The increasing participation of many developing countries in new and dynamic trade sectors has acted as both a driver and an outcome of the changing geography of international trade, characterized by a dramatic growth in the share of developing countries in world trade flows. An UNCTAD Expert Meeting (24-26 October, Geneva, Palais des Nations) will review national and international policies in three of these new and dynamic sectors: electronics, fish and marine products, and steel and related specialty products. Its major objective is to further promote and facilitate participation of developing countries in these sectors of international trade.
While developing countries account for 30 % of exports in the 20 most dynamic merchandise product groups, many developing countries, especially LDCs and African countries, continue to specialize in large part in sectors that are among the least market-dynamic in world trade. The difficulties these countries face in managing the challenges of, and reaping the benefits from, the rapidly changing global trading and economic processes, and the resulting shifts in the international division of labour, is a source of continuing concern.
Electronic products(PDF) dominate the dynamic sectors of world trade. It is estimated that over 15 per cent of total world merchandise exports involve electronic and electrical goods. Over the last three decades, developing countries have been progressively integrated into the production of electronic goods. East and South-East Asian countries lead the developing countries in terms of their share in trade in electronics, followed by the Latin American and Caribbean region. North Africa and Middle Eastern countries have picked up the trend.
The specific features of the electronic sector include rapid technological change, intense price competition, and constantly changing demand and preference patterns. These factors make it difficult for late or new market entrants to participate in global supply chains. Successful experiences indicate that making strategic policy choices based on a realistic assessment of the actual and potential comparative advantage of different sub-sectors in the entire value chain plays a crucial role. Additional keys for success are: robust and flexible supply capacity to respond to rapidly changing demand and preference conditions; effective integration into international production networks; avoiding the low or declining value-added trap; adequate market access and entry conditions; and regional South-South cooperation to support newcomers to this sector.
With regard to fisheries and marine products (PDF), developing countries account for around 77 per cent of world production, with China being the largest producer. Fish is one of the most important export items of developing countries. However, fish exporters from developing countries face very stringent health regulations and quality standards. On the other hand, fish consumption is rising. In developed countries, the emphasis is on the healthy properties of fish. In developing countries, fish is essential for food security.
With limits on catches, aquaculture has a bright future. Developing the fishery sector can contribute to raising national income and employment, improving food security, facilitating the development of a local processing industry, and increasing foreign exchange earnings. Technical assistance is needed to evaluate available fish resources and ensure the sustainability of stocks. Information and training are also essential. More value for the fish produced or caught can be obtained through less by-catch, better fishing efficiency, smaller losses during processing and better quality. Improving access to finance is also crucial for producers in developing countries.
Steel (PDF) remains a leading industrial sector. China, Japan, the United States, the European Union (EU) and the Commonwealth of Independent States (CIS) account for about three quarters of world crude steel production. Major exporters are the EU, the CIS, Japan, the Republic of Korea, and Brazil, and major importers are the EU, the United States, and China. Developing countries´ share in world exports has been steadily increasing. Developments in China have greatly affected the world steel market. Since 1996, Chinese production and consumption of steel have increased rapidly, making it the world´s largest producer and consumer. The excess steel capacity that long existed has now been reduced. The projected increase in capacity may just cover the additional supply, provided that Chinese demand continues to grow at its recent rates.
Nevertheless, the general tenor and direction of the world steel market is expected to change, with prices remaining at present levels or falling further, and excess capacity possibly becoming an issue once again. New production capacity is planned mainly in developing countries and countries in transition. These countries have significantly lower production costs than most developed countries. This can lead to increased market shares if international trade is not impeded. Efforts to limit the impact of government subsidies on international steel trade have not yet succeeded. To deal with trade-distorting practices in this sector, it is necessary to take into account not only subsidies but all relevant arrangements and measures with similar economic effects.
The first UNCTAD expert meeting on dynamic and new sectors of world trade took place from 5 to 7 February 2005 and considered IT-enabled outsourcing of services; renewable energy products, including bio-fuels; and textiles and clothing.
