nep-int New Economics Papers
on International Trade
Issue of 2020‒06‒08
thirty papers chosen by
Luca Salvatici
Università degli studi Roma Tre

  1. Trade tensions in LAC: Modeling outcomes By Laborde Debucquet, David; Piñeiro, Valeria
  2. The African Continental Free Trade Area: Potential Economic Impact and Challenges By Lisandro Abrego; Mario de Zamaroczy; Tunc Gursoy; Garth P. Nicholls; Hector Perez-Saiz; Jose-Nicolas Rosas
  3. Inward Foreign Direct Investment Promotion – A Review of Policy Rationales and Impacts By Gustafsson, Robin; Aalto, Eero
  4. Heterogeneous Impact of Non-Tariff Measures through the Global Value Chains: Empirical Evidence from China By Qizhong Yang; Tsunehiro Otsuki
  5. Export controls: America’s other national security threat By Chad P. Bown
  6. Estimating the welfare costs of autarky: a sufficient statistics approach By Esposito, Federico
  7. Local Trade Shocks and the Nationalist Backlash in Political Attitudes: Panel Data Evidence from Great Britain By Nils D. Steiner; Philipp Harms
  8. Service Exports and Public Funding By Ali-Yrkkö, Jyrki; Kuusi, Tero; Pajarinen, Mika; Wang, Maria
  9. China's Agricultural Imports under the Phase One Deal: Is Success Possible? By Xi He; Dermot J. Hayes; Wendong Zhang
  10. Strategies for sustainable upgrading in global value chains: The Egyptian textile and apparel sector By Grumiller, Jan; Raza, Werner G.; Grohs, Hannes
  11. Cultural Diversity and Foreign Direct Investment By Wei Feng; Yanrui Wu; Yue Fu
  12. Carbon pricing of international transport fuels: Impacts on carbon emissions and trade activity By Mundaca, Gabriela; Strand, Jon
  13. Innovation catalysts - How multinationals reshape the global geography of innovation By Riccardo Crescenzi; Arnaud Dyèvre; Frank Neffke
  14. EU Common Agricultural Policy - Impacts on Trade with Africa and African Agricultural Development By Kornher, Lukas; von Braun, Joachim
  15. ClearCorrect: Intellectual Property, 3D Printing, and the Future of Trade By Rimmer, Matthew
  16. Is Environmental Tax Harmonization Desirable in Global Value Chains? By Haitao Cheng; Hayato Kato; Ayako Obashi
  17. World Seaborne Trade in Real Time: A Proof of Concept for Building AIS-based Nowcasts from Scratch By Diego A. Cerdeiro; Andras Komaromi; Yang Liu; Mamoon Saeed
  18. The curse of the Andaman Sea Crisis: Policy implications for Africa on Mixed Migration Flows By Mutsvara, Shepherd; Kugonza, Gorret
  19. Impacts of the Belt and Road in the Eurasian Heartland By Alexey Kalinin; Albert Park
  20. Skills in African Labor Markets and Implications for Migration to Europe By Backhaus, Andreas
  21. Does Foreign Direct Investment Contribute to Poverty Reduction in Cameroon? An ARDL-Bounds Testing Approach By Stéphane Mbiankeu Nguea; Issidor Noumba; Armand Gilbert Noula
  22. Immigration and Work Schedules: Theory and Evidence By Bond, Timothy N.; Giuntella, Osea; Lonsky, Jakub
  23. Coverage and representativeness of Orbis data By Matej Bajgar; Giuseppe Berlingieri; Sara Calligaris; Chiara Criscuolo; Jonathan Timmis
  24. CAP measures towards environmental sustainability: Trade opportunities for Africa? By Latka, Catharina; Heckelei, Thomas; Kuhn, Arnim; Witzke, Heinz-Peter; Kornher, Lukas
  25. The Impact of Labour Migration on the Ukrainian Economy By Jerzy Pieńkowski
  26. Labor Market Effects of Technology Shocks Biased Toward the Traded Sector By Luisito Bertinelli; Olivier Cardi; Romain Restout
  27. Poinsettia Assembly and Selling Emotion: High Value Agricultural Exports in Ethiopia By Christopher CRAMER
  28. Public policies and the art of catching up: matching the historical evidence with a multi-country agent-based model By Giovanni Dosi; Andrea Roventini; Emanuele Russo
  29. Real Effects of Uncertainty: Evidence from Brexit By Anna Lipinska; Musa Orak
  30. The European Union: State of Play and prospects By Janusz Lewandowski

  1. By: Laborde Debucquet, David; Piñeiro, Valeria
    Abstract: Trade tensions between the major world economies increased in 2018, and US tariff increases triggered reprisals and counter-reprisals. In Latin America and the Caribbean (LAC), trade tensions between the US and China and other US trade partners are expected to generate a mix of opportunities and threats for exporters of food products. To better understand the likely impacts of global trade tensions for LAC, we modeled a set of four scenarios using the MIRAGRODEP model1. We looked at impacts on exports, imports, production, GDP, household consumption, and adjustment costs through changes in labor markets up to 2030. Impacts will differ across the region’s highly heterogeneous countries, but some broad trends are evident.
    Keywords: LATIN AMERICA; CARIBBEAN; AMERICAS; trade; international trade; modelling; trade policies; agricultural trade
    Date: 2019
  2. By: Lisandro Abrego; Mario de Zamaroczy; Tunc Gursoy; Garth P. Nicholls; Hector Perez-Saiz; Jose-Nicolas Rosas
    Abstract: Political momentum towards Africa-wide free trade has been intensifying. In March 2018, over 40 countries signed the African Continental Free Trade Area (AfCFTA) agreement. Once fully implemented, the AfCFTA is expected to cover all 55 African countries, with a combined GDP of about US$2.2 trillion. This SDN takes stock of recent trade developments in Sub-Saharan Africa and assesses the potential benefits and costs of the AfCFTA, as well as challenges to its successful implementation. In addition to increased trade flows both in existing and new products, the AfCFTA has the potential to generate substantial economic benefits for African countries. These benefits include higher income arising from increased efficiency and productivity from improved resource allocation, higher cross-border investment flows, and technology transfers. Besides lowering import tariffs, to ensure these benefits, African countries will need reduce other trade barriers by making more efficient their customs procedures, reducing their wide infrastructure gaps, and improving their business climates. At the same time, policy measures should be taken to mitigate the differential impact of trade liberalization on certain groups as resources are reallocated in the economy and activities migrate to locations with comparatively lower costs.
