SURFING ON THE TIDE? LEAST-DEVELOPED COUNTRIES TRADE DURING THE GREAT GLOBAL TRANSITION
SURFING ON THE TIDE? LEAST-DEVELOPED COUNTRIES TRADE DURING THE GREAT GLOBAL TRANSITION

Summary/Abstract: The rebalancing of global demand towards large emerging countries and the resulting long-lasting cycle of high international commodity prices had a profound impact on LDC trade. This process contributed to a wider geographicaldiversification of LDCs' exports but led also to a greater reliance on those highly priced commodities. LDCs remainparticularly vulnerable to external shocks; the 2008-2009 global crisis and the bumpy transitional recovery that followed illustrate the fragility of the recent trends. A slowdown in the growth of large emerging countries may end the commodity"super-cycle", deepening LDCs' structural trade imbalances. In such a perspective, renewed efforts towards extensive product diversification are called for. Fostering diversification has been supported for many years by preferential marketaccess to develop and --more recently-- to emerging countries. But preferences alone are not sufficient to improve thesupply-side capabilities of most LDCs. The new business models related to global value chains offer new opportunities to LDC s for export diversification and trade facilitation is one of the key components of this diversification strategy.

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