Small Countries Urged to Prioritize Trade Deals with Larger Partners
The article looks at trade options for small countries after the Doha talks. It compares two trade strategies: making mutual tariff cuts in a regional agreement versus cutting tariffs on their own. The study uses a model with two small countries trading with a larger world economy. The results suggest that reciprocal tariff cuts with bigger partners are more beneficial. Also, when small countries cut import tariffs alone, it helps their partners more than themselves when partners cut export tariffs. This means if global trade deals are uncertain, small countries should join hands with bigger nations in trade agreements. To offer good deals, they shouldn't slash their own tariffs too much.