Developing Countries Share Rises in World Trade to Half, Exposure to Volatile Cycles Shoots

The latest edition of the WTO’s flagship publication was released on 20 October 2014 in Geneva. Director-General Roberto Azevêdo, in marking the launch of the report, said that “the emerging trends highlighted in this report suggest that trade will be a major force for development in the 21st century”.

The report says, countries undertaking substantial reforms related to WTO accession were found to grow around 2.5 per cent faster for several years afterwards, the report notes.

The World Trade Report 2014 identifies these four trends as:

• the rise of the developing world;

• the expansion of global value chains;

• the higher prices of commodities; and

• the increasingly global nature of macroeconomic shocks.

Rise of the developing world

Since 2000, GDP per capita of developing countries has grown by 4.7 per cent, with developing country G-20 members performing particularly strongly. Meanwhile developed countries only grew by 0.9 per cent. As a result, developing countries now account for more than half of world output (in purchasing power parity terms).

Developing countries in global value chains

More than half of their total exports in value-added terms are now related to global value chains (GVCs). South-South global value chain linkages are becoming more important with the share of GVC-based trade between developing countries quadrupling over the last 25 years.

GVCs are associated with “deep integration” agreements: more than 40 per cent of free trade agreements in force today include provisions related to competition policy, investment, standards and intellectual property rights.

Higher commodity prices

Strong demand from large developing countries provides a strong reason to believe that the high-price environment is likely to stay.

Developing countries increased their market share in global agricultural exports from 27 to 36 per cent since 2000.

Synchronization in and globalization of macroeconomic shocks

Global trade value fell by over 30 per cent within only a few months in face of the global economic crisis.