Small States and the Politics of Multilateral Trade Liberalization

Abstract

The following article examines the position of small states in the global politics of trade and development. It does so by focusing specifically on the issue of multilateral trade liberalization and the attendant distributional consequences that this process is said to herald for small states. Drawing on historical intuitionalist insights, but couched in the specific empirical setting of the recent liberalization of the textiles and clothing sector, the article eschews the naturalistic and economically determinist language that often accompanies discussions of small states, and instead seeks to draw attention to the role of policy regimes in shaping the timing, form and the economic consequences of trade reform. Although it is often asserted that the problems of adjusting to freer trade for smaller, developing countries are due to ‘natural’ variables such as small population size, poor factor endowments and weak infrastructural capacities, what the paper shows is that some of the underlying factors shaping vulnerability — such as dependence on preferential trade and the lack of export diversification — may be more amiable to political and institutional influence than is commonly assumed. Hence, the nature and severity of the impact of economic liberalization on small, preference-dependent, developing countries should be understood as a contingent, rather than an inevitable, outcome of global economic change.