nep-int New Economics Papers
on International Trade
Issue of 2010‒10‒30
twenty-one papers chosen by
Alessia A. Amighini
University Amedeo Avogadro

  1. Multi-product exporters, carry-along trade and the margins of trade By Andrew B. Bernard; Ilke Van Beveren; Hylke Vandenbussche
  2. Intermediaries in international trade : Direct versus indirect modes of export By Andrew B. Bernard; Marco Grazzi; Chiara Tomasi
  3. Market size, competition and the product mix of exporters By Thierry Mayer; Marc J. Melitz; Gianmarco I.P. Ottaviano
  4. Can Belgian firms cope with the Chinese dragon and the Asian tigers ? The export performance of multi-product firms on foreign markets By Filip Abraham; Jan Van Hove
  5. "The Role of Trade Facilitation in Central Asia: A Gravity Model" By Jesus Felipe; Utsav Kumar
  6. Indirect Exporters By Fergal McCann
  7. Immigrant Networks and U.S. Bilateral Trade: The Role of Immigrant Income By Mundra, Kusum
  8. Structural Estimation of Variety Gains from Trade Integration in a Heterogeneous Firms Framework By d'Artis Kancs; Jan Van Hove
  9. The effects of internationalisation on domestic labour demand by skills : Firm-level evidence for Belgium By Ludo Cuyvers; Emmanuel Dhyne; Reth Soeng
  10. Trade Complexity and Productivity By Carlo Altomonte; Gábor Békés
  11. BACI: International Trade Database at the Product-Level. The 1994-2007 Version By Guillaume Gaulier; Soledad Zignago
  12. The internationalization process of firms : From exports to FDI ? By Paola Conconi; André Sapir; Maurizio Zanardi
  13. Internationalization strategy and performance of small and medium sized enterprises By Jonas Onkelinx; Leo Sleuwaegen
  14. The Private Credit Insurance Effect on Trade By Koen van der Veer
  15. Beyond market access : the new normal of preferential trade agreements By Chauffour, Jean-Pierre; Maur, Jean-Christophe
  16. Exports and Firm Characteristics in German Manufacturing Industries By Wagner, Joachim
  17. Trade in services : IT and task content By Andrea Ariu; Giordano Mion
  18. The global downturn and its impact on euro area exports and competitiveness By Filippo di Mauro; Katrin Forster; Ana Lima
  19. Trade Openness, Relative Demand of Skilled Workers and Technological Change in Tunisia, 1998–2002 By Monia Ghazali
  20. Does Agricultural Trade Liberalization Help The Poor in Tunisia? A Micro-Macro View in A Dynamic General Equilibrium Context By Nadia Belhaj Hassine; Veronique Robichaud; Bernard Decaluwé
  21. Fairness in the WTO Trading System By Andrew G. Brown; Robert M. Stern

  1. By: Andrew B. Bernard (Tuck School of Business at Dartmouth; CEPR; NBER); Ilke Van Beveren (Lessius Department of Business Studies; KULeuven-LICOS); Hylke Vandenbussche (Université Catholique de Louvain, IRES; Université Catholique de Louvain, CORE; KULeuven-LICOS; CEPR)
    Abstract: New empirical and theoretical work has highlighted the importance of multi-product firms in international tradeflows. We examine multi-product exporters in the small open economy of Belgium, considering their importance and the relationship between the margins of trade and firm productivity, both across firms and within firms over time. In addition, we employ proxies for trade costs to quantify the extensive and intensive margin adjustments of trade. Linking production and export data at the firm-product level, we discover new and, heretofore, unknown facts about multi-product manufacturing exporters. The large majority of Belgian manufacturing firms export products that they do not produce. More than three quarters of the exported products and more than one quarter of export value from Belgian manufacturers are in goods that are not produced by the firm, so-called Carry-Along Trade (CAT). CAT exports are concentrated in the largest and most productive firms and the value of CAT exports responds differently to variation in firm productivity and trade costs than does the export value of goods that the firm produces.
