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on International Trade |
| By: | Volker Nitsch |
| Abstract: | Politicians travel extensively abroad, for various reasons. One purpose of external visits is to improve bilateral economic relations. In this paper, I examine the effect of state visits on international trade. I use a large data set covering the travel activities of the heads of state of France, Germany and the United States between 1948 and 2003. My results indicate that state and official visits are indeed positively correlated with exports. A typical visit is associated with higher bilateral exports by about 8 to 10 percent, holding other things constant. |
| Keywords: | head, president, government, politics, gravity |
| JEL: | F13 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_1582&r=int |
| By: | Puga, Diego; Trefler, Daniel |
| Abstract: | Increasingly, a small number of low-wage countries such as China and India are involved in innovation - not the `big ideas', but the constant incremental innovations needed to stay ahead in business. We provide some evidence of this and develop a model in which there is a transition from old-style product-cycle trade to trade involving incremental innovation in low-wage countries. We explain why levels of involvement in innovation vary across low-wage countries and even across firms in each low-wage country. We then draw out the implications of this for the location of production, trade, capital flows, earnings and living standards. |
| Keywords: | international trade; low-wage country innovation |
| JEL: | F1 |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:5286&r=int |
| By: | James Markusen |
| Abstract: | Trade theory consists of a portfolio of models. What elements might be useful in modeling the offshoring of white-collar services, or do these issues call for an entirely fresh approach? I try to identifying some of the important aspects of this phenomenon and then argue that modeling could focus on (a) vertical fragmentation of production, (b) expansion of trade at the extensive margin, (c) fragments that differ in factor intensities and countries that differ in endowments, and (d) knowledge or capital stocks of countries or firms that are complementary to skilled labor, and create missing inputs for countries otherwise well suited to skill-intensive fragments. I argue that we can make good progress by selecting a number of "modules" from existing theory. I use these to formulate a series of simple "template" models which capture many of the characteristics of offshoring, and then use those models to identify the effects of technological or institutional changes which allow offshoring of white-collar services to occur. |
| JEL: | F2 |
| Date: | 2005–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11827&r=int |
| By: | Steven Brakman; Harry Garretsen; Marc Schramm |
| Abstract: | Based on a new economic geography (NEG) model by Puga (1999), we use the equilibrium wage equation to estimate two key structural model parameters for the NUTS II EU regions. These estimations enable us to come up with an empirically grounded free-ness of trade parameter. In line with NEG theory, the estimation results show that a spatial wage structure exists for the EU regions. By going back to the theoretical model we then analyze the implications of the free-ness of trade parameter for the degree of agglomeration. Our main findings suggest that agglomeration forces still have only a limited spatial reach in the EU. Agglomeration forces appear to be rather localized. At the same time, confronting our empirical results with the underlying new economic geography model also brings out the limitations of empirical research in new economic geography. |
| JEL: | F12 J31 R12 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_1566&r=int |
| By: | Rose, Andrew K |
| Abstract: | I search for a 'scale' effect in countries. I use a panel data set that includes 200 countries over forty years and link the population of a country to a host of economic and social phenomena. Using both graphical and statistical techniques, I search for an impact of size on the level of income, inflation, material well-being, health, education, the quality of a country's institutions, heterogeneity, and a number of different international indices and rankings. I have little success; small countries are more open to international trade than large countries, but are not systematically different otherwise. |
| Keywords: | big; country; cross-section; data; empirical; international; panel; population |
| JEL: | O57 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:5350&r=int |
| By: | Santos Silva, Joao; Tenreyro, Silvana |
| Abstract: | Although economists have long been aware of Jensen's inequality, many econometric applications have neglected an important implication of it: the standard practice of interpreting the parameters of log-linearized models estimated by ordinary least squares as elasticities can be highly misleading in the presence of heteroskedasticity. This paper explains why this problem arises and proposes an appropriate estimator. Our criticism of conventional practices and the solution we propose extends to a broad range of economic applications where the equation under study is log-linearized. We develop the argument using one particular illustration, the gravity equation for trade, and apply the proposed technique to provide new estimates of this equation. We find significant differences between estimates obtained with the proposed estimator and those obtained with the traditional method. |
| Keywords: | elasticities; gravity equation; heteroskedasticity; Jensen's inequality; poisson regression |
| JEL: | C13 C21 F10 F11 F12 F15 |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:5311&r=int |
| By: | Dutt, Pushan; Traca, Daniel A. |
