During the last 20 years, the world has witnessed dramatic proliferation of regional and bilateral preferential trade agreements. Indeed, bilateral trade flows covered by such agreements now amount to roughly half of the world s imports, and have contributed significantly to the dramatic growth of trade.

Industrial trade, technology and investment flows

INDUSTRIAL TRADE, TECHNOLOGY AND INVESTMENT FLOWS

Private capital flows have come to play the dominant role in development finance, eclipsing both official bilateral and multilateral flows.

Other Governments are promoting investment flows within the framework of bilateral agreements.

We have global supply lines in which goods are developed in one country, manufactured in another, and assembled in a third. Capital and know how flows across borders, so traditional bilateral trade flows have been replaced by a complex web of international commercial relations.

Sub theme 2 Trade, investment and private flows

Financing South South trade, technology and investment flows

The Bilateral Threat to Free Trade

Increased aid flows from bilateral development partners and multilateral financial institutions are essential for enhancing resilience capacities.

The new geography of South South trade and investment flows (SPC, para.

Trade, investment and technology flows play a crucial role in productivity catch up.

Combining this general picture with more general developing country trends rising incomes, rapid growth in middle classes, expanding trade and investment flows, bilateral and regional free trade agreements, and a growing share of global GDP (roughly 50 ) these economies growth momentum should return relatively rapidly, over the next 1 2 years.

The database will be expanded to include trade flows and the development of indicators to assess the implications of RTAs BTAs on such flows.

However, in recent years, bilateral North South trade agreements have proliferated.

The close bilateral relations between Pakistan and Afghanistan are marked by the frequent exchange of high level visits, progressive institutionalization and cooperation in diverse fields, and record levels of transit trade and bilateral trade.

(a) Is increased global integration a prerequisite for enhancing South South trade, technology and investment flows?

Furthermore, when grants and concessional bilateral flows are used to clear arrears with multilateral institutions, this further reduces the resources available for development.

(f) What are the most promising sources of funding for South South trade, technology and investment flows?

Financial flows for development must be generated through a meaningful international trade regime with strong development dimensions.

However, trade flows are not static, and Governments in the region need to be alert to structural changes occurring in those flows to assist businesses in adapting to such changes.

Concepts such as methods of impact assessment , time series analysis of balance of payments changes and gravity model of bilateral trade flows were difficult to understand for anyone not trained in economics and were not appropriate for consideration by the Special Committee or the Sixth Committee.

Trade liberalization measures at the bilateral, regional and multilateral levels complemented and reinforced each other.

The World Trade Organization is now disseminating trade profiles of economies combining trade flows with trade policy information sourced from within the World Trade Organization and other organizations and OECD has developed a prototype on trade indicators (trade plus production, employment, investment, etc.) linking standardized information from various OECD databases to trade data.

The African Growth and Opportunity Act is a different example of a bilateral preferential trade agreement.

The preferential treatment covers about 75 per cent of bilateral trade turnaround between the two countries.

I can report that the month of March did bring an improvement in trade flows between Israel and Gaza.

(b) Will South South industrial trade, technology and investment flows reshape the pattern of industrialization based on comparative advantages?

Developing country governments have also increased the number of concluded bilateral investment treaties (BITs) and double taxation agreements and, more recently, bilateral and regional free trade and investment agreements. (Examples are the ASEAN Investment Area Agreement and the South Asia Free Trade Area.

African nations have been a part of the recent proliferation of bilateral and subregional preferential trade agreements.

(e) Will the rise of a few developing countries as economic superpowers influence South South trade, technology and investment flows?

At the same time, commitments under bilateral, regional, and multilateral trade negotiations on services limit certain policy options.

Is the creation of a special fund and financial services for South South trade, technology and investment flows a viable option?

The steady lowering of barriers to trade and capital flows across geographical borders was essential to promote industrialization around the world.

The trade liberalization agreements that the EU has in the pipeline with Asia s vibrant economies (including South Korea, Singapore, Malaysia, India, Vietnam, Japan, and Thailand) are more ambitious in scope than previous bilateral deals. As large scale regional free trade arrangements take shape, the EU continues to signal unequivocal commitment to free trade through sophisticated bilateral agreements.

The larger strategic rivalry between the world s largest autocracy and its biggest democracy has also sharpened, despite their fast rising trade. In the past decade, bilateral trade has risen more than 20 fold, to 73.9 billion, making it the only area in which bilateral relations have thrived.

The capacity of trade to raise incomes, boost long term growth and increase financial flows for development has yet to be reflected in South South trade, even though from 1990 to 2001 merchandise trade among developing countries expanded twice as rapidly as world trade and trade in services grew even faster.

The United States trade embargo against Cuba is a bilateral issue that should not come before the General Assembly.

In the absence of efficient sources of financing, the transaction costs of South South trade, technology and investment flows will be increased.

See ECLAC, Cooperation on Competition Policy in Latin American and Caribbean Bilateral Trade Agreements, LC W.12, by V. Silva.

Bilateral donors and multilateral agencies significantly increased their aid commitments for trade related technical assistance and capacity building in 2003.

Developing countries and others are, however, not fully satisfied with the outcome in several areas, such as trade, investment flows and global governance.

The bilateral relationship has grown closer in recent decades, owing to active exploration of the Chinese market by South Korea s large industrial conglomerates. Today, their bilateral trade dwarfs that between China and North Korea.

Another delegation said his country had already responded favourably to a request from Benin to negotiate such a bilateral trade agreement.

Build South South trade in goods and services at the bilateral, regional and interregional levels in sectors with high growth potential.