Attaining the sustainable development goals through trade

Since 2020, the world has faced many crises, including climate change, the war in Ukraine, the ongoing war in Gaza, other geopolitical tensions, and food and energy insecurity, that disrupt trade flows and threaten progress towards the SDGsSustainable Development Goals. The growth of global merchandise trade is slowing, and geopolitical fragmentation hampers industrialization efforts of developing economies.

In the report to the Sixteenth Conference of UNCTAD, Rebeca Grynspan, Secretary-General of UNCTAD underscored the role of trade as a critical engine for economic transformation, particularly for developing economies striving for inclusive growth and resilienceThe ability of a system, community or society exposed to hazards to resist, absorb, accommodate, adapt to, transform and recover from the effects of a hazard in a timely and efficient manner, including through the preservation and restoration of its essential basic structures and functions through risk management (United Nations, 2016). (UNCTAD, 2025a). Strengthening productive capacitiesUNCTAD defines productive capacities as consisting of the productive resources, entrepreneurial capabilities and production linkages that together determine a country’s ability to produce goods and services that will help it grow and develop (UNCTAD, 2006) through trade is key to reducing vulnerability and enabling structural transformationStructural transformation or change can be broadly defined as the reallocation of economic activity across three broad sectors, agriculture, manufacturing and services, which accompanies the process of economic growth (Kuznets, 1966). It usually refers to the transfer or shift of production factors — especially labour, capital and land — away from activities and sectors with low productivity to those with higher productivity, which are typically different in location, organization and technology (UNCTAD, 2006); (Rodrik, 2013)..

Developing economies maintain a strong global export presence; LDCs still fall short of global export target

In 2024, developing economies accounted for 41% of global exports, up slightly from 40% in 2012. This stability underscores their enduring role in global trade, even amid shifting economic and geopolitical conditions.

SDGSustainable Development Goal target 17.11 calls for a significant increase in developing countries’ exports, with a specific aim to double the share of LDCsLeast developed countries in global exports from 1% in 2011 to 2% by 2020, a goal reaffirmed in the Istanbul (United Nations, 2011) and Doha (United Nations, 2022) Programmes of Action. Yet more than a decade later, progress has fallen short. In 2024, LDCs accounted for just 1.03% of global exports, up only marginally from 0.96% in 2012. These figures highlight the persistent structural barriers — limited diversification, weak infrastructure and small productive bases — that continue to constrain export growth in LDCs.

By contrast, SIDSSmall island developing states (SIDS) were recognized as a distinct group of developing countries at the Earth Summit in Rio de Janeiro in June 1992. More information on UNCTAD official page. increased their combined share of global exports of goods and services from 3.0% in 2012 to 3.4% in 2024, driven by gains in tourism, digital services, and creative sectors. While their overall share remains modest, this upward trend suggests the growing potential of services-led development pathways in vulnerable economies.

Between 2014 and 2024, only a limited number of developing economies achieved notable gains in their share of global exports of goods and services. Djibouti recorded an eightfold increase, while Guinea’s share rose sixfold. Armenia and Sao Tome and Principe quadrupled their global export shares, Lao People’s Democratic Republic, Viet Nam, and Cambodia tripled their export shares, and economies such as Niue, Mongolia, Georgia and Kyrgyzstan doubled theirs. China also expanded its share by 32%, reaching 12% in 2024 from 9% in 2011. In contrast, several developing economies, including Yemen, Lebanon, Guyana, Kiribati, Sudan, Suriname and Angola, experienced a decline in their global export shares over the same period.

No additional trade decoupling

In 2024, trade interdependence between the United States and China remained unchanged from 2023, with no further shifts in bilateral trade shares. The trend of geopolitical realignment, or friend-shoringFriend-shoring involves increased trading with economies with politically aligned stances. (UNCTAD, 2023), continued, but without additional decoupling. Between 2017 and 2024, the United States’ share of Chinese exports declined by more than 4 percentage points, largely due to the tariff escalations of 2018 and 2019. Similarly, China’s share of the United States’ imports contracted by 8 percentage points over the same period.

References

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