Source: Seaborne trade data adapted from UNCTAD, Review of Maritime Transport.
Prior to the 1970s, global trade flows were dominated by three major poles, North America, Western Europe, and the developing economies of East Asia (Japan, South Korea, and Taiwan). A trade dichotomy was observed between advanced (developed) and developing economies as raw materials mainly flowed north and finished goods flowed south. Differences in development levels can mainly explain this situation, including better economies of scale in advanced economies and unequal trade relations set up during the colonial era.
From the 1970s, this situation changed as economic development took place across a range of nations in Latin America (Mexico), Southeast Asia (Malaysia, Thailand, Indonesia), and East Asia (China, South Korea, Taiwan). Many manufacturing activities that had emerged in advanced economies were relocated to lower input cost locations, because of cheaper labor. Emerging multinational corporations were actively involved in this process.
Such a structural shift is well illustrated by the variation in the share of developing economies in seaborne trade, which used to be highly imbalanced, with much more cargo being loaded than unloaded. Economic development resulted in a growing share of developing economies as a destination for cargo. Consequently, global trade is now characterized by significant flows of cargoes (raw materials, intermediate and finished goods) from advanced to developing economies.