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close this bookThe Courier N 127 May - June 1991- Dossier 'New' ACP Export Products - Country Reports Cape Verde - Namibia (EC Courier, 1991, 104 p.)
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View the document‘New’ ACP export products
View the documentThe fruit and vegetables market in Europe: the case of France
View the documentFinding new markets in the North by Mercedes SILVA
View the documentFlowers and foliage: a blooming market
View the documentKenya - Broadening the range of agricultural exports
View the documentMauritius - successful diversification under adverse condiffons
View the documentZimbabwe - rhe expansion of non-traditional exports: general explanation
View the documentGhana - diversifying the export base problems and strategies
View the documentThe growth of non-traditional exports in the Caribbean
View the documentJamaica - manufacturing: almost exclusively for export
View the documentJamaica’s Preferential Trade Arrangements
View the documentPromoting export of ACP manufactures - The role of CDI

‘New’ ACP export products

Some of our readers may find the term ‘‘new’ ACP export products’ slightly odd. Indeed, it only has its full meaning on a country level, for what may constitute a new export product for one country may not be for another - bananas, for example. Generally referred to as nontraditional exports, these, on the level of the ACP, mean anything other than copper, bauxite, iron ore, phosphates, tin, cocoa, coffee, palm oil, groundnuts, cotton and sugar.

In our dossier on Commodity Prices, no 116 of July-August 1989, we indicated that behind the disappointing overall trade performance of the ACP states in the European market in recent years was a new trend - that of a rapid growth of exports of ‘new’ commodities. Although the aggregate value of these products (ECU 826 million in 1987, about 6.9% of total non-fuel exports), was so small as not to offset significantly losses incurred from the major ones, the number involved was large - as many as 70, encompassing fruits and vegetables, cut-flowers, canned fish, wood and wood products, leather and leather products, cotton yarn, fabrics, clothing and even watches and sunglasses. Some 28 ACP States were concerned, although only a few derived significant foreign exchange earnings from them.

As more countries join the list, we believe the time has come for a more detailed examination of this trend as a possible pointer to the future for the majority of the ACP States, given the continuing depression in the prices of the Group’s traditional exports.

A glance at the trade figures of the countries presented in this dossier shows a steady and substantial increase in the share of non-traditional products in overall exports: more than 30% for Mauritius and over 20% for Kenya Jamaica and Zimbabwe. Ghana, which came into picture as recently as 1986, has registered 5% and has adopted strategies aimed at increasing this share to 15% by 1993. The overall impact of this reorientation of trade on these countries’ economic growth, foreign exchange earnings and employment need not be stressed.

Irrespective of the factors responsible in each case for the growth, they are proof of successful efforts at diversification, and evidence, in some cases, of the extent of progress in value-added manufacturing. It should be noted that the question of the local processing of natural resources - or resource-based industrialisation - was a major preoccupation of the negotiators of LomV and that this has been more clearly expressed in the Convention.

Access to Markets

If sixteen years after the Lima Declaration the developing countries are still far from achieving the 25% of world industrial production set for the year 2000, it is not only because the expected shifts in the location of processing activities from the developed world to the developing countries did not materialise, it is also because the curtain of protectionism came down in many developed markets. Access to markets is extremely important.

As this dossier will show, however, the Lomonvention and other preferential trade arrangements have played and will continue to play an important role in the promotion of ACP non-traditional exports. But beyond these are other factors such as changes in fashion and taste of the populations of the developed world - which are ever more sophisticated and dominated by young people - and the concern for health and the environment.

The opening up of Eastern Europe and its eventual integration into a strengthened multilateral trading system would, no doubt, create more opportunities for exports of the developing countries as a whole, as would a more liberal import policy by Japan. Thus, while the conditions exist on the demand side to stimulate export of non-traditional products, the focus must be on internal factors.

Appropriate policy framework

Theoretically, countries with natural resources and large internal markets are ideally placed not only to diversify but also to achieve import substitution and boost exports. But natural endowments alone are insufficient, for these would translate into nothing in the absence of an appropriate policy framework. Indeed, with good policies, a number of countries can make a success of export diversification. Mauritius for example has been tremendously successful with very few natural resources.

The majority of ACP States are known to lack cruelly investment finance and technology, factors indispensible to the diversification of the export base. The production of high quality manufactured goods and out of season vegetables which demand sophisticated processes of control and delivery to ensure that they arrive on time at the market, fresh and up to the standard preferred by consumers, require investment finance and technical know-how. The ACP States’ ability to attract foreign assistance, whether private foreign investments, technical assistance, or transfer of technology depends on the fiscal, monetary and industrial policies they adopt - ie their ability to create environments that induce confidence. This means setting up appropriate investment codes that take on board the need for tax holidays, liberal foreign exchange regulations and the provision, if need be, of government assistance.

There must also be political stability: it is remarkable that the countries which have succeeded most in attracting foreign investments and broadening their export base are those which have established strong democratic traditions or are known for their long political stability.

Because this dossier is constituted largely of case studies, some of the articles are necessarily long. Some are clear examples of success in agricultural exports, others in manufacturing. We hope they provide valuable lessons for other ACP states.