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Would general trade liberalization in developing countries expand South-South trade?

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  • Erzan, Refik

Abstract

For most developing countries, the proportion of exports going to other developing countries has steadily increased since the early 1970's. Until that time, most of the developing countries with an outward-looking trade strategy did proportionately less trade with other developing countries, particularly manufacturers. Since the early 1970's, however, an outward orientation has often gone hand in hand with more South-South trade. The proportionate increase in South-South trade occurred despite relatively higher protection in most developing countries against the products for which they, as a group, have a comparative advantage. As the annual growth rate slowed, it greatly affected the direction of developing countries trade. But the resumption of growth in industrial countries did not alter the increasing trend in South-South trade. The structure of tariff and nontariff protection in most developing countries discriminated against products that other developing countries could supply competitively. Hence, across the board, nondiscriminatory liberalization would generally favor South-South trade - particularly if liberalization focused on the most heavily protected sectors.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 319.

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Date of creation: 31 Dec 1989
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Handle: RePEc:wbk:wbrwps:319

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Keywords: TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT; Economic Theory&Research; Trade Policy; Earth Sciences&GIS; Poverty Assessment;

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  1. Greenaway, David & Milner, Chris R, 1990. "South-South Trade: Theory, Evidence, Policy," World Bank Research Observer, World Bank Group, vol. 5(1), pages 47-68, January.
  2. Nogues, Julio J & Olechowski, Andrzej & Winters, L Alan, 1986. "The Extent of Nontariff Barriers to Industrial Countries' Imports," World Bank Economic Review, World Bank Group, vol. 1(1), pages 181-99, September.
  3. Laird, Samuel & Yeats, Alexander, 1988. "A Note on the Aggregation Bias in Current Procedures for the Measurement of Trade Barriers," Bulletin of Economic Research, Wiley Blackwell, vol. 40(2), pages 133-43, April.
  4. Lewis, Arthur, 1979. "The Slowing Down of the Engine of Growth," Nobel Prize in Economics documents 1979-2, Nobel Prize Committee.
  5. Nogues, Julio J., 1983. "Alternative trade strategies and employment in the Argentine manufacturing sector," World Development, Elsevier, vol. 11(12), pages 1029-1042, December.
  6. Havrylyshyn, Oli & Wolf, Martin, 1983. "Recent trends in trade among developing countries," European Economic Review, Elsevier, vol. 21(3), pages 333-362, May.
  7. Krugman, Paul, 1980. "Scale Economies, Product Differentiation, and the Pattern of Trade," American Economic Review, American Economic Association, vol. 70(5), pages 950-59, December.
  8. Tuong, Ho Dac & Yeats, Alexander, 1980. "On factor proportions as a guide to the future composition of developing country exports," Journal of Development Economics, Elsevier, vol. 7(4), pages 521-539, December.
  9. Thomas, Vinod, 1989. "Developing country experience in trade reform," Policy Research Working Paper Series 295, The World Bank.
  10. Havrylyshyn, Oli, 1985. "The direction of developing country trade : Empirical evidence of differences between South-South and South-North trade," Journal of Development Economics, Elsevier, vol. 19(3), pages 255-281, December.
  11. Laird, Sam & Nogues, Julio, 1988. "Trade policies and the debt crisis," Policy Research Working Paper Series 99, The World Bank.
  12. Havrylyshyn, Oli & Civan, Engin, 1985. "Intra-industry trade among developing countries," Journal of Development Economics, Elsevier, vol. 18(2-3), pages 253-271, August.
  13. Hal B. Lary, 1968. "Imports of Manufactures from Less Developed Countries," NBER Books, National Bureau of Economic Research, Inc, number lary68-1, October.
  14. Jagdish N. Bhagwati, 1978. "Anatomy and Consequences of Exchange Control Regimes," NBER Books, National Bureau of Economic Research, Inc, number bhag78-1, October.
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