UNCTAD: Trade growth in developing countries outpaced developed countries

The UN Trade and Development global trade update reveals a significant trend over the past four quarters: trade growth in developing countries has outpaced that of developed countries. This revelation comes amid significant uncertainty in the forecast for international trade and a looming risk of a downturn. However, there is some hope on the horizon, with expected easing in global inflation and China's economic stimulus for 2025 potentially providing tailwinds to global trade. Luz Maria de la Mora, the Director of International Trade and Commodities at UNCTAD, sheds light on these findings. The latest report indicates that global trade has increased by 3.7% in 2024, surpassing the 3% growth of the global economy. This growth signifies that trade remains a crucial source of economic activity and growth. Notably, South-South trade is on the rise, with developing countries engaging in trade at a slightly higher rate than the global average. This trend highlights the significance of trade as an engine for growth, particularly in developing nations. When addressing the impact of tariffs on international trade, Mora emphasizes the uncertainty brought about by the new US administration. With changing rules and unilateral measures disrupting the multilateral trading system, African countries face unique challenges. Mora suggests that African policymakers focus on crafting policies that promote sustainable trade, growth, and development while balancing revenue generation and global economic integration. The Africa Continental Free Trade Area emerges as a key instrument for regional integration, offering opportunities to expand markets, create value chains, and foster industrialization. By leveraging regional trade agreements and investing in SMEs, Africa can enhance its production capacity and move away from commodity dependence towards value addition. Mora also underscores the potential for Africa to develop regional value chains by reducing tariffs and non-tariff barriers. The director highlights the opportunities for high-tech and medium-tech products in intra-Africa exports, showcasing the continent's capability to enhance its trade activities and economic growth. The prospects for value addition are promising, with Africa well-positioned to capitalize on its resources and human talent. As Africa navigates these evolving trade dynamics, the continent stands at a pivotal moment to leverage regional trade agreements and multilateral platforms to drive economic development and prosperity.