Trade

‘2020 was a particularly important year for trade and sustainability, not least because of the repercussions of the COVID-19Infectious disease caused by the strain of coronavirus SARS-CoV-2 discovered in December 2019. Coronaviruses are a large family of viruses which may cause illness in animals or humans. In humans, several coronaviruses are known to cause respiratory infections ranging from the common cold to more severe diseases such as Middle East Respiratory Syndrome (MERS) and Severe Acute Respiratory Syndrome (SARS). The most recently discovered coronavirus causes a coronavirus disease called COVID-19. pandemic on people and planet.’

– Mr. Chad Blackman, Ambassador and Permanent Representative of Barbados, 3 July 2020

SIDSsmall island developing States (SIDS) were recognized as a distinct group of developing countries at the Earth Summit in Rio de Janeiro in June 1992.
More information on UNCTAD official page.¹ are highly vulnerable to economic shocks and are dependent on trade. They are also challenged by remoteness from trading partners and dependence on a few markets for imports and exports. Therefore, SIDS have also been identified as one of the groups that will be disproportionately affected by the COVID-19 pandemic and its economic impacts.

SIDS import more goods than they export, and are often highly reliant on services exports, e.g., related to transport, tourismTourism refers to the activity of visitors -—
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—-. International tourism expenditure is often approximated by the sum of travel services and transport of passengers, reported under balance of payments statistics (see Trade in services). Transport of passengers not considered, tourism represents a subset of travel, as some travelers, such as border-workers, travel for regular work, as they are holding employment contracts outside their usual residential environment. Activities of border-workers and similar travelers do not belong under tourism. -—
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—- and business services. They also have some comparative advantages in maritime activities and the trade of oceans products, fish and sea food.

This chapter will discuss SIDS’ trade, including:

Trade in goods and the evolution of trade, types of products traded and vulnerability to price changes, and SIDS’ revealed comparative advantageComparative advantage is a concept from Ricardian theory of international trade, which describes a country's possibility to produce a good at lower costs relative to a reference good than another country..
Shipping universe on SIDS in the global maritime value chain, their high share of global ship registrations, low shipping connectivity and high transport costs.
Trade in services makes a notable contribution to SIDS’ GDPGross domestic product (GDP) relying largely on travel servicesWithin the balance-of-payments classification of services, travel services cover goods and services - for own use or to give away - acquired from an economy by non-residents during visits to that economy. In this context, travel does not include passenger transport. -—
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—-., but with severe impacts from the COVID-19 pandemic.
Tourism as a source of livelihoods, employment and income with over 60 per cent fall in international arrivals to SIDS and 50 per cent drop in flight departures in 2020 after a long period of growth.
Trade vulnerabilities discussing challenges, such as remoteness, high transport costs, trade deficits, ICT goodsICT goods are those goods that are either intended to fulfil the function of information processing and communication by electronic means, including transmission and display, which use electronic processing to detect, measure and/or record physical phenomena, or to control a physical process -—
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—-. and services, as well as the need for digital transformation.

Notes

Aggregates for SIDS and SIDS regions in this chapter refer to the analytical SIDS grouping, as detailed in What makes a SIDS a SIDS, unless otherwise specified.