    Keywords: heterogeneous firms, multi-product firms, carry-along trade, productivity, trade costs, intermediation
    JEL: F12 F13 F14 L11
    Date: 2010–10
  2. By: Andrew B. Bernard (Tuck School of Business at Dartmouth; CEPR; NBER); Marco Grazzi (LEM Scuola Superiore S.Anna); Chiara Tomasi (LEM Scuola Superiore S.Anna; Universita’ degli Studi di Trento)
    Abstract: This paper contributes to the relatively new literature on the role of intermediaries in international trade. Using Italian firm-level data, we document significant differences between exporters of different types and highlight the role of country-specific fixed cost in the choice of direct versus indirect modes of export. Recent theoretical work suggests that intermediaries are typically providing solutions to country-specific fixed costs. Our empirical results largely confirm this relationship. Measures of country fixed costs are positively associated with intermediary exports both in the aggregate and within firms. In contrast, proxies for variable trade costs are largely not correlated with differences between direct and indirect exports.
    Date: 2010–10
  3. By: Thierry Mayer (Sciences-Po; CEPII; CEPR); Marc J. Melitz (Harvard University; NBER; CEPR); Gianmarco I.P. Ottaviano (Bocconi University; Fondazione Eni Enrico Mattei (FEEM); CEPR)
    Abstract: Recent empirical evidence has highlighted how the export patterns of multi-product firms dominate world trade flows, and how these multi-product firms respond to different economic conditions across export markets by varying the number of products they export. In this paper, we further analyze the effects of those export market conditions on the relative export sales of those goods: we refer to this as the firm's product mix choice. We build a theoretical model of multi-product firms that highlights how market size and geography (the market sizes of and bilateral economic distances to trading partners) affects both a firm's exported product range and its exported product mix across market destinations. We show how tougher competition in an export market - associated with a downward shift in the distribution of markups across all products sold in the market - induces a firm to skew its export sales towards its best performing products. We find very strong confirmation of this competitive effect for French exporters across export market destinations. Our theoretical model shows how this effect of export market competition on a firm's product mix then translates into differences in measured firm productivity. Thus, a firm operating a given technology will produce relatively more output per worker when it exports to markets with tougher competition. This productivity gain is further compounded by the effect of competition on the mix of exported products.
    Date: 2010–10
  4. By: Filip Abraham (K.U.Leuven, Centre for Economic Studies); Jan Van Hove (H.U.Brussel; K.U.Leuven)
    Abstract: Exporting firms are affected in many ways by competition on foreign markets. This paper focuses on the impact of Asian competition on the bilateral export performance of Belgian firms, controlling for firm level as well as destination-market characteristics. Export performance is measured in several ways, including the export intensity, the variety and quality of trade as well as the export intensity growth. Export performance appears to differ substantially across firms, across sectors and across destination markets. Our overall results indicate that both the export intensity and variety of Belgian firms’ exports are reduced by Asian competition. Especially the competitive pressure caused by mainland China and Hong Kong is strong. The competitive pressure is intense in labour-intensive sectors but also felt in a wide range of activities with a higher value added. Belgian exporters cope with foreign competition by following a variety-expansion or a quality-upgrading strategy.
    Keywords: multi-product firms, international trade, variety, quality, export intensity, competition, Asia
    JEL: F14 F15 L6
    Date: 2010–10
  5. By: Jesus Felipe; Utsav Kumar
    Abstract: With a decrease in formal trade barriers, trade facilitation has come into prominence as a policy tool for promoting trade. In this paper, we use a gravity model to examine the relationship between bilateral trade flows and trade facilitation. We also estimate the gains in trade derived from improvements in trade facilitation for the Central Asian countries. Trade facilitation is measured through the World Bank’s Logistic Performance Index (LPI). Our results show that there are significant gains in trade as a result of improving trade facilitation in these countries. These gains in trade vary from 28 percent in the case of Azerbaijan to as much as 63 percent in the case of Tajikistan. Furthermore, intraregional trade increases by 100 percent. Among the different components of LPI, we find that the greatest increase in total trade comes from improvement in infrastructure, followed by logistics and efficiency of customs and other border agencies. Also, our results show that the increase in bilateral trade, due to an improvement in the exporting country’s LPI, in highly sophisticated, more differentiated, and high-technology products is greater than the increase in trade in less sophisticated, less differentiated, and low-technology products. This is particularly important for the Central Asian countries as they try to reduce their dependence on exports of natural resources and diversify their manufacturing base by shifting to more sophisticated goods. As they look for markets beyond their borders, trade facilitation will have an important role to play.
