ISLAMABAD, Oct 30 (ABC): Expanding trade among developing economies is creating new opportunities for export growth, regional economic cooperation and industrial development. Meanwhile, changes in global supply chains are encouraging emerging markets to diversify trade partnerships and strengthen their participation in international commerce.
The growing importance of South-South trade comes amid major changes in global commercial relationships. Geopolitical tensions, technological restrictions and efforts to diversify suppliers are reshaping international trade patterns.
According to UN Trade and Development (UNCTAD), global trade reached a record $35 trillion in 2025. Merchandise trade among developing economies also increased by approximately 17%, highlighting the expanding role of South-South commerce.
UNCTAD’s Trade and Development Report 2026 projects slower global economic growth as geopolitical rivalries and technological restrictions reshape international trade.
At the same time, shifting US-China commercial relations and expanding intra-Asian trade are creating new opportunities for developing economies. However, the benefits will depend on industrial capabilities and export competitiveness.
Economic analyst and former Secretary-General of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) Shahid Anwar told Wealth Pakistan that changing trade relationships were encouraging governments and businesses to explore alternative suppliers and markets.
“This is creating new opportunities for developing economies, particularly in Asia,” he said, adding that the benefits of expanding international trade would not necessarily be distributed equally.
Anwar explained that geopolitical tensions and trade restrictions were prompting countries to reduce dependence on traditional trading partners and establish new commercial relationships.
Consequently, expanding trade among Asian and other developing economies could create opportunities for exporters, manufacturers and investors.
Countries with competitive industrial sectors and reliable supply chains would be particularly well-positioned to benefit.
However, Anwar cautioned that higher global trade values did not necessarily indicate an equivalent increase in the volume of goods exchanged.
He explained that part of the increase in global trade value reflected higher prices, particularly for energy, rather than a corresponding rise in physical trade volumes.
According to him, countries with stronger industrial bases, better technological capabilities and greater export capacity would gain more from changing international trade patterns.
South-South trade creates opportunities for regional integration
The growing importance of South-South commerce could encourage greater regional economic integration and help developing economies strengthen their supply chains.
It could also improve access to markets beyond traditional trading partners, creating opportunities for manufacturers and exporters.
However, Anwar warned that the fragmentation of the global economy into competing trade blocs could increase costs and disrupt supply chains.
Such developments could also limit opportunities for countries without strong economic partnerships.
He said economies facing high production costs, weak industrial capabilities and limited access to modern technologies could struggle to secure a meaningful share of emerging trade opportunities.
For Pakistan, the changing global trade environment offers opportunities to diversify export destinations, strengthen regional commercial ties and attract new business.
International companies are reassessing their supply chains, potentially creating opportunities for Pakistani manufacturers and exporters.
Nevertheless, Anwar cautioned that changing trade flows would not automatically translate into additional export orders for Pakistan.
He said international buyers would continue to prioritise competitive prices, consistent product quality and reliable delivery schedules.
Therefore, Pakistan would need to lower energy and production costs, improve industrial productivity, meet international quality standards and diversify its export base.
“The real challenge is not simply to find new markets, but to become competitive enough to capture them and gain greater value from what we produce,” he said.
Anwar added that countries investing in productive capacity and technological development would be better placed to benefit from changing global trade patterns.
In contrast, economies that failed to strengthen their industries risked falling further behind.
Industrial competitiveness remains key to export growth
Nadia Hassan, a research fellow at the Pakistan Institute of Development Economics (PIDE), said expanding commercial ties among developing economies were creating opportunities for regional integration.
However, geopolitical tensions were also contributing to the fragmentation of global trade.
Citing UNCTAD data, she highlighted the approximately 17% increase in merchandise trade among developing economies in 2025.
According to Hassan, the increase demonstrated the growing importance of South-South commerce and regional trade networks.
Nevertheless, she emphasised that expanding trade among developing countries would not automatically eliminate economic disparities between emerging and advanced economies.
The ability to translate new commercial relationships into sustained economic growth would depend on technological advancement, financial resources, industrial productivity and access to competitive supply chains.
“Economic benefits are not a natural by-product of shifting supply chains and nearshoring,” she said, stressing that countries needed sufficient productive capacity to compete effectively for investment and export orders.
Hassan explained that developing economies faced the challenge of capturing opportunities created by expanding intra-Asian and South-South trade.
At the same time, they needed to manage risks associated with competing economic blocs and selective supply-chain realignment.
Countries with limited industrial capabilities could be bypassed as international businesses concentrated production in locations offering stronger infrastructure, technological expertise, financing and reliable trade arrangements.
She said developing economies needed deeper regional integration, more efficient trade facilitation, technology-enabled payment systems and sustained investment.
These measures could strengthen their participation in international commerce and improve their ability to compete for emerging opportunities.
For Pakistan, the developments underline the importance of improving domestic production capabilities, promoting export diversification and strengthening regional economic partnerships.
Greater integration into emerging trade networks could help Pakistani businesses access new markets, attract investment and participate in higher-value international supply chains.
However, achieving these benefits would require improvements in industrial efficiency, technology adoption, trade infrastructure and the overall cost of doing business.
The continued expansion of South-South trade could strengthen the role of developing economies in global commerce as businesses seek diversified supply chains and alternative markets.
Ultimately, the longer-term benefits for emerging economies will depend on their ability to convert expanding trade relationships into higher productivity, stronger industries, sustained export growth and greater economic competitiveness.
