Polarization of trade between industrialized and developing countries

Over a long period of history the countries of the third world have had their economies linked to metropolitan countries in a bipolar, two-way relationship, which virtually excluded their trading among themselves. While many of their demands in the realm of international economic relations are directed at removing the constraints that impede their efforts at development, within the bipolar relationship itself there is a growing awareness that the mere intensification of this two-way flow as a means of solving their problems is both undesirable and impracticable. It is undesirable as it may serve to reinforce the dependency relationship; and it is impracticable because it is scarcely conceivable that the existing industrialized countries will provide an unlimited outlet for the vastly increased volume of tradable goods that the developing countries will be able to provide in the future. There will inevitably need to be 'horizontal' links as the developing countries acquire a greater capacity to meet each other's needs. Moreover, the slowing down of the rate of economic growth in the industrialized countries makes it even more necessary for the developing countries to strengthen their mutual economic links in order to accelerate their own progress.

In recent years the most dynamic expression of Third World or South-South cooperation has probably been that of 'economic cooperation among developing countries' (ECDC). During the 1970s, trade among Third World countries grew more rapidly than that between them and the industrialized world (at an average rate of 22% per annum). Today, however, such trade still constitutes only a bare 4% of world trade as a whole, which shows how much still remains to be done. The lack of a real South-South economic front, or of an economic community of the South, is bound to have an impact on the North-South negotiations, through which the South is seeking to negotiate with a group of countries which by contrast is indeed organized in an economic community. Unlike the South, nearly 70% of the North's trade is with the North, let alone the multiplicity of existing technical and communications links among the industrialized countries.