Removing Institutional Constraints in Utilizing Trade-Related ISMs for

LDCsIdentification of Export and Support

Measures- The Case of UgandaBy Sainabou Taal

1. Catalogue of priority exports

• Methodology: – Use of National strategies, country reports, sector

reports etc. namely:• DTIS (2006,2013), National Export Strategy, National

Development Plan, STDF “Mobilizing Aid for Trade for SPS-Related Technical Co-operation in East Africa: SPS Balance Sheet for Uganda”, ITC sector reports …

1. Catalogue of priority exports

2. Analysis of priority exports

• Methodology Step 1:– determined competitiveness by assessing the

following variables:• Export potential: value, world market share, growth

rates• International environment: growth in world demand,.

Uganda’s access to international markets

*Bases on Mandeng’s “revealed comparative advantage” methodology (1991)

2. Analysis of priority exports

• Filter 1: Value of export– High exports: Export > USD 100 million– Medium Exports: USD 100 million < Export > 1 million– Low Exports: Export < 1 million

• Filter 2: Competitiveness - "Retreats" represent declining groups in which the country is losing its market share.- "Waning Stars" represent declining groups in which a country gains in market share.- "Missed Opportunities" represent increasing groups in which a country is losing its market share.-"Rising Stars" represent increasing groups in which a country gains in market share.

2. Analysis of priority exports

• Filter 3: If mentioned in three key cross-sectoral strategies– NES– DTIS– STDF

• Filter 4: Diversification of export markets• Filter 5: Elimination of sectors that are not

relevant to ISMs (i.e. petroleum, cement)

2. Analysis of priority exports

2. Analysis of priority exports

• Methodology Step 2– Relying on national experts for input– Establishment of a National Review Committee to

examine current list– DESA Uganda Mission identified:

– Importance of value addition/chains– Market research needs– Trade facilitation– Donor coherence?

Current List awaiting further input from Review Committee

3. SWOT analysis of high potential exports

• General

Internal Strengths Natural Resource base (Good

and fertile soils, Good ecosystem for tourism and agriculture, minerals etc.)

The existence of an Institutional framework to support the export sector

Existence of export incentives (Zero rating of exports, manufacturing under bond, etc)

Liberal trade environment Abundant and trainable labour

Weaknesses Poor and inadequate transport

infrastructure Weak private sector facilitation,

Support services Limited access to finance Weak R&D Weak standards and quality

infrastructure High transport costs at(mainly

due to "landlockedness") High freight and cargo handling

costs at the key ports especially at Airport

Limited processing and value addition

Low labour skills High cost of energy

External Opportunities Non reciprocal Preferential

Treatments (Bilateral and Regional, Multilateral)

Regional Integration with lowering tariff levels and reduced non-tariff barriers

Oil Sector Changing consumer preferences

towards organic and natural food items making possible niche markets

High mobile penetration

Threats Global competition in Uganda’s

key markets Non Tariff Barriers and Sanitary

and Phyto-sanitary requirements Exchange rate volatility

Coffee*Legend: Blue: on-going or planned initiatives Yellow: possible ISMs*

Internal Strengths Strong farmers associations Strong private sector support

through Public Private Partnerships

Favourable policies due to importance of sector

Weaknesses Poor implementation of quality

standards/SPS (STDF, SPS) Insufficient transport

infrastructure: rural road networks, single export channel (EIF Tier I I )

Limited access to finance for smallholder farmers and small and medium exporters (UNCDF)

Lack of knowledge of international markets

Lack of specialized skills for diversification into new product lines

Lack of trust along supply chain Weak institutional capacity for

coffee specific research, extension services and enforcement of quality and standards regulations (STDF, TBT)

Weak marketing promotion and branding

External Opportunities Finalization of the Coffee Sector

Export Strategy Increase in global demand

especially speciality coffees (organic, 4Cs)

Growth in Arabica coffee exports from Uganda

Potential for value addition (farm to cup)

Trade movements made easier through EAC

Development in oil sector will lead to decreased energy costs and increased road infrastructure

Growth of ICT

Threats Coffee Wilt Disease and other pest

and diseases (SPS, EIF Tier I I ) Growing international competition Significant price volatility(on

average, it is decreasing) resulting in export volatility

Soil Fertilization and weather conditions (increased occurrence of heavy rains)

Loss of global market share esp. for Robusta

4. Matching ISMs with challenges to be addressed in priority exports

Product STDF SPS – WTO members

TBT Art. 11 EIF Tier 2 UNCDF

Coffee implementation of quality standards/SPS

implementation of quality standards/SPS

coffee specific research, extension services and enforcement of quality and standards regulations

transport infrastructure

coffee specific research, extension services and enforcement of quality and standards regulations

Coffee Wilt Disease and other pest and diseases

Coffee Wilt Disease and other pest and diseases

Floriculture Poor cold storage management

Poor cold storage management

Poor cold storage management

Traceability Traceability Traceability

Tea

Etc.