    Keywords: Central Asia; Gravity Model; Trade Facilitation
    JEL: F10 F15 F17
    Date: 2010–10
  6. By: Fergal McCann
    Abstract: An Indirect Exporter is defined as a firm that sells its product to a trade intermediary in its own country, who then goes on to export the good. Despite the numerous appearances of these firms in recent theoretical models, there has been no empirical work comparing these firms to Domestic firms and “Direct Exporters". Using a firm-level data set for Eastern Europe, I show that these firms do, as predicted in the theoretical literature, lie between Domestic firms and Direct Exporters for a range of measures of firm performance. The advantage enjoyed by Direct Exporters is the most robust finding, while the ambiguity surrounding the productivity gap between Indirect Exporters and Domestic firms indicates that these two categories of firm may be close to identical.
    Keywords: Exports; productivity; trade intermediation; indirect exporters
    JEL: F10 F14
    Date: 2010–10
  7. By: Mundra, Kusum (Rutgers University)
    Abstract: This paper examines the role of immigrant networks on trade, particularly through the demand effect. First, we examine the effect of immigration on trade when the immigrants consume more of the goods that are abundant in their home country than the natives in a standard Heckscher-Ohlin model and find that the effect of immigration on trade is a priori indeterminate. Our econometric gravity model consists of 63 major trading and immigrant sending countries for the U.S. over 1991-2000. We find that the immigrants' income, mostly through the demand effect, has a significant negative effect on U.S. imports. However, if we include the effect of the immigrant income interacted with the size of the immigrant network, measured by the immigrant stock, we find that the higher the immigrant income the lower is the immigrant network effect for both U.S. exports and imports. This we find in addition to the immigrant stock elasticity of 0.27% for U.S. exports and 0.48% for U.S. imports. Capturing the immigrant assimilation with the level of immigrant income, this paper finds that the immigrant network effect on trade flows is weakened by the increasing level of immigrant assimilation.
    Keywords: immigrant networks, immigrant assimilation, demand effect, trade
    JEL: F22 F11 J10
    Date: 2010–10
  8. By: d'Artis Kancs; Jan Van Hove
    Abstract: The present paper studies the variety gains from trade integration. Applying a heterogenous firm model we simulate trade liberalisation in alternative integration scenarios, where per unit trade costs, fixed trade costs and both of them are reduced. The main innovation of our paper is that we estimate the structural parameters of the underlying heterogenous firm model econometrically based on a unique firm level panel data, which contains more than 250,000 observations for exporting firms. Our results suggest that the variety gains from trade integration are substantial. Reducing trade barriers by 15 percent induces variety growth, as a result of which the gains from trade integration are up to 17 percent higher than classical trade models would predict.
    Keywords: F12, F14, R12, R23.
    Date: 2010–10–14
  9. By: Ludo Cuyvers (University of Antwerp; North-West University (Potchefstroom Campus), South Africa); Emmanuel Dhyne (National Bank of Belgium, Research Department; Université de Mons, Centre de recherche Warocqué); Reth Soeng (University of Antwerp, Steunpunt Buitenlands Beleid)
    Abstract: We empirically investigate the effects of the internationalisation of Belgian firms on domestic demand for production and non-production workers, which are used as proxies for unskilled and skilled labour. Distinction is made between home-employment effects of firms’ internationalisation, through either international trade or outward foreign direct investment, in highincome countries and in low-income economies. The results of our econometric analysis, using data over 1997-2007, suggest that increasing import shares from low-income countries or investing in those countries significantly reduces demand for low-skilled labour, while it increases demand for skilled labour. An increase in exports generally raises the demand for production workers, while it reduces the demand for non-production workers. However, these effects are reversed in the case of exports to low-income countries. Considering the impact of FDI, our results tentatively suggest that the setting up of a new international investment project has a positive impact on demand for non-production workers one period before it is made. This positive effect is offset in the long run, particularly in the case of investment in low-income countries.
    Keywords: labour demand, international trade, outward FDI, skilled and unskilled labour
    JEL: C23 F16 F21
    Date: 2010–10
  10. By: Carlo Altomonte; Gábor Békés
    Abstract: We exploit a panel dataset of Hungarian firms merged with country and product-level trade data for the period 1992-2003 to investigate the relation between firms’ trading activities (importing, exporting or both) and productivity. From our transaction data a number of proxies are derived, measuring at the firm level some characteristics of the traded bundles associated to various technological and relationship-specic dimensions of the trade activity, which we generally refer to as ‘trade complexity’. We find that our indicators of complexity are jointly correlated to the ex-ante productivity of trading firms, accounting for an additional third of the overall productivity premium. However, the elasticity of productivity to a change in the trade complexity indicators varies with different indicators of complexity and with the trade status of the firm. Policy conclusions are drawn from these findings.