| Abstract: | This paper explores the hypothesis that changes in trading patterns and partners of US industries have contributed to skill deepening through defensive, skill-biased innovation. It draws on Thoenig and Verdier's (2003) assertion that, since skill-intensive technologies are less likely to be imitated, increased exposure to international competition promotes skill-biased innovation, due to the rise in the intensity of imitation by foreign firms. Our main proposition is that the rate of growth of a trading partner is related to the intensity of imitation from firms operating in that country, implying that an increase in the rate of growth of an industry's representative trading partner should contribute to the rise in its skill-intensity. We find empirical evidence in support of this notion, showing that the rise in the average growth rate of the trading partners has contributed to about 20% of the skill-deepening within US industries. By contrast, we find evidence that measures of the volume of trade do not matter significantly for the rise in skill-intensity, in line with existing literature. |
| Keywords: | defensive innovation; skill bias; trade and wages |
| JEL: | F14 F16 J31 |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:5263&r=int |
| By: | David Hummels; Volodymyr Lugovskyy |
| Abstract: | Models with constant-elasticity of substitution (CES) preferences are commonly employed in the international trade literature because they provide a tractable way to handle product differentiation in general equilibrium. However this tractability comes at the cost of generating a set of counter-factual predictions regarding cross-country variation in export and import variety, output per variety, and prices. We examine whether a generalized version of Lancaster's 'ideal variety' model can better match facts. In this model, entry causes crowding in variety space, so that the marginal utility of new varieties falls as market size grows. Crowding is partially offset by income effects, as richer consumers will pay more for varieties closer matched to their ideal types. We show theoretically and confirm empirically that declining marginal utility of new varieties results in: a higher own-price elasticity of demand (and lower prices) in large countries and a lower own-price elasticity of demand (and higher prices) in rich countries. Model predictions about cross-country differences in the number and size of establishments are also empirically confirmed. |
| JEL: | F1 |
| Date: | 2005–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11828&r=int |
| By: | Luca David Opromolla (New York University - Department of Economics); Alfonso Irarrazabal (New York University - Department of Economics) |
| Abstract: | This paper develops a dynamic monopolistic competition model with heterogenous firms to analyze the effects of uncertainty on international trade. We characterize a stationary equilibrium, with N symmetric countries, where firms’ productivities evolve stochastically over time. Our model retains the main results of previous recent papers like Melitz (2003) and Bernard, Eaton, Jensen and Kortum (2003) and provides additional new predictions. Reentry export costs generate hysteresis in export participation creating a band of inaction within the stationary distribution of firms’ productivities. The decision to export becomes history-dependent and new entrants and incumbent firms might sustain temporary negative profits before becoming profitable. Most importantly, the model is very amenable to estimation and simulation, therefore representing a useful tool for analyzing the effects of trade policies. Several moments, like average age, size and productivity of different categories of firms (exporters, entrants, exiters,incumbents), the hazard rate of exiting or of becoming an exporter as a function of age and others have closed-form solutions that are crucial for matching static and dynamic features of the data. |
| Keywords: | Hysteresis, Heterogeneous Firms, Firm Dynamics, Zipf's Law |
| JEL: | F1 F2 |
| Date: | 2005–12–02 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpit:0512003&r=int |
| By: | Udo Broll (Dresden University of Technology, Germany); Jack E. Wahl (University of Dortmund, Germany); Wing-Keung Wong (National University of Singapore) |
| Abstract: | This note analyzes export production in the presence of exchange rate uncertainty under mean-variance preferences. We present the elasticity of risk aversion, since this elasticity concept permits a distinct investigation of risk and expectation effects on exports. Counterintutitive results are possible, e.g. though the home currency is revaluating (devaluating) exports of the firm increase (decrease). This fact may contribute to the explanation of disturbing empirical results. |
| Keywords: | Exchange rate risk, trade, elasticity of risk aversion, meanvariance model, devaluation |
| JEL: | F21 F31 |
| URL: | http://d.repec.org/n?u=RePEc:nus:nusewp:wp0510&r=int |
| By: | Debapriya Bhattacharya |
| Keywords: | Trade, Bangladesh |
| JEL: | F10 F13 |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:pdb:opaper:52&r=int |
| By: | Cuñat, Alejandro; Maffezzoli, Marco |
| Abstract: | We present a dynamic comparative advantage model in which moderate reductions in import tariffs can generate sizable increases in trade volumes over time. A fall in import tariffs has two effects on the volume of trade. First, for given factor endowments, it raises the degree of specialization of countries, leading to a larger volume of trade in the short run. Second, it raises the factor price of each country's abundant production factor, leading to diverging paths of relative factor endowments across countries and a rising degree of specialization. A simulation exercise shows that a fall in import tariffs over time produces a disproportional increase in the trade share of output as in the data. Even when elasticities of substitution are not particularly high, moderate reductions in trade barriers lead to large trade volumes over time. |
