Export Potential Map showcases results from the ITC export potential and diversification assessment methodology that spots: 1. Products, markets and suppliers with (untapped) export potential 2. Opportunities for export diversification.

1. Export Potential Map
Presented By:
Rashedul Kabir
Sr. Asst. Secretary, R&D
SEIP Project, BKMEA
Theoretical Part
Lecture : 15
14-September-2017

2. 10 Tips for Doing Business with European
Apparel Buyers
1. Conduct thorough market research rather
than wasting time and money on random
action
2. Shorten your delivery times
3. Shorten your sample lead times
4. Make sure your price is transparent and
logical – and keep it as low as you can
5. Make sure your products are compliant with
legislation and quality requirements

3. 1. Accept longer payment terms
2. Attract more buyers by offering them a one-
stop shop – on your own, or collectively
3. Aim for a faultless corporate social
responsibility (CSR) performance – and tell
your buyers about it
4. Communicate in clear, consistent key words
5. Be punctual, transparent and proactive

4. 10 Tips for Finding Buyers in the European
Apparel Sector
1. Find out which segment offers you the best
opportunities.
2. Use online platforms to get reliable
information on fabrics, brands and innovation
3. Visit the right trade shows and events
4. Develop a new collection for a trade fair and
set clear marketing objective
5. Invest time and effort in following up trade
fair contacts effectively

5. 6. Connect with the right trade associations
7. Be active on social media
8. Keep in step with auditing & certification
bodies
9. Register with specialized platform groups to
get more visibility
10. Keep in touch: good communication is a key
to success

6. Competitive Sectors

7. Target Markets

8. Fact about Bangladesh
The world chooses Bangladesh market!
But real thing should be opposite:
Bangladesh should choose her markets.
What Should We Do?

9. Export Potential Map
Export Potential Map showcases results from the
ITC export potential and diversification assessment
methodology that spots
Products, markets and suppliers with (untapped)
export potential
Opportunities for export diversification.
• With data for 222 countries and territories and
4,064 products

10. Export Potential Map
Export Potential
Diversification
Assessment
Methodology
GDP
Trade
relations
Data
Reliability
Land
Endowment
Distances
Market
Dynamics
Access to the
Sea
Market
Shares
Tariffs

11. Why it matters?
• Reaching new products and markets is a key to trade-led
growth.
• Trade and investment support institutions seek up-to-date
information to advise companies on which geographic
markets to focus, and to advise policymakers on which
sectors to prioritize for national development.
• The Export Potential Map allows for sectorial, national and
regional assessments
• It is a tool to translate economic analysis into practical
information on trade opportunities.
• It provides a unique ranking of untapped opportunities that
can guide the actions of any person working in
international trade.

12. Who is concerned?
The tool addresses a key demand from trade support
institutions, policymakers and the private sector in obtaining
clear guidance on the identification of export opportunities.
• Trade advisers can use the tool to provide targeted
guidance to the private sector on unexplored export
opportunities.
• Policymakers may use it as an information base when
prioritizing products and partner countries for national
export strategies or trade policy negotiations.
• Private companies can consult the tool for a quick scan of
attractive target markets for the products they produce and
export.

13. What is measured?
• Two indicators are available to spot – depending on the needs of
the country – existing products with export potential and new
products for export diversification.
• The Export Potential Indicator identifies the potential export value
for any exporter in a given product and target market based on an
economic model that combines the exporter's supply capacity with
the target market's demand and market access conditions. For
existing export products, supply capacities are measured through
historical information on trade performances.
• The Product Diversification Indicator estimates supply capacities
using the Product Space methodology that establishes links
between products based on how frequently they are found
together in the export baskets of countries. Supply capacity is
combined with the target market’s demand and market access
conditions to ensure that feasible products for the exporter also
have good chances of export success.

14. Overview of All Data Sources
Variable Source Further information Link
Export and import
values
ITC Trade Map 2011-2015 www.trademap.org
Ad-valorem tariffs ITC Market Access Map
Latest year available as of Apr.
2017
www.macmap.org
Price elasticities GTAP (Hertel et al., 2004)
Hertel, Hummels, Ivanic and
Keeney (2004)
https://www.gtap.agecon.purdu
e.edu/resources/download/2931
.pdf
Distances
CEPII GeoDist (Mayer and
Zignago, 2011)
CEPII GeoDist (Mayer and
Zignago, 2011), based on
geodesic distances between
main cities (with population
figures from 2004). Geodesic
distance between capital cities is
used for missing countries.
www.cepii.fr/CEPII/fr/bdd_mode
le/presentation.asp?id=6
GDP growth
projections
IMF World Economic
Outlook database
2015–2020 (as of April 2017) www.imf.org
Population projections ILOStat database
2015–2020 (UN estimates and
projections, July 2015)
http://www.ilo.org
Land endowment by
climate type
GTAP “Land Use” database,
version 7 (March 2011)
Avetisyan, Baldos and Hertel
(2011)
GDP (current US$) and
population data
World Bank WDI database 2001–2015 http://data.worldbank.org