    Date: 2010–10–25
  11. By: Guillaume Gaulier; Soledad Zignago
    Abstract: This paper documents the construction of BACI, our international trade database, which covers more than 200 countries and 5,000 products, between 1994 and 2007. New approaches have been developed to reconcile data reported by almost 150 countries to the United Nations Statistics Division, collated via COMTRADE. When both exporting and importing countries report to Comtrade, we have two different figures for the same flow, so it is useful to reconcile these into a single figure. To do this, firstly, as import values are reported CIF (cost, insurance and freight) while exports are reported FOB (free on board), transport and insurance rates have to be estimated and removed from import values. We regress the observed CIF/FOB ratios for a given flow on gravity variables and a product-specific world median unit value. In a second step we evaluate the reliability of countries reporting. We decompose the absolute value of the ratios of mirror flows using a (weighted) variance analysis. These measures of the reliability of reported data are used as weights in the reconciliation of each bilateral trade flow which is reported twice. Taking advantage of this bilateral information on each flow, we end up with a large coverage of countries and more reliable data, especially in terms of unit-values. BACI is freely available online to users of COMTRADE database, in different product classifications.
    Keywords: International trade; trade costs; CIF/FOB; trade data reconciliation
    JEL: F10 F14 F13 C80
    Date: 2010–10
  12. By: Paola Conconi (Université Libre de Bruxelles (ECARES); CEPR); André Sapir (Université Libre de Bruxelles (ECARES); CEPR); Maurizio Zanardi (Université Libre de Bruxelles (ECARES))
    Abstract: We describe a simple model in which domestic firms decide whether to serve a foreign market through exports or horizontal foreign direct investment (FDI). This choice involves a trade-off between the higher variable trade costs associated with exports and the higher fixed set-up costs associated with establishing foreign subsidiaries. Crucially, firms are uncertain about their profitability in foreign markets and can only learn it by operating there. To obtain market-specific knowledge, firms may follow an “internationalization process”, serving the foreign market via exports first and eventually, in some cases, switching to local subsidiary sales. To assess the validity of the predictions of our model, we use firm-level data on export and FDI decisions in individual destination markets for all companies registered in Belgium over the period 1997-2008. We show that firms’ strategies to serve foreign markets depend not only on the variable and fixed costs associated with exports and FDI, but also on the export experience they have acquired in that market.
    Keywords: Exports, FDI, Uncertainty, Experimentation
    JEL: F10 D21 F13
    Date: 2010–10
  13. By: Jonas Onkelinx (Vlerick Leuven Gent Management School); Leo Sleuwaegen (Vlerick Leuven Gent Management School; K.U.Leuven)
    Abstract: Focusing on the timing and geographical scope of import and export activities of Belgian small and medium sized enterprises (SMEs), the paper analyzes the importance, structural features and performance implications of firms that recently started to export following the geographical configuration of their international trade operations and their year of establishment. The analysis allows us to separate firms that started to export in the period 1998-2005 into four distinct groups: born internationals, i.e. firms which were established less than five years before their first year of exporting and exporting to less than five countries in the same region (regional focus), born globals; young firms but with a more internationally diversified export portfolio, born again globals, i.e. firms similar to born globals but established longer than five years before their first exports and traditional internationalizers, firms established more than five years before their first export operations characterized by a narrow geographical scope of their exports. We find SME export growth to be driven by a small group of born global firms, accounting for 60 per cent of the total increase in SME exports between 1998 and 2005. Analyzing the structural feature of the different types of firms, we find born globals to be more productive and characterized by a higher R&D spending and intangible asset intensity compared to other types of traders. We next test if the typology matters for the observed export performance differences across firms over time. We find that born globals grow faster in terms of export sales, have a stronger commitment to export markets and are more likely to continue exporting. Born globals also have the highest failure rate, traditional internationalizers the lowest. These findings suggest strong risk/return tradeoffs among the strategies chosen by the different types of firms. Performing a dynamic analysis of changes in trade configurations of firms over the observation period, we investigate how these changes have an impact on performance. Specific attention is paid to firms that stop importing/exporting. Especially firms that move from being exporters to become two-way traders, i.e. also starting to import goods from other countries show the most marked increases in turnover and productivity. The final part of the study analyzes the relationship between export and import activities to particular countries following the sequence in which they occur. We find that the probability to start importing from a country is 4 times higher for firms already exporting to that country than for trading SMEs without prior export experience in that country.
