nep-int New Economics Papers
on International Trade
Issue of 2016‒05‒21
fifty papers chosen by
Luca Salvatici
Università degli studi Roma Tre

  1. Uruguay’s Trade Policy and Specialisation over Two Decades: a Gradual and Permanent Path to Trade Openness By Natalia Ferreira-Coímbra; Marcel Vaillant
  2. The Lumpiness of German Exports and Imports of Goods By Wagner, Joachim
  3. ASEAN Economic Community: what model for labour mobility?1 By Daniel Rais
  4. Stricter regulation boosts exports: the case of Maximum Residue Levels in pesticides By Daniel Rais
  5. Comparative Advantage or Competitive Advantage in Explaining Agricultural Trade? By Moon, Wanki; Pino, Gabriel
  6. Exporter Dynamics and Partial-Year Effects By Andrew B. Bernard; Renzo Massari; Jose-Daniel Reyes; Daria Taglioni
  7. Special Tax Treatment as Trade Policy: A Database on Export Processing and Special Economic Zones By Daniel Rais
  8. Negotiating an Energy Deal under TTIP: Drivers and Impediments to U.S. Shale Exports to Europe By Daniel Rais
  9. More Than Copper: Towards The Diversification And Stabilization Of Zambian Exports By Daniel Rais
  10. Globalisation and Inter-Industry Wage Differentials in China By Chris Milner; Juliane Scheffel; Feicheng Wang
  11. Non-tariff measures and the world trading system By Ederington,Josh; Ruta,Michele
  12. Do Global Value Chains Cause Industrial Development? By Victor Kummritz
  13. Defining The Relationship Between The Real Exchange Volatility And Foreign Direct Investment In Turkey By fatih ayhan
  14. The Role of China, Japan, and Korea in Machinery Production Networks By OBASHI Ayako; KIMURA Fukunari
  15. Measuring Openness to Trade By Michael E. Waugh; B. Ravikumar
  16. Competing Liberalizations: Tariffs and Trade in the 21st Century By Jean-Christophe Bureau; Houssein Guimbard; Sébastien Jean
  17. Political support for trade policy in the European Union By Daniel Rais
  19. Exploring complementarities between goods and services trade in trade agreements By Daniel Rais
  20. Mind what your voters read: Media exposure and international economic policy making By Facchini, Giovanni; Frattini, Tommaso; Signorotto, Cora
  21. Toward alignment of carbon standards under the Transatlantic Trade and Investment Partnership By Daniel Rais
  22. The GATT's starting point : tariff levels circa 1947 By Bown,Chad P.; Irwin,Douglas A.
  23. Does Trade Liberalization with China Influence U.S. Elections? By Yi Che; Yi Lu; Justin R. Pierce; Peter K. Schott; Zhigang Tao
  24. High-Skilled Migration in Times of Global Economic Crisis By Mathias Czaika; Christopher Parsons
  25. Export Promotion: what works? By Olarreaga, Marcelo; Sperlich, Stefan; Trachsel, Virginie
  26. Trade Liberalisation and Optimal R&D Policies in a Model of Exporting Firms Conducting Process Innovation By Thanh Le; Cuong Le Van
  27. Trade Liberalization and Child Mortality: A Synthetic Control Method By Olper, Alessandro; Curzi, Daniele; Swinnen, Jo
  28. Ukrainian Export Diversification: Macro Level Analysis By Zubritskiy, Artur
  29. The effect of developing countries' competition on regional labour markets in Portugal By Tiago Pereira
  30. Trade Dispute Settlement in the Tripartite Free Trade Area By Daniel Rais
  31. International competition and labor market adjustment By João Paulo Pessoa
  32. Do labor standards benefit workers in horticultural export chains in Peru? By Schuster, Monica; Maertens, Miet
  33. Can Free Trade Be Clean Trade? By Rafaelita M. Aldaba; Caesar Cororaton
  34. Open-access Renewable Resources and Urban Unemployment: Dual Institutional Failures in a Small Open Economy By Ichiroh Daitoh; Nori Tarui
  35. NTMs, Preferential Trade Agreements, and Prices: New evidence By Daniel Rais
  36. Measuring the usage of preferential tariffs in the world By Hayakawa, Kazunobu; Kimura, Fukunari; Laksanapanyakul, Nuttawut
  37. Firm-to-Firm Trade: Imports, exports, and the labor market By Jonathan EATON; Samuel KORTUM; Francis KRAMARZ
  38. On the Comparative Advantage of US Manufacturing: Evidence from the Shale Gas Revolution By Rabah Arezki; Thiemo Fetzer
  39. Pricing-to-Market Analysis: The Case of EU Wheat Exports By Dawson, P.J.; Gorton, Matthew; Hubbard, Lionel; Hubbard, Carmen
  40. Special and differential treatment for developing countries By Emanuel Ornelas
  41. Using Firm-Level Case Studies to Address Trade Facilitation Challenges in Southern Africa By Daniel Rais
  42. Chilean Trade and Investment Agreements with Southern Countries By Daniel Rais
  43. The Investment Chapter of the Trans-Pacific Partnership Agreement and Latin America - A Possibility of Change and Convergence? By Daniel Rais
  44. Services Trade Restrictiveness Index: The Trade Effect of Regulatory Differences By Hildegunn Nordas
  45. South Africa’s Foreign Direct Investment Links with the BRIC Countries By Daniel Rais
  46. The Making of the TRIPS Agreement - Personal Insights from the Uruguay Round Negotiations By Daniel Rais
  47. How can the WTO better integrate the poorest countries into the growing knowledge-based economy? By Daniel Rais
  48. Do international migration and remittances reduce poverty in developing countries? By Siddique, Hafiz Muhammad Abubakar; Shehzadi, Iram; Manzoor, Muhammad Rizwan; Majeed, Muhammad Tariq
  49. Learning by Not Doing: Subsidy Disciplines in Services Trade By Daniel Rais
  50. Fair Access to Energy Resources, Market Transfers and Climate Change in the WTO By Daniel Rais

  1. By: Natalia Ferreira-Coímbra (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República); Marcel Vaillant (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República)
    Abstract: This paper analyses the process of trade liberalization in Uruguay, for both goods and services, over a period of more than two decades (1990-2013). This process was a mix of unilateral liberalization strategies as well as reciprocal trade agreements, where MERCOSUR played an important role. This document examine such a role, finding that even when regional integration contributed to increase competition on importing goods, this opening was associated with a contractive adjustment in many manufacturing sectors where opportunities arising from expansion were outweigh by the imperfection of the integration process and by a large number of non-tariff barriers. The access to international markets is an important problem for Uruguay in the near future. As the process of preferential trade liberalization continues and Uruguay remains out of this agenda, it will lose not only absolute but also relative market access. This document also analyses Uruguay´s specialization pattern, finding a deepening in the traditional composition of it exports basket, with a strong presence of products which make intense use of natural resources, but also with an important diversification within this category. An expansion in services was also found, especially from more traditional sectors to global services. Finally, this paper focused on identifying the impact of changes in specialization patterns on labor market. An important finding here is that an increasing proportion of labor depends directly or indirectly on external demand. In addition to this, there has been an increase in the levels of qualifications required per unit of gross production value, which when combined with the growth in exports has led to a greater proportion of labor depending on exports.