    Keywords: General equilibrium models;Trade barriers;Structural adjustment;Welfare;Forecasting models;Trade negotiations;Economic integration;Open economies;International trade agreements;Trade finance;Trade models;AfCFTA,general equilibrium,inequality,structural reforms,SDN,welfare gain,intra-African,NTMs,NTB,African country
    Date: 2020–05–13
  3. By: Gustafsson, Robin; Aalto, Eero
    Abstract: Abstract We review the extant research on the government inward foreign direct investment (FDI) policy interventions, concentrating on investment promotion agencies (IPA). Based on the research literature, the review synthesizes inward FDI policy intervention rationales and economic justifications for the intervention, impact evaluations of inward FDI interventions, and current forms and mechanisms of inward FDI promotion. We identify three distinct market failures in attracting FDI justifying public intervention to support FDI: (1) transactional and structural imperfections in the host market to attract FDI of multinational enterprises (MNE); (2) failure to incentivize firms in the home market in attracting inward FDI; and (3) firm constraints in engaging with foreign MNEs. Furthermore, policy interventions are justified due to FDI generates positive spill-over effects to local firms and valuable firm, industry, region, and economy level additionalities from public interventions. Policy interventions facilitating FDIs amplifies spillover-effects on host market firms, especially through increased productivity. Digital infrastructure and platform economy conditions in sectors, reduce transactional and structural imperfections. These advancements also foster more rapid and wider spillover effects. However, they also impose new imperfections in markets with respect to FDI.
    Keywords: Foreign direct investment, Investment promotion agencies, Impact evaluation, Policy rationales
    JEL: D83 F21 F23 L15 N70
    Date: 2020–06–02
  4. By: Qizhong Yang (College of Economics, Aoyama Gakuin University); Tsunehiro Otsuki (Osaka School of International Public Policy, Osaka University)
    Abstract: This paper investigates the impact of non-tariff measure (NTM)’s stringency on Chinese firms’ positioning in the GVC, which is measured by two types of GVC positioning indices. We then estimate the impact of NTMs on various firm performance by paying special attention to how the impacts vary across firms with different positioning in the GVC. The results show that NTMs imposed against and imposed by China could significantly reduce firms’ linkages with foreign countries, thereby reducing the firms’ importance within the GVC. We also find that stricter NTMs could even hinder firms’ innovative activities and decrease exports and imports. Further analysis indicates that these negative impacts of NTMs on firms are heterogeneous across firms depending on their original position in the GVC.
    Keywords: Global value chain, Non-tariff measure
    JEL: F14 F23
    Date: 2020–05
  5. By: Chad P. Bown
    Abstract: While the public was transfixed by the Trump administration’s policies alleging that imports were a threat to America’s national security during 2017–20, there was a concomitant and more quiet US policy shift on the export side. Addressing the national security threat presented by exports posed different economic and institutional challenges from those associated with import policy, including the acknowledgment that export controls for legitimate national security reasons can be the first-best policy to confront the problem at its source. Yet, export controls could also be misused as a beggar-thy-neighbor policy to redistribute economic well-being across countries, even from one ally to another. This paper describes how US export control policy evolved over 2017–20, as well as the international institutions—first the Coordinating Committee for Multilateral Export Controls (COCOM), then the Wassenaar Arrangement—historically tasked with multilateralizing US export restrictions used to protect national security. With the potential for US export control policy to brush up more frequently against WTO rules designed to limit the use of export restrictions, the paper also highlights new challenges for the WTO’s system of resolving trade disputes. Overall, a US failure to strike the right balance for its export control policy would result in it being ineffective at addressing national security risks, costly for the economy, and problematic for trade and diplomatic relations.
    Keywords: national security, export controls, dual-use technologies, ECRA, Wassenaar Arrangement, uncertainty
    JEL: F13
    Date: 2020–05
  6. By: Esposito, Federico
    Abstract: This paper uses the Jeffersonian Embargo enacted in 1807 to estimate the welfare costs of autarky. I use an Armington trade model to compute the welfare losses using two sufficient statistics: the share of expenditures on domestic goods and the elasticity of substitution between domestic and imported goods. I use historical data from 1792 to 1807 to estimate the Armington elasticity, using import tariffs as instrument for relative prices. The empirical findings suggest welfare losses of 2.83-8.14% of real income.
    Keywords: Autarky; welfare gains from trade; Jeffersonian Embargo; Armington elasticity
    JEL: F00 N0 N00 N7 N71
    Date: 2020–03–01
  7. By: Nils D. Steiner (Johannes Gutenberg University); Philipp Harms (Johannes Gutenberg University)
    Abstract: Is opposition to globalization rooted in economic transformations caused by international trade? To contribute to the ongoing debate on this question, we propose a “nationalist backlash” thesis and test it with panel data on individual political attitudes. We argue that individuals living in regions suffering from stronger import competition develop more nationalist attitudes as part of a broad counter-reaction to globalization. Our analysis of data from the British Household Panel Study (BHPS) finds that respondents from regions exposed to higher imports from low-wage countries – in particular, China – turn more critical of EU membership and international cooperation. Moreover, on an affective level, their nationalist sentiments increase. In contrast, there is no evidence that regional trade shocks cause economic policy orientations to shift leftwards. We thus document a direct individual-level response to import shocks in the form of rising nationalist attitudes that helps to explain these shocks’ aggregate electoral consequences in terms of increased vote shares for the radical right.
