This study undertakes a comprehensive evaluation of the major issues involved in a strategy of South-South trade, and demonstrates the actual potential and problems of such trade through a case study of Brazil-Trinidad and Tobago trade in the petrochemicals sector. It argues that in general that there is great potential for South-South trade in both goods and services, but its realization will require the implementation of certain policy measures such as the removal of trade policy barriers and financial constraints. Likely future declines in traditional trading opportunities with the North plus the special developmental gains to be derived from South-South trade should provide incentives for such policy changes. However, the relative importance which a country may attach to a South-South trade strategy will depend upon its specific conditions and features. In view of the growing interdependence of the world economy, an appropriate mix of policies which includes both South-South and South-North trade is crucially important for the future development of the South.