Poor failing break rich trade dominance: U.N. agency

GENEVA (Reuters) - Poorer nations, with three quarters of the world's population, are making little headway in breaking the dominance of rich powers in global trade, the U.N.'s trade and development agency UNCTAD said on Tuesday.

UNCTAD's comment was issued just before talks in Geneva over terms for a new world trade pact collapsed amid insistence by India and China that developing country farmers have strong protection against surges in imports from the North.

"Emerging economies" -- a reference to Third World giants like India, China and Brazil -- "are frequently in the spotlight but, overall, industrialized nations continued (in 2007) to dominate global economic activity," UNCTAD said.

Rich powers -- like the European Union, the United States and Japan -- accounted for 71 percent of world GDP last year although their peoples made up only 15 percent of the population of the globe.

In terms of goods, figures in UNCTAD's annual statistical yearbook showed, poorer nations accounted for only around 35 percent of world trade while the industrial powers of the North had around 61 percent, imports and exports included.

In services, according to UNCTAD, the rich countries had an even stronger grip, accounting for just under 72 percent of all exports last year.

And although economists have long argued that developing countries must diversify what their farms and factories produce if they are to improve the lives of their peoples, things are going in the opposite direction, according to the report.

The figures, UNCTAD said in a brief commentary with the report, "show a continued long-term trend towards concentration of exports.

"While developing countries sold many products and services overseas, an increasing amount of the value of these exports came from a limited number of goods."

UNCTAD gave no further explanation of its comments, but trade analysts said a slightly improved overall trade performance by poorer countries last year was helped by the soaring price of oil.

However, this only benefits a limited number of developing economies while hitting hard at those that have no oil of their own and have to import it.

The additional costs this imposes on producers in developing nations makes them increasingly vulnerable in their home markets to competition from goods exported by richer countries, development economists say.