    Keywords: liberalization, specialization pattern, labor market
    JEL: F13 F16 D57
    Date: 2015–12
  2. By: Wagner, Joachim (Leuphana University Lueneburg, Germany, & Centre of Excellence for Science and Innovation Studies (CESIS), KTH, Sweden)
    Abstract: This paper looks at a hitherto neglected extensive margin of international trade by investigating for the first time the frequency at which German exporters and importers trade a given good with a given country. Imports and exports show a high degree of lumpiness. In a given year about half of all firm-good-country combinations are recorded only once or twice for trade with EU-countries, and this is the case for more than 60 percent of all firm-good-country combinations in trade with non-EU countries. The frequency of recorded transactions tends to decline with an increase in the number of transactions per year. This is in accordance with the presence of per-shipment fixed costs that provide an incentive for trading firms to engage in cross-border transactions infrequently. Empirical models show that for Germany the frequency of transactions at the firm-good-country level tends to decrease with an increase in per-shipment costs when unobserved firm and goods characteristics are controlled for.
    Keywords: Lumpiness of trade; imports; exports; Germany
    JEL: F14
    Date: 2016–05–10
  3. By: Daniel Rais
    Abstract: The Community Blueprint foresees the achievement of a free movement regime for skilled labour, mobility of selected categories of people associated mainly with trade in services and investment. Labour migration policies for other types of workers are not part of the regional integration framework. The agenda on services trade mobility, institutionalized at the multilateral level by the 1995 WTO General Agreement on Trade in Services under the so-called ‘mode 4’ temporary movement of service providers, has taken shape in other regions of the world as well. For instance, in North America (NAFTA), Europe (EU), or South America (MERCOSUR), servicesrelated mobility provisions have coupled with other, more comprehensive, regional policies to migration (e.g. free movement of people in the EU, residence and work rights for all citizens of MERCOSUR and associated countries, etc.). Assessing the current context on labour migration within ASEAN and drawing on mobility models employed by other regional units, the study discusses the prospects for deeper labour market cooperation in Southeast Asia.
    Date: 2014–12–18
  4. By: Daniel Rais
    Abstract: Constructing an original panel on Maximum Residue Levels (MRLs) in pesticides for 50 countries over 2006-2012, this paper studies the effect of heterogeneity in MRL regulation on bilateral trade. We find evidence of regulatory heterogeneity diminishing trade at the extensive margin when the exporter faces more stringent regulation abroad, suggesting compliance costs in entering the destination market. Significantly, however, we also find strong evidence of regulatory heterogeneity increasing trade at the intensive margin for exports coming from countries that set the strictest standards, alluding to the positive informative effect of such regulation.
    Date: 2014–10–01
  5. By: Moon, Wanki; Pino, Gabriel
    Abstract: Comparative advantage is perhaps one of the most celebrated concept/theory in the history of economics since its birth in the late 18th century. It has dominated the field of international trade not only in academics but also in economic/development policy circles. International trade in agriculture, however, has been a notable exception. Agricultural protectionism disallowed the theory of comparative advantage to be valid in explaining agricultural trade. This paper attempts to shed light on the role of the state in determining international competitiveness of agricultural commodities. Farmers are neither the ones who make decisions whether or not to enter international markets nor are the ones who invest in R&D and develop new technologies with the goal of enhancing international competitiveness. Liberalizing trade is likely to send signals first to trading corporations, grain handlers, and governments and transmitted to farmers indirectly. Freer trade would initiate the process of specialization of production across the world, generating benefits in terms of greater production and lower prices, but offering little additional incentive for individual farm producers to reduce costs or adopt new technologies for the purpose of enhancing export opportunities (hence, lacking the creative destruction processes like in the manufacturing sector in which firm level strategies would determine international competitiveness). However, states may compete with each other to expand their exports or to decrease their dependence on food imports with strategic investments in agricultural infrastructure. The point is that state level strategies are likely to determine the pattern of agricultural trade in the long run.
