Basic Concepts and Proposals on the use of Policy Spaces in Trade-supported Strategies for Sustainable Development

Date period
1 September 2007

SummaryFor developing countries increasing trade flows is not sufficient to induce the needed structural changes or to bring about improvements in welfare. The majority of these countries show such features as a serious lack of connection between “modern” export sectors and the rest of the economy, a tendency towards the hypertrophy of an informal tertiary sector and towards social exclusion, leading to undesirable social polarization, and a growing specialization in the export of goods associated with potentially polluting activities. All these features need to be addressed if their deep integration in the global economy is to be an instrument for sustainable development in those countries.

Consequently, if the developing countries face the need to apply active policies to derive development benefits from trade liberalization, then the international trade system should allow policy space for them to be applied.

This paper presents the basic concepts and proposals of the Trade-supported Strategies for Sustainable Development, an alternative approach that has been developed in the International Centre for Trade and Sustainable Development (ICTSD), which aims at putting trade liberalization and other strategies to work in favour of sustainable development in developing countries.