Attaining the SDGs through trade
The Bridgetown Covenant underlined trade as a powerful source of economic transformation, and an effective engine to reduce poverty -—
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—-. However, the impressive expansion of global trade and investment over the past decades has unfortunately not resulted in benefits for all. The LDCsLeast developed country, and 95 out of 142 developing economies are commodity dependentA country is considered an export-commodity dependent when more than 60 per cent of its total merchandise exports are composed of commodities. -—
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—- or tied to lower-value activities in manufacturing or services sectors -—
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Since 2020, the world has been in a constant state of cascading crises that overlap and compound each other. Climate changes, the war in Ukraine, and now, the ongoing war in Gaza, other geopolitical tensions, food and energy insecurity are putting SDGsSustainable Development Goal at risk, especially for the most vulnerable countries -—
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—-. This is evidenced by disruptions in trade flows and shipping, exposing fragile and lower-income countries to supply shocks and price fluctuations, and the shifting of bilateral trade preferences toward countries with similar geopolitical stances -—
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Table of contents
Trade in services resilient while goods trade declined in 2023
Over the past decade, exports of goods and services from developing economies, LDCs, and 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. have fluctuated considerably. The COVID-19COVID-19 is an infectious disease caused by the strain of coronavirus SARS-CoV-2 discovered in December 2019. Coronaviruses are a large family of viruses which may cause illness in animals or humans. In humans, several coronaviruses are known to cause respiratory infections ranging from the common cold to more severe diseases such as Middle East Respiratory Syndrome (MERS) and Severe Acute Respiratory Syndrome (SARS). The most recently discovered coronavirus causes coronavirus disease COVID-19 -—
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—-. pandemicCommonly described by the WHO as ‘the worldwide spread of a new disease’, no strict definition is provided. In 2009, they set out the basic requirements for a pandemic: • New virus emerges in humans
• Minimal or no population immunity
• Causes serious illness; high morbidity/mortality
• Spreads easily from person to person
• Global outbreak of disease.
The US Centre for Disease Control uses a similar approach, but with a reduced set of criteria. It is very difficult to gauge whether the spread of a disease should be termed an outbreak, epidemic or pandemic. In other words, when to declare a pandemic isn’t a black and white decision -—
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—-. had a particularly severe impact on LDCs given their vulnerability to external shocks and limited 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 -—
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—-.. In 2020, their exports of goods and services in value terms saw a sharp decline by about 14 per cent, year-on-year, with a more moderate decline for SIDS at 8.9 per cent, while developing economies as a whole experienced a 9.3 per cent decrease (figure 1).
In 2023, developing economies’ total exports of goods and services saw a 3.7 per cent dip to about $12 trillion, following a record high of almost $13 trillion in 2022. This downturn was primarily driven by a 6.3 per cent fall in the value of trade in goods. In contrast, trade in servicesIn the international trade in services context, services are understood as the result of a production activity that changes the conditions of the consuming units or facilitates the exchange of products or financial assets -—
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—-. Following the balance-of-payments classification, trade in services refers to manufacturing services, repair services, transport, travel, construction, telecommunications, computer services, financial services, insurance, intellectual-property related and other business services, as well as personal and cultural services, and government services. of developing economies increased notably by 9.5 per cent. In 2023, global goods trade declined by 4.6 per cent, while world services exports went up by 8.9 per cent.
For LDCs, total exports of goods and services decreased by 2.5 per cent, amounting to $307 billion in 2023. LDCs’ exports of goods declined by 4.6 per cent, whereas services exports increased for the third year in a row (10.6 per cent in 2023). SIDS experienced a sharper decline in exports of goods (8.3 per cent) compared to LDCs, while their services trade remained at the level of the previous year. SIDS' total trade was estimated at $952 billion for 2023.
Figure 1. SIDS recovered from the pandemic earlier, recorded lower trade growth for 2023.Source: UNCTADstat -—
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Note: Year 2023 figures are preliminary. Goods are measured according to the balance of payments concepts.