    Keywords: Agricultural Trade, Comparative Advantage, Competitive Advantage, the Role of the State, International Relations/Trade,
    Date: 2016–01–22
  6. By: Andrew B. Bernard; Renzo Massari; Jose-Daniel Reyes; Daria Taglioni
    Abstract: Two identical firms that start exporting in different months, one each in January and December, will report dramatically different exports for the first calendar year. This partial-year effect biases down first year export levels and biases up first year export growth rates. For Peruvian exporters, the partial-year bias is large: first-year export levels are understated by 65 percent and the first year growth rate is overstated by 112 percentage points. Correcting the partial-year effect eliminates high first year export growth rates, raises initial export levels and almost doubles the contribution of net firm entry and exit to overall export growth.
    Keywords: export entry, export growth, margins of trade, heterogeneous firms
    JEL: F14 C81 D22
    Date: 2016–05
  7. By: Daniel Rais
    Abstract: Abstract Many countries treat income generated via exports favourably, especially when production takes places in special zones known as export processing zones (EPZs). EPZs can be defined as specific, geographically defined zones or areas that are subject to special administration and that generally offer tax incentives, such as duty†free imports when producing for export, exemption from other regulatory constraints linked to import for the domestic market, sometimes favourable treatment in terms of industrial regulation, and the streamlining of border clearing procedures. We describe a database of WTO Members that employ special economic zones as part of their industrial policy mix. This is based on WTO notification and monitoring through the WTO’s trade policy review mechanism (TPRM), supplemented with information from the ILO, World Bank, and primary sources. We also provide some rough analysis of the relationship between use of EPZs and the carbon intensity of exports, and relative levels of investment across countries with and without special zones.
    Date: 2015–07–31
  8. By: Daniel Rais
    Abstract: Denver Journal of International Law and Policy 43 (4) 2015, pp. 357-378: The problem of global security of energy supply is growing in importance. TTIP negotiations represent an opportunity to improve energy security in Europe and negotiate a legal framework for bilateral trade in energy, which could serve as a model for future negotiations at a multilateral level. This paper explores some of the thorniest legal, geopolitical, and economic issues that need to be taken up by TTIP negotiators for the promotion of a secure and sustainable trade in energy between the United States and European Union. It gives an account of the most recent developments in the TTIP negotiations on energy and examines the link between a possible legal framework for energy trade under TTIP and other energy-related regional and international fora. The paper critically assesses the negotiating positions of the European Union and the United States in light of their reciprocal energy profiles and needs. It offers an overview of the critical items most likely to be on top of the TTIP agenda on energy based on a comparative analysis of energy provisions in E.U. and U.S. legislation and in light of the both parties’ interests. Finally, it discusses the main driving forces and inhibiting factors capable of facilitating or rather impeding a successful conclusion of an energy trade deal between the United States and the European Union.
    Date: 2016–03–29
  9. By: Daniel Rais
    Abstract: We analyze Zambian export patterns using a new transaction-level trade dataset for the period 1999-2011. The data show that, in international comparison, Zambian exports are exceptionally concentrated (on mining products). This reliance has been increasing in recent years. Zambia’s exports are also characterized by a high level of churning in terms of firms and products. Multivariate models of survival probabilities suggest that exchange-rate volatility and difficult access to imported inputs significantly inhibit diversified and stable exports. We complement the econometric analysis with a qualitative study of the Zambian export sector. We conclude that one of the main policy levers for unleashing Zambia’s full potential as an exporter is by facilitating access to imported inputs. Additional measures that ease foreign-exchange transactions, simplify export and certification requirements, and increase the predictability of Zambia’s trade regime could be effective to promote Zambia’s non-traditional exports.
    Date: 2014–11–01
  10. By: Chris Milner; Juliane Scheffel; Feicheng Wang
    Abstract: This paper explores the relationship between globalisation and inter-industry wage differentials in China by using a two-stage estimation approach. Taking advantage of a rich household survey dataset, this paper estimates the wage premium for each industry in the first stage conditional on individual worker and firm characteristics. Alternative measures of globalisation are considered in the second stage; trade openness and capital openness. The regressions do not reveal a significant relationship between overall trade (import and/or export) openness and wage premia. However, disaggregation of trade into trade in final and intermediate goods is shown to matter. Increases in import (export) shares of final goods reduce (increase) the wage premium significantly, whereas imports or exports of intermediate goods do not explain differences in industry wage premia. This finding is supported by stronger effects for final goods trade in coastal than non-coastal regions. Our results also show a positive relationship between capital openness and industrial wage premium, though this finding is less robust when endogeneity issues are allowed for.
    Keywords: Globalisation; Industrial Wage Premium; China
    Date: 2016
  11. By: Ederington,Josh; Ruta,Michele
    Abstract: With the success of the World Trade Organization and its predecessor, the General Agreement on Tariffs and Trade, in reducing conventional tariff barriers, much of the recent focus of regional and multilateral trade agreements has switched to non-tariff measures, both border and behind-the-border policies. This paper considers the recent empirical and theoretical literature on non-tariff measures in the world trading system. It provides a set of stylized facts based on available data on non-tariff measures and reviews the key methods used to estimate their trade impact. It considers the theoretical treatment of these measures in the trade literature with a focus on the rules and institutions that govern non-tariff measures in the world trading system. It discusses some of the major issues regarding international cooperation in these policy areas, in particular whether such cooperation should entail deep integration (involving precise legally binding obligations) or shallow integration (which allows countries greater discretion in the setting of non-tariff measures). Finally, this paper reviews some of the specific features the World Trade Organization uses in dealing with non-tariff measures such as national treatment rules and non-violation complaints, and considers policy options beyond the WTO such as harmonization and mutual recognition of standards.