15. Necessary Notations
• i=Exporting country
• J=market
• k=product (4,034 products on the HS6 nomenclature)
• M=Import
• X=Export
• 𝑣𝑖𝑗𝑘=Trade value
• α𝑖𝑘=Relative supply performance, in terms of cost and
quality
• ß𝑖𝑗 =
𝑅𝑒𝑙𝑎𝑡𝑖𝑣𝑒 𝑒𝑎𝑠𝑖𝑛𝑒𝑠𝑠 𝑡𝑜 𝑒𝑥𝑝𝑜𝑟𝑡 𝑓𝑟𝑜𝑚 𝑐𝑜𝑢𝑛𝑡𝑟𝑦 𝑖 𝑡𝑜 𝑚𝑎𝑟𝑘𝑒𝑡 𝑗
• y𝑖𝑘 = 𝑇𝑜𝑡𝑎𝑙 𝑑𝑒𝑚𝑎𝑛d

16. Export potential
• Potential (or standard) export value of product k supplied by
country i to market j, in dollars, calculated
as supply × demand (corrected for market access) × bilateral
easiness to export. It is not a maximum: the actual trade value may
be below or above the potential value.
• Trade data used in the calculation of export potentials is based on a
geometric average between direct and mirror data of reliable
reporters over five years.
• Potential trade is defined as what trade would be in this theoretical
world. Potential trade can depart significantly from actual trade for
a number of reasons: unseized opportunities, non-tariff measures,
etc.
• SupplementaryExport Potential Assessments.pdf

17. Supply (EP)
The supply side in the export potential indicator is based on
the projected market share, multiplied by the exporter’s
expected GDP growth rate (relative to expected GDP
growth of other exporters of the same product) to capture
the relative increase in overall supply capacity.
This indicator is corrected for possible re-exports whenever
imports of the product exceed exports. It is also corrected
for market access: the supply indicator is meant to capture
projected market share in the absence of re-exports and
tariffs (the impact of tariffs on exports to a particular
market will be taken into account in the demand
component).

18. Demand
The demand side is based on projected imports
augmented by expected population growth (with
a unitary elasticity) and expected growth of GDP
per capita (subject to estimated revenue
elasticities of import demand per capita at sector
level).
The indicator also considers the tariff advantage
in the target market and the bilateral distance as
compared to the average distance over which the
target market usually imports the product.

19. Easiness to export
Easiness is based on actual trade between exporter i and market j for
products with potential relative to their hypothetical trade if exporter i
had the same share in market j as it has in world markets. The
numerator captures the actual trade and the denominator captures
trade complementarities between the exporter i and market j. If
Easiness > 1, country i finds it easier to trade with market j than with
world markets on average. This can reflect in a high numerator,
resulting for instance from the two countries being located in
proximity, sharing the same language or culture or having established
commercial links in the past. It can also reflect in a low denominator
due to a limited complementarity of the countries’ export and import
baskets. An Easiness > 1 will augment country i’s potential to trade any
type of product with market j. By contrast, if Easiness < 1, country i
finds it relatively more difficult to trade with market j, lowering its
potential to trade with that market irrespective of the product under
analysis.

20. Realized potential
Extent to which the export potential is already tapped. At
the most disaggregate level, by country, product and
market, the realized potential corresponds to the
potential to actual exports gap (in % terms) whenever
potential > actual exports and to 100% whenever
potential < actual exports. At the aggregate level (e.g.
export potential in a regional market or by sector), the
realized potential may be below 100% even though
potential < actual exports. The reason is that some
exporters, products or markets may have overused their
potentials while others could still have underused
potentials that should not be hidden.

21. Product diversification
An indicator measuring the likelihood of
successful product diversification. Diversification
opportunities are new or existing products with
marginal export potentials.