Developing economies’ share of global trade remained flat
Developing economies did not manage to increase their share in global trade in 2023, and the trend was similar for LDCs and SIDS. SDG target 17.11 sought to double the LDCs’ share of global exports from 1 per cent in 2011 to 2 per cent, as taken further by the Programmes of Action from Istanbul -—
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—- and Doha -—
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—-, but so far LDCs have missed the ambitious two per cent target. Despite the growth of their exports in absolute terms, LDCs’ share in world exports of goods and services has remained at around 1 per cent since 2012, a trend that persisted in 2023. In comparison, SIDS accounted for 3 per cent of global exports in 2023, while all developing economies collectively represented 40 per cent. Within LDCs’ export share, goods accounted for 0.8 per cent and services for 0.2 per cent (figure 2).
Figure 2. LDCs are not on a track to reach SDG Target 17.11 to significantly increase their share in global exports.Source: UNCTADstat -—
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Note: Year 2023 figures are preliminary. Goods are measured according to the balance of payments concepts.
Only a few developing economies significantly increased their share in world exports of goods and services from 2011 to 2023 (map 1). There was an eightfold increase for Djibouti and Timor-Leste and a sixfold for Guyana. Armenia and Guinea quadrupled their shares in global exports, and Cambodia, Georgia, Grenada, Lao People’s Democratic Republic, Niue, Samoa, Sao Tome and Principe, and Viet Nam doubled their shares during the same period. As for China, it increased its share by 1.3 times, to 11.6 per cent from the 9 per cent base in 2011. Some developing countries, for example, Ethiopia, Gambia, Kiribati, Lesotho, Tonga, and Vanuatu, saw their shares decline since 2011.
Map 1. Only a few developing countries cover a significant share of global exports of goods and services.Source: UNCTADstat -—
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Note: Year 2023 figures are preliminary. Goods are measured according to the balance of payments concepts.
LDCs’ export market destinations remain undiversified
In 2022, the United States of America and China were the two top merchandise export destinations for developing economies, LDCs, and SIDS. The United States of America was the destination for about 16 per cent of developing economies’ exports, 9 per cent for LDCs, and 11 per cent for SIDS. China received a 12 per cent share of developing economies’ exports, 24 per cent for LDCs, and 10 per cent for SIDS (figure 3). On average, about 65 per cent of LDCs’ and SIDS’ exports were directed to their top ten trading partners, compared with 55 per cent for developing countries as a group.
Figure 3. LDCs’ and SIDS’ merchandise exports concentrated on fewer partners than developing economies’, 2022.Source: UNCTADstat -—
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International trade decoupling continues
In 2023, the shifting of bilateral trade flows along geopolitical lines or friend-shoringFriend-shoring involves increased trading with economies with politically aligned stances. -—
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—-. The United States' share in Chinese exports declined by about 5 percentage points between 2017 and 2023, following the import tariffsTariffs “are customs duties on merchandise imports, levied either on an ad valorem basis (percentage of value) or on a specific basis (e.g. $7 per 100 kg). Tariffs can be used to create a price advantage for similar locally produced goods and for raising government revenues. Trade remedy measures and taxes are not considered to be tariffs.” -—
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—- escalation in 2018 and 2019 between the two countries (figure 4). During the same period, China’s share in the United States imports dropped by about 8 percentage points.
Figure 4. Trade interdependence between China and the United States declined.Source: UNCTADstat -—
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—-. UN Comtrade Database -—
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Note: China export dependence on the United States is calculated as China exports to the United States over total China exports. The United States import dependence on China is calculated as United States imports to China over total United States imports. The overall trade interdependence is calculated as bilateral trade (imports + exports) of United States and China over the sum of total trade of the two countries.