    Keywords: China shock; globalization; import competition; international trade; nationalism; political attitudes; EU support; panel data.
    JEL: C90 D01 D90 D91
    Date: 2020–05–22
  8. By: Ali-Yrkkö, Jyrki; Kuusi, Tero; Pajarinen, Mika; Wang, Maria
    Abstract: Abstract In this paper, we study service exports by Finnish companies, with a special focus on their EU trade. We use a register-based dataset of all Finnish service export firms. We find that service export growth has been fast. In 2010–2017, Finland’s service export volume grew by more than 50%, which exceeded the corresponding growth in service exports in Sweden, Denmark and Germany. 53% of Finnish service exports were directed to the EU. According to the results, the number of Finnish companies that engage in service trade to the EU has increased by around 55% since 2010. The share of exports by service industries has also increased dramatically and reached 65% of the total service trade to EU in 2017. Manufacturing accounts for almost 29% and other industries, such as utilities and construction, 6% of the total service exports to the EU. The study also yielded preliminary results on the impact of Business Finland’s activities on service exports. In these analyses, it was found that there was a significant degree of uncertainty in the estimates, and no statistically significant impact on the growth of service exports was found.
    Keywords: Service, Service exports, Subsidy, Financing, Impact
    JEL: F14 F60 L8 O38
    Date: 2020–05–18
  9. By: Xi He; Dermot J. Hayes (Center for Agricultural and Rural Development (CARD)); Wendong Zhang (Center for Agricultural and Rural Development (CARD))
    Abstract: We examine China's committed agricultural purchases under the phase one trade deal and whether it can fulfill those commitments due to the COVID-19 pandemic. We review China's actual agricultural imports from the United States and other countries up to the first quarter of 2020 and analyze trade deal obligations China must still meet by the end of 2020. We use prior seasonal patterns and US-China price differentials to predict China's agricultural imports from the United States in 2020. We examine total agricultural and related products with special focus on corn, soybeans, cotton, sorghum, pork, and beef. The data show China currently has an enormous market demand for agricultural imports, and, to date, has imported large quantities of pork, cotton, sorghum, and soybeans from the United States. However, China imports an even greater amount of agricultural products from other countries, which, in part, reflects a continued diversification away from US agricultural imports before and during the trade war. We predict China will import $18.60 billion in agricultural products from the United States in 2020, far behind the phase one target of $36.5 billion. The first quarter of 2020 was a trying time for agricultural trade, especially for China, so there is still room for optimism, and we see several positive signs that China will accelerate its agricultural purchases. First, US-China price differentials of relevant commodities recently increased, providing a market signal for China to increase imports from the United States. Second, there are indications that, beginning in October, China plans to import large quantities of corn, as its domestic supply gap has widened. Third, China has announced its intention to purchase 20 million tons of corn, 10 million tons of soybeans, and one million tons of cotton for its national reserve. Fourth, China is short on animal protein due to the African Swine Fever outbreak, and thus is purchasing an increasing share from the United States. Fifth, China is making good progress meeting the regulatory and structural changes promised as part of the phase one deal, including updating lists of US facilities eligible to export distillers dried grains with solubles and beef and pork products lists. However, US-China trade prospects depend critically on COVID-19's impact on international logistics and China's political willingness to allow US imports to return to and exceed pre-trade-war levels. We provide a commodity specific estimate of what China will need to import from the US in the last three quarters if it is to meet the terms of the deal by the end of 2020.
    Date: 2020–05
  10. By: Grumiller, Jan; Raza, Werner G.; Grohs, Hannes
    Abstract: The promotion of sustainable value chains is on the rise in the EU, with important implications for textile and apparel (T&A) products. EU T&A supplier countries and firms will increasingly have to adapt to the new EU value chain and market dynamics. Based on a case study of the Egyptian T&A sector, this policy note argues that the required transformation of the industry will be highly demanding. EU development policy should increase support in order to promote sustainable value chains in the T&A sector in Egypt, but also in other MENA countries with export-oriented T&A sectors
    Date: 2020
  11. By: Wei Feng (School of Management and Economics, Southeast University, China); Yanrui Wu (Economics Discipline, Business School, University of Western Australia); Yue Fu (School of Management and Economics, Southeast University, China)
    Abstract: In this paper, we first propose a theoretical model and derive hypotheses about the relationship between cultural diversity and foreign direct investment (FDI). We then test these hypotheses through regression analysis of a dataset of 230 Chinese cities covering the period of 2000-2014. It is shown that cultural diversity and FDI absorption are negatively correlated. The main mechanism is that cultural diversity impedes human capital development and hence obstructs FDI absorption. However, this negative relationship disappears gradually over time. In addition, it is also shown that there are threshold and spatial spillover effects. This research not only enriches the theory of FDI location, but also has implications for FDI policy-making.
    Keywords: Cultural diversity, FDI absorption, Economic growth, China
    JEL: F21 F41 G18
    Date: 2020
  12. By: Mundaca, Gabriela; Strand, Jon
    Abstract: We study impacts of carbon pricing to international transport fuels on fuel consumption and carbon emissions, trade activity, focusing on sea freight which constitutes the most important international trade transport activity. We use the WITS global dataset for international trade for the years 2009-2017 to estimate the impacts of changes in the global average bunker fuel price on the weight times distance for goods transported and carbon emission from international shipping. We find quite strong but variable negative effects of fuel cost increases on weight times distance for traded goods, and on carbon emissions from sea freight, for the heaviest goods categories at the 6-digit HS levels of aggregation in global trade, with bunker-price elasticities ranging from -0.03 up to -0.52. Considering an increase in the bunker fuel price as a proxy for a fuel tax, our results then indicate substantial impacts of bunker fuel taxes on the volume of sea transport, on bunker fuel consumption, and on carbon emissions from the international shipping sector. Our results indicate that, for the current level of international trade, a global tax of $40 per ton CO2 tax will reduce carbon emissions from global shipping fleet by about 7% for the heaviest traded products; and by most so for goods with particularly high weight-to-value ratios such as fossil fuels and ores.