| Keywords: | Heckscher-Ohlin; international trade |
| JEL: | F1 F4 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:5348&r=int |
| By: | Maggi, Giovanni; Rodriguez-Clare, Andres |
| Abstract: | We develop a model where trade agreements - in addition to correcting terms-of-trade externalities - help governments to commit vis-a-vis domestic industrial lobbies. We explore how trade liberalization is affected by the characteristics of the political environment, such as the degree to which governments are politically motivated and the influence of lobbies during the negotiation of the agreement. We find that governments may prefer to commit to tariff ceilings, rather than exact tariff levels. We also find that trade liberalization is deeper when capital is more mobile across sectors. In a dynamic extension of the model, the optimal agreement entails an immediate slashing of tariffs followed by a phase of gradual trade liberalization. In the gradual phase, the speed of liberalization is higher when capital is more mobile. |
| Keywords: | domestic commitment; lobbying; trade agreements |
| JEL: | D72 F13 |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:5321&r=int |
| By: | Edward B. Barbier; Michael Rauscher (University of Rostock) |
| Abstract: | This paper looks at a model in which two countries trade agricultural and manufactured commodities. The manufactured-goods sector produces with increasing returns to scale under conditions of monopolistic competition. It is shown that an increase in land endowment (or an increase in agricultural productivity) can have negative welfare implications for both countries. This outcome can result under three different scenarios: asymmetries across countries, i.e. a North-South model, a neoclassical labor market in the home country's instead of a Lewisian market, and alternative utility functions. |
| Keywords: | international trade, labor surplus economy, land expansion, monopolistic competition, North-South model. |
| JEL: | F12 J61 O15 O18 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:ros:wpaper:53&r=int |
| By: | Atsushi Kajii (Institute of Economic Research, Kyoto University); Takashi Ui (Faculty of Economics, Yokohama National University) |
| Abstract: | This paper presents a general framework to understand the possibility of a purely speculative trade under asymmetric information, where the decision making rule of each trader conforms to the multiple priors model (Gibloa and Schmeidler, 1989): the agents are interested in the minimum of the conditional expected value of trade where the minimum is taken over the set of posteriors. In this framework, we derive a necessary and sufficient condition on the sets of posteriors, thus implicitly on the updating rules adopted by the agents, for non-existence of trade such that it is always common knowledge that every agent expects a positive gain. |
| Keywords: | no trade; dynamic consistency; interim efficiency; rectangularity |
| JEL: | C70 D81 D82 D84 |
| Date: | 2004–02 |
| URL: | http://d.repec.org/n?u=RePEc:kyo:wpaper:582&r=int |
| By: | OECD |
| Abstract: | This paper provides an assessment of the impact of a package of structural reforms in all OECD countries on their long-run trade and output gains. The package includes reforms that reduce competition-restraining regulations, cut tariff barriers and ease restrictions on foreign direct investment to “best practice” levels in the OECD area. The analysis, which is based on earlier OECD studies, indicates that such reforms could lead to gains in GDP per capita in OECD countries of up to 4 to 5 per cent. As the analysis is confined to a relatively narrow set of policies and abstracts from potential dynamic effects from reform-induced increases in innovation, the overall gains from broad reforms could be significantly higher than reported in the paper. <P>Les bénéfices de la libéralisation des marchés de produits et de la réduction des barrières aux échanges et aux investissements internationaux dans les pays de l'OCDE Ce document offre une évaluation des réformes globales structurelles dans tous les pays de l'OCDE sur les échanges et la croissance de long terme. Ces réformes incluent l’ensemble des mesures politiques visant la réduction de la réglementation anti-compétitive, la baisse des barrières tarifaires et des restrictions sur les investissements directs étrangers vers les «meilleures pratiques» observées au sein des pays de l’OCDE. L’analyse, qui s’appuie sur de précédents travaux de l’OCDE, montre que de telles réformes peuvent conduire à une augmentation du PIB par habitant entre 4 et 5 pour cent dans les pays de l'OCDE. Étant donné que l’analyse ne couvre qu’un nombre de mesures spécifiques et exclut les effets dynamiques potentiels de l’innovation, les bénéfices tirés d’un ensemble de réformes beaucoup plus large pourraient bien être plus élevés que ceux reportés dans ce document. |
| Keywords: | international trade, réglementation, regulations, foreign direct investment, investissement direct étranger, commerce international, growth and productivity, croissance et productivité |
| JEL: | F13 F21 K2 O4 |
| Date: | 2005–12–02 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:463-en&r=int |
| By: | Stephan Betschart (Swiss Institute for Business Cycle Research (KOF), Swiss Federal Institute of Technology Zurich (ETH)); Rita Kobel Rohr (Swiss Institute for Business Cycle Research (KOF), Swiss Federal Institute of Technology Zurich (ETH)); Christoph Mosimann (Swiss Institute for Business Cycle Research (KOF), Swiss Federal Institute of Technology Zurich (ETH)); Christoph Siepmann (Swiss Institute for Business Cycle Research (KOF), Swiss Federal Institute of Technology Zurich (ETH)) |
