Discussion Brief for the Export Strategy-Maker

Prepared by:

José Luis Liranzo
Programme Manager-Trade Information Services
Caribbean Export Development Agency
Created May, 2001

1. Background/Introduction
2. The Trade Information "culture" in the Caribbean
3. Caribbean Export and the Trade Information Services Programme
4. The Trade Information Services Experience
5. Networking in the Caribbean
6. Actual situation
7. Conclusion

The International Trade Centre (ITC) has taken "Is your trade support network working?" as the theme for its Third Executive Forum, which will take place in September 2001 at Montreux, Switzerland. The trade support network is taken to cover the facilities and services that are available to exporters/potential exporters in a given country or region.

In preparation for the Forum, a number of position papers are being prepared by information specialists from different parts of the world as to why trade information services succeed or fail in their particular environments and examining the scope for networking trade information services nationally or regionally.

To portray the experience of delivering trade information services on a regional basis, this paper has been prepared by José Luis Liranzo, Trade Information Services Manager, at the Caribbean Export Development Agency (Caribbean Export).

Caribbean Export is an organization which assists Caribbean exporters through the provision of market research, grants, training, market promotion, technical assistance, trade information and other related services to penetrate regional (Caribbean) and extra-regional (North America, Europe, Latin America) markets and increase their export sales.

The Caribbean Export Development Agency (Caribbean Export), is a regional inter-governmental agency of the Forum of Caribbean States (CARIFORUM). It receives funding from the CARIFORUM Governments and from European Union and generates It became operational in its present form in January 1996, having operated under project status from 1989 to 1996. The Agency, with a total of 50 staff, is headquartered in Barbados and has a representative office in the Dominican Republic and a Trade & Investment Facilitation Office in Cuba.

Together with national Trade Promotion Organisations in the region, market specialists in the Caribbean, Latin America, North America and Europe, the Agency is dedicated to helping Caribbean enterprises increase their international competitiveness and export-earning capabilities.

The Agency provides services in the areas of technical assistance, market research, training, market promotion, trade information, trade advocacy and other related services, these services offered partly on a revenue-earning basis.

In 1996 the region was clearly separated in terms of focus on trade related matters. The CARICOM countries concentrated on the markets of US and Europe. The rest of the Caribbean (Cuba, Dominican Republic, Haiti, and the French and Dutch Overseas Countries and Territories) were not considered markets for CARICOM products and services and vice versa. The European Union, through its LOME IV Convention, included "the wider Caribbean" as a beneficiary of the Caribbean Region Trade Sector Development Programme. Consequently the Dominican Republic and Haiti became part of the beneficiary group. The Caribbean Forum of Countries (CARIFORUM) was formed from this larger group of countries who are beneficiaries of EU funds under the LOME IV Convention.

The formation of CARIFORUM created the situation of a greater and more active relationship between the region’s larger economies (e.g. Jamaica, Dominican Republic) and smaller economies (e.g. St Vincent & Grenadines). As a result cooperation and market interest increased. (A further expansion of the market had begun to occur earlier when, after the fall of the Communist bloc in the early 1990’s, Cuba lost most of its established trading partners. This resulted in a change in its trade policy and an increasing interest in the Caribbean market, which opened another potentially big market for Caribbean businesses).

The next significant step was the proposal by Dominican Republic for a Free Trade Agreement with CARICOM and negotiations started soon after. By 1997 it was clear that the agreement had potential and business started to get ready for the new market being opened for their products.

In 1997, free market information on United Kingdom (UK) and the United States of American (USA) of the type that traditionally interested the English speaking Caribbean, was available. The process of acquiring information was somewhat low tech. The available options were regular mail or faxes to institutions requesting information. It usually took a week or so to receive a response. In terms of regional information, business directories, such as importers or exporters directories, could also be purchased. Detailed market research on specific sectors did not exist to any great extent and where it existed it was usually disseminated free of charge with the costs borne by the organization sending it.

Following the changes in the economic trading environment, by late 1998 the demand for market information (which previously had been focused only on first world countries, particularly the USA and the UK) began to change. Companies started to request information about regional markets. Most of this information was not readily available. However, companies were willing to pay for timely information, so that they could be first to access these markets. Therefore, trade support organizations initiated the process of collecting information on regional markets.

Under the European Union’s 7^th European Development Fund (EDF), the Caribbean Export Development Agency was created. Its services were inherited from its predecessor, the CARICOM Export Development Project (CEDP). One of these services was that of trade information.