    Keywords: International Trade, shipping, carbon taxation, carbon emissions
    JEL: F1 F13 F18
    Date: 2020–03–19
  13. By: Riccardo Crescenzi; Arnaud Dyèvre; Frank Neffke
    Abstract: We study whether and when Research and Development (R&D) activities by foreign multinationals help in the formation and development of new innovation clusters. Combining information on nearly four decades worth of patents with socio-economic data for regions that cover virtually the entire globe, we use matched difference-in-differences estimation to show that R&D activities by foreign multinationals have a positive causal effect on local innovation rates. This effect is sizeable: foreign research activities help a region climb 14 percentiles in the global innovation ranks within five years. This effect materializes through a combination of knowledge spillovers to domestic firms and the attraction of new foreign firms to the region. However, not all multinationals generate equal benefits. In spite of their advanced technological capabilities, technology leaders generate fewer spillovers than technologically less advanced multinationals. A closer inspection reveals that technology leaders also engage in fewer technological alliances and exchange fewer workers in local labor markets abroad than less advanced firms. Moreover, technology leaders tend to set up their foreign R&D activities in regions with relatively low absorptive capacity. We attribute these differences to that fact that the trade-off between costs and benefits of local spillovers a multinational faces depends on the multinational’s technological sophistication. This illustrates the importance of understanding corporate strategy when analyzing innovation clusters.
    Keywords: innovation, regions, foreign direct investment, patenting, cluster emergence
    JEL: O32 O33 R11 R12
    Date: 2020–03
  14. By: Kornher, Lukas; von Braun, Joachim
    Abstract: Motivations and Aims of the Study This study is prompted by the pending further development of the Common Agricultural Policy (CAP) after 2020 and the consideration that, in the context of this potential change of EU agricultural policy, greater emphasis should be laid on African development, besides environmental, climate, health and distributional aspects. The aim of this study is to shed light on the impacts of European agricultural and trade policies on agricultural development in Africa, and the coherence of EU policies with development policy objectives. The consequences of Coronavirus controlling attempts that include border closures and market shut downs in both Europe and Africa have highlighted the key role of trade and market policies for development. The decision to establish the African Continental Free Trade Area (AfCFTA) provides another important reason to revisit EU – Africa trade policy relations in the important fields of food and agriculture. With a total volume of 400 billion euros for the 7-year budget period, which currently represents about 36% of the total budget (EU28), CAP spending is the largest expenditure item in the EU budget. Total EU development expenditures for Africa amount to about one-tenth of that, and the share for agricultural development and food security is only about 2% of the EU agricultural budget. In view of the goal to establish coherence between the agricultural and development policy of the EU, and in view of the high risks for food security in Africa due to the economic consequences of COVID-19, this budget imbalance must not be ignored. Moreover, Africa's opportunities and problems are becoming increasingly relevant for the EU, future EU policy should be examined whether they benefits Africa's agricultural development. This includes investment in sustainable agricultural productivity, infrastructure, and institutions that are conducive to trade. Common Agricultural Policy post-2020 On June 1, 2018, the European Commission presented the draft legislation on the future of the CAP for the period after 2020. It provides for a small reduction in the total volume of agricultural subsidies for its now 27 Member States. The proposal is based on higher ambitions with regard to environmental protection and climate change through mandatory ecological programs and an enhanced linkage of direct payments to the greening rules. A stronger environmental orientation is also considered very likely among the experts interviewed for this study. However, the draft also envisages changing the green architecture of the CAP and giving Member States greater freedom in achieving the targets set out in national strategic plans. This flexibility could lead to an increase in the use of coupled subsidies in some Member States, which in turn would increase export surpluses for some agricultural products. This could lead to renewed incoherence with agricultural development policy. Effects of European agricultural and trade policy in Africa Trade policy: In its present form, the CAP continues to promote food exports. In 2018, wheat (€3.3 billion), meat (€1 billion), dairy products (€1.7 billion) and processed food (€6 billion) were the main EU exports to Africa. Among these goods, the share of Africa’s imports from the EU ranges from 25% (meat) to 44% (dairy products). In the current debate on CAP adjustments, effects on developing countries have so far played a minor role, although the EU describes coherence with its development policy objectives as an important element of its policy. There is widespread agreement that, in the past, coupled subsidy payments, export refunds, and direct market interventions have made a major contribution to increasing agricultural production in the EU and have led to the EU’s increased export surplus. Low-priced food imports have weakened the agricultural sectors of African countries in the long-term and hindered the development of competitive agricultural production. These earlier effects cannot be corrected in the quickly because agricultural productivity depends on long standing favorable framework conditions and long-term investments in innovation. Regulatory framework: Although African raw agricultural material exports to the EU are largely free of duties under various agreements, processed products are only free of duties if it can be ruled out under the "country of origin" principle that components of the final good were imported from a third country. The proof of origin requires a list of the production stages and ingredients as well as their origin. This condition often makes it difficult for African exporters to export processed agricultural products to Europe, hindering the creation of regional value chains. De-bureaucratized regulations (supported by advice from development cooperation) should create flexibility if the majority of the ingredients originate from the partner country or the respective regional economic zone. Social and hygiene standards for goods imported into the EU are necessary but must be transparent. According to EU regulations, social standards must comply with the principles of the International Labour Organization (ILO). However, currently, these are not implemented consistently. It would be helpful if the EU provided more support to improve standards in Africa; otherwise, the export potential of African countries cannot be fully exploited. This should also include capacity strengthening in Africa to check the adherence to health standards of EU food products exported to Africa. Effects of direct payments: Direct payments to EU farmers continue to account for up to 50% of total farm income in the EU. As shown by the model simulations, a reduction in direct payments is not expected to have a significant impact on food production in Africa in the short-term because the decline in imports from the EU will largely be offset by imports from other world regions. In the long term, however, this could be different, as European agricultural enterprises may partly be kept in production locations by the direct