Third market countries and sustainable development
Emerging economies
Third-market countries, often referred to as developing or emerging economies, possess remarkable growth potential despite facing stiff competition from more advanced first and second-market nations. Their ability to thrive hinges on several key factors that deserve emphasis:
- Comparative Advantages
There are comparative advantages, such as abundant natural resources or a large pool of low-cost labour. These advantages allow them to carve out niche markets and attract investment, even in the face of competition. - Untapped Domestic Markets
Those countries often feature untapped domestic markets with a growing consumer base and increasing purchasing power. These markets offer substantial growth opportunities for businesses and industries. - Technology Transfer
Collaboration with advanced economies and foreign direct investment play pivotal roles in technology transfer. - Government Support
Reform initiatives create investment-friendly environments. Reducing bureaucratic hurdles and improving infrastructure are crucial components of this support. - Regional Integration
Developing efficient transport networks and harmonizing regulations facilitate the flow of goods and services across borders. - Investment in Human Capital
Education equips the workforce with the skills needed for emerging industries, enhancing productivity, and fostering innovation.
Is it sustainable?
- Achieving the same level of economic development as developed countries often requires substantial investments in infrastructure, education, healthcare, and technology. These investments can be costly and may require emerging countries to allocate significant resources over an extended period.
- The economic development is closely linked to improvements in living standards. Often rapid development without careful social policies can lead to social disparities.
- Emerging countries need to balance economic development with environmental preservation to ensure long-term sustainability. Precisely because they want to emerge at any cost, do not have the time and resources to invest in sustainability. However, it is an intangible and distant good for those struggling to survive.
- The global economy is interconnected. Emerging countries may face challenges related to global economic dynamics, including trade barriers.
- Political stability and the rule of law are essential for sustainable economic development.
- The trajectory toward development differs among countries due to unique circumstances. What works for one may not work for another.
Agreements on trade and sustainable Development
Starting from 2010, Switzerland and the other EFTA States have made it a systematic priority to embed provisions on trade and sustainable development within their Free Trade Agreements (FTAs). This commitment is evident in several key agreements:
A pivotal chapter was integrated into EFTA’s FTAs with Montenegro (signed in 2011), Bosnia and Herzegovina (2013), Central American States (2013), Georgia (2016), the Philippines (2016), Ecuador (2018), Indonesia (2018), and the Mercosur (which, although substantially finalized, is awaiting formal signing).
Notably, the EFTA-Hong Kong-China Free Trade Agreement of 2011 and the Swiss-China bilateral agreement of 2013 both include comprehensive chapters addressing trade and the environment. Simultaneously, complementary accords concerning trade and labour were also secured.
The commitment to sustainable development extends further through the modernization of the FTA with Turkey (2018) and the enhancement of existing FTAs with Albania (2015) and Serbia (2015), all of which now feature dedicated chapters on trade and sustainable development.
This steadfast integration of sustainable development considerations into trade agreements reflects a conscientious effort to foster economic growth while upholding environmental and social responsibility.
