To identify new markets and potential opportunities, or eliminate unsuitable markets, researchers should first examine macroeconomic data. Macroeconomics refers to research into the overall aspects of a country’s economy, including income, national output and the interrelationship between economic sectors.

The economic characteristics of an international market are conditions that organizations cannot control. If an organization cannot contend with these characteristics, or if the characteristics mean that a product or service is unlikely to be suitable for that country, then the market can be discounted as an opportunity or the organization can investigate methods of adapting to the market.

The macroeconomic features of a potential host country can be divided into several areas for research:

1. Gross national product (GNP)

The market value of all final goods and services produced by the nationals of a country in an annual time frame. GNP is often used as a measure of the size of a country’s economy, and incorporates income derived from overseas activity.

2. Gross domestic product (GDP)

The market value of all final goods and services produced in a country or region in an annual timeframe. GDP per capita is often used as a measure of the standard of living in a country.

3. Purchasing power parity (PPP)

Compares the purchasing power of different currencies in their domestic countries and is often used as an alternative to GDP figures for measuring the standard of living in a country. PPP is calculated using the amount of domestic currency needed to purchase a similar collection of goods in different countries.

4. Household disposable income

This is the average amount a household in a country has to spend after taxes and payment of essential items, such as housing costs and utilities.

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5. Market size

The market’s total number of buyers. The larger a country’s population, the larger the potential customer base.

6. Market potential

Describes how many people or businesses in a country could realistically be expected to purchase a product or service.

7. Market resources

The presence of natural resources in a country will have an impact on international business success. The presence of resources such as oil, soil, timber and minerals increases a country’s wealth and leads to increased development of infrastructure.

It is also important for exporters to consider the geography and climate of a potential market country, because both have an impact on the transportation of goods and dictate which products or services are likely to be purchased.

For organizations considering sourcing goods from an international market or setting up a production site in a foreign county, the presence of resources needed for production processes will be essential for success.

8. Market activity

In some cases, organizations will need to investigate the major economic industries present in a specific country. For example, an organization wishing to sell building machinery might need to check whether a potential market has its industry centered on agriculture rather than industry.

9. Infrastructure

A country’s infrastructure, such as the transportation network, the distribution of cities and major centers, and the extent of the national power supply, will have an impact on the distribution of goods or services and the costs involved with distribution.

In some cases, this information will also indicate a need to adapt a product or service (because the supply of electricity is intermittent, for example), or will indicate the unsuitability of exporting to that market.

Information about a country’s infrastructure will also give an idea of how effective business communications might be (for instance, the availability of telephone, Internet and mail services) and how easy it will be to travel to the country for meetings and to monitor business activities.

10. Urbanization

The amount of urbanization in a country is a measure of that country’s demand for certain goods and services and its income levels. In general, workers in urban areas are paid higher wages than workers in rural areas.

The post Start to identify new markets by looking at these 10 statistics appeared first on Trade Ready.

So when you’re doing this research, where do you start?

These are my top 6 rankings (you’ll need to look for sector/industry numbers, too) to get you started in your research.

1. Corruption Perception Index

Transparency International’s Corruption Perception Index gives you a good first look at one of the most critical issues in Latin American markets and a key barrier to trade. The levels of corruption vary greatly across the region, and therefore may be an important factor in narrowing in on potential options.

Uruguay tops the index with the lowest perceived corruption in Latin America (21^st in the world, just below Japan) and Chile comes in close behind at 24^th. At the other end of the scale, Nicaragua at 145^th and Venezuela at 166^th are near the bottom of the global index. While the index cannot cover every specific situation you may encounter, it gives you a general idea of what working in these countries will be like. The more corrupt a country, the riskier and more costly for you as an exporter.

2. Ease of Doing Business ranking

The World Bank comes up with its Ease of Doing Business ranking every year. Again, this can help you see which countries you might want to prioritise when developing your strategy, and which to leave for later – or at least which countries to plan more or fewer resources for. Mexico, Colombia and Peru top the ranking in Latin America.

Careful with this ranking, though. As it clarifies, “A high ease of doing business ranking means the regulatory environment is more conducive to the starting and operation of a local firm”, but it can’t cover every aspect of running and growing your business once it’s started!

3. Largest multilatinas

The America Economia Multilatinas ranking evaluates the global strength of Latin American-based multinationals, and ranks them based on their perceived ability to expand their influence and their business around the world. It’s useful because it will show you which countries produce the companies with the greatest global impact, which could be already doing business closer to you than you think.

Sometimes our clients base their decisions on the presence of certain companies or lack thereof, either because they are competitors or because they are complementary, or even buyers. If you look at the sales figures of these companies and other numbers, you will also quickly see the potential of different markets. By analysing their behaviour, you’ll generate a lot of useful market intelligence too.

