SECTOR-SPECIFIC FRAMEWORK FOR TRADE CAPACITY BUILDING (TCB) EVALUATION: an Australian example.
Abstract: The strategies driving rapid development of a $US100m live cattle export industry from Australia's Northern Territory to South East Asia are briefly described in the context of trade capacity building, and the primacy of industry associations as a vehicle for success is demonstrated. A simple framework for evaluating TCB success within one primary industry sector is suggested, capable of being scored without expensive survey or statistical capacity development.
Background
In the 1990s Australia's least developed region, the Northern Territory, rapidly built a live cattle export industry with South East Asia worth over $US100 million from a very low base. Elements of the strategies used and sustainable results achieved could be useful in deriving a framework for evaluating similar sector-specific initiatives. While it is unusual to work from a case study of export from a developed to less developed economies, and largely without any involvement of donor agencies, the lessons learnt are universal in application. Indeed, given the dependence of developing countries on primary products, the example might be directly useful in evaluation.
Live cattle had been exported from the north of Australia to nearby South East Asia for over 100 years, but it was only with rising Asian standards of living that the demand for meat decisively outgrew their ability to breed sufficient animals. The starting point for trade was opportunistic and competitive small to medium size enterprises at each end dealing on a one-to-one basis in a poorly understood regulatory environment. However it was recognised that there was strong complementarity in the trade, since northern Australia could breed sufficient animals under free range conditions but were unable to feed these numbers through the prolonged dry season, while South East Asia had agricultural wastes and wetter seasons for feeding, plus the wet market demand for fresh meat. There was also a useful poverty alleviation aspect, since farmers could provide green feed to feedlots and even fatten out-placed animals and so share in the developing trade.
The strategies that worked and the indicators of success are perhaps more obvious in hindsight than they were explicit at the time. They also developed over time, with patience. However they are coherent and can provide a useful framework for evaluation of progress in trade capacity development.
Strategies and indicators of success
Governments in each of the five major markets recognised the need to develop industry associations, at first separately and then bilaterally. The advantages are obvious: institutionalised coordination strengthened the ability of industry players to identify needs, to analyse priorities for action by both government and industry, to identify common knowledge gaps, and to develop an advocacy role. "Wins" from this phase, such as shared statistical information and shared research information, built support for later strategies. What was critical was the process of government/industry bilateral working group meetings working to formalise the
priorities for action.
A concrete example: early in trade development, very late quarterly announcement of import quotas by one government made orderly trade very difficult for breeders, transporters, exporters, feedlotters, abattoirs and retailers. Government to government talks, attended by industry from both countries, resulted in announcements being made four weeks earlier, very simply removing a major impediment.
Indicators of success:
Each bilateral market had separate, sometimes conflicting regulations. Industry alone was unable to negotiate harmonisation, nor were governments initially sufficiently consultative with industry to be certain of priorities. A particular issue was that the Australian Federal Government had assisted some importing countries with regulation development without understanding existing relationships. As bilateral industry associations developed mutual trust they were able to work together to adjust regulations within some priority framework.
A concrete example: one South East Asian country required double-fencing between quarantine-cleared cattle and non-cleared cattle, despite the absence of any fences in much of the Northern Territory. One visit to northern Australia by key market regulators and an adjustment to the place and time of quarantine clearance resolved the issue permanently.
Indicators of success:
Trade related infrastructure was required at each end of the bilateral, ranging from the physical such as roads for trucking cattle in the wet season, export yards for quarantine inspection, through safe humane shipping to improved veterinary laboratory services in the importing market. The existence of industry associations, with a developed level of trust from successfully negotiating some regulatory change, made prioritisation and systematic removal of impediments somewhat easier. The development of agreed priorities provided confidence to donor agencies in their own decision-making.
A concrete example: early in development of the live cattle trade, suitable unloading ramps were not available in some destination ports. Designs and even sample ramps were provided by shippers to assist trade development.
Indicators of success:
With strong bilateral relationships developed and a better understanding of differences, it was possible to move towards involvement in education and technical assistance. In-importing-country train-the-trainer courses were run by Northern Territory staff as an after-sales service on agreed topics like animal health, animal husbandry and pasture management. Some donor funding was forthcoming because the relationships and priorities were explicit. However even topic and curriculum development took years rather than months, reflecting the difficulty of understanding each other's realities.
A concrete example: there was a desire by one importing country for assistance with upgrading meat safety and quality, with the objective of meat export to a third country. It was only when actual choice of attendees was underway that it became obvious that the objective was unrealistic, but such was the level of trust thus far engendered that even late changes were made without loss of face.
Indicators of success:
Conclusions
The suggested indicators of success assume that trade policy within the country has been prioritised within national/regional plans for economic development and poverty reduction and that sectors possessing comparative advantage have been identified. Without this step having been completed, it is very difficult for the world's poorest countries to take advantage of global trading opportunities. All evaluation of TCB needs to be set out against these plans.
Given the preceding step, the primacy of industry associations as a vehicle for trade capacity building has been demonstrated for one primary industry sector. The indicators of success given are simple, capable of being scored without expensive survey or statistical capacity development, and are believed to accurately reflect the key objective of trade capacity building: the inclusion of the world's lesser developed nations in trade.
What has been presented here turns some established notions about the role of technical assistance and research cooperation on their heads, since in my experience it is only after relationships and trust have been developed that shared priorities, with all their misunderstandings and pain in development, can be derived and implemented with success.
Dr Howard Dengate
22 May 2004