or underutilized export potential. With a user-friendly interface and innovative visualizations, the Export Potential Map translates rigorous analysis into practical information about trade opportunities. A comprehensive export potential assessment identified promising export sectors, both traditional and new, in Ethiopia, Kenya, Mozambique and Zambia. Complemented by interviews with stakeholders in each country, the analysis will inform the design and implementation of the Partnership for Investment and Growth in Africa (PIGA) project as it seeks to boost trade and investment ties between China and the four African countries. The SAI Platform, a sustainability initiative backed by more than 90 international food and beverage companies with combined annual turnover in the hundreds of billions of dollars, has based its new Farm Sustainability Assessment ©shutterstock.com Providing trade and market intelligence
  • 19. ITC INTERVENTIONS: DOING MORE, BETTER ANNUAL REPORT 2016 17 online tool on ITC’s Standards Map, which contains information on more than 230 voluntary standards. The new tool will help SAI Platform members meet their sustainable sourcing targets and provide their thousands of suppliers with information about complying with sustainability criteria and avoiding duplication in sustainability assessments. The second edition of ITC’s flagship research publication was launched in October. SME Competitiveness Outlook 2016: Meeting the Standard for Trade contains analysis and practical recommendations for policymakers, SME managers and standard-setters on how to enable SMEs to meet standards and regulations – often a prerequisite for participating in international value chains – in order to drive growth and job creation. ITC market intelligence tools are global public goods that continue to provide up-to-date trade information to businesses, researchers and journalists around the world. Based on ITC’s annual user survey, the tools helped generate around $300 million in trade transactions in 2016 (see case study). Non-Tariff Measures The Non-Tariff Measures (NTMs) Programme brings the concerns of SMEs about regulatory and procedural trade obstacles to the attention of policymakers and other stakeholders, enabling concrete, specific responses. It increases the transparency of NTMs through company-level data collection and dissemination and provides thought leadership through applied research and analysis, thus contributing to evidence-based policymaking and reduced trade costs. Key results NTM surveys in 13 developing countries 18 000 trade-related regulations for 90 countries documented in Market Access Map tool Highlights ITC’s NTM Surveys (www.ntmsurvey.org) and trade obstacles alert mechanisms in 2016 channelled views from more than 5,700 SMEs in 13 developing countries to decision-makers. The surveys and alerts provide evidence about trade obstacles that businesses encounter on the ground; related stakeholder consultations in Benin, Comoros, the Dominican Republic, Ecuador, Ethiopia, Jordan, Kyrgyzstan, Mali, Nepal, the Philippines, the Seychelles and Uganda, as well as at the regional level in West Africa, explored practical ways to remove these obstacles. ITC NTM analysis informed the work of a Philippines government technical committee on simplifying trade procedures as well as ITC-backed sector export strategies in Nepal. It has in some instances already led to tangible changes on the ground, exemplified by the partial removal of an export ban on scrap metals in Mauritius after businesses reported it to the country’s trade obstacles alert mechanism. In addition, a business survey across the 28 European Union (EU) member states shed light on the NTM-related barriers EU companies encounter when exporting to and sourcing from developing countries. Based on input from more than 8,000 EU firms – of which four out of every five 1. National roundtable on non-tariff measures, Uganda 2. ITC Market Access Map booth, Central Asian Trade Forum 2016, Kazakhstan 21 3
  • 20. ITC INTERVENTIONS: DOING MORE, BETTER 18 INTERNATIONAL TRADE CENTRE were SMEs – the survey yielded insights that in turn will serve as a benchmark for comparison for the challenges reported by businesses based in those developing countries. Transparency, research and analysis efforts continued in 2016. New ITC country publications for Thailand, Indonesia and Egypt brought the NTM series total to 28. By year’s end, information on more than 18,000 regulations on exports and imports applied by 90 countries was available online through the Market Access Map tool. For certain countries, such as Jordan and Bangladesh, this data was complemented by information on administrative procedures related to exporting and importing. In November, ITC, the World Trade Organization and the United Nations Department of Economic and Social Affairs jointly launched a new regulatory alert system, called ePing, that will notify users when countries announce changes to their health and safety standards or technical regulations for products of interest to them (see case study). The goal is to keep users informed about regulatory changes and to give businesses an opportunity to signal potential trade irritants to national authorities so they can be swiftly resolved. While ITC’s NTM survey work has thus far concentrated on trade in goods, it will soon extend to services after the finalization and testing in 2016 of a methodology to capture barriers experienced by operators in the information technology, transport and logistics and tourism sectors. Competitive Intelligence The ITC Competitive Intelligence Programme delivers training and advisory services and develops online solutions to strengthen the capacity of TISIs in developing economies to provide clients with the real-time customized intelligence they need to improve operational performance and compete more effectively on international markets. It also assists SMEs to define their information needs, identify opportunities and anticipate risks. Key results Trade information portal created in Zimbabwe Enabled TISIs in 3 African countries to make market data more accessible to clients Highlights In Zimbabwe, ITC set up a national Trade Information Portal (tradezimbabwe.com), drawing on inputs from a network of trade-related institutions. The portal provides the country’s business community with up-to-date news and intelligence on foreign markets and their requirements, covering issues ranging from customs procedures, export guidelines and trade agreements through to information about business opportunities and useful contacts. The portal functions as an online international showcase for Zimbabwean companies, goods, services and local business opportunities. In addition, tradezimbabwe.com hosts the online European Business Information Centre, an online service platform containing Europe-specific information services for manufacturers and exporters interested in European markets. The platform also serves to connect 1. Trade Investment Facilitation Mechanism meeting, Egypt 2. Roundtable on non-tariff measures, Nepal 1 2
  • 21. ANNUAL REPORT 2016 19 European entrepreneurs to Zimbabwean companies, products and opportunities. In Tunisia, ITC laid the groundwork for establishing a monitoring cell to provide business intelligence on trends, risks and opportunities in online trade. Once it comes online in early 2017, the service, which will operate through the country’s Centre de Promotion des Exportations (CEPEX), will enable better decision-making and expand access to markets for Tunisian SMEs that sell goods and services over the internet. In the Bahamas, ITC was chosen by the Caribbean Development Bank to build a trade information portal in coordination with the country’s Ministry of Financial Services and the Bahamian Chamber of Commerce. The portal will serve as a one-stop shop to meet the informational needs of local entrepreneurs seeking to internationalize their operations and should thus contribute to helping the country diversify away from its current overreliance on tourism and off-shore services. It will also be a bridge for foreign entrepreneurs to build links to Bahamian suppliers of goods and services. Finally, in Kenya, the United Republic of Tanzania, and Zambia, ITC accompanied a project on promoting intraregional trade with training for TISIs on how to collect and present market data for their clients. Kenya’s Export Promotion Council has deployed its new expertise to regularly circulate information on mango trade to stakeholders in the sector. The Zambia Development Agency in February created a competitive intelligence portal for its honey sector to help industry actors make better business decisions. 