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While exports of many developing countries increased significantly since Monterrey, the share of vulnerable countries in world trade in goods and services remains low and world trade seems challenged to return to the buoyant growth rates seen before the global financial crisis.
SIDS’s share of global trade has been the lowest, averaging 0.17 per cent between 1990 and 2015, and showing a stagnant trend. This attests to their narrow resource bases, dependence on a few external and remote markets, high costs for transportation, communication and servicing; long distances from export markets and import resources; and low and irregular international traffic volumes.
The percentage of LDC exports in total world exports is very low, accounting for about 1 per cent of world’s exports in 2015, which is well below the targets of the IPoA and SDGs of 2 per cent. The downward trend since 2013 is mainly due to the decline in commodity prices. LDC exports also remained highly concentrated with almost 70 per cent of merchandise exports depending on three main products in 2014. The share of clothing products in LDCs exports increased from 7 per cent in 1995 to 11 per cent in 2014. Thus exports of products with higher value added and use of more advanced technology remain very limited. Merchandise exports from LLDCs were estimated at $158 billion in 2015, registering a fall of 30 per cent over 2014. The huge decline was caused by the collapse in commodity prices and sluggish demand. This was the second year that LLDC exports fell, following a 2 per cent fall in 2014. Merchandise imports to these countries also fell in 2014 and 2015, reaching an estimated $186 billion in 2015. African countries have higher shares of world trade and LDCs, LLDCs and SIDS but still account for only 2.4% (down from a peak of 3.5% in 2008). Middle-income countries, and upper middle-income countries in particular, account for a much larger share of global exports – their share increased from 16 per cent in 2000 to 27 per cent in 2015.
The product diversification index - computed by measuring the absolute deviation of the trade structure of a country from world structure, with a value closer to 1 indicating greater divergence from the world pattern - for LLDCs has remained about 0.6 per cent since 2010 thus reflecting very little value addition to the traditional exports and very little progress in export diversification. As a whole, LDCs have the highest product concentration compared to the world average among these groups. Merchandise exports from LLDCs are also highly concentrated in just a handful of products, in particular raw commodities. Likewise, the exports of SIDS and African countries were less diversified than those of the rest of the world.
Duty-free quota-free (DFQF) market access for LDCs in developed economies increased only slightly, reaching 84 per cent in 2014. However, access varies significantly by products – with agricultural and manufactured exports (except textile and clothing) having almost completely free market access (98 per cent and 97 per cent respectively). As of end of 2015, Australia, New Zealand, Norway and Switzerland provided 100 per cent DFQF coverage for LDCs, while the European Union provided 99 per cent coverage, excluding arms. However, the erosion of preferences has continued due to ongoing tariff liberalization, although it slowed down in recent years. The African Growth and Opportunity Act (AGOA) scheme, which grants preferential market access by the US to many African countries including 26 out of 34 African LDCs, was renewed until 2025.
Aid for Trade (AfT) to LDCs has also seen some improvement, with disbursements for LDCs increasing from US$9 billion in 2009- 11 to US$11 billion in 2013, mainly for economic infrastructure. Aid for trade to LLDCs doubled since 2002. Disbursements to these countries stood at $6.49 billion in 2014, down from $6.7 billion in 2013. Most support is going to economic infrastructure (56 per cent) and building productive capacities (41 per cent). According to UNECA, in 2013, Aid for Trade accounted for roughly 35 percent of sector ODA disbursements, or 26 percent of total ODA disbursements excluding debt relief. A worrying trend is the continuing sharp decline of ODA committed to trade regulation and policies, including capacity building which could enhance the capacity of SIDS to improve its trade. From 2010 to 2014, ODA has steeped considerably. Much of this ODA is from multilateral agencies, while that from the DAC countries, though quite low, increased steadily between 2011 and 2014. Aid for Trade disbursements to Africa continued to display a strong resilience, reaching a record-level of USD 15.8 billion. Total aid-for-trade commitments reached US$ 54.4 billion in 2014. Commitments in aid-for-trade to Africa totalled US$ 18.2 billion, which constituted roughly one-third of global aid-for-trade commitments.