Developing economies in Africa continue to struggle with trade diversification
In 2022, exports concentration index of developing economies stood at 0.10, notably higher than that of developed economies (0.07). From the regional perspective, Africa exhibited the highest export concentration at 0.24, followed by Asia and Oceania at 0.11. The export mix was more varied in the developing economies of the Americas at 0.10. LDCs showed an export concentration indexThis index measures, for each product, the degree of export market concentration by country of origin. It tells us if a large share of commodity exports is accounted for by a small number of countries or, on the contrary, if exports are well distributed among many countries. The index ranges from 0 to 1 with higher values indicating more market concentration -—
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—-. of 0.20, and SIDS stood at 0.22. LLDCsLandlocked developing country demonstrated the highest trade concentration ratio among the groups, registering 0.26. In 2022, several Sub-Saharan economies were prominently engaged in exports of natural resources, with Mali (0.85), Guinea-Bissau (0.85), South Sudan (0.84), and Botswana (0.79) ranking among the top fifteen in the index. Notably, Tokelau (0.98), the Marshall Islands (0.92), and Iraq (0.91) ranked the highest (figure 5).
Figure 5. Export concentration, even though reduced since 2012, remains highest in Africa and LLDCs.Source: UNCTADstat -—
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Note: The concentration is measured by the Herfindahl-Hirschman Index (HHI). An index value closer to one indicates that a country’s exports or imports are highly concentrated in a few products. On the contrary, values closer to zero reflect a more homogeneous distribution of exports or imports among a series of products. The country grouping refers to the April 2023 classification, as specified in UNCTAD -—
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In 2022, manufactured goods accounted for 65.5 per cent of total merchandise exports from developing economies, up from 57.8 per cent in 2012. The share of fuels has reduced from about 26.1 per cent in 2012 to 18.3 per cent in 2022. Food accounted for 7.9 per cent of total exports of developing economies, followed by ores, metals, precious stones, and non-monetary gold (7.2 per cent) (figure 6). LDCs still remain highly dependent on commodities. Although the share of manufactured goods in total exports of LDCs increased from 22 per cent in 2012 to 35.1 per cent in 2022, their merchandise exports are largely focused on simple manufactured products, such as textiles and clothing. The remaining LDCs’ exports are concentrated in ores, metals, precious stones, and non-monetary gold (25.7 per cent), followed by fuels (24.6 per cent), and food items (12 per cent). In 2022, SIDS’ exports contained a large proportion of manufactured goods (68.2 per cent), followed by fuels (18.1 per cent), and ores, metals, precious stones, and non-monetary gold (8.2 per cent) (figure 6).
Figure 6. Fuels' share in exports of developing economies and LDCs dropped significantly from 2012 to 2022, while the share of manufactured products increased.Source: UNCTADstat -—
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LDCs struggled to revive their services exports which depend highly on travel
Following the pandemic, developing economies have witnessed a robust recovery in services trade, particularly in travel receipts. In 2023, LDCs just reached their services exports value of 2019, while other developing economies surpassed it already by some 30 per cent. LDCs’ services trade is predominantly driven by travel, which despite its remarkable percentage recovery in 2022 and 2023, still needs time to return to pre-pandemic levels.
In contrast to LDCs, services exports of developing economies and SIDS are dominated by sectors other than transport and travel, with digital tradeDigital Trade is “all international trade that is digitally ordered and/or digitally delivered. playing a significant role. These other services include telecommunication and computer services, financial and insurance services, intellectual property-related services, audiovisual services and various business services like architectural, marketing, engineering, consulting, and trade-related, among others. However, it is noteworthy that SIDS located remotely and less integrated into global trade flows rely more heavily on international transport and travel receipts than the data for the group as a whole reveal (figure 7). Notably, Singapore’s exports of other services cover almost 90 per cent of total SIDS’ other services exports. In other SIDS, transport and travel dominate the services trade.
Figure 7. Services exports structure is linked with the faster recovery of developing economies and SIDS from the pandemic, and the slower recovery of LDCs.Source: UNCTADstat -—
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Notes: Figures are based on joint UNCTAD-WTO trade in services dataset. Year 2023 figures are preliminary. Within the EBOPSExtended Balance of Payments Services classification provides a breakdown of the Balance of Payments Trade in Services item (debit and credit) as defined in Balance of Payment Manual -—
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—-, by types of services. The classification thereby meets a number of user requirements, including the provision of more detailed information on Trade in services as required in connection with the General Agreement on Trade in Services (GATS). services classification, travel does not include international transport of passengers, which is covered under transport.