2016 Funders Core funders Canada, China, Finland, Germany, India, Ireland, Sweden Project-specific funders Caribbean Development Bank, Denmark, European Union, European Feed Manufacturers’ Federation (FEFAC), Germany, Humanist Institute for Cooperation with Developing Countries (HIVOS), Islamic Centre for Development of Trade, Japan, PepsiCo, Russian Federation, Sime Darby, Switzerland, Stichting IDH Sustainable Trade Initiative, Sustainable Agriculture Initiative (SAI) Platform, United Kingdom, United States, UN Development Programme (UNDP), UN Environment Programme (UNEP) SME Trade Academy in Libya: Developing entrepreneurship in a fragile state In the second half of 2016 ITC partnered with Expertise France, the French international technical cooperation agency, to develop and launch a pilot Arabic-language course for young Libyan entrepreneurs. The youth-oriented course provides an understanding of entrepreneurship as a way to overcome difficult economic conditions. In light of the country’s political instability, the six-week course was rolled out in collaboration with municipalities and seven universities in cities such as Tripoli, Misrata and Benghazi. The local partners complemented the online courses with in-person information and coaching. Despite electricity shortages and repeated bouts of insecurity, 1,074 young people, over a quarter of them women, self-enrolled in the course, of whom 303 successfully completed it and received a digital certificate. Course participants came from 40 locations all over Libya (see map). The goal of this pilot project was to confirm that e-learning, backed by local coaching, can be an effective approach for capacity building in Libya. Based on the positive initial results, Expertise France has announced further funding while including the project in a larger European Union- funded programme for sustainable economic development in Libya. Thanks to this support, Expertise France and ITC will in 2017 and 2018 expand the SME Trade Academy’s Libya-focused offerings to a 100-hour curriculum accompanied by online tools for entrepreneurs starting businesses in Libya, and in doing so contribute to the country’s economic recovery. Zawiya Tripoli Misrata Sirte Nalut Gharyan Bani Walid Hun Ghat Sabha Kufra Jalu Tobruk Benghazi Ajdabiya 300 100 50 10 1
  • 22. 20 INTERNATIONAL TRADE CENTRE 1 CASE STUDY ePing: Cooperating to give SMEs real-time information about non-tariff measures The challenge For companies around the world, meeting technical regulations and product standards is an increasingly important part of doing business, whether internationally or at home. With manufacturing production increasingly fragmented across countries and regions, standards play a critical role in insuring that components made in one factory fit where they belong in another. Meanwhile, consumer expectations for product safety, quality and sustainability have steadily increased. ITC’s Market Access Map tool now counts more than 13,000 regulations and conformity assessment procedures that come under World Trade Organization (WTO) rules for Sanitary and Phytosanitary (SPS) measures and Technical Barriers to Trade (TBT). The growing number of such non-tariff measures (NTMs) makes trading more complex, in particular for small and medium-sized enterprises (SMEs) in developing countries. These firms often struggle to make sense of the plethora of health and safety requirements, product regulations, testing and certification procedures and other such measures necessary for market entry. ITC business surveys conducted in more than 60 countries reveal that over 50% of the trade obstacles encountered by businesses relate to SPS and TBT measures. Meanwhile, the number of NTMs continues to grow. Each year, governments notify the WTO of more than 3,500 TBT and SPS measures, in line with transparency obligations for policies that may affect international trade. The notifications are supposed to give trading partners advance notice to understand and comment on impending policy changes. However, SMEs already struggling to cope with existing NTMs are ill-equipped to digest these new flows of information. The response ITC joined hands with the United Nations Department of Economic and Social Affairs (UNDESA) and the WTO to set up ePing, an online alert mechanism for new SPS and TBT notifications. After signing up (registration is free), users receive daily or weekly alerts on new WTO notifications in sectors and markets of interest to them. SMEs are thus better equipped to share any concerns about prospective market requirements with their own national authorities and ultimately to understand and comply with measures that eventually enter into force. More broadly, by enabling real-time debate on specific product requirements, the online tool supports timely and effective engagement among private sector and public stakeholders on SPS and TBT issues. The ePing system complements ITC’s suite of online trade and market intelligence tools, which accessibly present data on trade, investment, tariffs, NTMs, private standards and government procurement. In addition to the real-time alerts, companies can use ePing to search for older SPS and TBT notifications for sectors and markets they operate in. The results Prior to its global launch on 8 November, the ePing mechanism was tested in countries including Australia, Canada, Nepal, the Philippines and Uganda. User feedback has been positive, with government officials and business representatives praising the system for enhancing transparency around NTMs and enabling companies to prepare for policy change. ‘ePing is a useful platform for our exporters and stakeholders to readily access new trade challenges that affect their products and markets,’ said Nora Terrado, undersecretary for the Philippines’ Department of Trade and
  • 23. ANNUAL REPORT 2016 21 Industry. ‘This tripartite project has certainly improved accessibility and transparency on prevalent NTMs for SMEs participating in the global trade without additional costs to them.’ ‘ePing provides timely information on technical regulations in fisheries for my members,’ added Ovia Katiti Matovu, head of the Uganda Fish Processors and Exporters Association and a user of the new system. ‘I am now able to receive and share information with my members on changes in technical regulations notified to the WTO, as well as to engage in discussions on the chat forum relating to various notifications of concern.’ She said that the mechanism made it easy for her to communicate about NTMs with members of the business association she leads. The future Together with its partners, ITC will work to integrate ePing with other types of trade information and alerts. A key priority will be making the ePing system more accessible internationally, notably through partnerships with local institutions to translate the notifications into languages beyond English, French, and Spanish. Customized ePing interfaces could be built into national trade intelligence portals. 1. ©shutterstock.com 2. ePing launch at the World Trade Organization, Geneva 3. ePing web platform ©shutterstock.com 2 Partners United Nations Department of Economic and Social Affairs, World Trade Organization 3 ‘ePing is a useful platform for our exporters and stakeholders to readily access new trade challenges that affect their products and markets. This tripartite project has certainly improved accessibility and transparency on prevalent NTMs for SMEs participating in the global trade without additional costs to them. ’ Nora Terrado, Undersecretary, Department of Trade and Industry, the Philippines
