nep-int New Economics Papers
on International Trade
Issue of 2006‒03‒11
ten papers chosen by
Martin Berka
Massey University

  1. Agricultural Trade and the Doha Round: Lessons from Commodity Studies By Beghin, John C.; Aksoy, Ataman
  2. Geographic Proximity, Trade and International Conflict/Cooperation By John Robst; Solomon Polachek; Yuan-Ching Chang
  3. The Consequences of Trade Liberalisation on the Australian Passenger Motor Vehicle Industry By Sanidas, Elias; Jayanthakumaran, Kankesu
  4. Migration Flows and Intra-Industry Trade Adjustments. By José V. Blanes; Joan A. Martín-Montaner
  5. Market integration and industrial modernization : a global middle class perspective. By Alain Desdoigts; Fernando Jaramillo
  6. Virtual water and water trade in Andalusia. A study by means of an input-output model By Erik Dietzenbacher; Esther Velázquez
  7. Evolving Dairy Markets in Asia: Recent Findings and Implications By Beghin, John C.
  8. "Globalization and Pollution Industries in East Asia" By Toru Iwami
  9. Rethinking Agricultural Domestic Support under the World Trade Organization By Hart, Chad E.; Beghin, John C.
  10. Ethnic Networks and U.S. Exports By Subhayu Bandyopadhyay; Cletus C. Coughlin; Howard J. Wall

