South-South Trade: Trends, Issues, and Obstacles to Its Growth

South-South Trade: Trends, Issues, and Obstacles to Its Growth

South-South Trade: Trends, Issues, and Obstacles to Its Growth

South-South Trade: Trends, Issues, and Obstacles to Its Growth


The twelve papers in this volume provide information on and analysis of trade flows among developing countries (which are mostly in the Southern Hemisphere). The authors believe there is hope for economic growth, increased trade, and improved balance of payments in trade among the developing nations. The papers included here are the result of a research project initiated by the United Nations Conference on Trade and Development. This is a relatively new field, and these papers are a major source of information. They go beyond the confines of neo-classical theory, discussing the dynamic role of trade in the development and industrialization of developing countries.


The existence of trade among developing countries is beyond dispute. Disagreements exist mostly over the level and the composition of South-South trade, over the determinants of the dynamics of growth of the intra-South trade, and over the obstacles to growth.

Proponents of South-South trade analyze its costs and benefits in a rather idealized context of trade and development: Long-run dynamic economies of learning, the creation of domestic technological capability, and the consequent upgrading in the domestic structure of skills are emphasized as the positive gains from promoting South-South trade.

The critics of policies designed to promote the trade among developing countries adopt the static models of resource allocation through international trade to show that the promotion of South-South trade threatens the rules of free trade and that its current level already exceeds what would be acceptable in terms of the economic importance of developing regions in the world economy. Moreover, they perceive the trade policies adopted by developing countries as the major impediment to expansion of their trade among them.

The trade among developing countries is also criticized on distributional grounds, since there are doubts as to whether the benefits derived from this trade can be extended to all developing countries.

The debate on South-South trade contains implicit or explicit views on the role of international trade in industrial and development strategies. It also includes different conceptions of the operation of the market system in the eco-

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