SMALL ECONOMIES Recognizing small economies’ trade challenges

Small economies face specific challenges in their participation in world trade, for example lack of economies of scale or limited natural resources. Studies show that a small size is likely to limit an economy’s possibilities to diversify local production. This in turn makes it more difficult for small economies to adjust to changes in their trade policy regime.

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The Doha Declaration

The Doha Declaration mandates the General Council to examine these problems and to make recommendations to the next Ministerial Conference as to what trade-related measures could improve the integration of small economies.


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Since then...

The General Council instructed the Trade and Development Committee to hold dedicated sessions on small economies. The first of these took place in April 2002.

The discussions focus on a paper presented by a group of small economies (Barbados, Belize, Bolivia, Dominican Republic, Guatemala, Honduras, Mauritius and Sri Lanka, in document WT/COMTD/SE/W/3). The paper includes the following proposals:

  • the liberalization process must preserve the existing margins of preference for products exported by small economies
  • small economies must not be required to give reciprocal treatment in return for the preferential treatment that they receive from developed members in the context of regional trading arrangements
  • small economies must not be required to make concessions that are inconsistent with their development, financial and trade needs

There is currently no definition in the WTO of what a “small economy” is. Some members have argued that a definition is necessary before any commitment is made. Other members do not want to embark on such an exercise.