| Abstract: | What are the consequences of European economies’ goods structure for their exports as they face Asian competition? Over the last 30 years, the share of East Asian nations in international merchandise trade has been growing noticeably. This rise is often explained by the notion that Asian countries developed a network in which the production of mainly machinery goods has been split up along the production chain over different (Asian) countries and firms. Even though European imports from and exports to Asian countries currently account for only a relatively small fraction of Europe’s total trade, this share is increasing. Thus, the question regarding export perspectives of the European industry facing Asian competition arises. Based on the goods structure of eleven European and five Asian economies as well as the USA using the Standard International Trade Classification at the 1- and 2-digit level, similarities, differences and trends over time are analysed. The additional distinction of the export structure by stage of production (on the basis of the Broad Economic Categories of the United Nations) provides some information with respect to whether an economy is more assembly-based and less research-based or not. Moreover, special attention is given to the share in high-tech goods of the selected countries. Exports of hightech products expand more strongly with spill-over effects on other sectors of an economy. A look at the development of trade balances completes the picture, which of the European economies considered have more favourable export perspectives in the medium term and which ones less so. |
| Date: | 2005–06 |
| URL: | http://d.repec.org/n?u=RePEc:kof:wpskof:05-104&r=int |
| By: | Elina Eskola (Department of Economics, University of Copenhagen) |
| Abstract: | The study uses a computable general equilibrium (CGE) approach to simulate the welfare gains of improving trade and transport services in Tanzania up to the year 2015. The model takes into account the regional differences in trading margins and the different production patterns of commercial and subsistence producers. The results show that substantial economic growth can be achieved by alleviating the existing bottle necks in marketing. The regional growth patterns of production after market improvement favour the more isolated and often poorer regions, leading to decreased regional inequality over time. The main beneficiaries of the policy change are the rural poor whose income grows faster than the income of the wealthier urban dwellers. The results suggest, that if sufficient resources and political commitment to improving trade and transport sectors can be mobilised, the economic performance can be enhanced to reach the Millennium Development Goals by 2015. |
| Keywords: | computable general equilibrium (CGE); regional growth; commercialisation; infrastructure; trade; pro-poor growth; Tanzania; millennium development goals |
| JEL: | C68 D58 F14 I38 O55 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:kud:kuiedp:0522&r=int |
| By: | Raúl O'Ryan; Carlos J. de Miguel; Sebastian Miller |
| Abstract: | Computable General Equilibrium (CGE) models are a powerful economic tool for multidimensional/multi-sectoral analysis. They improve traditional input-output analysis generating quantities and prices endogenously and reflecting market incentives. They complement partial equilibrium analysis with a broader scope of analysis and the quantification of indirect and often non-intuitive effects. Environmental applications of CGE models include trade and environment, climate change, energy problems, natural resources management and environmental regulation analysis. The ECOGEM-Chile model described in this paper can be used to analyse impacts on macro, sectoral, social and environmental (air, water and land pollutants) variables of different economic, social or/and environmental policies, such as trade policies, environmental taxes, external price shocks, among others. The model incorporates the recently released 1996 input/output matrix as well as the most recent information on wages and income. In the specific application developed here, the model is used to analyse direct and indirect impacts on the Chilean economy of increasing fuel taxes by 100%. Additionally a trade policy of reducing tariffs to compensate the increase in revenues of these taxes is simulated. The tariff reductions are in line with the current Chilean trade policy. Winners and loser from both exercises are identified as well as the main determinants of the results. |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:edj:ceauch:211&r=int |
| By: | Cadot, Olivier; Carrere, Céline; de Melo, Jaime; Portugal-Pérez, Alberto |
| Abstract: | This paper estimates the effective market access granted under NAFTA in textiles and apparel by combining two approaches. First, we estimate the effect of tariff preferences and rules of origin on the border prices of Mexican final goods exported to the US and of US intermediates exported to Mexico. We find that one third of the estimated rise in the border price of Mexican apparel products compensates for the cost of complying with NAFTA’s rules of origin. We also find that the price of US intermediates exported to Mexico is raised significantly by the presence of rules of origin downstream. Second, simulations from a structural model inspired by our econometric estimates, suggest little market access improvement for Mexican exporters. |
| Keywords: | NAFTA; regional integration; rules of origin |
| JEL: | F10 F13 F15 |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:5264&r=int |
| By: | Fabrizio De Filippis (University “Roma Tre”); Valeria Costantini (University “Roma Tre”); Riccardo Crescenzi (University “Roma Tre”); Luca Salvatici (University of Molise) |