    Keywords: Free Trade,Economic Theory&Research,Trade Policy,Emerging Markets,Trade Law
    Date: 2016–05–04
  12. By: Victor Kummritz (Graduate Institute of International and Development Studies - Centre for Trade and Economic Integration)
    Abstract: Global Value Chains (GVCs) have become a central topic in trade and development policy but little is known about their actual impact on economic performance. Using a new unique set of Inter-Country Input-Output tables with extensive country coverage, I show that an increase in GVC participation leads to higher domestic value added and productivity for all countries independent of their income levels. Causality is established by building a novel value added trade resistance index that combines third country trade costs with industry-specific technological variables leading to an exogenous variation in GVC participation. Based on the preferred IV specification, I find that a 1 percent increase in backward GVC participation leads to 0.11% higher domestic value added in the average industry. Equally, I find for forward linkages that a 1 percent increase in GVC participation leads to 0.60% higher domestic value added and to 0.33% higher labour productivity.
    Keywords: Global Value Chains, International Trade, Economic Development
    JEL: F13 F14 F15
    Date: 2016–03–23
  13. By: fatih ayhan (University of Selcuk)
    Abstract: In this research, the relationship between real exchange rate volatility and foreign direct investment (FDI) is examined in theoretically and empirically by covering 1998Q1-2015Q4 period for Turkey. In the empirical modelling, FDI is explained with economic growth, exchange volatility and trade openness parallel with the existing literature. Moreover exchange rate volatility variable is computed by employing GARCH type model. The Bound Test approach which is proposed by Peseran et al. (2001) is employed in order to investigate the cointegration relationship between the variables. After we found cointegration, we analysed long and short term coefficients by using ARDL model. According to model’s results, growth and openness has positive and statistically significant effect on FDI, while volatility has negative effect on FDI as expected. However coefficient of volatility is statistically insignificant on FDI. Because of volatility coefficient is not statistically significiant, we can conclude that foreign investors take into consideration sustainable growth and openness for investing in Turkey instead of exchange rate volatility.
    Keywords: Exchange Rate Volatility, Domestic Investment, ARDL Model
    JEL: E44 F31 F21
  14. By: OBASHI Ayako (University of Wisconsin and Keio University); KIMURA Fukunari (Keio Univeristy and Economic Research Institute for ASEAN and East Asia)
    Abstract: China, Japan, and Korea have been the three largest players in East Asian machinery production networks. This paper employs a new method of analysing finely disaggregated international trade data that applies the concept of zero trade flows, least-traded goods, and intensive/extensive margins of trade growth and scrutinises changes in the roles of China, Japan, and Korea in machinery production networks between 2007 and 2013. We find, first, that China became a dominant player in global machinery production networks in terms of both export values and the diversity and density of product-destination pairs. Second, the growth of Korea as machinery parts and components supplier was also salient and Korea’s dependency on China rose sharply. Third, Japan continued to stagnate and machinery production links between Korea and Japan weakened substantially.Length: 33 pages.
    Keywords: zero trade; intensive and extensive margins; least-traded goods; productdestination pairs; machinery industry; parts and components trade
    JEL: F14 F23
    Date: 2016–03
  15. By: Michael E. Waugh; B. Ravikumar
    Abstract: In this paper we derive a new measure of openness—the trade potential index—that quantifies the potential gains from trade as a simple function of data. Using a standard multicountry trade model, we measure openness by a country’s potential welfare gain from moving to a world with frictionless trade. In this model, a country’s trade potential depends on only the trade elasticity and two observable statistics: the country’s home trade share and its income level. Quantitatively, poor countries have greater potential gains from trade relative to rich countries, while their welfare costs of autarky are similar. This leads us to infer that rich countries are more open to trade. Our trade potential index correlates strongly with estimates of trade costs, while both the welfare cost of autarky and the volume of trade exhibit correlate weakly with trade costs. Thus, our measure of openness is informative about the underlying trade frictions.
    JEL: E1 F11 F40
    Date: 2016–04
  16. By: Jean-Christophe Bureau; Houssein Guimbard; Sébastien Jean
    Abstract: This paper proposes a unique overview of trade policies trends since the launch of the Doha Round, based on detailed data on tariffs and trade covering 130 countries. We show that regionalism has delivered limited effective liberalization so far, leading to only a 0.3 percentage point (p.p.) cut in the worldwide average applied tariff duty between 2001 and 2013. WTO commitments (1.0 p.p. average cut) and unilateral liberalizations on a most-favored-nation (MFN) basis (1.3 p.p.) mattered far more on average, with more uneven consequences. As a result, we reckon that trade policy changes between 2001 and 2013 more than halved the worldwide welfare gains to be expected from the tariff-cutting provisions of the hypothetical Doha Agreement. If all ongoing RTA negotiations were concluded, expected gains would fall to one-third of their 2001 level.
    Keywords: Regional Trade Agreements;Unilateral Liberalization;Doha Development Agenda;WTO
    JEL: F10 F13 F14
    Date: 2016–05
  17. By: Daniel Rais
    Abstract: Abstract We adopt the Stigler–Peltzman model of policy-making as developed by Hillman for application to the politics of international trade, in which the government is represented by a political support function trading-off the industry rents stemming from protection against the losses accruing to the general population. As a starting point, we examine the economic impact of actual government action as revealed by the structure of protection, backing out the weights implied by the marginal welfare effects of the set of EU import tariffs across sectors. We build on Tyers' application of methods to international trade employing a numerical general equilibrium model of the EU. This captures direct marginal effects of sector-level protection on protected industries, indirect effects on upstream and downstream industries, and the effect on overall welfare. We then deconstruct the revealed weighting pattern along the lines of industry nationality and related industry characteristics.
