nep-int New Economics Papers
on International Trade
Issue of 2013‒03‒09
eleven papers chosen by
Alessia A. Amighini
Universita' Amedeo Avogadro

  1. How different are safeguards from antidumping ? evidence from us trade policies toward steel By Bown, Chad P.
  2. China's Competition and the Export Price Strategies of Developed Countries By Giorgia Giovannetti; Marco Sanfilippo
  3. Destabilization Effect of International Trade in a Perfect Foresight Dynamic General Equilibrium Model By Kazuo Nishimura; Alain Venditti; Makoto Yano
  4. Impact of the ASEAN Economic Community on ASEAN Production Networks By Cheewatrakoolpong, Kornkarun; Sabhasri, Chayodom; Bunditwattanawong, Nath
  5. Exchange Rate Pass-Through in the Global Economy. By Bussière, M.; Delle Chiaie, S.; Peltonen, T. A.
  6. The Potential Impact of Brazil’s Transportation Efficiencies on World Cotton Trade By Salin, Delmy L.
  7. Carbon-based Border Tax Adjustments and China’s International Trade: Analysis based on a Dynamic Computable General Equilibrium Model By Ling Tang; Qin Bao; ZhongXiang Zhang; Shouyang Wang
  8. Demand growth versus market share gains : decomposing world manufacturing import growth By Aksoy, M. Ataman; Ng, Francis
  9. Environmental Regulation Induced Foreign Direct Investment By Robert J R Elliott; Ying Zhou
  10. Persistence vs. Mobility in Industrial and Technological Specialisations: Evidence from 11 Euro Area Countries By Raphaël Chiappini
  11. International Competitiveness: is the reduction of wages a solution? An evaluation of the Portuguese case By Elsa Vaz; Maria Paula Fontoura

  1. By: Bown, Chad P.
    Abstract: Use of temporary trade barriers has proliferated across countries, industries, and even policy instruments. This paper constructs a panel of bilateral, product-level United States steel imports that are matched to a unique data set on trade policy exclusions that are associated with the 2002 United States steel safeguard in order to compare the trade impacts that result from application of various temporary trade barrier policies over 1989-2003. The analysis finds that the trade effects of an applied safeguard -- which is statutorily expected to follow the principle of nondiscriminatory treatment -- can nevertheless compare closely with the application of the explicitly discriminatory antidumping policy. The results on trade policy substitutability complement other recent research on these increasingly important forms of import protection.
    Keywords: Free Trade,Trade Policy,Water and Industry,Trade Law,Markets and Market Access
    Date: 2013–03–01
  2. By: Giorgia Giovannetti (DISEI, Università degli studi di Firenze); Marco Sanfilippo (Istituto Universitario Europeo)
    Abstract: This paper analyzes the impact of Chinese competition on developed countries export prices, with a focus on Italy. After a theoretical discussion of the channels affecting export prices in presence of competitors from low income countries, we estimate the pricing behavior of two major manufacturing sectors, consumer goods and machinery, distinguishing destination markets according to their income level. Results show that export competition from China has affected Italian price strategies over the period 2000-08, in an idiosyncratic way according to the income level of importers, sector and technology level of products exported. Contrary to what observed for other high-income countries, we find that Italy has followed a very specific strategy to face Chinese competition. Instead of changing “between sector”, moving up to the technology ladder, Italy has kept its specialization in traditional sectors and has upgraded the quality of its low-tech and labor-intensive products, when in direct competition with Chinese ones. For higher technology products, on the other hand, it has adjusted prices downward to reduce Chinese competitive pressure, especially in segments where it does not hold a comparative advantage, while it has fostered differentiation only for some niche products within the sectors with higher specialization.
    Keywords: China, export price competition, Italy
    JEL: F10 F14
    Date: 2013
  3. By: Kazuo Nishimura (Institute of Economic Research, Kyoto University); Alain Venditti (Aix-Marseille University (Aix-Marseille School of Economics), CNRS-GREQAM, EHESS & EDHEC); Makoto Yano (Institute of Economic Research, Kyoto University)
    Abstract: In the present paper, we consider a two-country, two-good, two-factor general equilibrium model with CIES non-linear preferences, asymmetric technologies across countries and decreasing returns to scale. It is shown that aggregate instability and endogenous fluctuations may occur due to international trade. In particular, we prove that the integration into a common market on which countries trade the produced good and the capital input may lead to period-two cycles even when the closed-economy equilibrium is saddle-point stable in both countries.