Creative services trade booming
Over the past two decades, exports of creative goods increased by more than 3.5-fold, compared to a 3.8-fold increase for all exported goods -—
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—-. In the last decade, creative services exports grew 2.8-fold, surpassing the 1.5-fold increase for all services exports. These data have been calculated by UNCTAD based on identifying goods and services with a significant creative component from the EBOPS for services (experimental estimation) and based on the HSThe Harmonized System (HS) is an international nomenclature developed by the World Customs Organization, which is arranged in six-digit codes allowing all participating countries to classify traded goods on a common basis. Beyond the six-digit level, countries are free to introduce national distinctions for tariffs and many other purposes. classification for goods.
In 2022, UNCTAD estimated that creative services exports reached a record $1.4 trillion, nearly double the $713 billion for creative goods exports (figure 8). Recently, creative goods and services exports have diverged due to a surge in software and R&D servicesResearch and experimental development (R&D) comprise creative and systematic work undertaken in order to increase the stock of knowledge – including knowledge of humankind, culture and society – and to devise new applications of available knowledge. (The OECD Frascati Manual) The definition used for international trade (MSITS 2010) includes testing and product development that may give rise to patents, as an addition. exports and the digitization of some creative products.
Figure 8. Global exports of creative services increasing faster than creative goods.Source: UNCTADstat -—
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The share of creative goods in total exports slightly decreased from 3.1 per cent in 2002 to 2.9 per cent in 2022. At the same time, the share of creative services in all services exports saw significant growth, rising from 12 per cent in 2010 to 19 per cent in 2022.
International trade in creative goods and services is highly concentrated, with a few product groups and key dominating economies. The top ten exporters account for 70 per cent of both creative goods and services exports. In 2022, the United States of America and Ireland were by far the largest exporters of creative services, with $244 billion and $231 billion, respectively. In Ireland, multinational companies strongly contribute to creative services exports, especially in computer services, as they report their global copyright and license income there.
Developing economies account for most creative goods exports, while developed economies account for most imports. Developed economies dominate creative services exports, accounting for around 80 per cent of the total in 2022, although the gap with developing economies has narrowed. In 2010, developing economies represented 10 per cent of global creative services exports, increasing to 20 per cent by 2022 (figure 9).
The creative economy could provide a feasible option for sustainable development and 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 -—
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—-. 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 -—
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—-. for LDCs, if developments seen in some Asian LDCs, like Cambodia and Myanmar, could be facilitated in other LDCs as well.
Figure 9. Cambodia and Myanmar account for most creative goods exports by LDCs.Source: UNCTADstat -—
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Note: LDCs: Asia include data only for Cambodia and Myanmar.
With fostered digitalization, trade in services becomes increasingly relevant
Boosted by the pandemic, digital trade, encompassing products ordered or delivered remotely over computer networks, has surged in significance over the past decade. While services such as transport, travel or construction faced sharp declines with the pandemic, digitally deliverable services trade witnessed a notable uptick across all regions and country groups. In 2023, the exports of digitally deliverable services from developing economies were three times higher than in 2010, with SIDS experiencing a four-fold increase. Singapore, as the world’s eighth-largest services exporter, boosted the SIDS’ figures, yet many remote small islands face substantial barriers to integrating into international digital trade. Despite a 180 per cent increase from 2010 to 2023, LDCs’ exports of digitally deliverable services expanded at a slower pace compared to other developing economies (figure 10).
Figure 10. LDCs lag behind in trade of digitally deliverable services.Source: UNCTADstat -—
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Notes: Year 2023 figures are preliminary.
Services trade is highly concentrated; only 3 developing economies among top 10 traders in 2023
Top 3 developing country exporters = 13% of global market.