  • 24. 22 INTERNATIONAL TRADE CENTRE CASE STUDY Equipping SMEs with the information they need to access markets The challenge Even in the information age, the kinds of information that businesses need when trying to sell into new markets can be hard to find. Data on international demand trends and information about tariff levels and requirements – like health and safety standards in target markets – tends to be fragmented, unavailable or expensive. Voluntary sustainability standards are increasingly de facto requirements to enter some lucrative market segments. Even before companies can grapple with the costs of certification they must understand which standards are relevant in a given market and what they would need to do to comply. The costs and time associated with such intelligence- gathering weigh heavily on small and medium-sized enterprises (SMEs), especially those in developing countries, which tend to be less internationally competitive in the first place. As a result, it becomes harder than it should be for SMEs to buy or sell across borders and connect to value chains. Moreover, even when firms are able to internationalize, prices may fall if they end up contributing to a supply glut. With better knowledge of market demand and price trends, SMEs would be able to make better trade-related decisions. The response Making trade information available to businesses in developing countries has been ITC’s raison d’être since its founding. Starting in 1999, ITC created a suite of online market intelligence tools that are completely free for users in developing countries. These global public goods – Trade Map, Market Access Map, and Standards Map – hold data from more than 190 countries and make it easy to visualize through tables, graphs and maps. Some of the data in the tools – on non-tariff measures, ad valorem equivalent tariffs and tariff quotas – cannot be found elsewhere; ITC experts calculate the statistics and share them with other international agencies. ITC market intelligence tools help users – exporters, importers, journalists, researchers, and others – navigate the constantly changing landscape of international trade and regulations. For instance, a would-be exporter can use Trade Map to discover which markets for her SME’s products have been the most dynamic in recent years and access contact information for importers in those markets. She can then advance to Market Access Map to see whether her country benefits from preferential tariff access to a target market and to understand the tariff rates and non-tariff measures that would apply to her products. Finally, Standards Map would allow her to identify any relevant sustainability standards and determine whether they might be worth adopting. A parallel component of ITC’s work is to train representatives from businesses, governments, trade and investment support institutions (TISIs) and the media in the use of the market intelligence tools, contributing to better analysis and a fact-based understanding of trade. In 2016, the number of registered users of ITC market intelligence tools surpassed 600,000, with over 3.2 million online visits. The results In 2016, ITC market intelligence tools helped generate around $300 million in trade transactions, based on businesses’ responses to ITC’s annual survey of users. One such business was Maneks Dis Ticaret, an Istanbul- based trading company dealing in iron and steel products, cement and metallic ores. Yilmaz Manisali, its director of business development, said that the up-to-date trade data in ITC tools, especially Trade Map, had helped the company make profitable business decisions, bolstering sales while minimizing costs. ‘ITC tools have been instrumental for us in the planning stage – they have allowed us to identify our target markets 1
  • 25. ANNUAL REPORT 2016 23 1. Export Potential Map tool ©shutterstock.com 2.3 Market Access Map workshops, Oman and Ethiopia 32 where we later enjoyed considerable sales,’ Manisali said. He explained that ITC tools had not only helped the company increase export revenues by targeting the right markets, they had made it possible to reduce shipping costs. ‘We have studied export-import routes of certain products and through this information were able to establish trading routes in the opposite direction of busy lines, thus allowing us to have very reasonable freight rates,’ he said. Providers of business advisory services also use ITC tools to help their clients overcome obstacles to accessing foreign markets. ‘ITC tools are of great use in our export service’, said Lorena Zamudio Benitez, general manager at Dragon Pacific International, a company based in Mexico’s Michoacán state that provides consulting services to exporters. ‘They help us evaluate potential markets and to find tariffs and non-tariff measures; and with this information we can advise our clients which products to promote abroad.’ A manager at Bors Dis Ticaret, a medium-sized Turkish exporter of baby clothes and home furniture, said ‘ITC’s market analysis tools are like a compass for us. They provide highly detailed information for our sector and guide us to make the right decisions at the end of the day.’ Feedback on ITC’s market intelligence training work has been similarly positive. In Viet Nam in 2016, ITC trained some 50 trainers affiliated with the Viet Nam Chamber of Commerce and Industry and the Foreign Trade University in the use of the tools, who in turn ran courses around the country for more than 600 representatives from businesses and the government. According to a participant survey 42% of the businesses increased exports following the training, while slightly higher proportions connected to new clients or markets either for exporting or importing. The future ITC’s suite of global public goods in trade intelligence is set to expand. ITC experts are constructing what will be the world’s most comprehensive database on preferential rules of origin associated with bilateral and regional free trade agreements (FTAs). Businesses, especially SMEs, often struggle to understand these rules and related administrative procedures, with the result that they cannot utilize the market access negotiated in an FTA. The new database, which will be operational by the end of 2017, will give users visibility and practical guidance on origin-related rules and procedures. Following avid interest in the Export Potential Map at its demonstration launch in late 2016, ITC is preparing a wider rollout in 2017. Information about potential for trade in services and for building export-oriented regional value chains is being added to the methodology to give clients a complete picture of promising sectors for export growth and diversification. Funders European Union, Germany, Japan, Russian Federation, Switzerland ‘ITC tools have been instrumental for us in the planning stage; they have allowed us to identify our target markets where we later enjoyed considerable sales.’ Yilmaz Manisali, Director of Business Development, Maneks Dis Ticaret, an Istanbul-based trading company
  • 26. 24 INTERNATIONAL TRADE CENTRE Trade Development Strategy The Trade Development Strategy Programme enables partner country decision-makers to identify priorities, set policy directions and act to further integrate their economies into international trade and investment. Through the design and management of sector, national and regional strategies, the programme aims to achieve higher levels of market-led trade performance, especially of small and medium-sized enterprises (SMEs), to improve growth, job creation and living standards. Key results 9 strategy solutions delivered in 7 countries Established 13 public-private dialogue platforms to manage, monitor and measure strategy implementation Supported strategy implementation in 4 countries Highlights In 2016, ITC worked with Myanmar to manage the implementation of the country’s National Export Strategy (NES), developed with ITC’s technical assistance two years earlier. Some 96 projects, implemented by a wide range of international development partners, public and private sector actors, have contributed to meeting the NES’s objectives of spurring export-led growth and job creation in high-potential sectors. Ten sector-focused committees established with ITC support worked with Myanmar’s Trade and Business Promotion Task Force to coordinate implementation and ensure alignment with the strategy. ITC also provided support to trade strategy design and management initiatives in Cambodia, Ethiopia, Kenya, Mauritius, Nepal and the United Republic of Tanzania. In Liberia, following consultations with more than 200 policymakers, trade and investment support institutions (TISIs) and enterprises, ITC helped the government develop a plan to diversify its export portfolio into the tourism and wooden furniture sectors. This work built on the 2014 National Export Strategy that ITC helped the country develop. Aimed at driving economic transformation through value-addition, these two new sector strategies set out a series of actions at the policy, institutional, enterprise and market partner levels to boost productive capacity and upgrade infrastructure to trigger latent potential for greater domestic and international trade. ©shutterstock.com©shutterstock.com Building a Conducive Business Environment ©shutterstock.com
