Trade Between Developing Countries Gains Importance

The flows of world trade are changing: In the early 1990s, half of global merchandise (measured by value) was traded between developed countries. In the current decade, the global balance of trade by development status is more level, with so-called emerging markets and developing economies exchanging a growing share of global trade among one another. Likewise, intra-developed nation trade has shrunk overall, while trade between developed and developing nations has remained an important factor throughout.

While the move of manufacturing capabilities to lower income countries has strenghtened trade between developed and developing countries, disposable incomes and consumer spending is rising in the developing world, creating increased trade activity between factories and consumers in the Global South. Developed country trade persists due to active consumer markets in rich countries that buy lower-value merchandise as well as higher value items that continue to the produced in developed countries to a degree.