ABSTRACT
Following the seminal work of Raul Prebisch (1950) and Hans Singer (1950), many developing countries started to voice their concern that world trade favours developed countries. The contribution of the Singer-Prebisch thesis was to provide empirical support to the argument that developing countries are faced with a secular tendency towards declining terms of trade. 1 But it was not until the establishment of the United Nations Conference on Trade and Development (UNCTAD) in 1964 that a forum was in place for developing countries to call for a change in the world trading system. Almost ten years thereafter, in 1973, these countries engineered the creation of a New International Economic Order (NIEO), under which they hoped to increase their role in world trade in order to achieve higher economic growth. Under the NIEO, developed countries were urged to give preferential treatment to imports of manufactured and processed products from developing countries, in order to move towards a more balanced world trade than was the status quo. However, the NIEO seems to have failed very badly in the sense that, as Chanthunya and Murinde (1998) show, there has been increased protectionism by developed countries against imports from developing countries, and in general the pattern of trade has remained imbalanced against developing countries.