    Date: 2010–10
  14. By: Koen van der Veer
    Abstract: International trade relies on trade finance (credit or insurance) by financial institutions. Data limitations, however, have made it difficult to quantify the impact of changes in the supply of trade finance on trade. This paper is the first to establish a causal link between the supply of private credit insurance and exports. I overcome endogeneity issues by using a unique bilateral data set which covers the activities from 1992 to 2006 of one of the world’s leading private credit insurers. This database enables me to use the insurer’s claim ratio - a primary determinant of the supply of credit insurance - as an instrument for insured exports. Subsequently, applying the method of instrumental variables and a variety of trade models, I consistently find a positive and statistically significant effect of private credit insurance on exports. The estimates are economically relevant and suggest that, depending on the decline in the supply of private credit insurance during the 2008-09 international trade collapse, the reduction in private insurance exposure explains about 5 to 9 percent of the drop in world exports and 10 to 20 percent of the drop in European exports.
    Keywords: trade finance; private credit insurance; international trade; trade credit
    JEL: F10 F14 G20 G22
    Date: 2010–10
  15. By: Chauffour, Jean-Pierre; Maur, Jean-Christophe
    Abstract: This paper takes stock of the growing success of preferential trade agreements. It revisits what are the defining characteristics of modern preferential trade agreements, which are typically pursued for a diverse array of motives. In particular, the market access justification traditionally used to analyze the desirability and impact of preferential trade agreements misses increasingly important dimensions. The"Beyond Market Access"agenda of preferential trade agreements presents a new and broad set of deep regulatory and policy issues that differs in substance from the removal of tariff and quantitative barriers to trade. Issues related to preferences and discrimination, as well as the nature and implementation of commitments acquire a different meaning in deep preferential trade agreements. This change of paradigm presents significant opportunities and challenges for reform-minded developing countries to use preferential trade agreements to their own advantage.
    Keywords: Trade Law,Free Trade,Environmental Economics&Policies,Emerging Markets,Trade and Regional Integration
    Date: 2010–10–01
  16. By: Wagner, Joachim (Leuphana University Lüneburg)
    Abstract: Reliable information on the characteristics of exporting and non-exporting firms is important to guide theorists and policy makers in an evidence based way. This holds true especially for Germany, a leading actor on the world markets for goods and services. This paper makes three contributions towards this aim: (1) It provides a synopsis and a critical assessment of 51 empirical studies on exports and firm characteristics that use data for German establishments or enterprises, arguing that this literature is not suited to extract the stylized facts needed. (2) It uses recently released rich high quality data for a large representative panel of enterprises from German manufacturing industries to investigate the links between firm characteristics and export activities, demonstrating the decisive role of human capital intensity for exporting. (3) It links these findings to the recent literature from the new new trade theory on international activities of heterogeneous firms that emphasises the role of productivity for exporting. It shows that productivity is important for exporting as is hypothesized in the formal theoretical models, but that contrary to the assumption made in these models productivity is not (only) the result from a random draw from the productivity distribution – it is strongly positively related to human capital intensity.
    Keywords: exports, firm characteristics, Germany
    JEL: F14
    Date: 2010–10
  17. By: Andrea Ariu (Université catholique de Louvain, IRES; Université catholique de Louvain, CORE; University of Ljubljana, Faculty of Economics (FELU), Slovenia); Giordano Mion (London School of Economics, Department of Geography and Environment; Author-Workplace-Name: National Bank of Belgium, Research Department; CEP, UK; CEPR, UK)
    Abstract: In this paper we investigate the determinants of the dramatic increase in services tradability focusing on the extensive margin of the phenomenon. We use balance sheet and firm-level service trade information over the period 1995-2005 provided by the National Bank of Belgium and we merge it with information on the evolution of information technology use and tasks performed by workers from the qualification and career survey provided by the BIBB-IAB. We show that technological change, measured either by the more intensive use of information technologies or by changes in the task content of jobs, has substantially contributed to the increase in the number of service-trading firms. Interestingly, we find evidence of a churning effect. While technological change has induced net entry into service trading, it has also increased the likelihood of both gross entry and exit of firms. Furthermore, our evidence suggests that due to the peculiar nature of services provision, the change in the tasks content of jobs is a better measure of technological change than the use of information technologies. Our results are robust to controlling for service trade liberalization and offshoring.
