Extract 3 – Trade patterns, emerging markets and developed economies

Whilst much of the developed world grapples with the public health challenge of rising obesity and treating lifestyle-related illnesses, in many of the world's most vulnerable developing nations, millions of citizens still face severe food insecurity and absolute poverty. Sustained rates of economic development and rapid GDP growth are widely seen as the key solutions to these deep-seated issues. Indeed, nutritional standards and household incomes in emerging nations have drastically improved because of the robust economic integration seen in recent decades. Figure 3.1 illustrates the structural changes in GDP and population size across a selection of emerging and developed economies over a 16-year period.

Fig. 3.1 – GDP and Population of selected countries 2005–21

Vietnam's profound economic transformation is frequently attributed to its pursuit of export-led industrialisation, having signed multiple major free trade agreements and integrated heavily into global manufacturing supply chains. It has become one of the world's leading exporters of consumer electronics and apparel. This rapid growth in manufactured exports has triggered significant increases in average household income and massive declines in absolute poverty rates. Some economists argue that emerging economies such as India, with its massive tech-services labor force, and Vietnam, with its manufacturing capability, have captured the largest share of the net welfare gains from global trade, while mature, developed economies like the UK run chronic trade deficits and face deindustrialisation. Figure 3.2 outlines the value of exports for these same nations.

Fig. 3.2 – Exports of Goods & Services of selected countries in 2021

However, the benefits of trade are not distributed evenly, and integration is not without severe costs for emerging economies. High levels of industrial production have led to massive environmental degradation, severe air and water pollution, and rapid depletion of local resources. Furthermore, heavy reliance on international supply chains leaves exporting nations highly vulnerable to global recessions, shipping cost shocks, and shifting protectionist policies in developed nations.

---

Question: