As trade tensions intensify across global markets, developing countries are responding not with retreat but with renewed determination to strengthen their trading ties. At a recent meeting in Geneva of the Global System of Trade Preferences among Developing Countries (GSTP), members reviewed progress towards activating a long-awaited agreement that requires only one more ratification to enter into force.

The significance of the GSTP is far from marginal. Its members collectively represent around 20.5% of world goods imports, some US$5 trillion of demand within a total market of US$18 trillion. The framework seeks to cut both tariffs and non-tariff barriers among participating economies, giving them the tools to diversify exports, build resilience, and improve predictability in their trade relationships.

For many developing countries, external shocks, whether geopolitical, climatic, or financial, have an outsized effect. The GSTP is therefore emerging as a mechanism to level the playing field, creating a network of South-South trade partnerships that are inclusive, mutually supportive, and less dependent on the policy swings of advanced economies. By promoting intra-developing-country commerce, it helps participants to anchor growth within their own regions, stimulate production chains, and strengthen collective bargaining power in the multilateral system.

In parallel, UN Trade and Development (UNCTAD) has turned its attention this week to another cornerstone of developing-country trade policy: the African Growth and Opportunity Act (AGOA). Introduced in 2000 as a non-reciprocal US preference scheme, AGOA grants duty-free access to the American market for more than 1,800 products from sub-Saharan Africa. Over the past two decades, it has provided critical support for African exporters seeking to reach the world's largest consumer economy.

However, with the scheme's renewal now uncertain, UNCTAD has warned that its expiry could undermine both export diversification and industrialisation across the continent. The impact would not be evenly spread but concentrated in smaller, trade-dependent states that have successfully built sectors around AGOA preferences.

Lesotho offers a vivid example. Roughly one third of its exports, principally textiles and apparel, depend on AGOA benefits. The industry employs between 30,000 and 40,000 workers, the majority of them women, and has been a key driver of inclusive economic participation. The loss of duty-free access could therefore ripple far beyond trade statistics, threatening jobs, household incomes, and community stability.

For UNCTAD, these two developments, progress on the GSTP and uncertainty over AGOA, illustrate the broader challenge facing developing economies: the need to secure predictable, equitable, and diversified market access in an increasingly fragmented trading landscape. Whether through new South-South frameworks or renewed North-South partnerships, the message is clear: developing countries are no longer passive participants in world trade. They are shaping their own routes towards resilience and inclusive growth.

https://unctad.org/news/developing-countries-chart-new-trade-strategies

This article represents the views of the author and not necessarily those of ICC.