Trade Facilitation, Diversity and Intra-Regional Exportability: A Study of Small Island Economies in the Caribbean and the South Pacific

Despite the contentious success of the trade agreements, the island countries have still been vehemently negotiating further trade deals. This study explores the element which enhances trade flows for selected Commonwealth countries in the Caribbean and Pacific regions. The results suggest that income (gross domestic product) growth as significant support for trade flows, regional trade integrations of the Pacific and Caribbean are explained in its quiet dynamism, worth strengthening and further reforming. This study, by means of a comparative investigation of selected countries from within the Pacific and the Caribbean regions, proposes that the strategy for enhancing trade integration is creating demand for diversification in the region through greater regional integration. The estimates demonstrate that the level of diversification positively impacted the regions’ bilateral export, having the Pacific region influenced almost twice as much like the Caribbean. Moreover, whilst understanding that the geographical location of the Caribbean already lets its states thrive through lower trading costs as compared to the Pacific, analysis in the study shows that the distance, remoteness and logistics difficulties inflate the price (or trade costs) limiting the success of regional trade agreements. JEL Classification: F13, F15

The US–China Trade War: Impact on India and Other Asian Regions

The growing protectionism globally and the outbreak of a major US–China trade war led Indian exports facing higher tariffs. This article has tried to investigate how India should react to the trade tensions between the two largest economies of the world. This will help policymakers in India to assess the impact of the likely developments and choose between different policy responses. In a bilateral US–China trade war, while both the United States and China stand to lose in terms of GDP, exports and imports, India stands to gain. India stands to lose when the US–China trade war applies also to India, which faces higher tariffs from both. India’s losses increase further when India responds by increasing its tariffs on imports from the United States and China. In fact, reducing own tariffs could be a wiser step. Enhancing productivity measures by raising port efficiency and making trade and transport sector more efficient appear to pay dividend. India gains even more from joining the RCEP-like trading block when the United States and China are indulging in bilateral trade war. Last but not least, US–China trade war seems to affect Asian countries, some positively some negatively. JEL Codes: F13, C68, F14