Trade between developing and developed nations

Tobacco is Zimbabwe’s top export product.

Developing countries export mostly raw materials to developed countries and the volume of trade among developing countries is generally low.
Developing countries have the highest proportion of the world’ population and their economies are based on export of raw materials which are needed in developed countries.
Due to this imbalance, developing countries have a trade dependency on developed countries.
This has a disadvantage because any changes in economic policies and conditions has a severe impact on the developing countries.
An example is the shift towards new raw materials such as replacing copper ire with optical fibre in telecommunications has greatly reduced the demand for copper on the world market.
This has a negative effect on Zambian economy which is heavily dependent on export of copper.
Similarly, technological developments which involve recycling and use of synthetic materials in manufacturing has reduced the demand for primary raw materials drastically.
Exports earnings by developing countries are also eroded by tendency amongst these countries to oversupply the market and this lower commodity prices.
In developing countries exports are dominated by one or two primary products mainly minerals or crops, whereas in developed countries there is a wide variety of manufactured goods.

Developing countries	Development countries
Exports dominated by one or two primary products e.g minerals, crops	Mainly a wide variety of manufactured goods
Prices and demand for primary products fluctuate at a low level and the rate of commodity price increase is generally low.	Demand for manufacture goods is steady at a high level and the price have risen
The total trade for these countries is small and most countries have a trade deficit	Volume of total trade is large and countries have a trade surplus
Trade is dominated by a few large TNC which export profits to their parent companies which re in developed countries.	All profits are retained by the exporting companies.
A poorly developed transport infrastructure, hampers trade.	Trade is facilitaed by well developed transport networks
Trade links are strongest with developed countries than with other developing countries.	Countries have many trade partners but the greatest volume of trade is with other developed countries.
Trade is affected severely when there is a world economic recession.	Trade is badly affected when there is a world economic recession.