‘2020 was a particularly important year for trade and sustainability, not least because of the repercussions of the COVID-19 pandemic on people and planet.’

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

SIDS1 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, tourism 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:

  1. Trade in goods and the evolution of trade, types of products traded and vulnerability to price changes, and SIDS’ revealed comparative advantage.
  2. Shipping universe on SIDS in the global maritime value chain, their high share of global ship registrations, low shipping connectivity and high transport costs.
  3. Trade in services makes a notable contribution to SIDS’ GDP relying largely on travel services, but with severe impacts from the COVID-19 pandemic.
  4. 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.
  5. Trade vulnerabilities discussing challenges, such as remoteness, high transport costs, trade deficits, ICT goods and services, as well as the need for digital transformation.
  1. 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.