ABSTRACT
The failure to manage balance of payments effectively will constrain the achievement of basic developmental objectives though management of the balance of payments might not be an objective of development policy. Moreover, the impact of international economic relationships on the immediate efficiency with which resources can be used and on longer-term constraints on development is considerable. This chapter discusses the trade policy for nonprimary products for developing countries. It focuses on exchange rate policy in relation to trade and development. A link with trade policy for primary products is also made. If developing countries wish to trade more with each other, to increase their exports to the developed world and, to reduce the rate of growth of their imports from the developed world, then they need to take steps to make the prices at which they trade reflect these objectives. Nontariff barriers to trade have assumed importance for determining the flow of developing country exports to the developed world.
