Pushing developing nations into liberalising their markets and exporting a narrow range of products leads to trade volatility, lower economic growth and increased poverty, according to a survey by charity World Vision.

The report by economist Brett Parris, released ahead of next week?s WTO meeting in Mexico, examined economic data from 84 developing countries between 1981 and 2000 to test the principle of urging them to liberalise trade, specialise in exporting what they are good at and let others produce the rest.

Parris said the findings contradicted the merit of the World Trade Organisation (WTO) ethos, and World Bank agreements that tie loans or grants to free trade or an openness to foreign investment.

?We are concerned that the policy options open to developing countries are increasingly being restricted,? Parris told Reuters in the Australian capital, Canberra.

?This is not how rich countries developed, and following this advice will not necessarily maximise a country?s long-term growth and development potential.?

Parris said his study, released by the international charity yesterday, showed that a 10 per cent increase in the concentration of exported products was associated with a 5.05 per cent increase in the volatility of trade deficits.

In turn a 10 per cent increase in trade gap volatility could cut gross domestic product growth, per capita, by an average 5.42 per cent.

Parris said trade was essential for developing countries and developed countries had to take seriously the need to provide greater market access for their goods and services.

But he said trade was only one side of the coin and more aid was essential to help poorer countries build the infrastructure and institutions needed to move forward.

?The ideological slogan «trade not aid» rests on a misleading dichotomy that has more to do with fiscal and political expediency and economic vested interests in OECD countries than sound development policies,? he said.