Emerging economies influence pattern of international trade

Emerging economies including China, India and Brazil are now able to influence the pattern and scope of international trade – according to WTO Director General Pascal Lamy.

“These emerging powers – China, India, Brazil, Mexico, Indonesia, Malaysia, South Africa – and many others are no longer policy takers.

“These countries now increasingly influence the pattern and scope of international trade, creating new supply and demand pulls and flexing their influence in international organisations,” he said recently at the Richard Snape Lecture in Melbourne, Australia

“This is no longer the world of the twentieth century dominated by the US pillar on one side and the European pillar on the other. We are in a twenty-first century multi-polar world”.

Key players

The WTO chief said the global network of imports and exports is no longer just the North-South paradigm of the past century. He added that the emergence of some developing countries as key players and as “real contributors” to global dialogue on trade and economics is a fundamental feature of this new geo-political reality.

“Increasingly we are seeing developing countries as producers and as markets for each other and this is one of the growing patterns of the new landscape of trade,” he said.

The WTO chief said that the in the past 20 years, merchandise trade between developing countries has expanded much faster than the North-South trade.

Skewed trade

A recent report by UNCTAD notes that in 2010 South-South exports made up 23 per cent of world trade compared to just 13 per cent in 2000.

“Developing countries are now the largest market for other developing countries. While this is encouraging, the contribution of developing regions to South-South trade is highly skewed,” he said.

Asian countries make up more than 80 per cent of South-South trade, with the shares of Africa and Latin America being just 6 per cent and 10 per cent respectively in 2010.

Mr Lamy said that economic ties between Africa and China and Africa and India are growing considerably.

“Trade between China and Africa will likely hit upwards of USD 200bn in 2012, up 25 per cent year on year. If this trend continues, reports are that Africa could surpass the EU and the US to become China’s largest trade partner in three to five years,” he added.