    Keywords: Perfect foresight dynamic general equilibrium model, international trade, aggregate instability, endogenous fluctuations, non-linear preferences
    JEL: C62 E32 F11 F43 O41
    Date: 2013–03
  4. By: Cheewatrakoolpong, Kornkarun (Asian Development Bank Institute); Sabhasri, Chayodom (Asian Development Bank Institute); Bunditwattanawong, Nath (Asian Development Bank Institute)
    Abstract: Empirical evidence suggests that the emergence of international production networks in East Asia results from market-driven forces such as vertical specialization and higher production costs in the home countries and institutional-led reasons such as free trade agreements. This paper examines two industries—autos and auto parts, and hard disk drives (HDDs)—to understand international production networks. The study examines the structure of vertical intra-industry trade among East Asian countries, especially members of the Association of Southeast Asian Nations, depicts international production sharing in the selected industries, namely HDD, and automobiles and automotive parts, in the region. The study also points out the importance of the People’s Republic of China and Thailand as assembly bases. It concludes that investment promotion policies contributed more to the emergence of international production networks than free trade agreements.
    Keywords: asean; production networks; asean economic community; east asia; vertical specialization
    JEL: F14
    Date: 2013–02–22
  5. By: Bussière, M.; Delle Chiaie, S.; Peltonen, T. A.
    Abstract: This paper estimates export and import price equations for 40 countries – including 19 emerging market economies (EMEs) – and aims to understand heterogeneity across countries in the degree of exchange rate pass-through to import and to export prices. Results indicate that (i) the elasticities of trade prices are sizeable in EMEs, and higher on average than in advanced economies for export prices; (ii) such elasticities are primarily influenced by macroeconomic factors; (iii) export and import price elasticities tend to be strongly correlated across countries; (iv) lower exchange rate pass-through in the United States, compared to other advanced economies, can be related to the geographical distribution of U.S. imports, more heavily concentrated in countries with high elasticity of export prices. Overall, these results yield an enhanced understanding of exchange rate pass-through, emphasizing the role of external factors.
    Keywords: emerging market economies; exchange rate pass-through; terms of trade.
    JEL: F10 F30 F41
    Date: 2013
  6. By: Salin, Delmy L.
    Abstract: This paper is a summary of: Rafael de Farias Costa, C. Parr Rosson, III, and Flynn J. Adcock, Transportation Infrastructure in Brazil: Impacts and Implications for Global Cotton Trade, Texas A&M, CNAS 2012-0. May 2012. Web. < Publications/Brazil Cotton Transportation Report June 2012.pdf> Brazil is the third largest cotton exporter after the United States and Uzbekistan. Cotton production in Brazil expanded from 2 million bales in the late 1990s to about 9.3 million bales in 2011. In 2007, Brazil began a comprehensive logistical investment plan to increase competitiveness in the world agricultural market. To increase transportation efficiencies, the Brazilian Government wants to reduce export route distances and port congestion by shifting exports from the southern ports to the north and northeast port regions. Texas AgriLIFE Research scientists estimated the impact of Brazil improvements in transportation infrastructure on cotton production, prices, and exports. Transportation costs for different regions within Brazil were estimated to reflect movements from mill to port. An origin-destination matrix of the Brazilian cotton industry that tracks cotton flows within the country was developed and validated. Findings indicate that a 2- to 3-percent transportation cost reduction would not have a significant impact on the world cotton trade. However, the United States may benefit slightly Brazil main cotton export routes from a 2-percent cost reduction, increasing exports by 640 bales, raising prices 2 cents a bale, and growing revenue by $457,900. If transportation costs drop by 10 percent, Brazilian exports could increase by 64,830 bales, raising prices by $3.61 per bale and increasing revenue by $27.8 million. India and the United States might lose market share. U.S. losses could include 4,490 fewer bales exported at a price of $0.28 less per bale and lower cotton export revenues of $5.7 million.
    Keywords: cotton, trade, shipping, export, Brazil, transportation, Agribusiness, Agricultural Finance, International Relations/Trade, Marketing,
    Date: 2013–01
  7. By: Ling Tang; Qin Bao; ZhongXiang Zhang; Shouyang Wang
    Abstract: With large shares in global trade and carbon emissions, China’s international trade is supposed to be significantly affected by the proposed carbon-based border tax adjustments (BTAs). This paper examines the impacts of BTAs imposed by USA and EU on China’s international trade, based on a multi-sector dynamic computable general equilibrium (CGE) model. The simulation results suggest that BTAs would have a negative impact on China’s international trade in terms of large losses in both exports and imports. As an additional border tariff, BTAs will directly affect China’s exports by cutting down exports price level, whereas Chinese exporting enterprises will accordingly modify their strategies, significantly shifting from exports to domestic markets and from regions with BTAs policies towards other regions without them. Moreover, BTAs will affect China’s total imports and sectoral import through influencing the whole economy in an indirect but more intricate way. Furthermore, the simulation results for coping policies indicate that enhancing China’s power in world price determination and improving energy technology efficiency will effectively help mitigate the damages caused by BTAs.
