Sun | Jun 26, 2022

Coke-Hamilton and Asare | Time for a shift

Making trade sustainable

Published:Sunday | May 22, 2022 | 12:07 AMPamela Coke-Hamilton and Afua Asabea Asare - Guest Columnists

Trade promotion agencies can tip the balance towards business resilience and ‘good trade’.

Businesses everywhere are facing supply-chain woes while feeling the impact of the pandemic in their lives. The supply-chain crisis is sparking a rise in inflation in many countries as firms seek new supply sources and new ways to ship and source goods in unstable markets.

Small firms with fewer reserves feel the pinch the most. The ripple effect is tremendous as they represent most businesses in national economies everywhere.

We must do all we can to make these firms more resilient in times of crisis.

Rather than go back to normal, or move to a new normal, there may be no ‘normal’ for these firms. Climate change, biodiversity loss, pollution, and food insecurity crises will continue to challenge companies in the years ahead.

This is where national trade promotion organisations can tip the balance towards prosperous societies. Countries seek ownership of their future – yet are more connected than ever. National trade promotion organisations are unsung champions, building businesses that create jobs and bring hope for generations to come. They have local knowledge, connections and experience to help people start businesses, grow and compete in the wider world.

But not just any trade. We need ‘good trade’ that is truly sustainable. This way, when shocks come, businesses and communities won’t be hit hard. This requires a sea change. Trade based on commodity exports, foreign investment, or short-term supplier contracts in global markets is not enough.

The pandemic has shown us that we must have every interest in supporting ‘good trade’ – trade that brings women, young entrepreneurs, and vulnerable groups into value chains; focuses on non-traditional exports; strengthens regional ties; empowers a transition to a green economy; and makes micro, small, and mid-sized firms more resilient to crises yet to come.

In Ghana, the reference to sustainable trade or a green economy is still a somewhat novel concept to young businesses. It, therefore, falls within the mandate of agencies such as the Ghana Export Promotion Authority to break down these conversations, enable MSMEs to buy into the concept and adapt these practices for business continuity and success.

During the pandemic and in ensuing months, many small businesses have spent their time profitably by engaging in capacity-building programmes. At the Ghana Export Promotion Authority, for instance, Trade for Sustainable Development modules taught businesses to implement green business practices by targeting resource efficiency, circular economy, sustainability standards, e-commerce, and access to finance.

The overall objective is to empower businesses to compete effectively in international markets, easing their participation in sustainable global value chains as they better understand and implement sustainable trade issues.

What is true in Ghana is true in other countries. Firms do better when they have access to networks and market information from business support organisations, according to research from the International Trade Centre for its SME Competitiveness Outlook. Countries with such organisations have more exporters than those who don’t. What’s more, firms engaged with business support organisations are three times as likely to export.

This service is important as firms that export generally do better than those who don’t, according to ITC’s COVID-19 business impact surveys conducted in 16 countries. Firms that export were twice as likely to create new or customised products to cope with the pandemic as those who did not.

Clearly, trade-promotion agencies are providing useful services. It is important for them to come together to compare what works best.

To make ‘good trade’ happen, solutions must be more digital, sustainable, and partnership-based.

- Pamela Coke-Hamilton is the executive director of the International Trade Centre. Dr Afua Asabea Asare is CEO of the Ghana Export Promotion Authority.