In­ter­na­tion­al trade

At the end of the 1990s, the TO­TAL SHARE of the De­vel­op­ing World in IN­TER­NA­TION­AL MER­CHAN­DISE TRADE (i.e., TRADE in GOODS on­ly, with­out SER­VIC­ES) amount­ed to about 30 per­cent of world's turn­o­ver. How­ev­er, this SHARE would go down to around 25 per­cent if we ex­clude OILex­port­ing coun­tries (which form a quite spe­cial case and can NOT be­ re­gard­ed as­ or­di­nary de­vel­op­ing coun­tries). And if­ we­ ex­clude Asian "TI­GERS" and "DRAG­ONS" which are al­so NOT quite typ­i­cal de­vel­op­ment coun­tries any more, the re­main­ing SHARE would shrink to­ about 1415 per­cent, or rough­ly ONESEV­ENTH, of­ world's trade.

Thus, IN­TER­NA­TION­AL COM­MERCE is rep­re­sent­ed most­ly by the DE­VEL­OPED (highin­come) NA­TIONS – more than 80 per­cent, ac­tu­al­ly. And they trade most­ly in MAN­U­FAC­TURES (fin­ished and semifin­ished in­dus­tri­al prod­ucts) – about TWOTHIRDS of the world MER­CHAN­DISE ex­ports.

In con­trast, the De­vel­op­ing World (if we again ex­clude the NIC) trades most of all in RAW MA­TE­RI­ALS and PRI­MARY PROD­UCTS (slight­ly pro­cessed IN­DUS­TRI­AL GOODS).

Ja­pan, with its HIGH de­gree of DE­PEN­DENCE on for­eign RAWMA­TE­RI­ALS sup­ply, with its big and grow­ing OFFSHORE pro­duc­tion and strong EX­PORT or­ien­ta­tion, plays a sig­nif­i­cant part in the "NORTHSOUTH" trade. Since middle of the 1990s, in its FOR­EIGN TRADE the turn­o­ver with DEVELOPING coun­tries oc­cu­pied more then HALF, bring­ing about 50 per­cent of Ja­pan's giant TRADE SUR­PLUS as well.

ASIA as con­ti­nent oc­cu­pied by far the biggest share in Ja­pan's trade with the De­vel­op­ing World (over FOURFIFTHS per­cent for ex­ports and over TWOTHIRDS per­cent for im­ports), while the REST was di­vid­ed be­tween LAT­IN AMER­I­CA and AF­RI­CA in a 3 : 1 pro­por­tion.

* There are TWO ma­jor groups of prob­lems of the de­vel­op­ing coun­tries in the field of TRADE, and both con­cern the present sit­u­a­tion and pros­pects in re­spect to their EX­PORTS.

# MAN­U­FAC­TURES EX­PORT

The in­ter­na­tion­al sta­tis­ti­cal or­gans pub­lish lists of coun­tries clas­si­fied ac­cord­ing to the KIND OF EX­PORT that ac­counts for over 50 per­cent of their to­tal in­ter­na­tion­al sales – like "MAN­U­FAC­TURESex­port­ing", "FUELex­port­ing", "MIN­ER­ALSex­port­ing" or "AG­RI­CUL­TURESex­port­ing" econ­o­mies.

The IN­DUS­TRI­AL­I­ZA­TION of the De­vel­op­ing World is un­der way. So, the econ­o­mies that are clas­si­fied as "MAN­U­FAC­TURESex­port­ing" al­ready ac­count for MORE than HALF of the TO­TAL EX­PORTS of the group (how­ev­er, among de­vel­op­ing coun­tries, those are "FOUR ASIAN TI­GERS" Hong Kong, Ko­rea, Tai­wan and Sin­ga­pore – which con­trib­ute MOST to this SHARE).

There is a great NEED for the de­vel­op­ing coun­tries to EX­PAND their sales on the OVER­SEAS MAR­KETS, so as to give the IN­DUS­TRI­AL­I­ZA­TION a new im­pe­tus and to en­joy ad­van­tag­es of the MASSSCALE pro­duc­tion.

How­ev­er, the COM­PE­TI­TION on the mar­kets of the DE­VEL­OPED COUN­TRIES is very STRONG, and there re­main many OB­STA­CLES hold­ing back the de­vel­op­ment of MAN­U­FAC­TURE EX­PORTS of the De­vel­op­ing World in form of TAR­IFF and NONTAR­IFF BAR­RIERS to trade be­tween the two groups of coun­tries.

Among them, QUAN­TI­TA­TIVE RE­STRIC­TIONS of dif­fer­ent kind should be men­tioned, in­clud­ing such pe­cu­liar in­stru­ment as "VOL­UN­TARY EX­PORT RE­STRAINT" (VER), al­so called "VOL­UN­TARY QUO­TA", con­cern­ing va­rie­ty of goods – from cloth­ing and foot­wear, to TV sets and com­put­ers.