  • 27. ITC INTERVENTIONS: DOING MORE, BETTER ANNUAL REPORT 2016 25 In Ukraine‘s southern regions of Kherson, Mykolaiv and Odessa, ITC brought together government authorities and fruit and vegetable producers to remodel traditional value chains and market linkages and revive the competitiveness of local SMEs. More than 150 stakeholders, including 44 women, charted a roadmap to create and capture more value. This roadmap is now being implemented by national authorities with support from ITC. In Qatar, which wants to cut its reliance on oil and gas, ITC facilitated consultations among public- and private-sector leaders to identify sectors with high export development potential. This work also looked at the investment requirements, business climate reforms and support services required to stimulate entrepreneurship and realize that potential. The resulting Strategic Trade Development Roadmap details quick-win actions aimed at creating employment opportunities through diversified trade within the region and around the world. Trade Facilitation The Trade Facilitation Programme works with policymakers in developing and least developed countries to implement trade facilitation reforms aimed at reducing the cost of doing business. It also partners with logistics operators and other trade facilitation stakeholders to ensure that SMEs are able to understand and comply with customs and other border requirements. Key results 6 countries ITC worked with ratified the WTO Trade Facilitation Agreement 11 countries assisted to estimate needs for technical and financial assistance to implement TFA obligations 2 000 women in Burundi, Tanzania, and Uganda joined ITC-backed network for informal cross-border traders Highlights ITC contributed to the design and adoption of policy recommendations for implementing the World Trade Organization (WTO) Trade Facilitation Agreement (TFA) in Curaçao, Dominica, Haiti, Saint Vincent and the Grenadines, Suriname and the West African Economic and Monetary Union (WAEMU). The WAEMU work was notable for the consensus ITC helped the 15-member bloc reach on implementing the TFA at a region-wide level (see case study). A central plank of this assistance was the establishment of inclusive inter-agency and public-private dialogue processes to ensure that business perspectives factor into the design of cross-border reforms, and that SMEs in particular are empowered to understand and comply with border requirements. In some cases this support involved setting up or strengthening national trade facilitation committees (NTFCs). These committees are required under the TFA and bring together stakeholders such as border agencies, logistics service providers and traders. They play an important role in designing and monitoring trade 1.2. Site visit: Wood furniture producer, Liberia 21
  • 28. ITC INTERVENTIONS: DOING MORE, BETTER 26 INTERNATIONAL TRADE CENTRE facilitation implementation. ITC worked to ensure that the private sector, especially SMEs, were represented on NTFCs. ITC assisted Botswana, Côte d’Ivoire, Guinea, Senegal, Tajikistan and Ukraine in establishing or strengthening such committees. Three countries ITC had supported on TFA-related issues – Afghanistan, Dominica and Senegal – ratified the TFA in 2016. In addition, ITC helped 11 countries estimate needs and develop project proposals for the technical and financial assistance they require to implement so-called ‘Category C’ obligations under the TFA. To enhance the impact of its trade facilitation interventions, ITC developed a network of partnerships with leading public and private stakeholders, including the United Nations Conference on Trade and Development (UNCTAD), the United Nations Economic Commission for Europe (UNECE), the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP), Brazil’s Ministry of Development Industry and Foreign Trade and the World Economic Forum. Cooperative work has ranged from technical training to the publication of materials on TFA implementation. In Burundi, Uganda and the United Republic of Tanzania, more than 2,000 women informal cross-border traders joined an ITC-backed network that serves as a vehicle for disseminating knowledge about cross-border procedures, increasing their ability to trade more safely and to formalize and grow their businesses. Supporting Trade Negotiations The ITC Supporting Trade Negotiations Programme assists business associations to articulate private-sector views and influence policymakers to ensure that trade negotiations, national policies and regulatory reforms reflect business perspectives. The key aim is to contribute to policy coherence and a more conducive business environment. Key results Supported Sudan’s preparation of Memorandum of Foreign Trade Regime and Legal Action Plan for WTO accession Supported the Comoros in revamping investment code Assisted Tonga in drafting National Trade Policy Framework Highlights In least developed countries (LDCs) acceding to the WTO, ITC works to build capacity among businesses, TISIs and governments to understand – and prepare to seize – the opportunities presented by membership in the global trade body. In 2016, ITC supported Sudan’s efforts to re-launch its WTO bid by assisting the government to draft its ‘Memorandum of Foreign Trade Regime.’ This document, a mandatory step in the accession process, was submitted to the WTO Secretariat. ITC also helped Sudan draft a legal action plan and an initial offer of services market-opening commitments. In addition, ITC worked to raise awareness about the implications of membership within the Sudanese business community. In 1 1.2. Site visit: Fruit and vegetable farm, Qatar 3. A market in the Comoros 2 3
  • 29. ITC INTERVENTIONS: DOING MORE, BETTER ANNUAL REPORT 2016 27 Comoros, ITC worked with the government to bring its investment code into alignment with international best practices and prospective WTO obligations. ITC in 2016 built on earlier work aimed at tackling non-tariff measures (NTMs) impeding intraregional trade in the auto- parts and beverage sectors within the Central European Free Trade Agreement (CEFTA, see case study). ITC worked with member governments and the CEFTA Secretariat to overhaul competition laws and regulations as well as to curb anti-competitive practices by private operators. In the Organization of Eastern Caribbean States (OECS), ITC followed up on earlier work with the OECS Commission to complete a regulatory assessment of key services sectors and produce a list of potential market-opening commitments in its negotiations with trading partners. In coordination with the Pacific Islands Forum Secretariat, ITC assisted Tonga to draft a preliminary National Trade Policy Framework based on extensive public-private sector consultations aimed at aligning Tonga’s policies with enterprise supply chains. In Pakistan, ITC contributed to enhancing the long-term capacity of the country’s Competition Commission, internally through the creation of a dedicated department to training and research and externally through a partnership to run courses on competition policy with the National University of Science and Technology. 4 2016 Funders Core funders Canada, China, Finland, Germany, India, Ireland, Sweden Project-specific funders Enhanced Integrated Framework, European Union, Finland, France, Germany/Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, Italy, Qatar, Standards and Trade Development Facility, Switzerland, UN Conference on Trade and Development (UNCTAD), UN Industrial Development Organization (UNIDO), Western NIS Enterprise Fund 5 4. Workshop on Ukraine’s export strategy 5. Workshop on cross-border trade procedures, Burundi