4. Population size

It’s not uncommon for foreign businesses to disregard the size of Latin American markets in terms of population, and underestimate a region of 600 million people. The CIA World Factbook, which provides some very useful data on every country in the world, produces this world population ranking.

But before you check it out, can you guess which the four most populated Latin American countries are? Population numbers can definitely be used as a proxy for the size of the economy, as well as the size of your potential market, whether B2C or B2B.

5. GDP per capita

Size is not everything, and anyone working in B2C will be looking to see the income levels of people in each country. Even in B2B, you will want to know what sort of country you’re dealing with, so GDP per capita is a good statistic to look at.

This ranking, also by the CIA World Factbook, is a good place to start. However, averages always hide certain realities – so if you want to see how income is really spread, check out the Gini coefficient stats from the World Bank, which measure levels of inequality and wealth distribution.

6. Democracy Index

Many exporters are understandably concerned about the political situation of the countries where they do business. While some are mainly focused on corporate responsibility, or fear for the stability and future of their business, others may simply not want to travel to a country lower on this list out of a feared lack of personal safety for their staff.

If you want to learn more, take a look at the Economist Intelligence Unit Democracy Index. The resulting ranking is rather handy when starting to paint a picture of Latin American markets.

Rankings are a great way to start your research

I wouldn’t rely solely on statistics or rankings, but they should definitely have a place when researching Latin American markets, particularly if these markets are totally new to you. Rankings will start highlighting some opportunities and flash some concerns. You will start spotting some patterns as to where the best exporting opportunities are as well. I hope they help in your future global business endeavours!

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Ongoing TTIP trade deal negotiations between Washington and Brussels may not be reached in 2015 as originally anticipated, EU officials admitted in late March.

“We have to do our best to get an agreement but we don’t want to reach an agreement just for the sake of it,” Latvian Foreign Minister Edgars Rinkevics stated on March 25. Latvia currently holds the EU presidency.

[quote type=center]We are aiming to conclude this under the Obama administration…but I cannot give you a date.[/sws_blockquote_endquote]
Obama’s term will end in January 2017.

Negotiations have been in progress since June 2013, and were originally expected to be completed in 2014. The deadline was pushed to 2015 when it became clear that issues would not be resolved before then; the European Commission froze trade talks in January 2014.

What’s holding up the deal?

The biggest obstacle to locking down a deal is investor-state dispute settlements (ISDS). This portion of the proposed deal is causing an uproar throughout the EU, as it will allow corporations to take governments to international arbitration tribunals, instead of local courts, to resolve investment disputes.

Germany – which is arguably the economic driver of the EU – has come out vociferously against the measure, followed by Austria and France.

Germany’s deputy chancellor, Social Democrat Sigmar Gabriel, stated in late March that he is resolutely against the ISDS measure, fearing its impact on the EU’s stringent regulatory laws.

[quote type =”center”]We won’t lower any social, environment, or consumer production standards,[/sws_blockquote_endquote]

Gabriel told Sueddeutsche Zeitung. “And we will not – I am completely sure of this – see any privatization of arbitration.”

Opposition to the measure has pushed the European Commission to launch a permanent court, which will oversee and decide cases between foreign corporations and governments

However, EU Commissioner for Trade Cecilia Malmström is committed to creating a court which will not only have the power to adjudicate on TTIP matters, but also future trade agreements; she argues that a multilateral court would be a better use of resources and will be more legitimate.

The biggest concern opponents have about the current ISDS clause is whether or not international corporations would be able to sue governments for altering environmental or regulatory measures post-investment.

Malmström told members of the European Parliament that she sees other alternatives for dealing with this issue,

Our idea is a clause that says investment protection rules offer no guarantee for investors that the legal regime under which they have invested will stay the same

She also suggests limiting the amount of appeals that corporations will be able to make against the findings of national courts, by either forcing them to choose to work with national courts or the ISDS framework, or to cease suits launched in national courts once ISDS arbitration begins.

Decreasing appetite for trade deal

When the EU-US trade deal idea was born in 2011, the EU was reeling from a debt crisis which led many to question whether the economic arrangement could be maintained. Trade with major players was seen as an elixir to restore the continent to economic health.

But now that economies have rebounded sufficiently, state governments are bristling at conceding too much to potential trade partners.

The overall estimation of how much the EU stands to benefit from the signing of the trade deal has also changed. German industry federation BDI initially said the EU could expect to generate 100 billion euros per year as a result of the deal.

BDI was roundly criticized for the numbers, while the Center for Economic Policy Research for the European Commission published its own, more conservative number: EU GDP is expected to grow 0.5% in 10 years as a result of the deal, or 119 billion euros by 2027.

With growing opposition and a less-rosy picture of what the EU may gain from the accord, negotiators are facing serious challenges in bringing the deal to fruition.

Should the EU create a separate court to handle ISDS cases?

The post The one big obstacle that has brought the TTIP deal negotiations to a stand-still appeared first on Trade Ready.