Trade in services is highly concentrated, with certain countries consistently ranking as leading services exporters and importers. China, India, and Singapore were the top three developing-country exporters in 2023, collectively contributing to 13 per cent of global services exports. China, the foremost exporter among developing economies, secured the fifth position globally in 2023, while India ranked seventh. Singapore, which held the eleventh spot in 2010, significantly increased its market share to about 4 per cent, making it the eighth largest exporter of services in the world. From 2010 to 2023, the combined share of top 10 exporters increased slightly, rising from 53 to 55 percent (figure 11).
Figure 11. Top 10 services exporters accounted for over a half of global services exports, with their collective share increasing from 2010 to 2023.Source: UNCTADstat -—
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Notes: Figures are based on joint UNCTAD-WTO trade in services dataset. Year 2023 figures are preliminary.
In 2023 tourist arrivals near pre-pandemic levels in LDCs
In 2023, international travel receipts experienced a remarkable 56 per cent annual increase in developing regions. However, transport exports dropped by an estimated 17 per cent compared to the previous year, driven by the decline in freight transport value. Towards the end of 2023, freight transport costs increased, as climate change and armed conflicts forced merchant fleets to adopting longer shipping routes (see Sustainable transport).
Other services trade grew steadily in 2023, rising by 7 per cent for developing economies as a group. Provisional statistics suggest a decline in the exports of other services from LDCs in 2023 (figure 9). Many categories of these other services are digitally tradable. Overall, international trade in digitally deliverable services outpaced non-digitally deliverable services trade over recent years -—
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Figure 12. International travel receipts grew strongly in 2023, while trade in transport services declined.Source: UNCTADstat -—
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Notes: Figures are based on joint UNCTAD-WTO trade in services dataset. Year 2023 figures are preliminary. Within the EBOPS services classification, travel does not include international transport of passengers, which is covered under transport.
Inbound tourist arrivals to developing economies saw steady growth until 2020, when the COVID-19 pandemic hit and tourist arrivals sharply declined to levels not seen in decades. While arrivals in LDCs fell just below their lowest levels of the 21st century, arrivals in SIDS and other developing economies plummeted even further. In 2023, SIDS reported a solid recovery with 72 million arrivals, though still 7 per cent below 2019 level. Developing economies collectively recorded 670 million inbound visitors, surpassing 80 per cent of the 2019 levels. Provisional statistics suggest that LDCs nearly matched their 2019 arrival numbers in 2023 (figure 13).
Figure 13. LDCs near pre-pandemic levels in tourist arrivals in 2023, while developing economies in general lag behind.Source: UNCTAD calculations based on UNWTO -—
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Notes: Year 2023 figures are preliminary.
Global inbound tourism earnings – including passenger transport and travel - recuperated globally in 2022 and 2023. In developing economies, international tourism receipts in 2023 surpassed 2019 levels by about 9 per cent. SIDS achieved this milestone already in 2022, with revenues in 2023 estimated to be 17 per cent higher than in 2019. The early estimates for LDCs indicate they have just reached the pre-pandemic international tourism earnings (-—
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—- and UNCTAD estimates based on UNWTO).
TrainForTrade has a global impact: over 20 000 trained from almost 220 countries or areas
Map 2. People from 219 countries participated in TrainForTrade activities, 2019-2023.Source: -—
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UNCTAD TrainForTrade provides bespoke technical assistance globally, with an emphasis on developing countries. It follows three goals:
- Build sustainable networks of support and knowledge exchange to enhance South-South cooperationBroad framework of collaboration among countries of the Global South in the political, economic, social, cultural, environmental and technical domains. It includes trade, FDI, regional integration efforts, technology transfers, sharing of solutions and experts, and other forms. Involving two or more developing countries, it can take place on a bilateral, regional, intraregional or interregional basis -—
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—-. and national ownership; - Promote digital solutions and innovative thinking to strengthen the capacities of international trade players;
- Encourage development-oriented trade policy to reduce poverty and to promote transparency and best practices in trade.
