nep-int New Economics Papers
on International Trade
Issue of 2006‒03‒25
eight papers chosen by
Martin Berka
Massey University

  1. Import duty incidence By Paul Veenendaal
  2. Doha scenarios, trade reforms, and poverty in the Philippines By Cororaton, Caesar B.; Cockburn, John; Corong, Erwin
  3. Pollution Haven Hypothesis or Factor Endowment Hypothesis: Theory and Empirical Examination for the US and China By Umed Temurshoev
  4. Trade Policy and Factor Prices: An Empirical Strategy By Daniel Ortega; Francisco Rodríguez
  5. Eradicating Extreme Poverty and Hunger: Towards a Coherent Policy Agenda By Prabhu Pingali; Kostas Stamoulis; Randy Stringer
  6. The Effect of Foreign Direct Investment on Labour Productivity: An Overview of an Empirical Study of Estonia and Slovenia By Priit Vahter
  7. From Bound Duties to Actual Protection: Industrial Liberalisation in the Doha Round By Mohamed Hedi Bchir; Lionel Fontagné; Sébastien Jean
  8. The Changing Structure of Pork Trade, Production, and Processing in Mexico By Bruce A. Babcock; Chad E. Hart

  1. By: Paul Veenendaal
    Abstract: Using National Accounts data and static input-output analysis we assess the extent of shifting the incidence of Dutch import duties to foreign customers and global tariff incidence on final demands. About 70% of the tariffs collected in the Netherlands are paid by foreign customers, mainly those in other EU-countries. While the Dutch export the incidence of most of the import duties that they collect, they also import duties levied elsewhere in the EU. Assessing tariff incidence globally we conclude that Dutch tariff incidence is in line with the incidence in the other member states of the European Union. We extensively explain the computational procedures followed.
    Keywords: import duties; tax incidence; input-output analysis
    JEL: C67 F1 H22
    Date: 2005–11
  2. By: Cororaton, Caesar B.; Cockburn, John; Corong, Erwin
    Abstract: "The paper examines the possible impact of Doha agreement on Philippine poverty. Using a detailed CGE analysis, the agreement is observed to depress world demand for Philippine agricultural exports, and thus slightly increase poverty, especially among rural households. However, an ambitious full trade liberalization scenario, which involves free world trade and domestic liberalization, leads to increased industrial exports that favor urban households. These impacts are driven primarily by domestic trade liberalization, as free world trade favors the agricultural sector by increasing the cost of competing agricultural imports." Authors' Abstract
    Keywords: Doha agreement ,Computable general equilibrium (CGE) ,Free trade ,
    Date: 2005
  3. By: Umed Temurshoev
    Abstract: This paper examines how free international trade affects the environment in the developed and less developed worlds. Using input-output techniques, tests of the pollution haven hypothesis (PHH) and the factor endowment hypothesis (FEH) for the US and China were empirically carried out. We found that China gains and the US lose in terms of CO2, SO2 and NOx emissions from increased trade, and the US is not exporting capital intensive goods. Thus both the PHH and the FEH are rejected, which implies that explaining the trade of pollutants remains an unresolved puzzle.
    Keywords: International trade, Environment, Pollution haven, Factor endowment, Inputoutput analysis.
    JEL: F18 Q32 D57
    Date: 2006–03
  4. By: Daniel Ortega (Center for Finance, Instituto de Estudios Superiores de Administración); Francisco Rodríguez (Economics Department, Wesleyan University)
    Abstract: This paper presents a new empirical strategy for estimating the effects of trade policy on domestic factor prices when policy endogeneity is suspected. Absent income effectson factor supplies or domestic prices, the coefficient on the terms of trade can provide an unbiased estimator of the effect of trade barriers on the factor distribution of income for a small economy. In the more general case where income effects are allowed for, we provide a means to quantify and control for the possible bias. We implement our strategy on a cross-national data set of trade policies and income shares of capital and labor. We find little evidence of the existence of Stolper-Samuelson effects, both for the sample as a whole as well as within cones of diversification. Consistent with a model of wage bargaining, we find that the effect of openness on capital shares is greater for countries with higher unionization rates.
    Keywords: Factor prices, trade policy, Stolper-Samuelson theorem, wage bargaining
    JEL: F13 F16
    Date: 2005–04
  5. By: Prabhu Pingali (Agricultural and Development Economics Division, Food and Agriculture Organization); Kostas Stamoulis (Agricultural and Development Economics Division, Food and Agriculture Organization); Randy Stringer (Agricultural and Development Economics Division, Food and Agriculture Organization)
    Abstract: Alleviating hunger and poverty has been and continues to be the pre-dominant policy challenge facing global and national decision makers. This paper argues that policy interventions for addressing this challenge should be designed in the context of emerging global, regional and national trends. This paper discusses four major trends that are shaping the future food economy and consequently the prospects for meeting the hunger and poverty goals. These trends are: i) rapid urbanisation in the developing world and its impact on food markets; ii) increasing integration of global food markets through trade; iii) deterioration of natural resource base and the degradation of the global and local commons; and iv) rising transactions costs in the acquisition and use of science and technology for development.