    Date: 2014–12–01
  18. By: Cenk Gokce ADAS (Istanbul University, Faculty of Economics)
    Abstract: It is believed that export firms are more productive than non-export firms. The reasons for that exporting firms have to endure additional cost because of transport costs, marketing research, advertising, local regulations etc. Export firms are also inclined to pay higher wages than non-export firms, because they use a higher skilled and more productive labours. Hence, export firms have to be more productive due to these additional costs. The aim of this study is to explain whether the productivity advantage of export firms does lead to a profitability advantage of exporters compared to non-export firms. For this reason, this paper attempts to summarise previous empirical studies on the firm level data considering the relationship between exporting firms, productivity, and profitability.
    Keywords: Productivity; Profitability; Exporting Firms; Manufacturing Sectors; Firm Level Data.
    JEL: D22 F14 L60
  19. By: Daniel Rais
    Abstract: More than three decades of research on trade costs and goods trade have unveiled fundamental insights into the determinants, the nature and the consequences of goods trade agreements. A cottage literature has also evolved studying similar issues from a services trade perspective, but the two-way interaction between goods and services trade has not been explored formally. Webridge this gap by providing a formal treatment of the inter-linkages between goods and services trade. The model provides insights into how trade agreements impact goods and services trade. We also explore the impact of the complementarities of goods and services agreements on goods and services trade empirically using bilateral goods and services trade data for OECD and BRICS trading partners over 1995-2010.
    Date: 2014–08–01
  20. By: Facchini, Giovanni; Frattini, Tommaso; Signorotto, Cora
    Abstract: We investigate how media exposure affects elected representatives' response to preferences on immigration and trade policy. Using a novel dataset spanning the period 1986-2004, in which we match individual opinion surveys with congressmen roll call votes, we find that greater exposure to media coverage tends to increase a politician's accountability when it comes to migration policy making, while we find no effect for trade policy. Our results thus suggest that more information on the behavior of elected officials affects decisions only when the policy issue is perceived to be salient by the electorate.
    Keywords: Media exposure; political economy; Public Opinion; Roll Call Votes
    JEL: F22 H89
    Date: 2016–05
  21. By: Daniel Rais
    Abstract: Abstract With its wide coverage of economic spheres and the variety of trade and investment measures currently under negotiation, the Transatlantic Trade and Investment Partnership (TTIP) opens windows of opportunity for climate change mitigation and adaptation. The paper examines the possible avenues and the WTO law implications for the alignment of emissions standards between the European Union (EU) and United States of America (US). Looking particularly at the automobile sector, it argues that TTIP negotiators should strive for the mutual recognition of equivalence of EU and US car emissions standards, while pursuing full harmonisation in the long term. It concludes that the preferential trade agreement (PTA) status of TTIP would not be able to exempt measures taken for regulatory convergence from compliance with applicable WTO rules, particularly the rules of the WTO’s Agreement on Technical Barriers to Trade (TBT). Furthermore, the EU and the US would not be able to ignore requests for the recognition of equivalence of third countries’ standards and would need to provide the grounds upon which they assess third countries’ standards as not adequately fulfilling the objectives of their own regulations and therefore rejecting them.
    Date: 2014–06–30
  22. By: Bown,Chad P.; Irwin,Douglas A.
    Abstract: How high were import tariffs when GATT participants began negotiations to reduce them in 1947? Establishing this starting point is key to determining how successful the GATT has been in bringing down trade barriers. If the average tariff level was about 40 percent, as commonly reported, the implied early tariff reductions were substantial, but this number has never been verified. This paper examines the evidence on tariff levels in the late 1940s and early 1950s and finds that the average tariff level going into the first Geneva Round of 1947 was about 22 percent. It also find that tariffs fell by relatively more in the late 1940s and early 1950s for a core group of GATT participants (the United States, United Kingdom, Canada and Australia) than they did for many other important countries, including the set of other (non-core) GATT participants.
    Keywords: Export Competitiveness,Debt Markets,Free Trade,International Trade and Trade Rules,Trade Policy
    Date: 2016–04–26
  23. By: Yi Che; Yi Lu; Justin R. Pierce; Peter K. Schott; Zhigang Tao
    Abstract: This paper examines the impact of trade liberalization on U.S. Congressional elections. We find that U.S. counties subject to greater competition from China via a change in U.S. trade policy exhibit relative increases in turnout, the share of votes cast for Democrats and the probability that the county is represented by a Democrat. We find that these changes are consistent with Democrats in office during the period examined being more likely than Republicans to support legislation limiting import competition or favoring economic assistance.
    JEL: D72 F13 F16
    Date: 2016–04
  24. By: Mathias Czaika (International Migration Institute, University of Oxford); Christopher Parsons (Business School, University of Western Australia)
    Abstract: We introduce two pioneering databases in order to analyze the implications of the Global Economic Crisis on international migration. The first details inflows of migrant workers of 185 nationalities to 10 OECD destinations, disaggregated by skill level (highly skilled and otherwise), between 2000 and 2012. The second comprises immigration policies implemented by 19 OECD countries between 2000 and 2012. We distinguish between six skill-selective admission policies, six post-entry policy instruments and three bilateral agreements. Subsequently we present preliminary analysis of these data against the backdrop of the Global Economic Crisis. The Global Economic Crisis negatively affected annual inflows of both highly and other skilled migrants between 2007 and 2009, although they resumed their upward trend thereafter. The starkest trends in policy terms include: the emergence and rapid diffusion of student job seeker visas, the relative stability in the prevalence of skill selective policies in the wake of the Global Economic Crisis, a greater use of financial incentives to attract high-skilled workers and increased employer transferability for migrants at destination.
