Export diversification at the time of slowbalisation

Export diversification remains an important development objective of many commoditydependent developing countries. Today’s global economic trends, however, suggest that the world may be entering a period of “slowbalisation”, signified by slower growth of trade, foreign direct investment and capital flows. Growing environmental concerns also raise questions over the viability of repeating the pattern of massive export growth enjoyed by some developing countries in the past several decades. Shifting patterns of economic growth call for a new focus in developing countries’ export diversification strategies. This chapter discusses that two areas - services trade and South-South trade – can provide developing countries with untapped potential for continuing export diversification. The chapter then discusses how South-South regional regulatory cooperation could enhance services trade and reduce the trade-distorting impact of non-tariff measures. To conclude, the chapter explores the role of Aid for Trade in enhancing export diversification through regional cooperation.