    Keywords: Agricultural Development, Poverty and Food Security.
    JEL: Q18 O1 O19
    Date: 2006
  6. By: Priit Vahter (Eesti Pank (Bank of Estonia) Research Department, University of Tartu)
    Abstract: This paper studies the effects of foreign direct investment on labour productivity in manufacturing industries of two transition countries, Estonia and Slovenia. The emphasis is on the dimension of export/local market orientation. The study is based on firm-level panel data. It is shown that in Estonia the export oriented foreign investment enterprises have on average much lower labour productivity than the domestic market oriented foreign affiliates. In Slovenia, on the contrary, the export orientation of foreign affiliates is not correlated with lower labour productivity. No horizontal spillover of foreign direct investment to domestic firms is detected in Estonia. In Slovenia, however, positive spillovers to domestic firms are found. The findings show also that different types of foreign direct investment can have different effects on the host country and that the existence of positive spillover may depend on the level of economic development of the host country.
    Keywords: foreign direct investment, productivity, spillovers, export oriented foreign direct investments
    JEL: F10 F21 F23
    Date: 2005
  7. By: Mohamed Hedi Bchir (Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)); Lionel Fontagné (Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)); Sébastien Jean (OECD, Paris)
    Abstract: In the background of the Doha Round of trade negotiations, this study proposes a CGE assessment of multilateral liberalisation of market access for non-agricultural products. The scenarios considered include the so-called ‘Girard proposal’ (with alternative choices for the coefficient involved), the removal of tariff peaks and complete liberalisation. This study is the first to take into account the difference between bound and applied tariffs, while considering all the enforced preferential trade arrangements and computing tariff cuts at the detailed product level (HS-6 classification). Although the liberalisation of market access for non-agricultural products is found to be welfare-enhancing at the world level, cross-country distributive effects prove significant. A soft liberalisation would not significantly reduce applied duties in developing countries, owing to their considerable binding overhang. By contrast, a deep liberalisation would entail fierce price competition among those developing countries that are largely specialised in similar sectors and in the same product quality range.
    Keywords: Doha development agenda, applied tariffs, preferential trade agreements, binding overhang, computable general equilibrium model
    JEL: F12 F13
    Date: 2005–11
  8. By: Bruce A. Babcock; Chad E. Hart (Center for Agricultural and Rural Development (CARD))
    Abstract: Critics of the U.S. proposal to the World Trade Organization (WTO) made in October 2005 are correct when they argue that adoption of the proposal would significantly reduce available support under the current farm program structure. Using historical prices and yields from 1980 to 2004, we estimate that loan rates would have to drop by 9 percent and target prices would have to drop by 10 percent in order to meet the proposed aggregate Amber Box and Blue Box limits. While this finding should cheer those who think that reform of U.S. farm programs is long overdue, it alarms those who want to maintain a strong safety net for U.S. agriculture. The dilemma of needing to reform farm programs while maintaining a strong safety net could be resolved by redesigning programs so that they target revenue rather than price. Building on a base of 70 percent Green Box income insurance, a program that provides a crop-specific revenue guarantee equal to 98 percent of the product of the current effective target price and expected county yield would fit into the proposed aggregate Amber and Blue Box limits. Payments would be triggered whenever the product of the season-average price and county average yield fell below this 98 percent revenue guarantee. Adding the proposed crop-specific constraints lowers the coverage level to 95 percent. Moving from programs that target price to ones that target revenue would eliminate the rationale for ad hoc disaster payments. Program payments would automatically arrive whenever significant crop losses or economic losses caused by low prices occurred. Also, much of the need for the complicated mechanism (the Standard Reinsurance Agreement) that transfers most risk of the U.S. crop insurance to the federal government would be eliminated because the federal government would directly assume the risk through farm programs. Changing the focus of federal farm programs from price targeting to revenue targeting would not be easy. Farmers have long relied on price supports and the knowledge that crop losses are often adequately covered by heavily subsidized crop insurance or by ad hoc disaster payments. Farmers and their leaders would only be willing to support a change to revenue targeting if they see that the current system is untenable in an era of tight federal budgets and WTO limits.
    Keywords: farm safety net; revenue targeting; U.S. farm programs; WTO
    Date: 2005–11

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