    Date: 2016
  25. By: Olarreaga, Marcelo; Sperlich, Stefan; Trachsel, Virginie
    Abstract: A recent literature has argued that resources spent on export promotion help export growth (Van Biesebroeck, Konings and Volpe, 2016). In this paper we build on this work and examine the heterogeneity in returns across countries to disentangle which are the characteristics of Trade Promotion Organizations (TPOs) that are more likely to generate higher returns. Results suggest that on average a one percent increase in export promotion budgets increases exports by 0.074 percent, con rming results in the earlier literature. Our results also suggest that these export gains translate into very large GDP per capita gains. Indeed, a one percent increase in export budgets generates a 0.065 percent increase in GDP per capita. More interestingly, our results show which TPO characteristics generate large increases in exports, and which generate large gains in terms of GDP per capita.
    Keywords: Export Promotion; Impact Evaluation
    JEL: C14 F13
    Date: 2016–05
  26. By: Thanh Le (University of Qeensland and Flinders University); Cuong Le Van (Centre d'Economie de la Sorbonne - Paris School of Economics, IPAG Business School)
    Abstract: This paper discusses the impact of trade liberalisation and R&D policies on exporting firms' incentive to innovate and social welfare. Key factors determining the government's optimal policy are the strength of R&D spillover effect and the toughness of firm competition. When firms only compete in an overseas market, the optimal policy is to tax R&D. Trade liberalisation in the overseas market induces a higher R&D tax rate to be imposed on firms. When firms also conduct business in the home market, the government should financially support firms' R&D. Trade liberalisation always increases firms' output sales, R&D investments, and social welfare
    Keywords: Trade; R&D spillovers; subsidies; welfare; process innovation
    JEL: F12 F13 F15 O31
    Date: 2016–03
  27. By: Olper, Alessandro; Curzi, Daniele; Swinnen, Jo
    Abstract: This paper investigates the causal effect of trade liberalization on children mortality by exploiting 40 policy reform experiments spanning the 1960-2010 period. We use a new approach – the Synthetic Control Method – for comparative case studies. Using this method we assess at the country level the trajectory of post-reform health outcomes of treated countries, which experienced a trade liberalization, with the trajectory of a combination of similar untreated countries. Contrary to previous findings, we showed that the effect of trade liberalization on health outcomes display a huge heterogeneity both in the direction and the magnitude of the effect. Among the 40 investigated case studies, 20 displayed a reduction in children mortality after a trade liberalization, and the majority of these are statistically significant. In 18 country casestudies we did not find any relevant effect, while in two cases ‒ South Africa and Mauritania ‒ we found a strong statistically significant worsening in child mortality after trade liberalization. Yet, the underline reasons of these negative effects are driven by very different situations.
    Keywords: Child Mortality, Trade liberalization, Synthetic Control Method, Democracy, Community/Rural/Urban Development, International Relations/Trade, Q17, Q18, O13, O24, O57, I15, F13, F14.,
    Date: 2015
  28. By: Zubritskiy, Artur
    Abstract: Complex microanalysis of Ukrainian goods exporting diversification on extensive and intensive basis was made. The national export structure deviations from the world one were formulated. Product codes groups characterized by the highest export concentration were detected.
    Keywords: Export, export diversification, export sector, export structure.
    JEL: F14
    Date: 2014–12–20
  29. By: Tiago Pereira (Embaixada de Portugal em Bruxelas / Embassy of Portugal in Brussels)
    Abstract: Portuguese trade with developing countries rose 564% in the last 20 years and China became in 2014 the 8th most important importer among all trade partners. At the same time, Portugal witnessed its manufacturing employment decreasing 34%. Using a sample of persons employed in enterprises between 2004 and 2012, I show whether regions more exposed to Chinese import competition face a larger decline in manufacturing employment. My results show that an increase of 1000 EUR in imports per worker throughout the period considered causes a decrease in the share of manufacturing employment in the working age population by approximately 0.12 percentage points or a decline of 0.431 log points. Moreover, my estimations did not show a clear conclusion about the impact of import competition on non-manufacturing employment and on whether people move to other regions in response to a trade shock, but they indicate a rise in unemployment.
    Keywords: Import Competition, Local Labour Market, Portugal, China.
    JEL: F14 F16 F66
    Date: 2016–03
  30. By: Daniel Rais
    Abstract: SECO Working Paper 2/2016
    Date: 2016–01–13
  31. By: João Paulo Pessoa
    Abstract: How does welfare change in the short- and long-run in high wage countries when integrating with low wage economies like China? Even if consumers benefit from lower prices, there can be significant welfare losses from increases in unemployment and lower wages. I construct a dynamic multi-sector country Ricardian trade model that incorporates both search frictions and labor mobility frictions. I then structurally estimate this model using cross-country sector-level data and quantify both the potential losses to workers and benefits to consumers arising from China’s integration into the global economy. I find that overall welfare increases in northern economies, both in the transition period and in the new steady state equilibrium. In import competing sectors, however, workers bear a costly transition, experiencing lower wages and a rise in unemployment. I validate the micro implications of the model using employer-employee panel data.
    Keywords: trade; unemployment; earnings; China
    JEL: R14 J01
    Date: 2016–03
  32. By: Schuster, Monica; Maertens, Miet
    Abstract: Private standards are spreading rapidly in international food trade and are moving beyond food quality and safety aspect to address environmental and social concerns. Using panel data from own company and worker surveys and different econometric techniques, we analyze how the adoption of a variety of private standards, that differ with respect to their focus on labor standards, influences employment conditions in the horticultural export chain in Peru. We find that workers employed in companies adopting labor standards are more likely to be paid a minimum wage, to have a contract and to receive training, but there is no effect of private standards on the level of the wage and on the employment period. We conclude that labor standards are most effective in reinforcing the respect of national labor laws and when there exists a clear cut definition of the employment requirements they push forward.
