For many, the America First trade policies of the Trump Administration are a potent symbol of the ongoing lurch towards populist and nationalist politics. However, populism is not confined to the United States. Regrettably, other countries may be less inclined to follow multilateral trade norms if leaders of the world trading system don’t set an example. Consequently, any assessment of the fate of developing country exports during recent years should take a global perspective.

In the latest report of the Global Trade Alert we explored whether developing country access to the large overseas markets changed considerably during the Populist era. While such market access is often conditioned by special schemes for imports from (typically selected) developing countries, such as national schemes for Generalised Systems of Preferences, other policy changes can influence the commercial opportunities of exporters from developing nations and need to be taken into account as well.

Considering developing country market access also to the largest emerging markets, and not just the biggest industrialised country economies, may reveal the degree to which commercial policy change during the Populist era affected so-called South-South trade flows as well as North-South trade flows.

Specifically, we consider four groups of developing country exporters: the least developed countries (LDCs), the members of the African Union, and the countries the World Bank deems as lower-middle income and upper-middle income. Evidently, membership of these groupings is not mutually exclusive, still it is useful to summarise the average exposure of each group’s goods exports to commercial policy changes undertaken in destination markets from 1 January 2017 to 15 November 2019.

For these purposes we take the following to be the destination markets of interest: China, the European Union, the United States, the rest of the BRICS group of large emerging markets (Brazil, Russia, India, and South Africa), and the larger G20 grouping. For each group of developing country exporters and each destination market, we calculated the percentage of the former’s bilateral goods exports to the latter that are in products where policy reforms easing imports and where policy interventions impeding imports were implemented during the Populist era. Such calculations use the latest finest grain international trade data available in the United Nations’ Comtrade database.

The top panel of the Figure below summarises the findings for LDCs and for the African Union group. The lower panel of the Figure plots the findings for the lower- and upper-middle income developing country groups. Large differences in the percentages of exports facing trade reforms and trade distortions in any destination market indicate a change in relative goods market access to that economy during the Populist era. Differences in reported percentages of export exposure across destination markets may reveal the degree to which North-South and South-South goods trade have been influenced by Populist era commercial policy changes.

Changes in the treatment of developing country exports during the Populist era

Source: Global Trade Alert

Mixed outcomes for South-South trade

All four groups of developing countries saw market access improve on more than half of their exports to China (see the first columns of both panels of the Figure). Moreover, the balance of export exposure to Chinese trade reforms and to Chinese trade distortions leans heavily tilted towards the former, which overall is likely to be supportive of South-South trade.

However, when the destination markets are the rest of the BRICS, the large trading powers of the emerging markets, the situation is reversed. More than half of LDCs, the African Union and both groups of middle-income developing nations’ exports faced trade distortions implemented by this residual BRICS groups during the Populist era. Exposure to their trade reforms was much lower. Among the large emerging market members of the G20, China’s policy mix was clearly different.

US commercial policy towards upper-income developing nations soured during the Populist era

Comparing the data presented in the columns relating to the US as a destination market in both the upper and lower panels of the Figure reveals that during the Populist era the United States has eroded the market access of the upper middle-income developing countries. The gap between these developing countries’ export exposure to US trade reforms and to trade distortions is some 15 percentage points.

This finding is indicative of a policy shift on the part of Washington, DC, and is consistent with its claims that some higher-income developing countries cling, inappropriately in their view, to developing country status at the World Trade Organisation.

Changing EU commercial policy treatment of developing country exports is, by contrast, relatively symmetric. That is, those developing country groupings whose exports were exposed more to Populist era import curbs also tended to have greater exposure to steps that open European markets. There is no suggestion here that this was the outcome of a deliberate choice made by policymakers in Brussels.

Overall, these findings caution against generalising about the impact of Populist era trade policy changes on the export prospects of developing countries. Due account needs to be taken of trade reforms as well as resort to protectionism. And, thinking in North-South or South-South terms is misleading. Developing country governments need to make individual assessments of what is at stake as the trading powers alter their commercial policy over time.

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Simon J. Evenett is Professor of International Trade and Economic Development at the University of St. Gallen, Switzerland, and Coordinator, the Global Trade Alert. Johannes Fritz is the Max Schmidheiny Foundation Fellow at the University of St. Gallen.