Lessons From the Unfinished Agenda of a Small Developing Economy Under Trade and Structural Reforms

Abstract

This article examines the issue of trade reforms confronting many African Caribbean and Pacific countries such as Fiji, which are set to lose their European Union sugar price subsidy at the end of 2007. It was found that attempts to offset the adverse impacts of the subsidy removal by targeting to improve the performance of any particular sector are counterproductive. Although the optimal policy for Fiji is a broad‐based diversification of exports, it is further argued that small developing economies need to address supply‐side constraints so that structural reforms can effectively sustain the economy's competitiveness in an increasingly globalised world economy. Copyright © 2011 John Wiley & Sons, Ltd.