    Keywords: Crop Production/Industries, International Development, International Relations/Trade,
    Date: 2015
  33. By: Rafaelita M. Aldaba (Philippine Institute for Development Studies, 106 Amorsolo Street, Legaspi Village, Makati City, Philippines.); Caesar Cororaton (Philippine Institute for Development Studies, 106 Amorsolo Street, Legaspi Village, Makati City, Philippines.)
    Keywords: Trade, Philippines
    Date: 2016–04
  34. By: Ichiroh Daitoh (Faculty of Business and Commerce, Keio University); Nori Tarui (Department of Economics, University of Hawaii at Manoa)
    Abstract: This paper investigates when poverty reduction and environmental resource preservation can be compatible in developing economies with two prominent institutional failures: wage rigidity in urban labor markets and open access to rural natural resources. We develop a small open dualistic economy model with these institutional features, and investigate the effects of an export tax on the resource good on urban unemployment and overexploitation of the rural resource. At the steady state, the first-best policy calls for an urban wage subsidy while rural labor should be subsidized at a lower rate, or be taxed. A rural tax constitutes the first-best policy when the domestic price of urban manufactured good is sufficiently high. Thus the well-known first-best policy prescription by Bhagwati and Srinivasan (1974) does not apply to developing countries when the world price of the resource good is low under free trade and/or an import tariff on the manufactured good is high. Unlike what the literature indicates, an increase in the export tax rate generally reduces the rate of urban unemployment, thereby improving welfare. However, the level of urban unemployment is more likely to increase if the initial rate of export tax is lower. A small export tax always improves welfare by mitigating the two institutional failures.
    Keywords: open access, renewable resource, urban unemployment, export tax on the resource good, Harris-Todaro model
    JEL: O13 Q27 F18
    Date: 2016–03–30
  35. By: Daniel Rais
    Abstract: Combining for the first time a new dataset of non-tariff measures (NTMs) in 65 countries with the CEPII’s unit values database, we estimate average ad-valorem equivalents (AVEs) for SPS, TBT and other measures by section of the Harmonized System of product classification. While most existing AVEs are obtained from indirect quantity-based estimation, ours are obtained from direct price-gap estimation. They lie in a single-digit range, i.e. substantially lower than previous estimates based on older data. Our results may reflect the progressive phasing out of commandand- control instruments such as quantitative restrictions in many countries; they also suggest that sanitary and technical regulations have not substituted for them as trade-restrictive interventions. Most interestingly, we show that deep-integration clauses in regional trade agreements, in particular the mutual recognition of conformity-assessment procedures, substantially reduce the price-raising effect of NTMs, possibly reflecting lower compliance costs.
    Date: 2015–02–02
  36. By: Hayakawa, Kazunobu; Kimura, Fukunari; Laksanapanyakul, Nuttawut
    Abstract: The preference utilization ratio, i.e., the share of imports under preferential tariff schemes out of total imports, has been a popular indicator for measuring the usage of preferential tariffs vis-Ã -vis tariffs on a most-favored-nation basis. A crucial shortcoming of this measure is the data requirements, particularly for import value data classified by tariff schemes, which are not available in most countries. This study proposes an alternative measure for preferential tariff utilization, termed the "tariff exemption ratio." This measure offers the unique advantage of needing only publicly available data, such as those provided by the World Development Indicators, for its computations. We can thus calculate this measure for most countries for an international comparison. Our finding is that tariff exemption ratios differ widely across countries, with a global average of approximately 50%.
    Keywords: Tariff, International trade, International agreements, Preferential trade agreements, General system of preferences, Utilization of preferential arrangements, Tariff revenues
    JEL: F15 F53
    Date: 2016–04
  37. By: Jonathan EATON; Samuel KORTUM; Francis KRAMARZ
    Abstract: Customs data and firm-level production data reveal both the heterogeneity and the granularity of individual buyers and sellers. We seek to capture these firm-level features in a general equilibrium model that is also consistent with observations at the aggregate level. Our model is one of product trade through random meetings. Buyers, who may be households looking for final products or firms looking for inputs, connect with sellers randomly. At the firm level, the model generates predictions for imports, exports, and the share of labor in production that is broadly consistent with observations on French manufacturers. At the aggregate level, firm-to-firm trade determines bilateral trade shares as well as labor's share of output in each country.
    Date: 2016–03
  38. By: Rabah Arezki; Thiemo Fetzer
    Abstract: This paper provides the first empirical evidence of the newly found comparative advantage of the United States manufacturing sector following the so-called shale gas revolution. The revolution has led to (very) large and persistent differences in the price of natural gas between the United States and the rest of the world owing to the physics of natural gas. Results show that U.S. manufacturing exports have grown by about 6 percent on account of their energy intensity since the onset of the shale revolution. We also document that the U.S. shale revolution is operating both at the intensive and extensive margins.
    Keywords: manufacturing, exports, energy prices, shale gas
    JEL: Q33 O13 N52 R11 L71
    Date: 2016
  39. By: Dawson, P.J.; Gorton, Matthew; Hubbard, Lionel; Hubbard, Carmen
    Abstract: The EU is a major player in the global wheat market. This paper examines the pricing behavior of EU wheat exporters using a pricing-to-market (PTM) analysis. Wheat is an exemplary product for testing PTM theories as it is widely and frequently traded, and it is largely unbranded. We estimate the relationship between export unit values and exchange rates using quarterly panel data for 11 export destinations for 2000- 2013. Results show that there is a meaningful long-run relationship between export unit values and exchange rates, but there is little evidence of differential mark-ups between export markets. Belarus and Iceland are exceptions where the EU exercises local currency price stabilization.