  • 30. 28 INTERNATIONAL TRADE CENTRE CASE STUDY Tackling non-tariff measures at the regional level to improve the business climate for trade The challenge Decades of progressive market-opening have lowered tariff barriers around the world, with the result that non-tariff measures (NTMs) now loom larger as a source of trade frictions. NTMs cover a wide range of policies such as technical regulations, sanitary and phytosanitary measures (SPS), quantitative restrictions, various fees and charges, certification requirements and other conformity assessment issues. Many of these policies are designed to protect consumer safety and the health of humans, plants and animals. Conforming to the demands of NTMs can imply significant costs for traders – costs that weigh particularly heavily on small and medium-sized enterprises (SMEs) in developing countries. Streamlining NTMs has become a major component of national trade policy agendas, including in bilateral and regional integration initiatives. Despite significant progress, important challenges remain, in particular the harmonization of procedures for the enforcement of NTMs, which themselves can be a substantial source of uncertainty, costs and delays. The response ITC works to address NTMs on multiple fronts. Transparency tools such as Market Access Map provide information on the requirements of thousands of mandatory and private standards. Business surveys reveal how companies in developing countries encounter NTM-related obstacles when seeking to trade across borders and shed light on whether those competitiveness-sapping obstacles are the result of bureaucratic procedures or the content of the measures themselves. The survey results can in turn be analysed to identify how regulatory and border agencies can remove inefficiencies that inhibit small firms in priority sectors from participating in the world economy but contribute little to achieving public policy goals. ITC works with governments and regional institutions to design and implement solutions to smooth trade flows. Building on the NTM surveys, ITC developed a three-step methodology to address regulatory and procedural obstacles to trade at the regional level. First, it works with regional institutions and national governments to identify priority sectors, regulations and value chains for intervention based on the potential benefits that would result from region-wide reforms. Next, they examine the underlying causes of regulatory and procedural obstacles. The final step is to design and implement plans to address regulatory and procedural obstacles. The results In response to relatively low levels of intraregional trade and investment, ITC has been working in regions including the Central European Free Trade Agreement (CEFTA), the Arab states, and the Economic Community of West African States (ECOWAS) to identify and eliminate non-tariff barriers. In the CEFTA bloc over a 16-month period, ITC mobilized private-sector lead firms and suppliers in the auto-parts and beverage sectors to identify burdensome trade barriers and articulate their concerns in a manner conducive to designing policy and regulatory reforms to address them. Public- private dialogue forged an informed consensus among CEFTA stakeholders – companies and governments – on what the most cumbersome NTMs were and how to address them. (In the beverage sector, these included discriminatory excise duties and the lack of mutual recognition of quality certificates; in the auto sector, complex customs documentation requirements were a particular source of problems.) CEFTA parties in 2016 introduced a raft of trade facilitation procedures aimed at resolving these issues, pledging to accord mutual recognition to each other’s legislation and trade-related documentation and to eliminate the main 1
  • 31. ANNUAL REPORT 2016 29 NTMs identified in early 2017. These reforms promise to make trade procedures in the region more transparent and predictable, reducing trade costs and making it easier for companies to do business across borders within the region and internationally. In the Southern Mediterranean region, business survey results and a regional roundtable on NTMs have informed ITC’s work to foster economic integration across Algeria, Egypt, Israel, Jordan, Lebanon, Morocco, the State of Palestine, Tunisia and Turkey. The EuroMed Trade Helpdesk was beta tested throughout 2016 ahead of a formal 2017 launch. Its online portal provides economic operators with information about trade statistics, customs procedures, business contacts, and tariff and non-tariff policies across the region while serving as a venue to share news and information about trade-related events. In addition, a problem-solving network of officials from trade and other ministries of the participating governments will work to increase transparency and promote intraregional trade and investment. Alongside this work, ITC partnered with the League of Arab States and national institutions to address key NTM-related challenges identified through the business surveys. These included a lack of accredited laboratories to certify that products meet health and safety regulations; issues around the issuance and recognition of trade-related documents; and uncertainty about customs procedures. Thematic working groups produced a set of recommendations to promote region-wide harmonization of product quality and food safety measures as well as conformity assessment procedures. In ECOWAS, where surveyed businesses indicated that trade within the region faced border surcharges and taxes not encountered in trade with the rest of the world, ITC and the African Development Bank jointly organized a high-level regional roundtable on NTMs in June. At the gathering, delegates from across the region agreed to tackle these border costs. They also agreed on action to tackle other NTMs identified in the surveys, such as quality requirements and testing for agricultural products; difficulties getting certificates of origin proving that manufactured goods are made in the region; and a level of regulatory and procedural obstacles to trade that is generally high compared to the rest of the world. The future CEFTA parties have agreed on the recommendations for NTM-related policy reforms for the auto-parts and beverage supply chains, and are now in the process of implementing them. ITC and CEFTA will build on this by working with GIZ, the German technical cooperation agency, to address NTMs along other value chains in the region. In the Arab states, ITC will continue to shed light on NTMs and work with governments and regional institutions to implement the action plans to address rules of origin, product quality and food safety. In the ECOWAS region, the recommendations from the NTM work fed into regional integration projects that will start implementation in 2017, such as a regional trade barriers alert system. Funders Canada, China, Finland, Germany, Ireland, Sweden, India, European Union, United Kingdom, United States, Germany/GIZ 1. ©shutterstock.com 2. Training on non-tariff measures, Bangladesh 3. National roundtable on non-tariff measures, Philippines 32
  • 32. 30 INTERNATIONAL TRADE CENTRE CASE STUDY Leveraging WTO commitments to boost intraregional trade in West Africa The challenge Trading with one’s neighbours can be an important driver of value addition and job creation irrespective of a country’s level of development. But across much of the developing world – especially in Africa – levels of intraregional trade are low compared to those in Europe and North America. In the West African Economic and Monetary Union, a regional economic community comprising Benin, Burkina Faso, Côte d’Ivoire, Guinea-Bissau, Mali, Niger and Togo, trade among the bloc’s members in 2014 accounted for a mere 13% of their total international commerce. This situation is not for want of regional policy initiatives in favour of integration. Like other regional economic communities within Africa, the WAEMU countries (often referred to by their French acronym, UEMOA) have taken important steps to establish a common external tariff and customs code with the ultimate goal of establishing a single regional market. Despite significant progress, however, companies in the region have struggled to trade more with each other across borders. A major reason for this is high trading costs. According to the World Bank Doing Business – Trading Across Borders indicators, conducting trade transactions in the WAEMU region is 15% more expensive than the world average and almost four times costlier than in advanced economies. Weak physical infrastructure, together with the high expenses and long delays associated with cross- border operations, discourages intraregional trade. To address