payments where they would not be able to survive without these subsidies. Furthermore, the direct payments allow investment decisions that increase the productivity of variable production factors. The current EU agricultural subsidy policy hampers the development of African agriculture much less than it did before export subsidies and coupled subsidy payments were largely abolished. Meat case study: African countries on average import around 20% of meat products, a quarter of which come from the EU. Poultry accounts for the majority of African meat imports, with poultry parts accounting for three-quarters of African poultry imports from the EU. However, the European poultry sector benefits little from subsidy payments and European producer prices are relatively high in international comparison. The low export prices of poultry parts are a result of the low demand for these products in Europe and not a consequence of the CAP. This also means that a reduction of EU poultry exports through political measures (and the associated higher prices) would primarily burden consumers in Africa. Dairy products case study: Many countries in North and West Africa are heavily dependent on milk powder imports, some of which exceed domestic production multiple times. The CAP has far-reaching impact in the dairy market. Following the abolition of the milk quota, European milk production has continued to increase, although low European producer prices are supposed to reduce the incentive to do so. However, dairy farms in the EU still benefit from income support. Direct payments, as well as coupled subsidies (in some Member States), provide incentives for investing in productivity-enhancing technologies, and in this way positively affect milk production. In addition, the EU provides a safeguarding against price risks through support purchases of milk powder,1 which are re-supplied to the market below world market prices. On the other hand, in some African countries, the (proportional) production costs are lower than in European countries. At present, however, these African countries are not able to meet the rapidly growing demand for milk products on the continent. Investments in local value chains and improved infrastructure would increase African productivity and intra-African trade could gain in importance. Effects of CAP environmental orientation: According to the expert consultation carried out for this study, a stronger environmental and climate orientation of the CAP, which takes into account the indirect effects of intensive agriculture on the environment and climate, would have a dampening effect on European agricultural exports to Africa. In the model simulation, the implementation of the European Nitrate Regulation leads to a reduction in livestock farming and alters European meat production. As a result, European exports (especially of pork) to Africa would decrease by 33-52%, and European exports of dairy products by about 5-7%. However, this reduction in European exports would probably be mainly absorbed by other exporters, resulting in largely unchanged African meat consumption. Preliminary conclusions on CAP reform and trade policy with Africa i) The increased return to coupled subsidy payments and support prices now being considered in some EU countries, as already begun in 2013, is inconsistent with the objectives of the EU’s 1 Between January 2018 and June 2019, 380,000 tonnes of milk powder were sold from the intervention stock, which is about 50% of the 2018 export volume to Africa. development policy and should, therefore, be limited. Otherwise, there is a risk of increased unfair competition with Africa. ii) The more targeted linking of agricultural subsidies to environmental and climate regulations increases the costs of agricultural production in the EU, especially in livestock farming, and could be expected to reduce the EU's production and export surpluses. This would create local incentives in Africa to invest in domestic agriculture. iii) Extensive open market access to the EU for African agricultural products, in particular also processed food, without tariff escalation, shall be facilitated. Concession of result-oriented, long transition periods, and trade policies allowing for the protection of African agriculture (i.e. granting further scope to protect key agricultural industries beyond 2035) before African markets are fully opened shall be considered. iv) In a future strategic EU – Africa trade agreement adapted to AfCFTA, trade preferences should be transferred to such an agreement. In addition, "Aid for Trade" programs should be maintained regardless of the FTAs. v) New opportunities for direct digital trade in agricultural and food products from Africa should be facilitated, promoted and increased to create value addition in processed products (cocoa, tea, coffee) in decentralized rural areas. vi) Appropriate quality, health, environmental and social standards of agricultural and food products traded in and with Africa should be developed further together with African partners. Employment effects should be taken into account. The EU should provide support on improving these standards in Africa, e.g. through "Aid for Trade" programs, as African export potential would otherwise not be fully exploited. vii) Simplification of origin rules (supported through consultation with trading partners) should provide scope for flexibility, provided the majority of the ingredients originate in the partner country or regional economic area.
    Keywords: Agricultural and Food Policy, International Development, International Relations/Trade
    Date: 2020–05–27
  15. By: Rimmer, Matthew (Queensland University of Technology)
    Abstract: This paper considers the relationship between intellectual property and trade in the context of 3D printing. Modern 3D printing has not only disrupted the discipline of intellectual property, but it has also provided profound challenges for the regulation of trade and globalization. Part II provides a case study of the patent dispute between ClearCorrect and Align Technology. The ruling of the Court of Appeals for the Federal Circuit will have larger ramifications regarding the jurisdiction of the International Trade Commission in respect of the digital economy. Part II further considers subsequent patent disputes between the parties before the United States Patent and Trademark Office. Part III considers how the trade dispute between the United States and China will affect 3D printing and examines whether 3D printing will reverse the United States’ pattern of manufacturing offshore. Part III further notes the collateral impact of tariffs upon 3D printing and considers the adoption of 3D printing in China and the issues that may arise in terms of intellectual property ownership, intellectual property infringement, and intellectual property licensing. Part IV considers larger contextual issues raised by international organizations with respect to intellectual property, trade, and 3D printing.
    Date: 2018–12–31
  16. By: Haitao Cheng (Graduate School of Economics, Hitotsubashi University,); Hayato Kato (Graduate School of Economics, Osaka University); Ayako Obashi (School of International Politics, Economics and Communication, Aoyama Gakuin University)
    Abstract: The spatialunbundlingofpartsproductionandassemblycurrentlycharacterizes globalization, leadingtotheworldwidedispersionofpollution.Weconsidersociallyop- timal (cooperative)environmentaltaxesinatwo-countrymodelofglobalvaluechains in whichthelocationofbothpartsandassemblycandi er.Whenunbundlingcosts are sohighthatpartsandassemblymustcolocateinthepre-globalizedworld,pollu- tion isspatiallyconcentrated,andharmonizingenvironmentaltaxesmaximizesglobal welfare.Incontrast,withlowunbundlingcoststriggeringthedispersionofpartsand thuspollutionthroughouttheworldastoday,harmonizationfailstomaximizeglobal welfare.Similarresultsholdwhenthetwocountriesnon-cooperativelychoosetheir environmentaltaxes.