| Abstract: | The paper aims at understanding the structural features of the bargaining coalitions in the Doha Round of the WTO. We provide an empirical assessment of the preferences of each negotiating actor looking at general economics indicators, development levels, structure of the agricultural sectors, and trade policies for agricultural products. Bargaining coalitions are analyzed by grouping countries through a cluster analysis procedure. The clusters are compared with existing coalitions, in order to assess their degree of internal homogeneity as well as their common interests. Such a comparison allows the detection of possible “defectors”, i.e. countries that according to their economic conditions and policies seem to be relatively less committed to the positions of the coalition they join. |
| Keywords: | Agricultural trade negotiations, Bargaining coalitions, WTO, Cluster analysis |
| JEL: | F13 Q17 |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2005.99&r=int |
| By: | Andre Varella Mollick; Joao Ricardo Faria; Pedro H. Albuquerque; Miguel A. Leon-Ledesma |
| Abstract: | Several empirical studies report the existence of declining terms of trade between commodities and manufactures, supporting the Prebisch-Singer hypothesis. As globalisation leads to greater integration of markets, we ask if in a fully integrated economy the terms of trade will display the same negative trend. Assuming that globalisation would make the world economy behave as the US economy, this paper shows that the US internal real commodities' terms of trade over the 1947-1998 period experienced slowly declining but significant trends. We then test if common factors may be driving the US and international terms of trade in the long-run. The results suggest that both series, particularly those using crude materials in the numerator, share a positive long-run relationship. It follows that international integration plays no role in causing the decreasing trend of the terms of trade. |
| Keywords: | Economic Integration; Globalisation; Prebisch-Singer |
| JEL: | E31 F15 F41 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:ukc:ukcedp:0510&r=int |
| By: | Francesco Paolo Mongelli (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.); Ettore Dorrucci (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.); Itai Agur (European University Institute, Florence, Italy.) |
| Abstract: | The start of the European Economic and Monetary Union (EMU) has spurred a new interest in the debate on the effects of monetary unions on regional economic integration. This literature either investigates past episodes of monetary unions or attempts to gauge any effect with a few years of EMU data. This paper takes instead a more general perspective - it investigates the link between economic integration and the overall institutional process of regional integration in Europe – of which monetary integration was only one step – over the last 50 years. We look mainly at two dimensions - European institutional integration – whose main steps were the customs union in 1968, the single market in 1993 and the single currency in 1999 – and intra-European trade. We pay special attention to the successive EU enlargements which took place in 1973, 1981, 1986, and 1995. Different facets of openness and trade linkages are presented. After looking at some descriptive links between institutional and trade integration, the paper uses some causality tests to assess the direction of causality and magnitude of impact. The evidence provided is consistent with the idea that the interaction between regional institutional and trade integration before monetary union matters. Such interaction runs in both directions, although the link from institutional to trade integration dominates. Many open questions remain, however. |
| Date: | 2005–12 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbops:20050040&r=int |
| By: | Vitor Trindade (Department of Economics, University of Missouri-Columbia); James E. Rauch |
| Abstract: | Some cultural goods, like clothes and films, are consumed socially and are thus characterized by the same consumption network externalities as languages. At the same time, producers of new cultural goods in any one country draw on the stock of ideas generated by previous cultural production in all countries. For such goods, costless trade and communication tend to lead to the dominance of one cultural style, increasing utility in the short run but reducing quality and generating cultural stagnation in the long run. Increasing trade costs while keeping communication costs low may reduce welfare by stimulating production of cultural goods that are “compatible” with the dominant style, thereby capturing consumption network externalities, but that add little to the stock of usable ideas. Our two-country analysis suggests a reform of cultural policy whereby import restrictions in the smaller country are removed, and are replaced by subsidies to the fixed costs of production of new cultural goods in its traditional style. |
| Keywords: | consumption network externalities, home market effect, globalization, cultural policy |
| JEL: | F12 F13 F15 Z10 |
| Date: | 2005–11–30 |
| URL: | http://d.repec.org/n?u=RePEc:umc:wpaper:0517&r=int |
| By: | Dennis Browne |
| Keywords: | Dispute Settlement, WTO, LDC, Bangladesh |
| JEL: | F10 |
| Date: | 2005–01 |
| URL: | http://d.repec.org/n?u=RePEc:pdb:opaper:45&r=int |
| By: | Carsten Helm (Institut für Volkswirtschaftslehre (Department of Economics), Technische Universität Darmstadt (Darmstadt University of Technology)) |
