Main Determinant Factors of the Export Success

1. Main Determinant Factors of the Export Success The target of this paper review is to discussing the factors that affect and lead to export success

2. May19,2005 Export Success, Basheer Hamwi 2 What are the benefits of export success?  Export success would improve producer prices Improve the cultivation practices Encourage adopting new varieties. Increase production in quantity and quality Foster economic growth Strengthen job security Support foreign exchange Support private sector Create good environment for investments Initiate source of income to a country Increase earning of foreign currency to pay for necessary imports Improve the standard of living

3. May19,2005 Export Success, Basheer Hamwi 3 What are the difficulties for D.C in IM to be ES? I M have some difficulties for DC related to export for several reasons: High competitiveness Similarity of agricultural production in developing countries The fluctuation in the market prices Developed countries subsidize their agricultural products depressing the world prices Developing countries rely mainly on agricultural and textiles exports, but these have limited market access in the developed countries.

4. May19,2005 Export Success, Basheer Hamwi 4 What are the main factors determine export success? Regulations and legislations Export can be hindered by: Inadequate legislation Protection of intermediate products raises their costs Licensing system

5. May19,2005 Export Success, Basheer Hamwi 5 II. Quality Standardization Lack of proper quality assurance and grading increases the rate of rejects in destination markets It is very damaging to lose reputation in the international markets because of low quality So, it is necessary to: Develop export specifications, guided by international standards such as: ISO 9000 Enhance packaging and storage Insist on minimum standards Expand extension services It is also essential for exporters to have brand-name development

6. May19,2005 Export Success, Basheer Hamwi 6 III. Procedures Trade distorting practices include: Excessive bureaucratic control of trade Non-Trade tariff barriers such as: export bans, export quotas, and the exaggerated documentation requirements

7. May19,2005 Export Success, Basheer Hamwi 7 IV. Research, Studies and Information The most necessary step in this area is establishing institutions assisting exporters with; Entering foreign markets Providing information on: Market conditions Consumer tastes Training exporters Arranging of buyer visits Implementing propaganda and advertising programs in foreign markets Creating proper trade environment that facilitates predictability and, accordingly, marketing and export planning

8. May19,2005 Export Success, Basheer Hamwi 8 V. Export Facilities It is crucial that the governments: Implementing efficient essential export Infrastructure Simplifying and harmonizing customs procedures Providing an efficient supporting services Developing transportation and communications networks Reducing all the transactions costs Allowing access to imported intermediate inputs at world market prices Expanding refrigerated facilities either by government or by private sector

9. May19,2005 Export Success, Basheer Hamwi 9 VI. Relation Strengthening through Trade Agreements Market access facilitated under co-operation agreements The agreements usually allow to: Achieve costs reduction Enlarge market size. Facilitate investment. Achieve reciprocal free trade between partners Complete or partial exemption of tariffs and non-tariff measures Diversify export sectors Stimulate competitiveness Change trade policies, laws and regulations Offer an incentive for production increase Activate private sector exports

10. May19,2005 Export Success, Basheer Hamwi 10 VII. Production Diversification and Improvement Countries should concentrate on maximizing returns from areas in which they have comparative advantage Countries can not maintain export successfully unless: Providing availability and stability of supplies as well as price competitiveness Diversifying agricultural exports

11. May19,2005 Export Success, Basheer Hamwi 11 VIII. Investment Encouragement There are tight links between export success and investment Export success can : Initiate opportunities for great investments Enhance investment in the field of export through establishment of Export-Processing Zones which are generally used to achieve three goals: Promotion of investment and employment in export-oriented production Increase foreign exchange earnings from nontraditional exports. Benefit from free of restrictions on foreign exchange, tariff-free imports for export production, moderate levels of taxation, streamlined administrative procedures, and private sector management.

12. May19,2005 Export Success, Basheer Hamwi 12 IX. Market Access Promoting market access include all the factors that affect competitiveness and the incentives for producers to export Supporting penetration to foreign markets can be done through avoiding antiexport bias systems

13. May19,2005 Export Success, Basheer Hamwi 13 X. Financial Aspects Failure in export can be resulted from: The absence of trade finance Costly infrastructure services Tax charge on export or on production Non tariff barriers make transaction costs excessive and discourage export

14. May19,2005 Export Success, Basheer Hamwi 14 XI. Other Activities Related to Trade They include: Creation of specialized associations in different fields of agriculture Sustainable Natural Resources wealth strengthening Human Capital

15. May19,2005 Export Success, Basheer Hamwi 15 The impacts of domestic policies on export Domestic policies can improve or hinder export In some cases, domestic policies affect export negatively Policies should be consistent both at micro and macro levels and not conflict A proper pricing policy can be used as a tool for agricultural production increase and quality improvement, and then for export enhancement The policy of export liberalization: Create pressures for increased efficiencies Promote competitions Accelerate overall economic growth

16. May19,2005 Export Success, Basheer Hamwi 16 Suggested National Plan to Get Export Success Several considerations should be taken by policy makers when planning to achieve ES: Comprehensive Program of Reforms in the economy Sustainable Agricultural Trade Development Strategy Setting up an Export Policy Creating Specialized Associations Initiating Export Promotion Programs focused on sectors that demonstrate the best growth potential and highest level of competitiveness Identifying Companies that have export potential Training and assisting exporters to upgrade their skills Produce specifically for export Establishing one unit body responsible for export arrangements Implementing Propaganda and Advertising Programs

17. May19,2005 Export Success, Basheer Hamwi 17 conclusion Nations need to promote export and the most important factors to export success are Modifying legislation of foreign trade Identifying main targeted markets Identifying main products enjoying high competitive abilities. Allowing for promoting technology, diversifying export products Increasing foreign investment Strengthening trade policy institutions Making strong contacts with trade partners Arranging visits of delegations abroad to explore overseas market opportunities Organizing participation in international trade fairs Building trust for local goods Establishing Control Strategies ensuring high quality for export through: Overall quality enhancement Introducing price premiums for quality Efficient export-inspection Exporters insisting on higher quality Building good reputation in the target markets

18. May19,2005 Export Success, Basheer Hamwi 18 Thank you all for your kind attention