    Keywords: Environmentalpolicy;Fragmentation;Emissiontaxcompetition;International coordination;Tradeinpartsandcomponents
    JEL: F18 F23 Q56 Q58
    Date: 2020–05
  17. By: Diego A. Cerdeiro; Andras Komaromi; Yang Liu; Mamoon Saeed
    Abstract: Maritime data from the Automatic Identification System (AIS) have emerged as a potential source for real time information on trade activity. However, no globally applicable end-to-end solution has been published to transform raw AIS messages into economically meaningful, policy-relevant indicators of international trade. Our paper proposes and tests a set of algorithms to fill this gap. We build indicators of world seaborne trade using raw data from the radio signals that the global vessel fleet emits for navigational safety purposes. We leverage different machine-learning techniques to identify port boundaries, construct port-to-port voyages, and estimate trade volumes at the world, bilateral and within-country levels. Our methodology achieves a good fit with official trade statistics for many countries and for the world in aggregate. We also show the usefulness of our approach for sectoral analyses of crude oil trade, and for event studies such as Hurricane Maria and the effect of measures taken to contain the spread of the novel coronavirus. Going forward, ongoing refinements of our algorithms, additional data on vessel characteristics, and country-specific knowledge should help improve the performance of our general approach for several country cases.
    Date: 2020–05–14
  18. By: Mutsvara, Shepherd; Kugonza, Gorret
    Abstract: This paper evaluates the collective failure of the Association of Southeast Asian Nations’ (ASEAN) in protecting the victims of the Andaman Sea crisis in May 2015. It draws parallels between the ASEAN region’s efforts to contain mixed migrant flows and that of the African Union in Libya and Eritrea. Little attention has been given to the policy implications for the African Union (AU) after the aftermath of the Andaman Sea crisis in 2015. As a result, the key question for determination in this paper is two-fold. Firstly, it needs to be determined, through literature review, if Malaysia’s policy of border securitization dithered with the principle of non-refoulment by making the Andaman Sea victims pawns at the hands of smugglers and traffickers. The second line of inquiry draws policy prescriptions for the African Union by evaluating how the European Union has implemented border management projects in an effort to contain migrants transiting to Europe through Libya
    Date: 2020–04–30
  19. By: Alexey Kalinin (Academic Director; The SKOLKOVO Institute for Emerging Market Studies); Albert Park (Director, HKUST Institute for Emerging Market Studies, Chair Professor, Department of Economics, Division of Social Science and Division of Public Policy; The Hong Kong University of Science and Technology)
    Abstract: Belt and Road projects in the Eurasian Heartland (Central Asia and the Caucasus, Russia, and Belarus) have predominately focused on the exploitation of the region’s natural resources rather than on developing infrastructure, building industrial facilities, or partnering in innovations. However, there is a visible positive impact of the BRI on host countries in the Eurasian Heartland, as evidenced by rising investment, increasing trade, institutional improvements, and growing humanitarian connections and awareness. At the same time, there are also unintended consequences of Chinese BRI activity, including negative social, environmental, and economic impacts that could undermine the future development of the Initiative due to public opposition and politicization.
    Keywords: Belt and Road, China, Financial Development, Firms, Jobs
    Date: 2020–04
  20. By: Backhaus, Andreas
    Abstract: This paper assesses the potential for skilled labor migration from sub-Saharan Africa to Europe. It utilizes representative surveys from Ghana and Kenya to shed light on the quality and distribution of skills in the labor markets of these countries. Skills in both countries are found to be unevenly distributed, with significant parts of the labor force being essentially unskilled. Similarly designed surveys from France, Germany, and the UK further allow comparing skills and formal education between the African and the European countries. On average, the labor force in the subSaharan African countries is less skilled and less educated than the European labor force. Importantly, even at the same levels of formal education, workers in Ghana and Kenya are substantially less skilled than workers in Europe. The paper further considers a number of hypothetical scenarios for skilled labor migration from the African to the European countries. It is demonstrated that the European countries would have to recruit workers from the very top end of the African skill distribution to match European demands for skills. In turn, the average worker from the African labor markets would fit only into the low end of the European skill distribution where employment rates are low. Hence, more regular and skilled labor migration from African countries will unlikely be a remedy for skill shortages in Europe unless migrants are positively selected on their skills. In that case, however, additional opportunities for skilled labor migration would risk a brain drain from African countries that could harm economic development there. Improving the quality of education in sub-Saharan Africa on a broad scale remains indispensable for mutually beneficial migration between Africa and Europe.
    Keywords: migration,skills,human capital,brain drain,sub-Saharan Africa,Europe
    JEL: I25 J61 O15
    Date: 2020
  21. By: Stéphane Mbiankeu Nguea (Faculty of Economics and Management, University of Dschang); Issidor Noumba (Faculty of Economics and Management, University of Yaoundé II - Soa); Armand Gilbert Noula (Faculty of Economics and Management, University of Dschang)
    Abstract: This paper investigates the impact of Foreign Direct Investment (FDI) on poverty reduction in Cameroon from on the period 1984-2014. Auto Regressive Distributed Lags (ARDL) bounds test approach to co-integration has been applied to analyze the data coming from freedom house and World Development Indicators (WDI). Three poverty reduction proxies namely life expectancy, per capita household consumption expenditure and infant mortality rate are used to capture multidimensional feature of poverty and to increase the robustness of the results. The findings revealed that the impact of FDI to alleviate poverty is less significant in Cameroon as evidenced by one out of three (infant mortality) poverty reduction proxies where a short-run positive impact of FDI on poverty reduction is confirmed. These findings suggest that Cameroon may use FDI as a short-term poverty reduction instrument. JEL Classifications: F21, I30
    Keywords: Foreign direct investment,poverty reduction,co-integration,autoregressive distributed lag,Cameroon
    Date: 2020–05–11
  22. By: Bond, Timothy N. (Purdue University); Giuntella, Osea (University of Pittsburgh); Lonsky, Jakub (University of Oxford)
    Abstract: We develop a theoretical framework to analyze the effects of immigration on native job amenities, focusing on work schedules. Immigrants have a comparative advantage in production at, and lower disamenity cost for nighttime work, which leads them to disproportionately choose nighttime employment. Because day and night tasks are imperfect substitutes, the relative price of day tasks increases as their supply becomes relatively more scarce. We provide empirical support for our theory. Native workers in local labor markets that experienced higher rates of immigration are more likely to work day shifts and receive a lower compensating differential for nighttime work.
