Trade and development

More about Trade, Development and Adjustment

 

The multilateral trading system has delivered successive rounds of trade liberalisation and established mechanisms to protect the interests of member economies. The result has been growth for those economies that have engaged in the process, recognising the importance of openness and establishing an appropriate trade policy framework including corresponding and complementary domestic policies.  Consequently, for developing countries, the objective of integration into the global economy should be an integral part of national development strategies.

 

Trade enables a country to focus on its areas of comparative advantage, reaping the benefits of a global division of labour and economies of scale. Trade expands the scope of markets for goods and services produced in an economy, while providing access to goods, services and technologies from abroad.

In the context of the multilateral trading system, there is no fixed definition of “developing country”. Rather, member economies of the World Trade Organisation (WTO) can self-select their status as “developing” or “developed.”

 

A subset of developing countries is designated by the United Nations as “Least developed countries.” For more information on this category of countries, see the web site of the United Nations Conference on Trade and Development. Developing countries have access to special and differential treatment (see 'Special and Differential Treatment').

 

Trade liberalisation is most effective when approached in a manner designed to minimise economic distortions and accompanied by appropriate domestic policy reform and institutional development.