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Publication: Understanding International Trade
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A publication of the OECS Trade Policy Project aimed at students,
businesspersons and the public that explains the operation of the trading
system from the perspective of the Eastern Caribbean.
Written for the OECS Trade Policy Project by Edwin Laurent.
Published by: The OECS Trade Policy Project June 2006.
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The world of international trade can appear abstract and far removed from everyday
life. The very terms used, the WTO, the FTAA, the CSME, might seem designed to mystify
rather than enlighten. Many people are therefore content to ignore trade negotiations,
disputes and agreements, viewing those matters as concerning only Governments and big
businesses. Increasingly, however, these processes are defining not only commercial and trading
relations among countries, but economic activities within countries themselves. Quite
ominously, they constrain Governments’ flexibility on an increasing range of economic policy
issues.
In the 21st century no country can expect to be an “island unto itself”, shut off from and
indifferent to the outside world. This is nowhere more true than in the OECS countries2,
whose economies have, from the earliest colonial times, been open to and reliant on
international trade. The quality of life of their people, their security and standard of living
have therefore always depended upon the international situation and developments. Rather
than producing for themselves the things that they need, these islands have earned their
livelihood through producing goods for sale abroad; initially a variety of commodities,
ranging from cane sugar, rum and bananas, to light manufactured goods, and now, increasingly,
to the provision of services for foreigners, principally tourism. Their exports of goods have
been principally to Europe, the Caribbean and the USA. Their imports are more varied,
coming from the USA, Japan, Europe, Latin America, China and several other sources. Services
are sold principally to North America and Europe. The income from the sale or export of the
narrow range of goods and services that they produce is used to purchase from abroad
(to import) the diversity of goods and services they consume. Therefore, what happens
internationally affects the lives of everyone locally and is thus of real concern. At the most
basic level it determines what can be sold abroad and sets the prices that can be received and
those to be paid for purchases from abroad.
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