David Van
As Cambodia continues to navigate the complexities of global trade, it is imperative that its trade policy advisory bodies, such as the Trade Policy Advisory Board (TPAB), are equipped with sophisticated tools for analysis and decision-making. While the Trade Intelligence and Negotiations Advisor (TINA) platform of UNESCAP offers robust analysis and scenario simulation capabilities—particularly for bilateral trade in nominal dollar values—it lacks the granularity needed to differentiate between raw materials, semi-finished, and finished goods. This limitation hinders the development of nuanced trade policies that could better serve Cambodia’s economic interests.
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To address this limitation, it is proposed that TPAB seeks access to additional trade databases such as the International Trade Center (ITC) Trade Map and Export Potential Map, along with the Australian CAPRED database. The ITC Trade Map provides detailed Harmonized System (HS) Code classifications, allowing for a more granular analysis of trade flows. The Export Potential Map offers insights into actual versus potential exports, enabling the identification of untapped export opportunities and potential trade partners. Integrating these databases with TINA would significantly enhance Cambodia’s trade analysis and policy development capabilities.
Benefits of Accessing Multiple Trade Databases
- Enhanced Granularity and Detailed Trade Analysis
- HS Code Classification: The ITC Trade Map database offers detailed information on the types of goods traded, categorized by HS codes. This granularity allows for a deeper analysis of trade flows, distinguishing between raw materials, semi-finished, and finished goods. Such insights are crucial for understanding the structure of Cambodia’s trade, identifying value-added opportunities, and developing targeted trade policies.
- Export Potential Insights: The Export Potential Map provides a clear picture of Cambodia’s current exports versus its untapped export potential. This information is invaluable for identifying new markets and products with high export potential, guiding trade policy towards sectors with the greatest growth opportunities.
- Sectoral and Product-Level Insights: By integrating data from TINA, Trade Map, Export Potential Map, and CAPRED, TPAB can perform more nuanced analyses, such as identifying sectors with potential for upgrading from raw material exports to higher-value finished goods. This could also support the identification of bottlenecks in the supply chain and inform policy decisions aimed at improving Cambodia’s trade balance.
- Strategic Trade Policy Development
- Trade Deficit Management: Given Cambodia’s significant trade deficit, access to comprehensive data is essential for formulating strategies to reduce this imbalance. By understanding the nature of goods imported versus exported, TPAB can design policies that promote the export of higher-value finished goods while reducing reliance on imports of semi-finished or finished products.
- Trade Diversification and Export Promotion: The combination of databases enables Cambodia to explore new markets for its exports and diversify its trading partners. The Export Potential Map, in particular, helps in identifying products and markets with untapped potential, which could be key to driving export growth and reducing trade deficits.
- Negotiation of Favorable Trade Agreements: Detailed trade data will also help in negotiating more favorable trade agreements that reflect Cambodia’s economic priorities. With access to insights from multiple databases, TPAB can advocate for terms that support long-term economic goals, such as trade diversification and industrial upgrading.
- Capacity Building and Knowledge Transfer
- Training and Skill Development: Accessing and effectively utilizing these databases will require targeted training for Cambodian trade analysts and policymakers. This presents an opportunity for capacity building within TPAB and other relevant institutions, ensuring that trade data is interpreted accurately and used effectively in decision-making processes.
- Knowledge Sharing: Collaborating with institutions like ITC and CAPRED could foster knowledge sharing, providing Cambodia with insights into global best practices in trade policy analysis and negotiation. This collaboration could also support the development of locally relevant analytical tools and methodologies.
- Comprehensive Trade Strategy Formulation
- Data-Driven Decision Making: By leveraging multiple databases, TPAB can develop a comprehensive trade strategy that is both data-driven and evidence-based. This will enhance the credibility of Cambodia’s trade policies and negotiations, ensuring that they are aligned with national development goals.
- Overcoming Data Limitations: Each database has its strengths and limitations. For example, while TINA provides strong scenario simulations, TradeMap offers detailed product-level trade data, and the Export Potential Map identifies market opportunities. By integrating these tools, TPAB can overcome individual database limitations and develop a more holistic view of Cambodia’s trade landscape.
Proposal for Database Integration and Platform Development
To maximize the benefits of these tools, it is recommended that TPAB develops a national trade analysis platform that integrates data from TINA, ITC Trade Map, Export Potential Map, and other relevant databases such as the Australian CAPRED. This national platform should be designed to allow seamless access to, and analysis of, comprehensive trade data, enabling more informed and strategic decision-making.
Key components of the proposed platform should ideally include:
- Data Integration Layer: A module that consolidates data from various sources, ensuring that users can access all relevant information through a single interface.
- HS Code and Export Potential Analytics Module: A dedicated tool that provides insights into the types of goods traded, allowing users to distinguish between raw materials, semi-finished, and finished goods, and to assess untapped export opportunities.
- Customizable Reporting and Dashboard Features: Features that allow users to generate tailored reports and visualize trade data, facilitating easier interpretation and decision-making.
- User Training and Capacity Building Programs: Ongoing training sessions for TPAB and other relevant stakeholders to ensure effective use of the platform and its integrated data sources.
The integration of multiple trade databases into an ideal single, customized platform would offer a significant opportunity for Cambodia, through TPAB, to enhance its trade policy analysis capabilities. By accessing and leveraging detailed trade data from TINA, ITC Trade Map, Export Potential Map, and CAPRED, TPAB and other relevant government institutions can develop more effective strategies to manage trade deficits, promote export growth, and negotiate favorable trade agreements. The proposed platform will not only provide a comprehensive view of Cambodia’s trade landscape but also equip policymakers with the tools they need to navigate the complexities of global trade in a rapidly changing and challenging economic environment, considering ongoing and future geopolitical trends, such as the growing US-China de-risking tendency.
David Van (22-8-2024)
David Van is a savvy business and policy advisor, with a long experience in regional senior management roles and development sector in Asia, as well as government relations advisory support, blended finance and private-public partnership conceptualization.