  1. By: Beghin, John C.; Aksoy, Ataman
    Abstract: While global analytical approaches to agricultural trade liberalization yield large gains for most economies, there are substantial variations in the policy regimes across commodities. To clarify the multiplicity of distortions and impacts, the World Bank’s Trade Department undertook a series of commodity studies. The studies highlight the important challenges faced by negotiating countries in the Doha Round of the World Trade Organization (WTO) trade negotiations. The studies provide a sharper look at the North-South dimensions of the agricultural trade debate, with the North’s trade barriers, domestic support, and tariff escalation. They also underscore the South-South challenges on border protection and the reduced rural income opportunities for the lowest-income countries due to policies in higher-income countries that depress world prices. Agricultural trade liberalization would induce significant price increases for most commodities. The studies identify the detrimental effects of multilateral trade liberalization for some countries because of lost preferential trade agreements and higher prices on net consumers of commodities. Given the complexity of specific issues in agriculture, as well as the North-South and South-South dimensions of distortions, a global solution would be required to liberalize these markets. Rather than being self-contained, agricultural trade negotiations should involve concessions on other sectors and issues (services and intellectual property rights for example) to identify overall reform packages palatable to all parties.
    Keywords: agricultural trade liberalization, Doha, World Bank, commodities
    JEL: F1
    Date: 2006–03–03
  2. By: John Robst (University of South Florida); Solomon Polachek (State University of New York at Binghamton and IZA Bonn); Yuan-Ching Chang (Chinese Cultural University, Taiwan)
    Abstract: This paper examines the interactive effect of distance and trade on international conflict and cooperation. The effect of geographic distance depends on trade, while the effect of trade varies with geographic distance. Trade reduces conflict to a greater extent when dyads are geographically close, but has a greater effect on cooperation when countries are more distant. Geographic proximity increases conflict and cooperation more among non-trading dyads.
    Keywords: conflict, trade, distance, geographic proximity, cooperation, international relations, international interactions
    JEL: A12 A13 F1 O57
    Date: 2006–02
  3. By: Sanidas, Elias (University of Wollongong); Jayanthakumaran, Kankesu (University of Wollongong)
    Abstract: This paper is an appraisal of the impact of Australian trade liberalization measures on imports, exports, productivity, and internal demand of the passenger motor vehicle industry. There is clear evidence that this liberalization has increased the volume of trade, imports, exports, and productivity, but reduced the locally produced cars for internal consumption. Various models are constructed and applied. Thus, this paper is an application of the bounds testing procedure based on the ARDL approach to cointegration and the comparison of the latter with the OLS and Johansen’s cointegration methods in the contexts of small samples.
    Keywords: Trade liberalization, Australian Passenger motor vehicle industry, ARDL approach
    Date: 2006
  4. By: José V. Blanes (Department of Economics, Universidad Pablo de Olavide); Joan A. Martín-Montaner (Departmento de Economica, Universitat Jaume I)
    Abstract: In this paper we analyse the link between trade and migration. Focusing in the experience of Spain, we relate a marginal index of intra-industry trade with the stock of foreign workers - classified according to their country of origin and their situation in the Spanish labour market. We focus on the possibility that existing networks of foreign workers and their connections with their countries of origin could stimulate trade with the host country. Our results show a significant impact of the number of immigrants with work permits on intra-industry trade adjustment. However, this impact being positive or negative depends on whether foreign workers are employees or self-employed, the duration of the work permits and the type of job they occupy.
    Keywords: migration, intra-industry trade, networks.
    JEL: F10 F14 F15 F22
    Date: 2006–03
  5. By: Alain Desdoigts (CES-EUREQua et LEG-Université de Bourgogne); Fernando Jaramillo (Universidad de Los Andes)
    Abstract: This paper highlights cross-boarder aspects of demand spillovers on (de-) industrialization into international environments with extra profits-making firms. We develop an inter- and intra-industry trade general equilibrium model featuring hierarchic and ideal-type preferences as well as inequality in labor income and shareholding. Its key feature is the introduction of complementarities propagating across both industries and boarders, which yield global profit (de-) multiplier effects. When firms are domestically-owned, trade-induced global in their scope horizontal complementarities benefit the less homogeneous middle class/more competitive/smaller trade partner. As long as differences in technology are not too large, technological catch-up growth leads the share of higher-priority goods in GDP to suffer erosion in the advanced trade partner and modernization to accelerate in those sectors which produce higher-income elasticity goods in both trade partners. However, the free trade multiplier effect is strengthened (weakened) at the aggreate level in the lagging (leading) country.
    Keywords: Horizontal complementarities, hierarchic preferences, world middle class, deindustrialization, trade.
    JEL: F10 O11 O14
    Date: 2006–02
  6. By: Erik Dietzenbacher (Faculty of Economics, University of Groningen); Esther Velázquez (Department of Economics, Universidad Pablo de Olavide)
    Abstract: Andalusian agricultural sectors are relatively small, but consume by 90% of the available water resources. More than 50% of the final demands for agricultural products are exported to other Spanish regions or abroad. Using a virtual water concept with an input-output framework, we find that a substantial part of the Andalusian water consumption is necessary for exports. Considering the water content of its trade, Andalusia is found to be a net exporter of water, whereas it is an extremely arid region. Examining regional policy aspects, a reduction in the exports abroad of agricultural products yields considerable benefits in terms of water savings and only moderate costs.
    Keywords: Input-Output Models, Virtual Water, Trade and Sustainability
    JEL: R15 Q25 Q17
    Date: 2006–03
  7. By: Beghin, John C.
    Abstract: This paper is an overview of important findings regarding the ongoing evolution of Asian dairy markets based on a series of new economic investigations. These investigations provide systematic empirical foundations for assessing Asian dairy markets with their new consumption patterns, changing industries, and trade prospects under different domestic and trade policy regimes. The findings are drawn from four case studies (China, India, Japan, and Korea), as well as a prospective analysis of future regional patterns of consumption and a policy analysis of trade liberalization of Asian dairy markets. The overview distills the findings of these new investigations and integrates them in the earlier economic literature; it draws policy implications and identifies lessons for countries outside of Asia, especially for emerging exporters in Latin America.
    Keywords: Asia, China, dairy, India, Japan, Korea, liberalization, trade integration.
    JEL: F1
    Date: 2006–03–03
  8. By: Toru Iwami (Faculty of Economics, University of Tokyo)
    Abstract: In this paper, we investigate what the East Asian data tell us about the "pollution haven hypothesis." In the region, pollution goods are not traded so much directly, and their production is not clearly correlated with inward FDI and openness of the country in question. Although production of pollution goods is indirectly related to manufacturing exports as materials and intermediate goods, domestic consumption exerts larger impact on the production than exports. These facts imply that pollution industries are not so much influenced by the "globalization," suggesting indirectly also that a gap in environmental regulations do not lead to an increased scale of foreign trade and FDI. To the question of how FDI inflows and openness contribute to energy efficiency and labor productivity, we find a positive effect of FDI on the labor productivity in low and middle-income countries, although its effect on energy efficiency is rather vague.
    Date: 2006–01
  9. By: Hart, Chad E.; Beghin, John C.
    Abstract: This paper focuses on the third pillar of the Uruguay Round Agreement on Agriculture (URAA) of the World Trade Organization (WTO), the discipline of agricultural domestic support. The paper examines the current definition of agricultural domestic support used by the WTO, focusing on the Aggregate Measure of Support (AMS) and other forms of support that are less to least distorting (Blue and Green Box payments). The analysis looks at the recent experience of four member states (the United States, the European Union, Japan, and Brazil). The structure of recent support varies considerably by country. Some countries, notably the United States, have strategically used the de minimis exemption to deflate their support figures substantially in order to remain within AMS limits, even though total support has exceeded these limits. The paper investigates the possible effects of changing the definition of the AMS so that it better reflects current support conditioned by market forces. If market prices (world and/or domestic) were to be used to compute current market support, a greater variability of the AMS would result, and violations of AMS limits would be more likely given the anticyclical nature of policies included in the AMS, especially for the United States and European Union.
    Date: 2006–03–03
  10. By: Subhayu Bandyopadhyay (West Virginia University and IZA Bonn); Cletus C. Coughlin (Federal Reserve Bank of St. Louis); Howard J. Wall (Federal Reserve Bank of St. Louis)
    Abstract: This paper provides new estimates of the effects of ethnic network on U.S. exports. In line with recent research, our dataset is a panel of exports from U.S. states to 29 foreign countries. Our analysis departs from the literature in two ways, both of which show that previous estimates of the ethnic-network elasticity of trade are sensitive to the restrictions imposed on the estimated models. Our first departure is to control for unobserved heterogeneity with properly specified fixed effects, which we can do because our dataset contains a time dimension absent from previous studies. Our second departure is to remove the restriction that the network effect is the same for all ethnicities. We find that ethnicnetwork effects are much larger than has been estimated previously, although they are important only for a subset of countries.
    Keywords: ethnic networks, state exports
    JEL: F10 R10
    Date: 2006–03

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