23. Supply (PD)
The supply side in the product diversification indicator is
based on density, calculated using the product space
methodology. It has been transformed to ensure that the
relative dispersion of the indicator is similar to the one of
the supply side in the export potential indicator. It has
then been normalized, so that total export capacity by
country (for all products) corresponds to its expected
export value computed based on current exports and
expected GDP growth, and that total export capacity by
product (of all countries) corresponds to expected world
demand for that product, computed as the sum of
expected country demands.

24. Potential to actual exports gap
Extent to which potential exports deviate from actual exports. Actual
exports may be higher or lower than potential exports. In the first
case, the gap is indicative of upcoming competition from other
countries that have not fully used their export potentials. In the
second case, the gap is indicative of room for export growth should
frictions in the form of regulations, buyer-seller mismatches, etc. be
overcome.
Actual exports>Export potential= Upcoming competition from other
countries that have not fully used their export potentials
Actual exports<Export potential= Room for export growth should
frictions in the form of regulations, buyer-seller mismatches, etc.

25. Actual exports
The value of actual exports calculated as an
arithmetic average of direct and mirror data of
reliable reporters over the past five years.
Actual exports=Export potential-Untapped
potential
Exporters Export potential (bn) Actual exports (bn) Untapped potential (bn)
China 4.10 2.50 1.60
India 1.20 0.56 0.60
Cambodia 0.44 0.25 0.23
Bangladesh 0.52 0.36 0.18
Sri Lanka 0.21 0.13 0.13
Viet Nam 0.18 0.11 0.11
Thailand 0.22 0.16 0.10
Indonesia 0.14 0.10 0.07
Turkey 0.14 0.13 0.05
Portugal 0.07 0.09 0.02

26. Untapped potential
This value represents the gap between export
potential and actual exports, only when the
potential exceeds exports. This is particularly
important when aggregating by regions or sectors,
so products that exceed their export potential don't
affect the Sectoral or regional untapped potential.
Untapped potential=Export potential-Actual exports
Only if export potential>exports

27. What is the export potential for a
product/sector or country/region ?
• What is the export potential
for Bangladesh as Exporter / Market ?
Untapped export potential*US$ 17.7 bn

28. What is the export potential for a
product/sector or country/region ?
• Find products for which Bangladesh has the
highest export potential.
T-shirts & vests of cotton, knit/crochet, Men's
trousers & shorts of cotton, and Women's
trousers & shorts of cotton. T-shirts & vests of
cotton, knit/crochet shows the largest
absolute difference between potential and
actual exports in value terms, leaving room to
realize additional exports worth US$ 3.8 bn.

29. What is the export potential for a
product/sector or country/region ?
• Spot the most attractive target markets for
Bangladesh.
United States of America, Germany and
United Kingdom. United States of America
shows the largest absolute difference between
potential and actual exports in value terms,
leaving room to realize additional exports
worth US$ 2.3 bn.

30. HS Code 1996 (Knitwear)
Code Description
61 ARTICLES OF APPAREL AND CLOTHING ACCESSORIES, KNITTED OR CROCHETED
6101
Men's or boys' overcoats, car-coats, capes, cloaks, anoraks (including ski-jackets), wind-cheaters, wind-jackets and similar articles,
knitted or crocheted, other than those of heading No 6103
6101 10 Of wool or fine animal hair
6101 20 Of cotton
6101 30 Of man-made fibres
6101 90 Of other textile materials
6102
Women's or girls' overcoats, car-coats, capes, cloaks, anoraks (including ski-jackets), wind-cheaters, wind-jackets and similar articles,
knitted or crocheted, other than those of heading No 6104
6102 10 Of wool or fine animal hair
6102 20 Of cotton
6102 30 Of man-made fibres
6102 90 Of other textile materials

31. Tree Map

32. GAP Chart

33. GAP Chart (based on export potential)

34. GAP Chart (based on export actual exports)

35. GAP Chart (based on potential to actual
exports GAP)

36. GEO Map

37. Analyze Export Potentials (based on export
potential rank

38. Analyze Export Potentials (based on
demand)

39. Analyze Export Potentials (based on
easiness to export)

40. Product Diversification (ranked on product
diversification)

41. Product Diversification (ranked on demand)

42. Product Diversification (ranked on supply)

43. Group Assignment
Assignment.docx

44. Source/Reference
• http://www.trademap.org
• http://exportpotential.intracen.org
• https://www.youtube.com/watch?v=0aRknwOpDrg
• https://www.cbi.eu/market-
information/apparel/doing-business/
• https://www.cbi.eu/market-
information/apparel/finding-buyers/

45. Any ?
Thank You