The Economic Exposure of Small States to Competing Trade and Security Agreements

Small states operate within international economic systems shaped by trade agreements, investment relationships, security partnerships, and geopolitical competition. Their dependence on external markets and suppliers can create significant exposure when international policies or commercial relationships change. This research examines how competing trade and security arrangements affect smaller economies, drawing on evidence from the World Trade Organization and the International Monetary Fund.

The study distinguishes formal agreement membership from the economic consequences of specific policies, including trade restrictions, investment screening, export controls, and changes in international supply chains. It examines geopolitical fragmentation, the role of connector economies, and differences in exposure across countries and sectors. The findings emphasize that economic vulnerability depends on actual market concentration, trade relationships, institutional capacity, and policy commitments rather than geopolitical alignment alone.