29 Jun, 2012
Geneva, 26 June 2012 (UNCTAD News Release) – South-South trade has grown dramatically in the past decade to about a quarter of the value of world trade, says UNCTAD’s newly-launched South-South Trade Monitor. The online publication, to be issued twice a year, monitors trade among developing countries. As trade is a precursor of travel trends, especially business travel, the Monitor also offers clear indications of future trends in travel. The inaugural issue covers: South-South exports by region; main export sectors; and the evolution of factor intensity of exports by destination.
According to the Monitor, South-South trade is a case of regional specialization: Asia exports manufactures and Africa and the Americas (i.e. Latin America and the Caribbean) export commodities to Asia. However, in trade within a region, manufactures claim the highest share both in Africa and Latin America.
Another notable point is that, in the decade from 2001 to 2010, these two regions have substantially shifted the destinations of their manufacture exports from the North to the South. Africa’s exports of manufactures to the South increased from 33% (2001) to 45% (2010) of its total manufacture exports. The Americas show an even greater shift, from 19% (2001) to 33% (2010).
A breakdown of South-South manufacture exports reveals that those traded among the South are of higher skill intensity than those exported to the North (i.e. developed countries), which indicates that South-South trade can provide a ground for increasing export value added.
Following are excerpts from SOUTH-SOUTH TRADE MONITOR, No. 1, June 2012. Download the full report with charts and graphs by clicking on the link.
1. South-South export rebounded faster than world trade after the 2008 crisis
In 2010, South-South export reached $3.5 billion, claiming 23 per cent of world trade.
As from 2008, developing countries as a whole exported more to the South than to the North.
Between 2001 and 2010, South-South export grew on average by 19 per cent per year compared to 12 per cent of the world export growth.
After the 2008 global economic crisis, South-South exports rebounded much faster than world export growth. South-South exports grew by 30 per cent between 2009 and 2010.
2. South – South trade is basically trade with and within Asia
Asia claims over 80 per cent of all South – South exports, of which intra-Asia exports account for around 74 per cent. Asia’s dominance in South – South trade has been consistent throughout the studied period of the last 15 years.
The shares of Africa and Americas in South – South exports in 2010 were 6 per cent and 10 per cent, respectively. For both regions, the North remains the main export destination.
Asia’s “pull” of exports from other regions also increased: Africa’s exports to Asia accounted for 62 per cent of its 2010 total southbound export (31 per cent in 1995); and in Americas 42 per cent (24 per cent in 1995).
Intra-regional trade is less significant for Africa and Americas. The share of intra-Africa exports fell from 63 per cent (1995) to 29 per cent (2010) of its total southbound exports. For the Americas, the share fell from 71 per cent (1995) to 53 per cent (2010) of the Americas’ total southbound exports. Trade between Africa and Americas remained just over 1 per cent of total South – South exports throughout 1995 – 2010.
3. Between Southern regions, trade shows the pattern of regional specialization
Over 60 per cent of South – South exports are in manufactures.
The majority (over 90 per cent) of South – South manufactures exports come from Asia. Americas claim 6 per cent and Africa’s share is 2 per cent. This has been a consistent pattern for the last decade.
South – South trade as a whole is the case of regional specialization: Asia exports manufactured goods and Africa and the Americas export commodities to Asia. Fuels dominate Africa’s exports to the Americas, while basic food items are the main exports from the Americas to Africa.
In trade within a region, however, manufacture exports claim the highest share both in Africa and the Americas.
4. Focus (a): South – South exports in manufactures
In 2010, South – South exports in manufactures accounted for 21 per cent of the world manufactures exports. The share increased by 10 percentage points from the level in 1995.
The share of manufactures in total exports is significantly different across developing regions. For the Americas and Africa, the share fell from the 2001 level by over 10 percentage points.
During the same period, there has been a destinational change in manufacture exports of Africa and the Americas. Southbound manufacture export increased constantly.
5. Focus (b): South – South exports and increasing export value added
Manufacture exports were grouped into five skill-intensity categories. Among manufactures, South – South exports in TDRC claimed 24 per cent of the world, and TDRE claimed 26 per cent of the world.
Across all categories, the share of South – South manufacture exports has been on a constant rise since 2001. In 2010, South was the main destination of all categories of manufacture exports, except TDRB (labour- intensive and resource-based manufactures such as leather, textile and articles of apparel).
Skill intensity of manufacture exports to the South is generally higher than those to North, except in the case of America.
UNCTAD research revealed that there is a tendency that South – South exports show a higher factor-intensity (measured in terms of revealed physical capital intensity) than South exports to North.