    Keywords: Border carbon tax adjustments; International trade; Dynamic computable general equilibrium model; Price determination power; Technological change
    JEL: D58 F18 Q43 Q48 Q52 Q54 Q56 Q58
    Date: 2013–01
  8. By: Aksoy, M. Ataman; Ng, Francis
    Abstract: This paper decomposes manufacturing import growth rates in a selected set of large industrial and developing countries (five industrial and eight developing) and measures the relative contributions of domestic demand and market share changes for two separate periods 1991/92 - 2001/02 and 2001/02 - 2007/08. It also shows the shares of imports both from the rest of the world and from developing countries for aggregate and three-digit manufacturing sectors. Import growth is much higher during the 2000s driven by higher demand growth rates. While market share changes explain most of the growth during the 1990s, its contribution is relatively smaller during the 2000s. Imports from developing countries have grown much faster both in industrial and developing country markets driven primarily by market share changes. However, more than half of market share gains by developing countries are caused by the exports of China, which accounts for more than 70 percent of market share gains of developing countries in the sample countries during the 2000s. Despite rapid growth, developing countries'share in the gross absorption of the sample countries is still low and can expand substantially even if demand growth is much lower in the near future.
    Keywords: Emerging Markets,Currencies and Exchange Rates,Debt Markets,Markets and Market Access,Trade Policy
    Date: 2013–02–01
  9. By: Robert J R Elliott; Ying Zhou
    Abstract: The last decade has witnessed a renewed interest in the relationship between environmental regulations and international capital flows. However, empirical studies have so far failed to find conclusive evidence for this so-called pollution haven or race to the bottom effect where foreign direct investment (FDI) is assumed to be attracted to low regulation countries, regions or states. In this paper we present a simple theoretical framework to demonstrate that greater stringency in environmental standards can lead to a strategic increase in capital inflows which we refer to as environmental regulation induced FDI. Our result reveals a possible explanation for the mixed results in the empirical literature and provides an illustration of the conditions under which environmental regulations in the host country can affect the location decision of foreign firms.
    Keywords: FDI, environmental regulations, pollution halo
    JEL: F2 Q5
    Date: 2013–02
  10. By: Raphaël Chiappini
    Abstract: This paper analyses the evolution of the specialisation pattern of 11 Euro area countries by analysing their comparative and technological advantages over the period 1990-2008. Using the estimation of marginal densities and Markov transition probabilities, we examine both the external shape of the distribution of technological and comparative advantages and the intra-distribution dynamics. Our results point out that there is, on average, a high persistence in industrial specialisation patterns of the 11 Euro area countries under scrutiny, conrming a lock-in eect, notably for Italy. Nevertheless, our results related to technological specialisation reveal a large mobility of technological advantages during the same period, especially in Spain.
    Keywords: specialisation dynamics, revealed comparative advantage, technological comparative advantage, transition probability, intra-distribution dynamics
    JEL: C14 F14 O33
    Date: 2013–01
  11. By: Elsa Vaz (Economics Department of University of Évora and CEFAGE); Maria Paula Fontoura (ISEG - School of Economics and Management / Technical University of Lisbon, and UECE – Research Unit on Complexity and Economics)
    Abstract: The purpose of this paper is to analyse, for the case of Portugal, the effectiveness of wage reduction - a current proposal since 2011 ??to help the country to reverse the high public and external debt - in promoting the efficiency and international competitiveness of the economy. A static multi-sector and single-country general equilibrium model is used and data is collected from the GTAP7 Database. The model allows the measurement of changes by sector. The simulations performed show that extending the reduction of wages already deployed by the government in the public sector to the private sector leads to a positive impact on employment (both skilled and unskilled labour), production and volume of exports in all sectors except those that are R&D intensive, the latter having a low weight in the Portuguese economy. However, it is possible that the positive results in terms of external competitiveness are not sustainable, as the impact on productivity is negative, albeit small, for most sectors. There are also reasons for concern regarding the observed deterioration of the trade balance of most sectors, the exception being the traditional labour intensive sectors, which show good prospects in this respect.
    Keywords: Competitiveness; Wages; Stability and Growth Pact; General Equilibrium Model; Portugal.
    JEL: D58 J38 D24
    Date: 2013

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