C. Strengthening the region’s export capacity
4. Logistical support
Increasingly, the private sector is overlapping with and complementing government action in this sphere. In some countries, export promotion agencies are developing into independent bodies with high private- sector participation and the services they provide are financed by the users themselves. This trend can be seen as a guarantee that the services offered will respond to exporters’ needs and that their cost is justified in terms of the expected benefits. In the smaller Caribbean countries, however, the public sector continues to be the principal export promotion agent for goods and services.
(a) Establishment of service exporter federations For a country to promote its trade interests, its public and private sectors need to work together and engage in ongoing dialogue. Such two-way feedback helps to identify hurdles and also ways to address trade issues entailed in accessing external markets. Despite the varied interests and features of service firms, the effectiveness that can be achieved by a service firm association, along the lines of the business associations that exist in the manufacturing and farming sectors, could be crucial in the framing of policies to benefit members. Although associations exist in some service subsectors, a
federation of service associations and entrepreneurs would offer a stronger platform for addressing the common challenges facing the sector as a whole (International Trade Centre, 1998). These institutions act as entrepreneurship mentors, given that most business operators lack awareness of how to undertake foreign trade operations.35
Such federations –or coalitions, as they are known– already exist in some Latin American countries; e.g., Unión Argentina de Entidades de Servicios (Argentina) and Coalición de Exportadores de Servicios (Chile).
(b) Dissemination of government support measures for trade information and intelligence
Business operators often limit themselves to domestic markets out of sheer lack of knowledge of the international market. It is interesting to note that one of the first items offered to new service-firm operators in developed countries is a step-by-step guide on how to export their services. These guides describe each step the operator must take in order to access external markets, and some provide assistance in formulating an export strategy and answers to the most common problems encountered by service exporters.36
34 The development of this type of financial product is felt to have been one of the determining factors of Silicon Valley’s success in becoming a world centre of information and communications technology, although it took 40 years for it to become a hub of intellectual activity.
35 The United States Coalition of Service Industries (USCSI) was a pioneer in these efforts and played a key role in the United States taking the leadership in including services in the agenda of the Uruguay Round, which led to the General Agreement on Trade in Services (GATS). Similar coalitions exist in other countries: British Invisibles, Hong Kong Coalition of Service Industries, Irish Coalition of Service Industries, South Asian Service Industries Forum, Swedish Coalition of Service Industries, etc.
36 See the website of Export Development Canada (www.edc.ca); Industry Canada’s subsite entitled “Take a world view... Export your services” (strategis.ic.gc.ca); the website of the Australian Trade Commission (www.austrade.gov.au), beginning with an “Export capability tool” which examines various factors and aspects that help assure the success of new exporters; and “Exporting of services”, geared towards small and medium-sized businesses in the United States (www.unzco.com/basicguide/c8.html).
The website of the Colombian agency Proexport, for instance, provides basic information and specifics on exporting services.37
Coordinated action by the public and private sectors can broaden the access of service firms to the information they need. Most export promotion agencies have networks of offices abroad and inside the country. This gives them privileged access to trade intelligence that is vital for conducting business abroad and allows them to track exportable supply in the various regions of the country. The private sector, on the other hand, with its networks of international trade-association contacts, can tap public and private databases on the Internet to create trade intelligence networks that promote export firms and the services they offer.38 They can also provide free
access to a broad range of trade information, e.g., market access conditions, key legislation on the movement of persons, taxation, accreditation, pricing, specifications for services in greatest demand, export contacts and calendars of international fairs.39
(c) Organization of and participation in international fairs and matchmaker events There has been a growing trend at trade fairs to promote exchanges among firms offering different kinds of services. Electronic media and business-to-business networks help in the task of tracking down information by sector and by country. Direct contact with potential clients allows service providers to share information on company background, explain work procedures and arrangements, indicate the quality of services offered, give an overview of client portfolios, and present documentation on successful past contracts. Such events are also an excellent vehicle for
forging strategic partnerships with firms in other countries and sharing trade intelligence on market features, the specifics of demand for services in those markets, and key cultural considerations for successfully launching services in new markets.
Chambers of commerce in a number of countries organize trade missions for their members at low cost, with financing from programmes set up by the export promotion agencies.
(d) Broader use of quality certifications
Certification that attests to the quality of services and their compliance with international standards is a useful way to allay external consumers’ lack of confidence in new agents. Many operators are hesitant to use such certifications, partly for cost reasons but also because they are unsure of their ability to maintain certification requirements over time and are fearful of the repercussions of the possible loss of certification. Experience with small-scale goods exporters shows that participation by trade associations in publicizing the importance of quality management systems encourages operators to observe quality standards that gradually modify management techniques, cost rationalization and quality control measures to bring them in line with the international standards in place in more demanding markets (International Trade Centre, 2001; 1998).
National standards authorities have information on the standards that apply to each specific service sector.40
Currently, most certifying firms are private concerns that must be accredited or recognized by the government in order for their certification to be valid in Europe, the United States or Japan.41
37 According to Proexport, many Colombians export services without realizing it; others export knowingly but do not report their exports; and yet others report figures well below the real ones. “Cómo exportar servicios”, Proexport-Colombia (www.proexport.com.co). In Brazil, the Ministry of Development, Industry and Foreign Trade has prepared a paper containing basic information but it is not available through the exporter’s portal but through the page on export barriers (http://www.mdic.gov.br/comext/deint/Barreiras/CartilhaServicos.PDF). 38 One example is the Ibero-American Association of Chambers of Commerce (www.aico.org).
39 A useful source is the TradePort website (www.tradeport.org), which offers trade intelligence, guidelines and business databases. It also has calendars of business events, glossaries and reference guides.
40 The World Standards Services Network (WSSN) is a network of websites of standards organizations from around the world. Through the websites of its members, WSSN provides information on international, regional and national activities and services in standardization and related spheres (http://www.wssn.org) (International Trade Centre, 2001).
41 The situation of certification is very heterogeneous across the region, given the diverse productive and business conditions of the countries. Brazil, for instance, has some 8,000 certifying firms in a wide range of areas, while Argentina has 4,000. Chile, one of the countries whose foreign trade has a high impact on GDP, has only an estimated 350 certifying firms, although government projections indicate that number will reach 1,000 in the year 2005. In Chile, most of these firms deal with products (mainly in the forestry, agriculture and fisheries sectors), with only very few focusing on procedures in the environmental and labour areas (“Con permiso para crecer”, Agricultural Supplement, No. 1,394, El Mercurio, Santiago, Chile).