Surfing on the Tide? Least Developed Countries Trade During the Great Global Transition

The rebalancing of global demand towards large emerging countries and the resulting long-lasting cycle of high international commodity prices had a profound impact on LDC trade, its composition and its distribution. This process contributed to a wider geographical diversification of LDCs' exports but led also to a greater reliance on those highly priced commodities. LDCs remain particularly vulnerable to external shocks; the 2008-2009 global crisis and the bumpy transitional recovery that followed illustrate the fragility of the recent trends. A slowdown in the growth of large emerging countries may end the commodity "super-cycle", deepening LDCs' structural trade imbalances. In such a perspective, renewed efforts towards extensive product diversification are called for. Fostering diversification has been supported for many years by preferential market access to develop and -- more recently -- to emerging countries. But preferences alone are not sufficient to improve the supply-side capabilities of most LDCs. Global manufacturing and the fragmentation of supply chains offer new opportunities to LDCs for export diversification; trade facilitation is one of the key components of this diversification strategy. The paper reviews those trends from an empirical perspective. Statistics on LDCs being particularly scarce, a special effort was made to compile available trade and market access data in order to identify trends, patterns and stilised facts