South-South cooperation strengthening trade ties

Trade between developing economies — South-South trade — now represents 25% of global merchandise trade, up from 18% a decade ago. This structural shift reflects both economic growth in the Global South and deliberate policy efforts to reduce dependence on developed-country demand.

Asia-Africa trade corridors have seen the most dynamic growth. China remains the dominant trading partner for most Sub-Saharan African economies, but new bilateral arrangements are diversifying the landscape. Intra-African trade, though still constrained by infrastructure gaps, grew 8% in 2024, supported by early implementation of the African Continental Free Trade Area (AfCFTA).

Latin American intra-regional trade has been buoyed by Pacific Alliance integration, with Mexico, Colombia, Peru, and Chile deepening value chains in automotive, agri-food, and digital services. Mercosur-EU negotiations, while still unresolved, have encouraged both blocs to seek alternative partners, inadvertently accelerating South-South engagement.

UNCTAD analysis of trade data finds that South-South trade is increasingly moving up the value chain. While commodities still dominate, the share of manufactured goods and services in South-South flows has increased by 6 percentage points since 2015. This reflects industrialisation in economies like Viet Nam, Bangladesh, and Ethiopia.

The data challenge remains significant. Mirror trade statistics — using partner-country reported data to fill gaps in national reporting — are still required for nearly 40% of South-South trade flows in the UNCTADstat database. Improving statistical capacity in developing economies remains a key challenge for accurate measurement.

Datasets used in this analysis