* How­ev­er, there al­so are some PRIV­I­LEG­ES and CON­CES­SIONS grant­ed to the ex­port­ers in the De­vel­op­ing World by the in­dus­tri­al ("highin­come") coun­tries on UNI­LAT­ER­AL, RE­GION­AL and MUL­TI­LAT­ER­AL ba­sis. As ex­am­ples, can serve:

The sys­tem of TAR­IFF PREF­ER­ENC­ES creat­ed with­in the Com­mon­wealth of Na­tions (the for­mer "Brit­ish Com­mon­wealth") which as­sists the de­vel­op­ing coun­tries of the for­mer Brit­ish Em­pire to sell their man­u­fac­tured prod­ucts in Great Brit­ain, Can­a­da, and Aus­tra­lia (first, it was in­i­tiat­ed by Brit­ain UNI­LAT­ER­AL­LY – way back in 1919).

The mech­a­nism of "AS­SO­CI­A­TION" (or SPE­CIAL RE­LA­TION­SHIP") creat­ed by the Eu­ro­pe­an UN­ION (EU) re­gard­ing ex­ports of about 70 socalled ACPcoun­tries (with "ACP" stand­ing for "Af­ri­can, Carib­bean and Pa­cif­ic"). This ar­range­ment should be re­gard­ed as RE­GION­AL be­cause it is an ele­ment of RE­GION­AL (Eu­ro­pe­an) in­te­gra­tion sys­tem (al­beit the ge­og­ra­phy of EU TRADE RE­LA­TIONS with ACPcoun­tries is very di­verse). The cur­rent Lome Con­ven­tion reg­u­lat­ing these re­la­tions and grants to all ACPcoun­tries PREF­ER­ENC­ES cov­er­ing COM­MOD­I­TIES such as sug­ar, rice, co­coa, cof­fee and beef, as well as some IN­DUS­TRI­AL PROD­UCTS such as rum.

The "GEN­ER­AL­IZED SYS­TEM OF PREF­ER­ENC­ES" (GSP) in­tro­duced by de­vel­oped coun­tries for the ben­e­fit of de­vel­op­ing coun­tries un­der ae­gis of the Unit­ed Na­tions Or­gan­i­za­tion UNO (and im­ple­ment­ed with­in the UNC­TAD struc­ture) rep­re­sents a typ­i­cal MUL­TI­LAT­ER­AL ar­range­ment.

The ex­pan­sion of MAN­U­FAC­TUR­ING IN­DUS­TRIES around the De­vel­op­ing World brings about NOT on­ly EX­PORT EX­PAN­SION pol­i­cies of in­di­vid­u­al coun­tries, but al­so ef­forts in IM­PORT SUB­STI­TU­TION. Thus, weak IN­DUS­TRI­AL STRUC­TURES of many de­vel­op­ing coun­tries are strong­ly backed by their PRO­TEC­TION­IST POL­I­CIES in­clud­ing HIGH im­port tar­iffs on MAN­U­FAC­TURED goods.

The adop­tion by the UNO of the NONREC­I­PROC­ITY prin­ci­ple in 1965, fixed in the GATT agree­ment in the course of the To­kyo Round of ne­go­ti­a­tions, gives the DE­VEL­OP­ING ("poor") coun­tries the right to en­joy PREF­ER­ENC­ES and CON­CES­SIONS grant­ed by the DE­VEL­OPED ("rich") coun­tries with­out con­trameas­ures (i.e., with­out the socalled "rec­i­proc­ity", or­, in oth­er words, with­out OPEN­ING their own mar­kets in re­turn).

# COM­MOD­I­TY EX­PORT

It is clear that ALL de­vel­op­ing coun­tries, and es­pe­cial­ly "FUELex­port­ing", "MIN­ER­ALSex­port­ing" and "AG­RI­CUL­TURESex­port­ing" (i.e., those trad­ing in COM­MOD­I­TIES of dif­fer­ent kind – like oil and gas, cot­ton and wool, cof­fee and co­coa, tin and cop­per, ba­na­nas and sug­ar), are much in­ter­est­ed in se­cur­ing good RE­TURNS (ex­port REV­E­NUES) from the COM­MOD­I­TY trade (i.e., from ex­port of RAW MA­TE­RI­ALS and PRI­MARY PROD­UCTS).

Such prod­ucts do oc­cu­py in the ex­ports of the "Ag­ri­cul­tu­ral South" (de­vel­op­ing coun­tries) much BIGGER share than in the ex­port trade of the "In­dus­tri­al North" (de­vel­oped econ­o­mies). The TRADE of many small coun­tries in Asia, Af­ri­ca and Lat­in Amer­i­ca have acquaired the socalled MON­O­CUL­TU­RAL char­ac­ter, i.e., their ex­port rev­e­nues de­pend on­ the sales of­ very FEW com­mod­i­ties one, two, some­times three – a very strong DE­STA­BI­LIZ­ING fac­tor.

So, the EC­O­NOM­IC SIT­U­A­TION and WELLBE­ING in many "RE­SOURC­ESex­port­ing" coun­tries (trad­ing in fuels, ag­ri­cul­tu­ral prod­ucts, min­er­als and met­als) high­ly de­pend on WORLD COM­MOD­I­TY PRIC­ES, their ab­so­lute LEV­ELS and DY­NAM­ICS (which is mostly unfavorable).

TWO examples: PRICES for such an essential commodity as COFFEE – a key export for many poor countries – have fallen by almost HALF over the first three years of the 21^st century and are at their LOWEST level in THREE decades. And COTTON prices have fallen by a similar amount since the mid1990s and are at their LOWEST since the Great Depression of the 1930s. Only OIL and GAS producers around the world had been happy for a while with the recent PRICE trends, actually.