Terms of Trade and North-South Relations: Implications for Foreign Wealth Accumulation and Comparative Development (1962-2025)

How critical are terms of trade (and in particular prices of primary goods) in the geography of foreign wealth accumulation and the comparative development of world regions in the postwar globalization? To address this question, I rely on the global coverage of the new WBOP dataset and further split the primary commodities unilateral trade into agricultural, fuel, and mining products categories for the 1962-2025 period. I also construct a world price index of exports for each category of goods relying on the unit value of all 5-digit subheading reported and gathered in UN comtrade. I find that for non-fuel primary commodities the increase in the value exchanged throughout this period is explained by a faster rise in volumes than the increase in prices. I run counterfactual simulations in order to get an estimation of the importance of long-run prices of these primary commodities in the accumulation patterns of foreign wealth and development paths of world regions. For example, if mining products exporting countries would have organized and increased their prices in a similar way as the OPEC, Sub-Saharan Africa would own a substantial foreign wealth in 2025 (+1400% of its GDP vs -43% in reality). Similarly, if agricultural product prices would have followed fuel prices in 1962-2025, it would have allowed Latin America to own a foreign wealth of +490% of its GDP (vs -30% in reality). I also illustrate the impact of such scenarios on the per capita growth of countries. These results aim at estimating the relevance of the discussion about the role of global trade organization and the correlative set price of commodities in the unequal development of countries around the world.