| Abstract: | This paper analyzes liability issues in the context of internationally traded goods like hazardous waste. If waste disposers of a small open economy are judgement-proof, then the extension of liability to waste exporters distorts the factor allocation and may reduce disposal care. Hence the optimal extension is partial at most. However, extending liability increases incentives of the waste importing country to hold domestic disposers liable. Interaction through the price system and through contracts that condition payments for disposal services on the occurrence of an accident yield identical outcomes if disposers are judgement-proof. |
| Keywords: | extended liability, hazardous waste trade, externalities, moral hazard |
| JEL: | Q38 F18 D63 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:tud:ddpiec:153&r=int |
| By: | Amos Peters (CARICOM Secretariat) |
| Abstract: | This paper explores the fiscal effects of tariff reduction for the Caribbean Community.The paper concludes that Caribbean countries are likely to experience short-run revenue shortfall as a consequence of trade liberalization. Indications are that the shortfall could be as much as a 45 per cent decline in customs duties. In order to mitigate this substantial effect, the ongoing efforts at fiscal reform must continue, paying particular attention to lowering tax exemptions, enhancing indirect tax systems, improving tax collection and administration and modifying the tax structure to reflect lower dependence on trade taxes for fiscal receipts. |
| JEL: | D6 D7 H |
| Date: | 2005–11–26 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwppe:0511018&r=int |
| By: | Mustafizur Rahman; Wasel Bin Shadat |
| Abstract: | The ongoing negotiations on non-agricultural market access (NAMA) in the WTO are expected to lead to substantive reductions in the tariff rates on industrial goods in both the developed and the developing countries. Although an agreement on the formula and coefficient(s) is yet to be reached, it is becoming increasingly clear that countries are moving towards a differentiated swiss-type formula with deeper cuts for higher tariffs. The July (2004) Framework Agreement stipulated that LDCs will not be required to undertake any tariff reduction commitments under the NAMA. However, LDCs are likely to suffer substantive tariff preference erosion as a consequence of NAMA negotiations since any tariff reduction by the developed countries will result in a fall in the preferential margins currently enjoyed by the LDCs under the various GSP schemes operated by the developed countries. Consequently, the competitive edge currently enjoyed by the LDCs by taking advantage of the preferential treatment under the various GSP schemes is set to suffer erosion. This is a major concern for Bangladesh and other LDCs in the Asia-Pacific region. This paper attempts to make an estimate about the range of preferential erosion for Bangladesh given her current trade pattern and preferential treatment enjoyed by her exports. The paper finds that for Bangladesh, the preferential erosion could be substantial (e.g. $42.1 million worth of net preference erosion in the EU alone for RMG products under one of the possible scenarios). Reduced preference margin will also undermine future competitiveness in the developed country markets. It is also to be noted that tariff reductions under NAMA will have positive implications for Bangladesh in the US market where most of Bangladesh’s industrial goods do not enjoy GSP treatment. Thus, tariff reduction under NAMA is expected to have diverse implications for Bangladesh’s export of industrial goods. NAMA, thus, may increase Bangladesh’s competitive edge vis-à-vis Caribbean and Sub-Sahara African countries which are currently enjoying zero-tariff access for apparels under the AGOA and the CBI. The paper reviews some of the proposals that are being discussed to address the possible negative consequences of preference erosion for the LDCs |
| Keywords: | WTO-General Council, NAMA, Bangladesh |
| JEL: | F10 F13 |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:pdb:opaper:51&r=int |
| By: | Dorothée Boccanfuso (GREDI, Faculte d'administration, Université de Sherbrooke); Luc Savard (GREDI, Faculte d'administration, Université de Sherbrooke) |
| Abstract: | In Senegal, the poverty reduction strategy will take place in a context characterized by international trade liberalization in the agricultural sector, in general and the groundnut sector, in particular. This is the backdrop against which we have developed a micro-simulated multiple household computable general equilibrium such as proposed by Decaluwé et al. (1999b). Four simulations have been made and their impacts assessed at the macroeconomic, sectoral and household levels. The first two simulations concerned tariff reforms, and the last two, the external shocks resulting from a change in export prices on the world market (groundnuts and groundnut oils). These simulations have been used to assess the impacts that the liberalization of the groundnut industry and the privatization of Société Nationale de Commercialisation des Oléagineux du Sénégal (SONACOS) provided for in the Framework Agreement, may have on households and to establish a link between these economic reforms, poverty and income ditribution. This model is very flexible because it allows, in particular, a change in the distribution of the target groups who had not been retained prior to the simulation exercise so that an ex post analysis of poverty and inequality to the modeling exercise could be carried out. |
| Keywords: | computable general equilibrium model, micro-simulation, poverty analysis, income distribution, privatization |
| JEL: | D58 D31 I32 L33 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:shr:wpaper:05-12&r=int |
| By: | Anderson, Kym; Valenzuela, Ernesto |