To accomplish these objectives, TrainForTrade combines e-learning, face-to-face and hybrid activities: an environmentally friendly and cost-efficient approach, providing mass access to high-quality education while allowing the training of individuals chosen for their capacity to impact their communities. TrainForTrade currently covers three areas: Port Management, e-CommerceE-commerce is defined as the sale or purchase of goods or services, conducted over computer networks by methods specifically designed for the purpose of receiving or placing of orders. The goods or services are ordered by those methods, but the payment and the ultimate delivery of the goods or services do not have to be conducted online -—
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—-. and Trade Statistics. Between 2019 and 2023, it held 163 events, in which over 20 000 people from 219 countries or areas took part (map 1 and table 1). These participants completed on average 7.6 days of training. Asia, Africa and the Americas accounted for the bulk of this capacity development, with respectively 37, 28 and 23 per cent of all attendees. TrainForTrade’s team led face-to-face workshops in almost 30 countries, maintaining a strong field presence and an extended network.
Table 1. Over 20 000 participants trained by TrainForTrade between 2019 and 2023.| Year(s) | Number of participants | Share of women | Number of certificates delivered | Hours of training | Days of training | Number of countries or areas covered | Average score | Satisfaction rate |
|---|---|---|---|---|---|---|---|---|
| 2019 | 2 936 | 47% | 1439 | 127 670 | 22 281 | 170 | 77% | 89% |
| 2020 | 2 984 | 43% | 1389 | 92 196 | 17 798 | 177 | 78% | 88% |
| 2021 | 4 449 | 43% | 2546 | 143 639 | 28 389 | 184 | 79% | 89% |
| 2022 | 4 777 | 38% | 2418 | 164 643 | 31 784 | 194 | 79% | 90% |
| 2023 | 6 206 | 42% | 3019 | 212 401 | 41 038 | 188 | 79% | 91% |
| 2019-2023 | 20 246 | 43% | 10 835 | 740 550 | 141 290 | 219 | 79% | 91% |
Source: -—
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Note: For activities lasting longer than one year, the number of participants for each year is shown. For that reason, the number of participants does not add up to the 2019-2023 total. The number of certificates delivered should not be compared to the number of participants as not all activities lead to a diploma.
Over the past five years, TrainForTrade has considerably boosted its global impact (table 1). The number of participants per year has been steadily increasing from 2019 to 2023, with the year 2023 seeing the highest figures. In 2023, TrainForTrade has reached over 6 000 participants of which over 3 000 obtained a certificate, attesting to the skills acquired. In the same year, TrainForTrade delivered over 40 000 training days or over 200 000 training hours. To achieve these results, TrainForTrade relied on the advantages of its longstanding e-learning experience and opened online courses to a broader audience. The Port Management category accounted for 54 per cent of all participants, while the Trade Statistics and e-CommerceE-commerce is defined as the sale or purchase of goods or services, conducted over computer networks by methods specifically designed for the purpose of receiving or placing of orders. The goods or services are ordered by those methods, but the payment and the ultimate delivery of the goods or services do not have to be conducted online -—
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—-. activities represented 35 and 11 per cent, respectively.
Women’s empowerment is a priority. Overall, 43 per cent of all participants were female: an impressive figure given TrainForTrade’s activities related to sectors remaining largely male-dominant worldwide (i.e., port management). To multiply its impact and foster South-South Cooperation, TrainForTrade systematically trainsTrade Analysis and Information System future instructors who propagate their enhanced capacities and knowledge in their communities. Between 2019 and 2023, 315 high-profile candidates became “trainers” of the Port Management Programme, mostly in Africa and Latin America, after a series of intensive online and face-to-face seminars. With a satisfaction rate reaching outstanding level of over 90 per cent and an average score approaching 80 per cent, TrainForTrade continues to promote achievement of SDGs (particularly goals 1, 5, 8, 9, 13, 14, 17) and aims to extend a world of opportunities for all.
References
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