    Keywords: night shifts, working conditions, immigration
    JEL: F22 J61 J31 R13
    Date: 2020–05
  23. By: Matej Bajgar (OECD); Giuseppe Berlingieri (OECD); Sara Calligaris (OECD); Chiara Criscuolo (OECD); Jonathan Timmis (OECD)
    Abstract: This paper describes the coverage and representativeness of Orbis, a commercial database of firm-level records across many countries. Such databases can provide key insights into global economic trends and shed light on how policies affect firms within and across countries. As a benchmark, the paper uses industry-level data from the OECD STAN dataset as well as micro-aggregated data from the OECD MultiProd and DynEmp projects, which draw on official microdata representative of the entire firm population. Results indicate that Orbis is more suitable for studies that: i) take a global perspective rather than make comparisons across countries; ii) analyse top performers and multinationals rather than underperforming firms; and iii) focus on mean performance or changes within firms rather than the entire firm distribution or entry and exit.
    Keywords: cross-country analysis, distributed microdata analysis, firm-level data
    JEL: D22 O47 Y1
    Date: 2020–05–28
  24. By: Latka, Catharina; Heckelei, Thomas; Kuhn, Arnim; Witzke, Heinz-Peter; Kornher, Lukas
    Abstract: The future EU Common Agricultural Policy (CAP) requires coherence with the Sustainable Development Goals (SDGs) and the international commitments in the fight against climate change. Next to ensuring stable food supply by supporting farmers and enhancing agricultural productivity, environmental sustainability is a core aspect of the proposed future CAP. At the same time, new policies must not compromise socio-economic development in low-income countries, especially in Africa, as stated in the European consensus on development. On the contrary, the extensification of agriculture in the EU may create trade opportunities for African countries. We apply a global agri-economic model to assess trade-related impacts of potential, environmentally motivated changes of CAP policies in the EU and Africa. Our findings suggest that EU production levels of meat would change with a stronger environmental focus of the CAP. These changes reduce the EU’s share in agri-trade flows to Africa. However, food supply in Africa is not projected to deteriorate, as imports from other world regions and, to a limited extent, increasing domestic production can fill the gap. In how far potentials for domestic production growth can be used in African regions depends at least partly on their competitiveness vis-á-vis substituting importers. A sensitivity analysis on reduced transport costs shows that infrastructure investments could contribute to a stronger integration of Africa in international markets. On a global level, our analysis reveals the need to balance sustainability trade-offs in terms of avoiding leakage effects from EU agricultural production changes versus facilitating economic growth potentials in low- and middle-income countries.
    Keywords: Agricultural and Food Policy, Environmental Economics and Policy, International Relations/Trade
    Date: 2020–05–27
  25. By: Jerzy Pieńkowski
    Abstract: This paper reviews evidence on the main economic impacts of the post-2014 wave of labour emigration on the economy of Ukraine, based on an overview of international and Ukrainian studies and surveys. Emigration reduces labour supply and pushes up wage growth for workers who stay in the country; one of the issues of concern is a skills waste – most of Ukrainians abroad work outside their qualifications or in very simple jobs. The main benefit for the Ukrainian economy is linked to an inflow of remittances equivalent to 8% of GDP. Remittances significantly improve the welfare of migrants’ families and stimulate domestic demand, pushing up the GDP in the country and playing a counter-cyclical role. A stable and substantial inflow of remittances contributes to a more sustainable balance of payments, counterbalancing permanent trade and investment income deficits. The impact of emigration and remittances on Ukraine’s public finance is mixed: remittance inflows lead to increased VAT, excise and customs revenues, while reduced labour supply diminishes revenues from labour taxes and social security contributions in Ukraine. The policy recommendations for the Ukrainian authorities include encouraging migrants, especially the skilled ones, to invest in, and return to, their home country; creating a more attractive business environment for this purpose (and beyond); a better use of the workforce remaining in the country through stimulating employability; improving social aspects of the Ukrainian migration, especially encouraging higher social security coverage of migrants.
    JEL: F22 F24 J61
    Date: 2020–04
  26. By: Luisito Bertinelli (CREA, Université du Luxembourg); Olivier Cardi (Lancaster University Management School, UK); Romain Restout (Université de Lorraine (CNRS UMR 7522), Nancy, F)
    Abstract: Motivated by recent evidence pointing at an increasing contribution of asymmetric shocks across sectors to economic fluctuations, we explore the sectoral composition ef- fects of technology shocks biased toward the traded sector. Using a panel of seventeen OECD countries over the period 1970-2013, our VAR evidence reveals that a perma- nent increase in traded relative to non-traded TFP lowers the traded hours worked share by shifting labor toward the non-traded sector, and has an expansionary effect on the labor income share in both sectors. Our quantitative analysis shows that the open economy version of the neoclassical model can reproduce the reallocation and redistributive effects we document empirically once we allow for technological change biased toward labor together with additional specific elements. Calibrating the model to country-specific data, the model can account for the cross-country dispersion in the reallocation and redistributive effects we document empirically once we let factor-biased technological change vary across sectors and between countries. Finally, we document evidence which supports our hypothesis of factor-biased technological change as we find empirically that countries where capital-intensive industries contribute more to the in- crease in traded TFP are those where capital relative to labor efficiency increases. Keywords: Sectoral technology shocks; factor-augmenting efficiency; Open economy; Labor reallocation across sectors; CES production function; Labor income share.