| Abstract: | We estimate the impact of global merchandise trade distortions and services regulations on agricultural value added in various countries. Using the latest versions of the GTAP database and the GTAP-AGR model of the global economy, our results suggest real net farm incomes would rise in developing countries with a move to free trade, thereby alleviating rural poverty - despite a terms of trade deterioration for developing countries that are net food importers or are enjoying preferential access to agricultural markets of high-income countries. We also show, for several large developing countries, the contribution of their own versus other countries' trade policies |
| Keywords: | agricultural value added; CGE modeling; economic welfare; trade policy reform |
| JEL: | C68 D58 F17 Q17 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:5337&r=int |
| By: | Luis Araujo (Michigan State University and Fucape); Emanuel Ornelas (University of Georgia and IBMEC Business School - Rio de Janeiro) |
| Abstract: | There is substantially more trade within national borders than across borders. An important explanation for this fact is the weak enforcement of international contracts. We develop a model in which agents build reputations to overcome this institutional failure. The model describes the interplay between institutional quality, reputations and the dynamics of international trade. It also rationalizes several empirical regularities. We find that history matters for trade volumes, but that its effects vary with the institutional setting of the country. The same is true for the efficacy of trade liberalization programs. Moreover, while stricter enforcement of contracts enhances trade in the short run, it makes it harder for individual traders to develop good reputations. We show that this indirect negative effect may produce an "institutional trap": for sufficiently low initial levels of contract enforcement, a small tightening in enforcement reduces future trade flows. We find also that search frictions aggravate the problems created by weak enforceability of contracts, even if they impose no direct cost on agents, but that trade liberalization can mitigate these negative effects. |
| Keywords: | International trade, Export dynamics, Contract enforcement, Reputation |
| JEL: | F10 F23 D83 L14 |
| Date: | 2005–11–30 |
| URL: | http://d.repec.org/n?u=RePEc:ibr:dpaper:2005-08&r=int |
| By: | May Yeung |
| Keywords: | Trade, Bangladesh |
| JEL: | F10 F36 |
| Date: | 2005–06 |
| URL: | http://d.repec.org/n?u=RePEc:pdb:opaper:48&r=int |
| By: | Hyung-Jong Lee; Karinne Logez |
| Abstract: | Since a catastrophic Tsunami hit coastal areas around the Indian Ocean on 26 December 2004, many have suggested that trade could be a more useful instrument to assist the recovery of affected countries than aid transfers alone. To probe this argument, this paper examines the economies of the affected countries and identifies their overall trade interests and market access concerns. In addition, it summarizes EU and US trade measures which aim to help the recovery. It is argued in the paper that, despite even when trade measures benefit the tsunami-affected countries overall, they may have limitations in delivering benefits directly to the affected people and region. |
| Date: | 2005–10–14 |
| URL: | http://d.repec.org/n?u=RePEc:oec:traaab:23-en&r=int |
| By: | Jane Korinek |
| Abstract: | Increased global integration affects groups of individuals differently. This paper examines ways in which greater integration through trade impacts women and men differently, and ensuing implications for growth. The paper finds that trade creates jobs for women in export-oriented sectors. Jobs that bring more household resources under women’s control lead to greater investments in the health and education of future generations. Although women are more than ever formally employed, differences in wages earned by men and women persist in all countries. Women also have less access to productive resources, time and, particularly in many developing countries, education. Professional women continue to encounter discrimination in hiring and promotion, including in OECD countries. The impact of trade liberalisation on women is important not only because they represent over half of any population, but also because they face constraints which make them less able to benefit from liberalisation. Once different impacts are ascertained, well-designed policy responses may aid women in taking advantage of greater openness to trade. |
| Date: | 2005–11–23 |
| URL: | http://d.repec.org/n?u=RePEc:oec:traaab:24-en&r=int |
| By: | Shiv Raj Bhatt (Trade Capacity Building Project, UNDP Nepal); Bhattarai Ekta (Trade Capacity Building Project, UNDP Nepal) |
| Abstract: | Despite significant achievements in the socio-economic front in past decades under planned development efforts, women’s status is still far behind of men. In fact, the development that took place in the country, which largely failed to address the problem of gender inequality, resulted in low women’s participation in the development process, representation in decision-making, and ownership in productive resources. Nepal acceded to the World Trade Organization (WTO) in 2004. As an instrument of trade liberalization it can significantly affect the lives of people, including women. Economists working on gender and trade investigating the complex relationship between gender inequalities and trade liberalization find that trade liberalization has had mixed results for gender outcomes. Socio-economic conditions, institutional arrangements, access over productive resources and many other factors largely determine whether and to what extent a country or a particular group of people benefits from trade. Therefore, Nepal’s entry into the WTO may also produce mixed results for gender outcome, especially in existence of widespread gender discriminations in economic life. In a situation of large socio-economic differences between men and women, Nepal needs active policy interventions to expand human choices and to contribute to increasing income and gender inequalities, especially after WTO membership. Therefore, it is imperative to implement active policy interventions rather than passively wait for the markets to deliver automatic benefits if the opportunities of WTO membership are to be translated into tangible, widespread, long lasting and equitable benefits for Nepalese women. |
