What can you do with Global Trade Flow Statistics? What can the numbers tell you? Think of it like getting to know a person. Each person has a story. Each product that is bought or sold has a story too. The big picture of international trade is composed of many millions of individual stories woven together into a huge, ever-changing tapestry. Global Trade Flow Statistics are like “vitals”.
When you go to a doctor, he/she checks weight, blood pressure, temperature, etc. These pieces of data provide the foundation for understanding your particular situation. After the preliminaries are completed, you will be asked additional questions in order to assess your individual condition. Perhaps x-rays, blood tests or another specialist examination will be called for. Each vital statistic is evaluated in combination and in context (with the aid of experts) in order to render a proper diagnosis and treatment plan.
Global Trade Flow Statistics (about what has been, is currently and what is expected to be bought or sold by a particular country of your respective product) are vital pieces of information. They not only establish a fundamental knowledge of the situation, but also provide the necessary clues about what other data is required. Collecting, comparing, analyzing and reporting this and accompanying data are called Market Research.
No would-be (intelligent) exporter or importer of products or raw materials should attempt to conduct business without it. It would be similar to dispensing a prescription without a thorough examination. You might guess right more times than not, particularly if you consider yourself to have “street smarts”, but the cost of not knowing what you don’t know can be considerable.
Many times, the most important information that can be gleaned from statistical analysis is more questions. I remember stumbling upon a 10,000% jump in annual shipments of auto parts from the U.S. to an obscure African country. Further investigation revealed that, to circumvent the trade embargo imposed upon South Africa, U.S. shipments were being rerouted through an adjacent nation.
Another anomaly I remember was the exponential increase in imports by the U.S. of Chilean Salmon. Market research conducted for an entrepreneurial friend of mine, revealed that 98% of Chilean salmon shipments came into Miami, took several days to clear customs and then several more days to be trucked to destinations north. His plan was to establish direct flights into Nashville, reroute distribution and save almost a week. In the world of a fresh, perishable commodity like fish, that’s an eternity.
At CenTradeX, I developed dynamically generated reports that illustrated the trade balance (comparing exports with imports) for any particular product between any chosen trading partners (countries) over a 20 year period. With 6,000 product categories and 200 countries that generated over 1,000,000 snapshots, it was easy to observe, if “trade war” is a metaphor you are comfortable with, exports representing money (green) and imports representing (red) how the U.S. has been faring, economically speaking, (soldier by soldier/product by product) with China over time.