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Meeting: Expert Meeting on Market Entry Conditions Affecting Competitiveness and Exports of Goods and Services of Developing Countries: Large Distribution Networks, Taking into Account the Special Needs of LDCs
Date: 26–28 November 2003
Location: Geneva


Summary
( For information only - Not an official record )

Individual experts and specially invited resource persons put forward their views on how developing country producers could obtain market entry, particularly in developed country markets, taking into account the growing importance of large distribution networks. The following text summarizes their comments and suggestions and is intended to reflect the richness and diversity of the views expressed.

Large distribution networks are geographically diversified networks with many components that handle large volumes of products and that are, usually, vertically integrated. Experts agreed that it was important for developing country producers to engage with these networks since they have become the core of the logistic chain both of domestic commerce and international trade and therefore offer the potential for producers of reaching wider markets. The experts noted that the large distribution networks pose particular market entry conditions. These conditions may be defined as the parameters that exporting firms in developing countries have to meet in order to enter such distribution networks for goods and services in the markets of developed countries. The parameters in question may relate to product characteristics, the nature of the production process (e.g with respect to worker health and safety, or to environmental impact), prices and speed of delivery. Compliance with such market entry conditions is a prerequisite for participation in entry modes such as direct exportation, joint ventures, partnerships, franchising, licensing or trade fairs, and for the use of a sales representative, distributor or consolidator.

It is important to distinguish between market access and market entry. While the possibility of entering foreign markets depends on market access conditions (determined by the legal and administrative conditions imposed by the importing countries under internationally agreed trade rules), the ability to enter a market is a function both of the competitiveness of the exporter (determined by the relative cost and quality of the product, including environmental/health aspects), and of the characteristics of supply chains and the structure of markets. Thus, market access is a prerequisite for market entry to occur, but is not sufficient. An important difference between market access and market entry conditions is that while market access conditions in principle are subject to international jurisdiction under WTO rules, market entry conditions are not and producers have to conform to them or lose the opportunity to enter markets. Developing country exporters (especially those from LDCs), as well as their Governments, therefore need to go beyond market access concerns and also focus upon the conditions governing actual market entry. At the same time, it is important to note that both market access and market entry conditions are changing continuously and that developing country exporters need to adapt to these changes as they take place. A particularly important example is the end to preferences for ACP countries in EU markets in 2006, which will oblige producers to become competitive.













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