    Keywords: Sectoral technology shocks; factor-augmenting efficiency; Open economy;Labor reallocation across sectors; CES production function; Labor income share.
    JEL: E22 F11 F41 F43
    Date: 2019
  27. By: Christopher CRAMER
    Abstract: We examine how investment in high-value agriculture can help to address the balance of payments constraint on growth and the wage employment challenge in Ethiopia while accelerating structural change. The industrialization of freshness has significant implications for policy priorities.Development cannot be sustainable without structural change, in Arthur Lewis’s sense of a shift of people out of low and into progressively higher productivity economic activities. This process has often been (mis)understood as a rural to urban shift, or as only a departure from agriculture and into those sectors classified as manufacturing or industrial. However, our research, which draws on fieldwork in Ethiopia, shows that simple sectoral classifications have become increasingly unfit for purpose. Besides the process of ‘servicification’, i.e. the greater share of final value of manufactured goods derived from service activities like logistics, marketing and branding, we argue that there is a parallel process of the ‘industrialization of freshness’. Structural change is taking place within agriculture and rural areas rather than away from them, but the implications for ‘industrial’ strategies are rarely discussed. Among the influences accelerating an industrialization of freshness are a globalized unbundling of production, technical change, and the increasing significance of phyto-sanitary, quality, and ‘ethical’ standards.Our interviews with farm managers and owners, as well as airline managers and government officials, show that several agricultural enterprises are increasingly knowledge-intense, organizationally and technically sophisticated and by a reasonable definition ‘industrial’. Moreover, we find that horticulture exports embody another dimension of complex, cross-sectoral economic activity through their reliance on extremely sophisticated logistics and transport. The horticulture export sector has created far greater demands and pressures for the development of up-to-date transport and logistics in Ethiopia than, for example, the textile and leather sectors.We then identify, within the context of the Upper Awash Valley in Ethiopia, some of the apparently technical but, above all, socio- political constraints limiting the potential for high value agriculture to contribute to growth and structural change.Our method and findings are very different from the literature on ‘complexity’ and ‘product space’ and they query pessimistic conclusions about ‘premature deindustrialization’. And our findings suggest the need to rethink how industrial strategies can promote structural change: much more support should be directed to high value agricultural production and less focus on assembling garments or trainers in subsidized industrial parks.
    Keywords: Éthiopie
    JEL: Q
    Date: 2018–08–17
  28. By: Giovanni Dosi (Institute of Economics and EMbeDS, Scuola Superiore Sant’Anna, Pisa (Italy)); Andrea Roventini (OFCE Sciences Po, Sophia-Antipolis (France), Institute of Economics and EMbeDS, Scuola Superiore Sant’Anna, Pisa (Italy)); Emanuele Russo (Institute of Economics and EMbeDS, Scuola Superiore Sant’Anna, Pisa (Italy))
    Abstract: In this paper, we study the effects of industrial policies on international convergence using a multi-country agent-based model which builds upon Dosi et al. (2019b). The model features a group of microfounded economies, with evolving industries, populated by heterogeneous firms that compete in international markets. In each country, technological change is driven by firms’ activities of search and innovation, while aggregate demand formation and distribution follows Keynesian dynamics. Interactions among countries take place via trade flows and international technological imitation. We employ the model to assess the different strategies that laggard countries can adopt to catch up with leaders: market-friendly policies; industrial policies targeting the development of firms’ capabilities and R&D investments, as well as trade restrictions for infant industry protection; protectionist policies focusing on tariffs only. We find that markets cannot do the magic: in absence of government interventions, laggards will continue to fall behind. On the contrary, industrial policies can successfully drive international convergence among leaders and laggards, while protectionism alone is not necessary to support catching up and countries get stuck in a sort of middle-income trap. Finally, in a global trade war, where developed economies impose retaliatory tariffs, both laggards and leaders are worse off and world productivity growth slows down.
    Keywords: Endogenous growth, catching up, technology-gaps, industrial policies, agent-based models.
    JEL: F41 F43 O4 O3
    Date: 2020–06
  29. By: Anna Lipinska; Musa Orak
    Abstract: In the historic Brexit referendum on June 23, 2016, U.K. citizens voted in favor of leaving the European Union (EU), a result that created substantial uncertainty regarding the future economic relationship between the United Kingdom and the EU. As can be seen in Figure 1, uncertainty, measured by the Economic and Policy Uncertainty (EPU) index of Baker et al. (2016), spiked around the Brexit referendum date and has remained elevated relative to its pre-referendum levels since then.
    Date: 2020–05–11
  30. By: Janusz Lewandowski
    Abstract: "I believe that Europe, in its own style, will draw pragmatic conclusions from the crisis, not revolutionary ones; conclusions that will allow us to continue enjoying a Europe without borders. (...) The conclusion from the crisis will be a strengthening of all the preventive mechanisms that allow us to recognize threats and react in time of need. Research programs will be more strongly directed toward diagnosing and treating infectious diseases. Europe will gain greater self-sufficiency in the area of medical equipment and drugs, and the EU – greater competencies in the area of the health service, thus far entrusted to the member states. The 2021-27 budget must be reconstructed, to supplement the priority of the Green Deal with economic stimulus programs. In this way structural funds, which have the greatest multiplier effect for investment and the labor market, may return to favor. So once again: an addition, as a conclusion from the crisis, and not a reinvention of the EU," writes Dr. Janusz Lewandowski the author of the 162nd mBank-CASE seminar Proceeding.
    Keywords: European Union, Poland, reform, European Neighbourhood Policy, rule of law, COVID-19
    JEL: N44
    Date: 2020–05–15

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