these challenges, WAEMU members in 2013 launched an ambitious trade facilitation programme with a view to ease intraregional goods trade by simplifying and harmonizing cross-border procedures and requirements. After World Trade Organization (WTO) members adopted the Trade Facilitation Agreement (TFA) in Bali in December 2013, the WAEMU secretariat and its member governments decided to accelerate those efforts. The response Since early 2014, ITC has supported the WAEMU secretariat and its member states’ pursuit of a regionally harmonized and coordinated implementation of the TFA, with a view to achieving economies of scale while establishing a more predictable trading environment across the region. This has involved working towards region-wide consensus among public and private sector stakeholders from all WAEMU member states on modalities for implementing the TFA. Under the TFA, developing countries need to divide their future obligations into three categories: Category A commitments, which they already implement or will do so immediately upon the agreement’s entry into force; Category B commitments, for which they require additional time; and Category C commitments, for which they require both time and technical or financial assistance. While most governments will implement the TFA at the national level, ITC worked with WAEMU on an alternative path: implementing selected Category B and Category C measures region-wide, backed by a coordinated effort to raise the technical and financial assistance WAEMU members require. Even for individual governments, categorizing TFA obligations and quantifying technical assistance needs is not straightforward as many developing countries have sought and received external technical assistance for the process. For the WAEMU bloc, ITC developed a conceptual framework to help the secretariat and member states identify measures suitable for a coordinated approach. TFA obligations will be implemented regionally if they meet the following criteria: one, a majority of WAEMU countries place them in categories B or C; two, implementation would require the regional legal framework to be amended; three, they support the ‘corridor’ framework for regional integration; and four, if money and resources could be saved by implementing regionally instead of at the national level. 1
  • 33. ANNUAL REPORT 2016 31 Starting in June 2014, ITC supported the WAEMU secretariat to assess members’ TFA compliance, identifying gaps as well as best practices. They then assessed common technical and financial needs for TFA implementation in the region, developing detailed project proposals for the implementation of Category C measures in six of the bloc’s eight countries. Region-wide implementation is not appropriate for all TFA measures, so ITC proposed a four-tiered scheme for the degree of cooperation on each obligation. The most basic tier, regional cooperation, involves information sharing across the WAEMU. The next level, regional harmonization, would include the development of WAEMU-wide guidelines leaving individual countries to determine when and in what order to implement measures. Regional coordination, the third level, would give the WAEMU secretariat region- wide oversight to ensure synchronous implementation. Only for the top tier would there be full regional implementation, with the WAEMU secretariat directly responsible for implementing measures on behalf of member governments. The results WAEMU members have reached consensus both on the principle of regional TFA implementation and on a set of measures to implement in a harmonized manner. At a March 2016 regional event organized by ITC in Dakar, public- and private-sector stakeholders from all WAEMU countries agreed on nine TFA measures for coordinated implementation. These include the TFA rules on publishing border procedures on the internet so that businesses can easily find them, establishing enquiry points for traders and ensuring border agency coordination. Other measures selected include the TFA’s rules for how customs authorities manage risks related to goods transit and procedures for determining ‘authorized economic operators’ who qualify for speedier border clearance. Following the regional workshop, the WAEMU adopted a series of recommendations including one to establish, with ITC support, a regional trade facilitation committee – a region-wide analogue of the national committees required under the TFA – to coordinate and oversee the implementation of the chosen measures. The future ITC will work to support the creation of national and regional trade facilitation committees, governance structures that will facilitate the implementation of the TFA at both levels. In particular, it will seek to ensure adequate private-sector participation on those committees so that the problems businesses encounter on the ground factor into policy reforms. ITC will also build a strong network of trade facilitation experts within the region to ensure sustained support for smooth border processes. In addition, ITC will work with the WAEMU secretariat to replicate across the bloc best practices identified during the TFA compliance assessment. One example of such practices is electronic certificates of origin; currently, some members of the bloc still issue physical certificates for traded merchandise. WAEMU’s collective approach to TFA implementation could ultimately be emulated by other regional economic communities. 32 1.– 3. ©shutterstock.com Funders Canada, China, Finland, Germany, Ireland, Sweden, India, Qatar, UNCTAD
  • 34. 32 INTERNATIONAL TRADE CENTRE U N S D G I T C Strengthening Trade and Investment Support Institutions The Strengthening Trade and Investment Support Institutions (TISIs) Programme aims to improve the managerial and operational performance of TISIs so that they can better assist small and medium-sized enterprises (SMEs) to internationalize. Its AIM for Results approach helps TISIs assess, improve and measure their performance. Other interventions work to foster dialogue among TISIs, to support the creation of new organizations when needed and to strengthen particular aspects of individual or groups of TISIs. Key result 100% of TISIs surveyed would recommend ITC support to peer institutions 90% of TISI participants said ITC e-learning courses taught them new operational and managerial skills they can apply in their institutions $280 million in estimated additional exports resulting from ITC’s intensive support to 18 TISIs Highlights In 2016, the programme provided case studies and research, institutional assessments, capacity building, networking and business generation support to more than 800 institutions. As a result of a September workshop in Zanzibar, managers from 15 TISIs from East Africa, Mauritius and Nepal reported improvements in member management and revenue generation. The Zanzibar National Chamber of Commerce, Industry and Agriculture (ZNCCIA) reports that while only 55% of its mostly SME members paid their dues in 2015, 74% did so in 2016. The Computer Association of Nepal put the segmentation practices taught during workshop into practice, allowing its members to sign up online for different levels of membership and support based on their needs. In 2016, 10 TISIs were benchmarked according to the AIM for Results methodology: Rwanda Development Board, Gambia Investment and Export Promotion Agency, Maroc Export, Canada Global Affairs, Mongolia National Chamber of Commerce and Industry, ZimTrade, ASEPEX (Agence sénégalaise de promotion des exportations, Senegal), Ghana Export Promotion Authority, ITHRAA (Public Authority for Investment Promotion and Export Development, Oman), and Pacific Islands Trade Invest. For two of these – Maroc Export and ZimTrade – the exercise was a re-benchmarking following their graduation from the AIM for Results project. It demonstrated that both agencies had registered significant performance improvements, with scores moving from below average to first in class for the region. ©shutterstock.com Strengthening Trade and Investment Support Institutions