The Trade Information Services Unit was setup in the following way:

The Unit comprised a Manager, a Market Research Officer (whose functions were varied but usually related to producing directories and generic market research as opposed to tailored market reports for specific clients), an Information Specialist (dedicated to collecting information on trade control measures and companies and to answering customers’ requests), a Librarian (in charge of the trade information centre) who was supported by an assistant.

Among the information services being offered at that time were a fax on demand service, a business opportunities bulletin, directories, and CARICOM country profiles and income regimes.

In 1997 and early 1998 several user satisfaction surveys and impact assessment evaluations were conducted on the services being offered, specifically requesting information on whether clients were willing to pay for immediate information on markets and products. The results were ambiguous: on one hand they confirmed that the services were needed but on the other hand that companies were unwilling to pay for it.

In order to cope with the increasing cost of obtaining the large amounts of information Caribbean Export (CE) stored (e.g. statistics, company data, tariffs, reports), a charge was introduced in late 1997 for the services offered. Although the amount charged was symbolic, information requests declined by almost 60%. This decline was attributed to being the result of either a lack of interest in the information offered or that it was of little or no consequence. Therefore in 1998 the portfolio of services offered by Caribbean Export was revised.

The findings of the review and needs assessment were that clients were willing to pay for market intelligence, market research and the provision of internet business solutions such as e-commerce and e-catalogs. There were indications that perhaps other methods of delivering traditional services (such as directories although electronically accessible) would in the future generate some revenue for the Trade Information Unit.

Based on this information Caribbean Export re-oriented the objectives of its Trade Information Services Programme, which resulted in the generation of some revenue in 1997 and 1998. As a result of the changes in services, the structure of Trade Information Services Unit also changed. Since most of the trade information services relied on information and communications technology for dissemination, the expertise the Unit was developing in relation to such technology became an integral part of the Trade Information Services Programme.

Another important factor that impacted positively on the delivery of services was the adoption of the ISO9000 standard by the Agency. These procedures were used to improve the trade information services of the organisation. Although Caribbean Export has not filed for ISO9000 certification, all the procedures have been implemented and regular revisions and audits are conducted to ensure their proper application.

The series of surveys conducted through the third quarter 1997 and first half 1998, to evaluate the needs of the Trade Information Service’s customers in the Caribbean Region, were on the services being offered and requested in particular feedback on what information was needed and whether clients were willing to pay for it. The results of the surveys were used to analyse the potential to create revenue generating services and thus support the Agency’s interest in producing some kind of sustainability through commercializing its services. This mandate towards commercialisation has since changed. Today, Caribbean Export is diversifying its fund management by attracting donor agencies other than the European Union in an effort to ensure its continuing existence. We still charge for the services that our clients are willing to buy but commercialisation is no longer the main focus of our efforts. This process, though, has helped the Trade Information Service to develop services that are being paid for by clients and therefore fulfilling both our mandates: sustainability and development.

The results of the surveys allowed for the Trade Information Programme to analyse more closely the needs of its main client bases. These needs can be summarised as follows:

It is important to highlight that all respondents agreed that the main business of today’s Trade Promotion Organisation (TPO) is to provide information. Traditional information services that include trade information centres that are merely a library of trade related publications, reports and essays have disappeared. In fact, libraries are moving to update with their trade information services, with some having quite specialised services (e.g. the British Library’s Business Information Service) that provide the private sector with up-to-date market information. Therefore, the need for the traditional "library" service has disappeared (at least at a regional level).

It is the immediate posting or dissemination of tailor made information that is needed and highly appreciated by TPO stakeholders. Such information services include the distribution of e-journals and e-newsletters, the availability of on-line databases of exporters, importers and product information, and electronic versions of market profiles and analysis and other publications related to international trade. In conclusion, printed information is being abandoned or left to libraries to handle. It does not reach the businessman within the necessary timeframe to make decisions. Trade Information Centres are dedicating more and more resources to cater for these electronic-remote access services instead of the traditional function of archiving collections. There is therefore a need to differentiate the roles of traditional, print-based libraries and document centers from the modern Trade Information Centre, a better term being a Trade Information Service.

Another important issue that has driven the adoption of modern information and communications technology to the information services of Caribbean Exports is the fact that Caribbean Export is a regional organisation. The location of clients who cannot physically visit the organisation’s offices is a major impediment unless one adopts or develops remote access to services.