    Keywords: trade in services; extensive margin; technological change; task content
    JEL: F14 F16 O33 L80
    Date: 2010–10
  18. By: Filippo di Mauro (European Central Bank, Directorate Economics, Economic Developments, Kaiserstrasse 29, 60311 Frankfurt am Main); Katrin Forster (European Central Bank, Directorate Economics, Economic Developments, Kaiserstrasse 29, 60311 Frankfurt am Main); Ana Lima (European Central Bank, Directorate Economics, Economic Developments, Kaiserstrasse 29, 60311 Frankfurt am Main)
    Abstract: World trade contracted sharply in late 2008 and early 2009 following the deepening of the financial crisis in September 2008. This paper discusses the main mechanisms behind the global downturn in trade and its impact on euro area exports and competitiveness. It finds that the euro area was hit particularly hard by the contraction in global demand. Moreover, the collapse in the demand for euro area products during the downturn was exacerbated to some degree by unfavourable developments in price competitiveness, resulting in further losses in competitiveness compared to our main trading partners, in line with pre-crisis trends. This view is also confirmed by evidence from broad-based competitiveness measures, which show that euro area countries recorded losses in productivity during this period. Going forward, the recovery in world trade will depend mainly on a resurgence in global demand and its expenditure composition. With regard to the euro area, as the global economy recovers at varying speeds and given the current growth momentum in emerging economies, the performance of the external sector may be hindered by the geographical orientation of its export markets, which are mainly focused on advanced economies and other EU member states. Furthermore, the strength and sustainability of the recovery in exports will also depend on the restructuring process undertaken by European firms in response to globalisation-related challenges. Governments within the European Union should therefore focus on policies to strengthen competition and increase market integration, in order to benefit fully from the globalisation process going forward. In contrast, a resurgence in global protectionist policies could dampen the prospects for world and euro area trade and should be strongly resisted. JEL Classification: F10, F15, F43
    Keywords: Trade, euro area, competitiveness
    Date: 2010–10
  19. By: Monia Ghazali (Institut Supérieur de Finance et Fiscalité de Sousse)
    Abstract: This paper investigates the relationship between technological change and the relative demand of skilled workers in Tunisia. For this purpose, we use a firm level database drawn from the national annual survey report on firms (NASRF) provided by the Tunisian National Institute of Statistics (TNIS). The annual data covers 635 firms from manufacturing and non- manufacturing sectors over the period 1998–2002. The estimation of the demand for skilled labor is based on the estimation of a translog cost function. We control for potential endogeneity issues and we give empirical evidence supporting the trade-induced technological change theoretical intuition. Our empirical results confirm the existence of a trade-induced technological change that contributes to increasing the relative demand for skilled workers. Yet, the relationship between trade and technology deserves deeper interest. Further empirical research on transmission channels would reinforce current studies on skill- biased technological change.
    Date: 2010–10
  20. By: Nadia Belhaj Hassine (Economic Research Forum (ERF)); Veronique Robichaud; Bernard Decaluwé
    Abstract: This paper is an attempt to contribute to the research on poverty-alleviation potential of trade, by exploring the poverty effects of agricultural trade liberalization in Tunisia. Specifically, the study uses a small open economy computable general equilibrium (CGE) that includes technology transfer and endogenous productivity effects from trade openness in agriculture to investigate whether the trade reforms benefit the poor and whether agricultural productivity growth boosts the potential gains from trade. The structure of the paper is as follows. Section 2 outlines the plan for empirical investigation and presents the procedure to measure total factor productivity. Section 3 describes the CGE model and explains how the link between productivity and trade policy is incorporated. Section 4 presents some features of the Tunisian economy, in particular with regard to the agricultural sector and reviews the data used in the econometric and CGE models. Section 5 reports the empirical results and section 6 synthesizes the main findings and draws some conclusions.
    Date: 2010–10
  21. By: Andrew G. Brown (Amherst, MA); Robert M. Stern (University of Michigan)
    Abstract: We first provide a brief critique of the utilitarian principle as a guide to fairness in the world trading system. We then turn to the alternative conception of fairness in terms of economic equity, exploring the meaning of its two components: equality of opportunity and distributive justice. We thereafter proceed to discuss the conditions of autonomy and reciprocity that have to be met in order to realize greater fairness in multilateral trade negotiations. Next, we comment on aspects of procedural justice that are necessary for the functioning of a fair trading system. Finally, we conclude with an overall assessment of the considerations of the fairness achieved in the Uruguay Round multilateral negotiations.
    Keywords: Fairness, Equality of Opportunity, Distributive Justice, Global Trading System
    JEL: D63 F02 F10 F13
    Date: 2010–10

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