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Many of these North-South agreements are missing the developmental perspective, for at least three reasons:. One of the key motives for developing countries to enter into agreements with partners at a similar level of development in the same area is that of market access. Of course, the benefits of market access, such as scale economies and the diversification of production, are arguments that apply to trade integration generally, be it with developed or developing countries.

Nevertheless, for many developing countries that are at an early stage of industrial development, a regional orientation involving countries with similar economic structures and technological capabilities may be considered a more viable option. In other words, the regional market often sets less exclusive benchmarks than competition with mature suppliers, so that even production at the infant industry stage can be successfully broadened.

South-South cooperation can also be advantageous when it comes to competition to attract FDI and to avoid races to the bottom. This finding is also supported by empirical evidence of an increase in the relative share of manufactures and medium- and high-skilled products in the intraregional trade, which suggests that regional cooperation between developing countries can be an important means to accelerate industrialization.


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Furthermore, regional cooperation in the monetary and financial area can provide important tools for the stabilization of intraregional exchange rates, and thereby reduce their potential to serve as a source of instability or as a transmission mechanism for global shocks. Similarly, cooperation on major investment projects can reduce common bottlenecks in public infrastructure like energy and water supply. Please click here if you are not redirected within a few seconds. Palais des Nations, , Av. Discover this author.

Supachai Panitchpakdi. Many of these North-South agreements are missing the developmental perspective, for at least three reasons: Bilateral FTAs often transform formerly non-reciprocal trade preferences between developed and developing countries into symmetric market access regulations; thus, the cornerstone of the post-war international trade system, the special and different treatment of developing countries, is continuously being eliminated.

WTO-plus standards and Singapore issues, e. Moreover, these FTAs usually make no provisions at all for monetary cooperation, even though the overall competitiveness of developing countries is highly vulnerable to external shocks. Thus, developing countries often have to accept far-reaching commitments regarding formerly classical domestic policy without being adequately compensated in terms of warranted market access and market success.

Simultaneous participation in many FTAs with different rules and implementation horizons makes policy coordination in developing countries increasingly difficult, in particular with regard to the reconciliation between national development objectives, regional commitments and multilateral rules and regulations. On the same topic. Caribbean Trade and Integration. Roger Hosein. Andrew L. The Reality of Aid Judith Randel. Kenneth Heydon. The International Migration of Health Workers. John Connell.

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