Taking advantage of the advent of new information and communication technology, the following are a summary of the services that Caribbean Export has implemented to meet the information needs of its clients:

• Web site news
• Information Centre with Internet and international database access
• Enquiry/Reply service
• Electronic Publications
• Directories
• Market research reports
• Agreements/treaties reports (TradeWins newsletter)
• Business Opportunities Service (trade leads)
• E-lists for dissemination of e-publications
• TradeWatch (weekly newsletter on trade related matters)
• Remote Access to Databases
• Trade Regulations
• Trade Statistics
• Companies and their products
• Business Opportunities & Trade Leads
• Trade Publications
• Consultants Register
• Trade Information Services & Products
• Market Research/Intelligence Service
• Market research reports
• Market Visits (e.g. trade missions)
• Consortia Market Projects (joint activities with groups of companies e.g. group marketing, market entry programmes)
• On-line Training Courses

Based on the results of the surveys we were able to re-focus on these new services, develop and implement them. The change over was completed by December 1999.

One major constraint to the operation of fee based services which emerged is the administrative support necessary for such operations, which must include the implementation of proper accounting controls and systems such as accounts receivables, collection and billing. The non-availability of such systems forced the Trade Information Service to abandon its subscription services as their handling required a level of administrative support that was not available.

The Caribbean Export’s Trade Information Services are today one of the most reliable and rapid response facilities in the Caribbean Region. It has created a respectable image as a provider of information, to the extent that a considerable amount of revenue is generated from the selling of its services. The market research function under the Trade Information Services Unit portfolio has been successful and is constantly used by regional and extra-regional companies and organisations to access new markets. In this field, Caribbean Export has become the competitor of firms such as KPMG, Price Waterhouse Coopers and Ernst & Young in the Caribbean.

Subscription based services, although needed and a possible good source of revenue, had to be dropped in favor of less "accounting intensive" services such as Market Research: less clients, less accounting transactions and less payment follow up. This generated a situation whereby small companies could not pay for these services and were being left out of this highly developmental but commercial service. To alleviate this problem we implemented a policy to price proposals according to the business with which we were dealing: a conglomerate would be charged at full pricing with a profit margin built-in while a small producer or manufacturer would get subsidized reduced prices. This policy was left to the discretion of the Market Researchers who dealt with the companies and who knew quite well the client companies’ resources and ability to pay.

The Trade Information Service has also expanded its internal services and is now responsible for information technology and information systems functions within the Agency. In this regard, it has been spear heading the change in the Agency towards a technology oriented organisation and has led projects such as the creation of a "paperless office", implementing an Electronic Document Handling project throughout the Agency.

It has also successfully developed a network of trade correspondents that cover all of the Caribbean Basin region and some European and Canadian markets. Caribbean Export’s web-site, www.carib-export.com, although not completely finished, is a comprehensive example of a dissemination mechanism for TPOs.

Other services in the process of development or due to be implemented as part of the Service’s expansion of its portfolio are:

• CD-ROM Directories
• Internet Marketing Services
• Hosting of customers’ web pages
• Posting of yellow pages
• Electronic commerce
• Customs Information Services
• Credit and Insurance Data
• Transportation Data

It is our view that the constant changes introduced in the Trade Information Services Unit has made it a dynamic service provider whose main objective is the satisfaction of its clients.

Caribbean Export was initially set up as a "parent" TPO to create or assist national TPOs. In that context the European Union, through its Constitutional Development Programme (implemented by Caribbean Export), gave Caribbean Export the responsibility to administer national funds and sub-regional funds (the latter in the case of EDADU in the OECS countries). This in a way enabled the Caribbean’s national TPOs and Caribbean Export to link and, in most cases, to network.

Having said that, and in relation to other TPOs in the region that did not have any apparent necessity to link with Caribbean Export, it is interesting to look at the networking experience of Caribbean Export and such organizations.

Drawing on the experience of Caribbean Export in terms of its efforts to create linkages with national TPOs, one can note the following:

A national TPO’s regular function is to get information that eventually leads to one or more of its clients exporting to a market. Usually TPOs are not involved with those interested in importing goods from other markets. Regional TPOs like Caribbean Export, must encourage intra-regional trade that would include assistance to both types of business. Consequently there is no conflict with national institutions that are dedicated to export promotion. In this area, both Regional and National TPOs should work together.