    Keywords: Agricultural Finance, Crop Production/Industries,
    Date: 2015
  40. By: Emanuel Ornelas
    Abstract: Special and Differential Treatment for Developing Countries (SDT) constitutes a central feature of the GATT/WTO system. Its formal goal is to foster export-led growth in developing countries. Its theoretical foundations and empirical support are, however, weak at best. In particular, SDT conflicts with the GATT's two key principles of reciprocity and non-discrimination, compromising the efficiency of the multilateral trading system. Still, if SDT provisions help those who most need help, sacrificing economic efficiency may be justifiable. However, there are numerous criticisms, on theoretical and empirical grounds, to the premises and the achievements of SDT-based disciplines, casting serious doubt on its effectiveness in helping developing countries trade and grow. For researchers, the good news is that there is plenty of room for progress, with several important areas where our understanding remains unsatisfactory but progress is feasible---that is, where the expected return to research effort seems unusually high.
    Keywords: Generalized System of Preferences; preferential tariffs; trade policy; World Trade Organization; terms of trade; firm delocation; export-led growth
    JEL: G18 H63 L15
    Date: 2016–03
  41. By: Daniel Rais
    Abstract: SECO Working Paper 1/2016
    Date: 2016–01–04
  42. By: Daniel Rais
    Abstract: SECO Working Paper 1/2015
    Date: 2015–01–05
  43. By: Daniel Rais
    Abstract: SECO Working Paper 2/2015
    Date: 2015–06–23
  44. By: Hildegunn Nordas
    Abstract: This paper presents indices of regulatory heterogeneity based on the rich information in the STRI regulatory database. The indices are built from assessing – for each country pair and each measure – whether or not the countries have the same regulation. For each country pair and each sector, the indices reflect the (weighted) share of measures for which the two countries have different regulation. Estimates of the relationship between regulatory heterogeneity and trade shows that on average a reduction in the regulatory heterogeneity by 0.05 points is associated with 2.5% higher services exports and that the impact is larger the lower the level of trade restring regulation. The trade costs associated with the average score on the regulatory heterogeneity index (0.26) amounts to an ad valorem equivalent trade cost of between 20 and 75% at low levels of the STRI. Regulation has become slightly more similar from 2014 to 2015 in telecommunications. For the other sectors, countries have become slightly less similar over the same period.
    Keywords: regulatory cooperation, trade costs, trade in services
    JEL: F13 F15 F42 F53
    Date: 2016–05–13
  45. By: Daniel Rais
    Abstract: SECO Working Paper 10/2014 by Stephen Gelb, WTI/Mandela Institute
    Date: 2014–09–01
  46. By: Daniel Rais
    Abstract: Abstract The “Making of the TRIPS Agreement†presents for the first time the diverse personal accounts of the negotiators of this unique trade agreement. Their contributions illustrate how different policy perspectives and trade interests were accommodated in the final text, and map the shifting alliances that transcended conventional boundaries between developed and developing countries.
    Date: 2015–10–01
  47. By: Daniel Rais
    Date: 2014–09–24
  48. By: Siddique, Hafiz Muhammad Abubakar; Shehzadi, Iram; Manzoor, Muhammad Rizwan; Majeed, Muhammad Tariq
    Abstract: International migration and remittances have an important role in economic and social development of the developing countries as it helps in achieving the gains of globalization. This paper endeavors to explore the relationship by forming and evaluating a new data set on foreign remittances, international migration, poverty and inequality in South Asian countries. As poverty and income inequality are the prime issues faced by the developing countries meanwhile a handsome number of skilled and educated workers of such countries is employed abroad in the high income countries, so the foreign remittances sent by these workers to home countries is expected to have positive impacts on poverty reduction. The contribution of foreign remittances in the total income of South Asia is 4.2% which shows a significant proportion of GDP and it has significant impact on poverty alleviation.
    Keywords: poverty, remittances, migration, inequality
    JEL: F0
    Date: 2016
  49. By: Daniel Rais
    Abstract: Abstract This paper explores the hitherto futile quest for developing disciplines on the trade- and investment-distorting effects of services subsidies. It sheds light on the multiplicity of factors that have weighed on the conduct of negotiations on subsidy disciplines in a services trade context at both the global and preferential levels, and advances a few thoughts on what the future may hold for the adoption of such disciplines. The analysis suggests that it is rather unlikely that WTO Members will any time soon reach a consensus on the matter of subsidy disciplines for services beyond those that currently (and timidly) obtain in the GATS and in many preferential trade agreements. The main reason behind such a conclusion stems from a marked rise in the value of preserving policy space in a trading environment characterized by considerably greater global market contestability than two decades ago.
    Date: 2015–04–14
  50. By: Daniel Rais
    Abstract: This paper addresses the issues of dual pricing and export restrictions in the energy sector, stressing the comparability of their economic and climate change impacts. It assesses whether WTO disciplines relevant and applicable to such practices are well-equipped to ensure fair access to energy resources. It finds that relevant GATT disciplines are overall deficient in the case of dual pricing and export taxes, while the landscape of WTO-plus obligations generally consisting of a network of narrowly tailored commitments. It discusses possible avenues to address such practices under the ASCM to the extent that they distort domestic energy prices and subsidize consumption of cheap fossil fuels
    Date: 2015–04–01

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