| JEL: | F1 F2 |
| Date: | 2005–11–27 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpit:0511015&r=int |
| By: | Ananya Raihan; Mabroor Mahmood |
| Abstract: | This research paper examines Bangladesh's opportunities as regards GATS Mode 4, particularly in the area of export of manpower, and provides a negotiating strategy that would be helpful for the policymakers. Evaluating the demographic trends in the European countries, the authors argue that Bangladesh can generate significant gains through TMNP by utilising the special treatment that has been accorded to LDCs in the recent WTO meetings. The distinguishing feature of the article is that it mapped the classes of manpower with various ISCO-88 categories, and classified Bangladesh's export interests under three broad groups. Such an approach, first ever used in Bangladesh, is believed to assist the policymakers to identify Bangladesh's areas of interests and articulate their stance accordingly to ensure maximum gains from future negotiations |
| Keywords: | Trade Negotiations, Bangladesh |
| JEL: | F13 |
| Date: | 2004–04 |
| URL: | http://d.repec.org/n?u=RePEc:pdb:opaper:36&r=int |
| By: | Fahmida Khatun |
| Abstract: | Prepared under CPD's Capacity Building in Trade-Environment Issues in Bangladesh: Addressing the WTO Work Programme, the paper makes an attempt to analyse environmental issues in the context of multilateral trading systems and the developments taking place in the WTO, particularly in the context of their relevance to Bangladesh. While Part A focuses on various multilateral agreements in the WTO on environmental issues, Part B deals with liberalisation of environmental goods and services. Part C critically analyses the effects of environmental measures on market access. The paper highlights a range of environmental issues and debates emerging in the WTO, keeping in view Bangladesh's interests and puts forward a number of recommendations as regards Bangladesh's policy stance with respect to some of the key issues in the upcoming negotiations. |
| Keywords: | WTO, Environment, Bangladesh |
| JEL: | F10 O13 |
| Date: | 2004–02 |
| URL: | http://d.repec.org/n?u=RePEc:pdb:opaper:35&r=int |
| By: | Uttam Kumar Deb |
| Abstract: | This paper reviews the state of negotiations as regards agriculture and the developments in the context of the July Package. The paper also brings out the major points of contentions and analyses possible impacts of various negotiating proposals for Bangladesh’s agricultural sector and its economy. Moreover, the paper comes up with possible strategies for Bangladesh in view of the ongoing negotiations on agriculture in the WTO. |
| Keywords: | WTO-General Council, Agriculture, July Package, Bangladesh |
| JEL: | F10 Q17 |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:pdb:opaper:53&r=int |
| By: | Deepak Shah (Gokhale Institute of Politics & Economics Deemed to be a University , Deccan Gymkhana, Pune – 411 004 Maharashtra , India) |
| Abstract: | This paper seeks to evaluate the present and future prospects of developing and developed countries in agricultural exports in general and in horticultural exports in particular. The study also evaluates the behaviour of international export prices for agricultural commodities, both for developing and developed nations. In general, this study provides an insight into the direction in which various developed and developing countries are heading for insofar as their agricultural and horticultural exports are concerned in the changed market conditions. The study has made a few major observations. First, the study shows decline in market share of developing countries’ in world agricultural exports in the face of marginal increase in their market share in world fruits and vegetable (F&V) exports during the period between 1981 and 1997. Second, although the study shows lower market share of developing countries’ in world F&V exports during the period between 1981 and 1997, the growth in F&V exports as proportion of total agricultural exports is noticed to be much faster for developing countries’ as against the developed countries’ during the same period. Third, though agricultural exports of Least Developed Countries (LDC) have grown only marginally between 1981 and 1997, the growth in their F&V exports is seen to have been tremendous, especially after the late eighties period. Similarly, Socialist Countries of Asia (SCA) and developing countries of Oceania have also shown sharp increases in their F&V exports after the late eighties period. Fourth, while except America, other Africa and Oceania, all the developing countries have shown decline in their market share in total F&V exports of Developing Market Economies (DME), Asia shows rise in its market share not only in agriculture but also in F&V exports of DME. Another major observation of this study is in terms of instabilities in export prices. The instabilities in export prices of agricultural commodities, including horticultural ones, are noticed to be more sharp for developing world as compared to developed world. The study, therefore, has categorically emphasized upon the fact that the future growth in horticulture production and trade, especially of developing world, will mainly depend on future price mechanism and also on the import demand of these high value crops in various regions of the world. |
| Keywords: | Liberalization and Horticultural Exports of Developing Countries |
| JEL: | F1 F2 |
| Date: | 2005–12–02 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpit:0512001&r=int |