Small States and the Multilateral Trading System

Small States and the Multilateral Trading System

Overcoming Barriers to Participation You do not have access to this content

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Commonwealth Secretariat
22 Dec 2015
9781848599338 (PDF)

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Developing countries, including as small states and least developed countries (LDCs), continue to face significant challenges within the global trading system. Action is required to allow them to overcome disadvantages and achieve sustainable levels of income from trade.

This study provides a fresh perspective on how measures can be taken to enhance the participation of small states, many of which are Commonwealth countries, in the multilateral trading system. It contributes to the ongoing general debate about reforming the World Trade Organization and global trade governance.


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  • Foreword

    Trade has generally been acknowledged as an important enabler of growth and development, and the integration of national economies into the multilateral trading system (MTS) can have an important role in fostering trade-led economic growth and development.

  • Foreword

    This publication brings together a selection of recent Commonwealth research and analytical work on small states’ participation in the multilateral trading system (MTS). The chapters have been written and reviewed by outstanding experts, both practitioners and academics, in the field of international trade. While sharing their findings and extensive experience, they have successfully managed to tailor their work to the special case of small states, many of which are World Trade Organization (WTO) members. This is a significant addition to the existing body of literature on multilateral trade, given its approach and orientation.

  • Abbreviations and acronyms
  • Small States in the Multilateral Trading System: An Overview

    Small vulnerable economies recognize that given their size, it is impossible for them to integrate into the global economy without forming alliances with many countries, groups, commercial interests and geographies. However, because of limited leverage, multilateral negotiations are a valued option as they allow small countries to benefit from group negotiating efforts. – Dr Marion Williams, Ambassador of Barbados in Geneva

  • Systemic Issues for the Commonwealth Small States in the Functioning of the World Trade

    Recurring standstills in the World Trade Organization (WTO) Doha Round of negotiations is rightly spurring debate among the WTO’s members and Secretariat, as well as experts and stakeholders, on the future of the organisation.1 The issues at stake are not new. Amid concerns about the languishing negotiations, WTO members made a collective call at the 2011 WTO Ministerial Conference for the organisation to be improved and its functioning to be strengthened. To date, however, members are yet to make any decisions or provide guidance regarding a process to advance such efforts.

  • Commonwealth Small States and Least-developed Countries in World Trade Organization Dispute Settlement

    The World Trade Organization (WTO)’s binding dispute settlement system has been heralded as the ‘jewel in the crown’ of the multilateral trading system. The establishment of the WTO in 1995 included a new ‘Understanding on the Rules and Procedures Governing the Settlement of Disputes’ (DSU) that contains innovations that resulted in a paradigm shift from the General Agreement on Tariffs and Trade (GATT) trading relations based on economic power and politics to a WTO system based on the rule of law. The resulting increased legality of the WTO was initially hailed to benefit smaller countries considerably, of which many are developing countries and least-developed countries (LDCs). As Steger and Hainsworth (1998) commented shortly after the creation of the WTO, the shift ‘is particularly beneficial for smaller countries, as without the rules and procedures of the DSU…they would not have the necessary bargaining power vis-à-vis the larger powers’.

  • What Do Small and Poor Developing Countries Need from the Multilateral Trading System?

    The participation of small and poor developing countries in multilateral trade negotiations has given rise to a plethora of analyses and polemics about what can/ should/might be agreed and, implicitly, whose fault it will be when agreement is not reached. It is neither an attractive nor a particularly constructive position to be in, and certainly not one that fills the independent observer with much hope. This chapter takes a slightly different slant by going back to basics to ask a more fundamental question – what do small and poor developing countries need from a trading system? – and then working out from there what to make of the multilateral trade negotiations. Its purpose is not to create a shopping list or a negotiating position for World Trade Organization (WTO) negotiations, but rather to help prioritise issues for the group of least-developed countries (LDCs) and to put into perspective what we actually end up with (which, of course, I am not attempting to predict). It is thus basically a normative exercise.

  • Building Trade Capacity of Small States: Strategic Approaches to Aid for Trade

    Having emerged from the World Trade Organization (WTO)’s 2005 Hong Kong Ministerial Conference, the Aid for Trade (AfT) initiative is set to mark its tenth anniversary. It continues to attract huge attention in global trade policy discourse, particularly in the context of supporting trading capacity of developing countries. The financial and technical assistance provided under AfT aims to tackle developing countries’ supply-side constraints so that they are able to effectively participate in global trade. It is this underlying but specific trade purpose that distinguishes AfT from the rest of traditional overseas development assistance (ODA). Although the term ‘Aid for Trade’ is relatively new in multilateral trade-policy discourse, aid flows serving similar intended purposes have long existed and have been regularly reported by donors. The trade dimensions as highlighted in AfT received renewed focus under the Doha Round of multilateral trade negotiations, as many developing countries realised that their lack of supply-side capacity prevented them from effectively participating in and benefiting from the expansion of global trade and investment activities.

  • Small States' Services Trade: Enhancing Participation in the Multilateral Trading System and Beyond

    Services are part and parcel of today’s social and economic fabric, proving to be critical for small states’ development and helping them overcome their inherent disadvantages of smallness and remoteness. Services such as health and education are vital to improving livelihoods; environmental services help to alleviate the impact of economic activities on the environment; and transport, telecommunications, financial and business services facilitate trade and reduce transaction costs, which are often exorbitant in the case of small states. Services such as tourism transform local communities and contribute to the preservation of culture and heritage, whereas developments in information and communication technology (ICT) transform business models, catalysing innovation and creating avenues for the diffusion of information and knowledge. Chapter 1 of this book highlighted the main trends in the services sector for Commonwealth small states. This chapter, although looking at a broader group of small states,1 goes deeper into the analysis of services, outlining the key services sectors for small states, some areas of concern and developments at the multilateral level.

  • List of 31 Commonwealth Small States
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