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Regional integration and development in small states

  • Schiff, Maurice

The author examines the impact of various trade policies for small developing states in the face of changing international trends - including globalization, the proliferation of regional integration agreements, the changing relationship between African, Caribbean, and Pacific (ACP) countries and the European Union (EU), the erosion of ACP preferences in the EU market, the Everything-But-Arms Initiative (a 2001 EU initiative providing forty nine developing countries free access to EU markets), and the negotiations on the Free Trade Agreement of the Americas. The author concludes that: 1) The participants in South-South regional integration agreements should further reduce their external trade barriers. 2) The trade component of the Cotonou Agreement between the ACP countries and the EU is likely to harm those countries. The ACP countries should liberalize their trade regimes to reduce the size of transfers to the EU. 3) Small states should sign free trade agreements with the rest of the Organization for Economic Cooperation and Development (OECD), and pursue multilateral liberalization. 4) Small states, and other developing countries should intensify South-South regional cooperation in the area of regional public goods. 5) The EU, and other OECD countries should provide country-specific technical assistance for"behind the border"reforms in small states - something specified in the Cotonou Agreement for ACP countries - as well as assistance in implementing their commitments under World Trade Organization agreements.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 2797.

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Date of creation: 28 Feb 2002
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Handle: RePEc:wbk:wbrwps:2797
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  1. Panagariya, A., 1997. "Preferential trading and the myth of natural trading partners," Japan and the World Economy, Elsevier, vol. 9(4), pages 471-489, December.
  2. John Whalley, 1998. "Why Do Countries Seek Regional Trade Agreements?," NBER Chapters, in: The Regionalization of the World Economy, pages 63-90 National Bureau of Economic Research, Inc.
  3. Andriamananjara, Soamiely & Schiff, Maurice, 1998. "Regional groupings among microstates," Policy Research Working Paper Series 1922, The World Bank.
  4. Schiff, Maurice, 1996. "Small is beautiful : preferential trade agreements and the impact of country size, market share, efficiency, and trade policy," Policy Research Working Paper Series 1668, The World Bank.
  5. Hoekman, Bernard, 2002. "Strengthening the global trade architecture for development," Policy Research Working Paper Series 2757, The World Bank.
  6. Finger, Michael J. & Schuler, Philip, 1999. "Implementation of Ururguay Round commitments : the development challenge," Policy Research Working Paper Series 2215, The World Bank.
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