4 February 2015: A policy brief from the UN Conference on Trade and Development (UNCTAD) calls for improving the global governance of trade, warning that regional trade agreements are subjecting many developing countries to more stringent requirements than those contained in multilateral trade agreements.

In the February 2015 brief, ‘Advancing the Post-2015 Development Agenda Requires a Development Policy Rethink,’ the UN body reports that a proliferation of regional and other kinds of international trade agreements subject developing countries to a range of rules and restrictions, at the cost of their sovereignty and with the risk of being trapped in low-value manufacturing niches. The authors observe that the past decade’s high commodity prices have raised the specter of “premature de-industrialization” that can occur when countries rely mainly on commodity exports for growth, rather than making further investments in industrialization. Neither, they say, does participation in international production networks necessarily promote economic and social development to the level that is needed; rather, what may result is a limited degree of industrialization, which they term “thin industrialisation.”

To address these issues, the authors recommend that developing countries boost domestic and regional demand, based on redistributive measures and domestic investment by the public sector. They recommend directing resource rents toward promoting industrialization and sustained growth. They urge developing countries to enact industrial policies that will increase productivity, productive capacity and competitiveness, as well as encourage innovation and create decent jobs.

On the global governance of trade, the authors call for supporting inclusive multilateral mechanisms, avoiding competitive liberalization that does not serve the needs of developing countries, and reconsidering the developmental character of the growing number of regional trade agreements. They note that a more robust “South-South integration architecture” is already emerging, for example, in the shape of the BRICS countries’ (Brazil, Russia, India, China, South Africa) New Development Bank (NDB), and that this could become a basis for developing countries to leverage the increased economic and political power they have acquired in the past two decades and, in turn, could “help buttress a more ambitious post-2015 agenda.” [Publication: UNCTAD Policy Brief No. 31: Advancing the Post-2015 Development Agenda Requires a Development Policy Rethink] [UNCTAD Press Release]