Commerce between developing countries -- often called "South-South trade" -- is expanding rapidly, but harnessing its benefits to reduce poverty, create stable growth, and help developing nations diversify their economies is posing a challenge for nations caught up in this quickly changing global market.
An UNCTAD expert meeting to be held 16-17 October 2007 will focus on "participation of developing countries in new and dynamic sectors of world trade: the South-South dimension." Those who set government policy, researchers, and businessmen will exchange information on how to obtain development gains from South-South trade, and on how to promote further trade between developing nations in dynamic and new sectors that foster the most durable and widespread kinds of economic expansion and positive development impacts.
UNCTAD research has shown that the South-South trend, if linked to products for which high demand now exists, can be used to help countries move up from low-value-added to higher-value-added production and translate the benefits into overall development and rising standards of living. The discussion will focus, among other things, on identifying products and economic sectors likely to lead such growth. It also will centre on UNCTAD findings that support South-South trade increases along with appropriate macroeconomic, investment and financial measures. Participants in the meeting will attempt to prepare an analytical framework for such development-oriented strategies.
As South-South trade has grown in recent years, it has become clear that developing countries export a wider variety of products to each other than they do to the industrialized nations of the "North," and that the product mix of trade within regions tends to be more diverse than that of trade between regions. That provides an opportunity for economic diversification among countries that in the past have exported a limited number of products and consequently have been vulnerable to volatility in international prices for those products. Under the influence of South-South trade, a number of lower-middle and lower-income countries are now actively diversifying their exports.
Participants in the expert meeting will consider how to overcome obstacles to expanded and effective South-South trade, such as market access and market entry conditions, lack of domestic financing, limited domestic resource bases, lacunae in infrastructure development and insufficient linkages between domestic economic sectors.