  • 35. ITC INTERVENTIONS: DOING MORE, BETTER ANNUAL REPORT 2016 33 In 2016, ITC worked intensively with 18 TISI clients, leading to operational and managerial efficiency gains estimated to result in $280 million in additional exports. It substantively engaged with a further 105 TISIs, helping them remedy specific weaknesses such as business-to-business (B2B) capacity and other business generation activities. ITC also reached additional clients through e-learning modules, webinars, the tisibenchmarking.org platform and an associated newsletter. Feedback from clients demonstrates a high level of satisfaction with ITC’s TISI performance improvement support as 100% of surveyed beneficiaries said they would recommend ITC services to other organizations. In November ITC co-hosted, with Maroc Export, the 11th Trade Promotion Organization Network World Conference and Awards (WTPO) in Marrakesh, Morocco. More than 200 policymakers, business leaders and representatives from over 80 trade and investment promotion organizations from around the world attended the gathering. 1. Designing a performance roadmap with Mongolia’s National Chamber of Commerce and Industry 2. Workshop participants explore how to multiply their TISIs’ impact, Zanzibar 21 2016 Funders Core funders Canada, China, Finland, Germany, India, Ireland, Sweden Project-specific funders Caribbean Development Bank (CDB), One UN, Saint Lucia 18 105 171 550+ Intensive Multi-year engagement following the AIM methodology Substantive Workshops, due diligence, advisory support, etc. Technical Webinars, e-learning, conferences, self-service benchmarking, technical publications Light Touch engages a large audience through newsletters, media, publications, blogs, speaking opportunities FIGURE 2 TISI clients approach and key outputs in 2016
  • 36. 34 INTERNATIONAL TRADE CENTRE CASE STUDY Quantifying trade and investment support institutions’ impact on trade performance and GDP The challenge Trade and investment support institutions (TISIs) such as chambers of commerce, business associations and export promotion agencies play a critical role in enabling businesses to access the information and networks they need in order to succeed in international markets. For smaller companies, especially in developing countries, building expansive in-house capacity on trade-related matters is unfeasible, making TISIs that much more important. Nevertheless, TISIs around the world face increasing demands from their stakeholders, especially cash-strapped governments, to demonstrate that they are providing value for money. For the kinds of work TISIs do, precisely quantifying the effects of their support to business clients is a challenge, exacerbated by the difficulty of attributing each of the different services they provide to particular impacts in terms of increased trade and investment. In addition to complicating their efforts to justify their stakeholders’ investments and fees, these attribution issues are part of a more fundamental challenge for TISIs: the ability to understand the impact their various services generate is a prerequisite for improving resource allocation and shaping their service portfolios. Recognizing these challenges, the network of European Trade Promotion Organizations (ETPO) asked ITC to coordinate an impact study to help them demonstrate the value they deliver. ITC was well placed to answer the call, having for years worked with TISIs in developing and transition economies to support them in assessing, improving, and measuring their effectiveness and resource efficiency. The three-step process is dubbed ‘AIM for Results’. The response ITC invited a team of economists from the University of Geneva to conduct the study. The study team used data from three separate trade promotion organization (TPO) surveys, two conducted by the World Bank in 2005 and 2010 and a 2014 survey conducted by ITC in partnership with members of the ETPO network. In total, the database covered 94 countries with a special focus on 14 European TPOs. The team developed an econometric methodology to compare different TPOs and measure the impact of changes in export promotion budgets on exports and GDP per capita. It also identified the TPO characteristics – whether governance, activities, funding level or funding source – that lead to the highest returns. In partnership with INVESTING IN TRADE PROMOTION GENERATES REVENUE 1 of ADDITIONAL EXPORTS spent on generates $1 $87 EXPORT PROMOTION INCREASE IN GDP $384 additional
  • 37. ANNUAL REPORT 2016 35 The results The resulting report, Investing in Trade Promotion Generates Revenue, provided powerful evidence about how funding for TPOs can increase exports and GDP. The study estimated that each additional dollar spent on helping companies to develop and improve their exports can generate $87 worth of additional exports and a $384 boost to GDP. It broke new ground in academic literature on the topic by showing that export promotion can have positive spinoffs in terms of higher productivity, even in non-exporting sectors. In addition, the study showed that the managerial and operational practices of TPOs matter for countries’ exports as well as their broader economic performance. For instance, practices such as having private-sector representation on TPO boards; charging fees for services; concentrating on a limited number of sectors and target markets; and focusing on established exporters tend to be associated with higher returns both in terms of exports and GDP. The results also showed that investing in country branding and small and medium-sized enterprises (SMEs) can help drive more rapid GDP growth. Walter Koren, chief executive officer of Advantage Austria, the country’s trade promotion agency, said the study ‘supports and strengthens our strong belief that trade promotion organizations provide a very high return on investment, help to develop a national economy and do contribute significantly to GDP growth.’ Maroc Export, Morocco’s trade promotion agency, has asked ITC to conduct a similar study looking at its overall impact on Morocco’s exports as well as at how different export promotion programmes affect export results. The future The Investing in Trade Promotion Generates Revenue report will be used as a reference to encourage further research. ITC is committed to carrying out similar impact studies in other regions and to working with independent research organizations to develop and apply rigorous methodologies to measure the value created by trade and investment promotion organizations. The results of those studies will shed light on policies and practices that agencies could put in place to maximize their impact. By continuing to collaborate with the research community on impact measurement, ITC aims to enhance the impact of its work to strengthen trade and investment promotion organizations. This in turn bolsters the extent to which these critical TISIs are able to contribute to SME trade success, and through it to broad-based growth and job creation. 1. Investing in Trade Promotion Generates Revenue report 2.3. Workshop on improving performance measurement, Costa Rica Funders Finland, Germany 2 3
  • 38. 36 INTERNATIONAL TRADE CENTRE CASE STUDY Bolstering Zimbabwe’s infrastructure for standards compliance and certification The challenge The ability to meet standards and technical regulations in value chains and target markets has become a critical determinant of whether businesses can succeed in international trade. However, for the vast majority of companies, especially small and medium-sized enterprises (SMEs), compliance and conformity certification cannot happen in isolation. A well-functioning ecosystem of institutions and technical infrastructure is vital for companies to seize the international market opportunities presented by standards compliance. This ecosystem ranges from national standards bodies, which develop and promote standards; to testing and inspection laboratories that verify whether products are indeed compliant; certification bodies; and an array of technical regulatory agencies. The work of these bodies is critical for supporting enterprises to apply relevant standards, meet export market regulations and prove to trading partners that their products comply. In many developing countries, however, quality-related technical institutions are often limited by insufficient resources, know-how and equipment. Testing facilities are inadequate and conformity-assessment bodies are frequently unrecognized in international markets. This imposes high costs and burdensome, time-consuming procedures on businesses that wish to obtain certification. This in turn hampers trade and limits its potential contribution to growth and socioeconomic development. Zimbabwe