2002年-世界发展银行全球_Regional_Integration_and____________Development_in_Small_States_34页_1mb

Summary of "Regional Integration and Development in Small States" by Maurice Schiff

Core Content

This working paper by Maurice Schiff from the World Bank's Development Research Group explores the trade policy implications for small states in the context of global and regional integration trends. It emphasizes the need for small states to adopt a combination of unilateral and multilateral trade liberalization, expand South-South regional cooperation, and seek technical assistance from developed countries to improve domestic trade regimes.

Main Views

• Small states should liberalize trade with both the rest of the world (ROW) and with the OECD, especially through free trade agreements (FTAs), to enhance their economic competitiveness and reduce dependency on preferential access.
• South-South regional integration agreements (RIAs) may lead to welfare losses for the bloc as a whole due to trade diversion and asymmetric gains between member states. This is particularly true if external trade barriers are not simultaneously reduced.
• Regional public goods cooperation is crucial for small states, as it can lead to significant economic and political benefits. Examples include infrastructure, environmental protection, and energy projects.
• North-South RIAs, such as those between ACP countries and the EU, are subject to preference erosion and may result in welfare losses for ACP countries due to the EU capturing tariff revenues and improving its terms of trade.
• The Cotonou Agreement between the EU and ACP countries is based on reciprocity and differentiation, but it may harm ACP countries, especially those not classified as LDCs, by reducing their preferential access and increasing transfers to the EU.
• The Everything-But-Arms Initiative (EBA) provides free access to EU markets for 49 LDCs, but it may not be sufficient to fully offset the loss of preferential access for other developing countries.
• Technical assistance is essential for small states to implement "behind the border" reforms and improve their trade policies in line with WTO agreements.
• The FTAA (Free Trade Agreement of the Americas) and other trade blocs may not be beneficial for small states due to the dominance of larger economies and the potential for trade diversion.

Key Information

• List of Small States: The paper defines 41 small states, most of which are part of the ACP-EU Cotonou Agreement, with only 14 being LDCs.
• Regional Integration Agreements (RIAs): Small states are members of 17 RIAs, with many participating in multiple agreements.
• Impact of Trade Barriers: If small states maintain high external trade barriers while reducing internal ones, they may suffer from trade diversion and lose competitiveness.
• Asymmetric Gains: Larger and more developed members within RIAs tend to gain more due to trade surpluses, agglomeration effects, and dynamic divergence.
• Erosion of Preferences: Preferences in EU markets for ACP countries are eroding due to the Uruguay Round, the EU’s FTAs with other regions, CAP reforms, WTO rulings, and the dismantling of the MFA.
• EBA and Its Limitations: While the EBA offers free access to the EU for LDCs, it may not be sufficient for other ACP countries and could have negative impacts on non-EBA countries.
• Policy Recommendations:
  • Small states should liberalize trade with the ROW and OECD.
  • Expand South-South regional cooperation and focus on regional public goods.
  • Intensify negotiations for FTAs with the OECD.
  • Seek technical assistance for trade reforms from the EU and other OECD members.
  • Avoid reliance on preferential access and instead pursue multilateral liberalization.

Conclusion

The paper highlights the challenges small states face in the context of globalization and regional integration. It argues that while RIAs can offer some benefits, they often result in asymmetric gains and welfare losses. Therefore, small states should focus on unilateral trade liberalization, multilateral agreements, and regional cooperation on public goods to improve their development prospects. The World Bank is encouraged to provide technical support to help small states navigate these complex trade dynamics.