Assistance for import is a different area. Caribbean Export networked with a series of regional and national TPOs and government institutions to create a Trade Correspondent network. When market information was needed to satisfy one of Caribbean Export's clients, partners would either indicate that they were not set-up to collect that information (i.e were not import promotion agencies) or took a long time to answer. The programme worked when independent trade correspondents were appointed and fees were paid for their work.

Usually TPOs are non-profit organisations, so the main compensation for their work is recognition. Therefore somebody else's achievement cannot be credited to them, hence the duplication of efforts, information, projects, etc. For example, Caribbean Export possesses a software system to process trade information (Caribbean Trade Information System - CARTIS). This system has been offered to other TPOs for their use. The advantages of such a linkage e.g. uniformity of data and possible consolidation of databases, have been ignored by younger TPOs who are developing their own software and creating new databases. The resulting wastage of resources (since the cost of developing such software is high) and the longer training and implementation process are obvious.

On a more positive note, Caribbean Export has experienced successful networking through the following activities:

1. Distributing the TradeWatch magazine to customers using an electronic mailing list and using a regular mailing list to distribute printed periodicals such as Caribbean Export News (the Agency’s newsletter) and TradeWins (newsletter on trade agreements etc).
2. Through its web site and its discussions forums, online searches, database access, business and career opportunities services and trade news.
3. Through its Trade Correspondent Network, that provides the relevant market information for paying clients.
4. Through its Customs Experts service that assists member countries in implementing and maintaining the ASYCUDA customs administration system.
5. And, through its Board of Directors, the dissemination of trade policy advocacy and other country-related information. (Each CARIFORUM member country is represented on Caribbean Export’s Board).

Following many trials and failures, what is the way forward to achieving increased networking of TPOs? One solution might be to form "the parent-son" regional structure where international and regional funds are channeled through an institutional development programme.

If Caribbean Export creates (and we are set to do so) a comprehensive Internet presence and website with on-line searches for all the information mentioned above, then all other TPOs would have the opportunity to use Caribbean Export as their source of information, although they may not be willing to give recognition for this.

Since Caribbean Export’s ownership belongs to the CARIFORUM governments and despite national TPOs who might offer similar services, Caribbean Export’s programmes are seem as the "Regional Programmes and Services". This helps to improve linkages and lessen the threat to be seen as a competitor, thus facilitating networking with other TPOs of the region. We believe that the model of creating a regional institution that administers funds for developing national TPOs could be the only way to effectively network TPOs.

In terms of Caribbean Export’s Trade Information Service, it has shifted it services from free to revenue generating by offering tailor made, customer oriented Market Intelligence Services. Other subscription based services and products have been produced but without proper administrative support (billing, collection) they are doomed to disappear. The lack of resources on the part of the Accounts Department to provide support to revenue generating services, hindered the scale and the number of services that could have been offered to Caribbean Export’s clients. This was despite recommendations made by consultants on the importance of having in place the necessary account management systems and human resources to manage this aspect of charging for services. The Trade Information Services Unit was forced to provide for free services that otherwise would have been subscription based (e.g. electronic periodical publications such as Business Opportunities Bulletin Tradewatch and Tradewins). Had these services been charged, they would have generated a considerable amount of money for the Agency.

Because of our regional scope and responsibilities and despite the difficulty for clients to physically visit the Agency, the Trade Information Centre has been kept, although its operation has been reduced. It only keeps information and publications not easily obtainable on the Internet and is mostly used by staff for research purposes, companies that are based in Barbados or visiting Barbados and scholars (Barbados has a major campus of the University of West Indies).

The development of state-of-the-art services, such as web-page hosting and e-commerce solutions by Caribbean Export, has helped to overcome a serious obstacle for today’s Caribbean businesses (as in many other small economies): the high cost of telecommunications and high tech solutions. Although not the traditional line of business of a TPO, it certainly assists in creating new markets for its clients and therefore could be considered a market generating service thus fulfilling our export development mandate. Caribbean Export intervention in this field will dwindle with time as private providers develop these services and they become affordable for small companies.

Caribbean Export’s Trade Information Service experience is a clear example that these kinds of organisations can be of great help in a region like the Caribbean. It also has proven that revenue can be generated from Trade Information Services if these services are what private sectors are looking for and the services bring a certain amount of exports to clients using the services. A couple of success stories and once the word gets around, everybody would like to at least hear what these Trade Information/Market Experts have to say. These efforts are carving out the ground that establishes the roots that will keep Caribbean Export and its Trade Information Services around for a while.

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Posted 23 October 2008