is one such country. It faces multiple obstacles to realizing its goal of expanding international trade and making optimal use of opportunities afforded by regional integration initiatives and the interim Economic Partnership Agreement with the European Union. One of these is the limited capacity of the country’s quality-related support institutions. Without inspection, testing and certification services that are accepted in export markets, whether within the region or further afield, exporters are unable to demonstrate compliance with relevant standards and technical regulations, with the result that for them market- opening agreements exist largely on paper. Another hindrance for would-be exporters is that Zimbabwe’s regulatory authorities often lack the technical capacity to develop and implement technical regulations and standards in line with the World Trade Organization (WTO) Agreements on Sanitary and Phytosanitary Measures (SPS) and Technical Barriers to Trade (TBT). The resulting misalignment with regional and international standards also curbs Zimbabwean companies’ ability to access foreign markets. The response ITC has worked to enhance the capacities of Zimbabwe’s quality infrastructure, from its national standards body, the Standards Association of Zimbabwe (SAZ), to the laboratories that test and certify its export products, particularly agricultural goods. Trainers within Zimbabwean government departments for research, agriculture, health and biotechnology were equipped to educate SMEs about standards and complying with European Union import requirements, in particular European Commission directives setting out maximum safe limits for residual levels of pesticide and veterinary antibiotics in food products. In addition, officials from the relevant ministries received training on WTO rules for health and safety standards and technical regulations to equip them to better help SMEs access foreign markets. ITC worked with the SAZ to improve its certification schemes for key international management standards. These schemes certify entire companies as having world-class management processes, whether for their quality management system (ISO 9001), environmental management practice (ISO 14001), or workplace health and safety (OHSAS 18001). Having well-regarded management system certificates serves as a credible signal that 1
  • 39. ANNUAL REPORT 2016 37 companies can deliver high-quality goods and services and improves their standing in the eyes of potential buyers at home and abroad. In addition, ITC trained testing and certification laboratories to meet an international standard that recognizes their competence to conduct tests and measurements for the purposes of accreditation (ISO 17025). When laboratories have this accreditation, it increases the acceptance of certificates they issue for Zimbabwean products in export markets. ITC also supported the acquisition of new testing equipment by the SAZ’s main testing facility. The results Since it started working with ITC, the SAZ has been able to ramp up the pace of certification. In 2016 it certified 125 companies to ISO 9001 quality management standards, 21 to ISO 14001 environmental management standards and 13 to OHSAS 18001 occupational health and safety management standards. Ten firms were certified to HACCP/ ISO 22000, an international standard that builds on Hazard Analysis and Critical Control Points (HACCP), a widely used process for safe food production that is a prerequisite for entering several major markets. The SAZ’s laboratories have doubled their sample testing capacity, thus sharply increasing the number of products and companies that can receive certification every month. In addition, SAZ-affiliated laboratories have expanded the range of tests they can conduct, allowing them to meet client needs they were previously unequipped to serve. Their main laboratory now houses analytical instruments for gas chromatography mass spectrometry and high performance liquid chromatography. This makes it possible to separate and identify the different components of a sample and thus to detect dangerous fungal toxins and measure the detailed nutritional content and residual antibiotic or pesticide levels in potential food exports. SAZ laboratories are already recognized by the Southern African Development Community’s region-wide accreditation system as competent to carry out chemical tests on water in accordance with ISO 17025. This is poised to expand to include mycotoxins, poisonous chemical products produced by fungi that can be present in food crops. The SAZ’s increased testing capacity will help Zimbabwean food products become more competitive within and beyond the country’s borders. Finally, the project helped the SAZ achieve operational efficiencies through the use of software to track information related to standards. The future ITC will build on these results in partnership with institutions like the SAZ and the Ministry of Commerce and Industry with the goal of strengthening Zimbabwe’s quality infrastructure and in turn expanding and diversifying the country’s export base. An initial priority will be to reinforce the capacities of the inspection agencies and four testing laboratories related to plant and veterinary health; biotechnology; and food and drug safety. Funder European Union 1. ©shutterstock.com 2.3. Standards Association of Zimbabwe laboratory after refurbishment 4. Fruit and vegetable market, Zimbabwe 2 3 4
  • 40. 38 INTERNATIONAL TRADE CENTRE U N S D G I T Connecting to International Value Chains Value Added to Trade The Value Added to Trade Programme focuses on enhancing the ability of small and medium-sized enterprises (SMEs) to meet market requirements and integrate into local, regional and global value chains. It works to make them more competitive by improving sector and enterprise-level capabilities, strengthening the ecosystems in which SMEs operate at each step of the value chain and building public-private dialogue platforms for wide-scale transformational change. Key Results Targeted sector development projects created 1,200 jobs Over $20 million worth of additional exports generated Over 560 companies benefited from ITC technical assistance Highlights During 2016, ITC worked both to transform trade capacity across entire economic sectors and to upgrade individual aspects of value addition. A single-funder portfolio of projects operating in Bangladesh, Kenya and Uganda to upgrade capabilities and exports in sectors ranging from information technology (IT) services to avocados has increased exports by an estimated $20 million and created 1,254 new full and part- time jobs. Firms’ exports grew by an average of 71.4%; they broke into 33 new export markets and struck deals with 165 new clients. The Kenyan avocado industry (see case study) and Bangladesh’s IT and IT-enabled services sector registered some of the best performances. In the Caribbean region, ITC worked closely with coconut producers, agro-processors, buyers and supporting institutions to lay the groundwork for boosting productive capacity and efficiency, product quality and value addition across the sector (see ITC Innovates story). Better product packaging can be critical to a company’s efforts to move up the value chain. In the United Republic of Tanzania, ITC worked with the country’s Small Industries Development Organization to invest $250,000 in establishing a multi-purpose packaging facility. This will allow local food and beverage sector SMEs to purchase world-class packaging material up to 40% more cheaply than they could when their low order sizes meant that conventional packagers demanded unaffordable rates. Improved quality and branding are also critical to add and capture value, both in goods and services. In Myanmar, ITC assisted public- and private-sector stakeholders to encourage economically inclusive and culturally respectful tourism in the country’s Kayah state (see case study). In Nepal, ITC assisted the pashmina sector to develop its first official branding guidelines and register the Chyangra Pashmina trademark. In Sri Lanka, ITC concluded a project to improve fruit and vegetable quality that has seen European Union health and safety alerts related to food imports from Sri Lanka decrease by about 40% since 2013. In Zambia, ITC brought in international designers to help small-scale honey producers develop attractive labels, ©shutterstock.com