Managing Fiscal Adjustment Costs of Regional Trading Arrangements: The Case of Small Island Pacific States

The fourteen island member states of the Pacific Islands Forum are some of the smallest and geographically most isolated countries in the world. Despite their small size, limited negotiating capacity and miniscule share of world trade, they are embarking on a number of ambitious North–South regional trading arrangements. This issue of Commonwealth Trade Hot Topics highlights some policy challenges facing small states in trade negotiations, and proposes options for managing fiscal adjustment costs emanating from these processes.