Trade Liberalization and Small Economies

This report discusses the effect of global integration through trade and investment liberalization on small economies. Findings included the idea that small states are more vulnerable and experience greater income volatility than larger states, and that the sources of this vulnerability are often a result of the external environment. This report offers a range of common relevant policy actions for small states themselves and the international community to deal with their special problems of volatility, vulnerability, transition to the changing global trade regime, capacity building and the challenges and opportunities from globalization. This document is part of a series of papers commissioned by the IDB for the 3rd Meeting of the Trade and Integration Dialogue held on October 16th and 17th, 2001 in Washington, DC.