Trade Agreements Between Developed And Developing Countries

In recent decades, the global economy has grown rapidly. This growth was partly driven by an even faster rise in international trade. Trade growth, in turn, is the result of both technological developments and concerted efforts to reduce trade barriers. Some developing countries have opened up their own economies to fully exploit economic development opportunities through trade, but many have not. Other trade barriers in industrialized countries are concentrated in agricultural products and labour-intensive industries, in which developing countries have a comparative advantage. Continued trade liberalization in these areas, particularly by developed and developing countries, would help the poorest to escape extreme poverty, while benefiting the industrialized countries themselves. The resulting integration of the global economy has increased living standards around the world. Most developing countries contribute to this prosperity; over the course of several years, revenues have increased dramatically. As a group, developing countries have become much more important in world trade – they now account for one-third of world trade, up from about a quarter in the early 1970s. Many developing countries have significantly increased their exports of manufactured goods and services compared to traditional commodity exports: production from developing countries has increased to 80% of developing countries` exports. In addition, trade between developing countries has grown rapidly, with 40% of their exports to other developing countries.

However, in many other countries, particularly in Africa and the Middle East, progress has been slower. In the poorest countries, their share of world trade has declined considerably and, without reducing their own trade barriers, they are at risk of further marginalizing. Approximately 75 development and transformation economies, including virtually all least developed countries, fit this description. Unlike successful integrators, they are disproportionately dependent on the production and export of traditional raw materials. The reasons for their marginalization are complex, including deep structural problems, weak political framework and institutions, and protection inside and outside.

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