nep-int New Economics Papers
on International Trade
Issue of 2022‒06‒27
57 papers chosen by
Luca Salvatici
Università degli studi Roma Tre

  1. Import liberalization as export destruction? Evidence from the United States By Holger Breinlich; Elsa Leromain; Dennis Novy; Thomas Sampson
  2. Proposed alcohol tax reform in the UK: Implications for wine-exporting countries By Kym Anderson; Glyn Wittwer
  3. Firm export responses to tariff hikes By Facundo Albornoz; Irene Brambilla; Emanuel Ornelas
  4. How do environmental policies affect green innovation and trade? Evidence from the WTO Environmental Database (EDB) By Bellelli, Francesco S.; Xu, Ankai
  5. The Empirics of the China Trade Shock: A Summary of Estimation Methods and A Literature Review By Akira Sasahara
  6. Machine learning in international trade research - evaluating the impact of trade agreements By Holger Breinlich; Valentina Corradi; Nadia Rocha; Michele Ruta; J.M.C. Santos Silva; Tom Zylkin
  7. Preference utilization in the global economy: An empirical analysis By Cariola, Gianmarco; Lanz, Rainer
  8. Expecting Brexit By Swati Dhingra; Thomas Sampson
  9. Intra-bloc tariffs and preferential margins in trade agreements By Emanuel Ornelas; Patricia Tovar
  10. Trade Volatility in the Association of Southeast Asian Nations Plus Three: Impacts and Determinants By Thi Nguyet Anh Nguyen; Thi Hong Hanh Pham; Thomas Vallée
  11. New trade agreement in Asia: Liberalisation in times of geopolitical rivalry By Hilpert, Hanns Günther
  12. Does International Tourism Spur International Trade in SSA Countries? A Dynamic Panel Data Analysis By Nicholas M. Odhiambo; Talknice Saungweme
  13. Explaining Bilateral Patterns of Global Wine Trade, 1962-2019 By German Puga; Alfinura Sharafeyeva; Kym Anderson
  14. Voting on a Trade Agreement: Firm Networks and Attitudes Toward Openness By Diana Van Patten; Esteban Méndez
  15. The practicality of regional import substitution as a strategy for sustainable development in the Caribbean By Alleyne, Antonio; Lorde, Troy; Moore, Winston
  16. Examining the determinants of import demand in Tanzania: An ARDL approach By Vacu, Nomfundo P; Odhiambo, Nicholas M
  17. Understanding of Trade By Stefanie Stantcheva
  18. Trade and innovation By Marc J. Melitz; Stephen J. Redding
  19. United States–Vietnam trade relations By Mai, Nhat Chi
  20. International Trade and Gender Gaps in College Enrollment By Sarah Conlisk; Gaston Navarro; Maddie Penn; Ricardo M. Reyes-Heroles
  21. The Impact of Foreign Capital Inflows on Poverty in Vietnam: An Empirical Investigation By Mercy T. Musakwa; Nicholas M. Odhiambo
  22. Diaspora Economics By Fang, Tony; Wells, Alex
  23. Policy brief: Switzerland-based private sustainability standards and WTO law By Espa, Ilaria; Imeli, Brigitta
  24. Opposing firm-level responses to the China shock: horizontal competition versus vertical relationships By Philippe Aghion; Antonin Bergeaud; Matthieu Lequien; Marc J. Melitz; Thomas Zuber
  25. German arms exports and the militarisation of Arab States' foreign policies By Hüllinghorst, Yannik; Roll, Stephan
  26. Stranded Assets in the Coal Export Industry? The Case of the Australian Galilee Basin By Christian Hauenstein; Franziska Holz; Lennart Rathje; Thomas Mitterecker
  27. Two Approaches of Measuring Intra-industry Trade By Dutta, Sourish
  28. A new hydrogen world: Geotechnological, economic, and political implications for Europe By Grinschgl, Julian; Pepe, Jacopo Maria; Westphal, Kirsten
  29. The Long-Run Effects of Immigration: Evidence Across a Barrier to Refugee Settlement By Antonio Ciccone; Jan Nimczik
  30. Multinationals and Varieties of Capitalism: When U.S. Giants Stepped into the Swiss Coordinated Labor Market in the 1950s By Sabine Pitteloud
  31. Canal Istanbul: Turkey's controversial megaproject. Its likely impacts on the Montreux Convention and regional stability By Eldem, Tuba
  32. Dynamic spatial general equilibrium By Benny Kleinman; Ernest Liu; Stephen J. Redding
  33. Information Frictions and News Media in Global Value Chains By Ha Bui; Zhen Huo; Andrei A. Levchenko; Nitya Pandalai-Nayar
  34. Technology, trade, work councils and income distribution- new insights from MICROPROD By Zsolt Darvas
  35. Monthly Report No. 11/2021 - FDI in Central, East and Southeast Europe By Gabor Hunya; Branimir Jovanović
  36. Advancing European internal and external digital sovereignty: The Brussels effect and the EU-US Trade and Technology Council By Bendiek, Annegret; Stürzer, Isabella
  37. The bilateralisation of British foreign policy: Status and consequences for Germany and the EU after one year of Brexit By Mintel, Julina; von Ondarza, Nicolai
  38. Regulation on Market Distortion Caused by Government Data-sharing Policies: Applicability of WTO Agreement on Subsidies and Countervailing Measures (Japanese) By WATANABE Shota
  39. The political economy of moving up in global value chains: how Malaysia added value to its natural resources through industrial policy By Lebdioui, Amir
  40. Germany, the EU and Global Britain: So near, yet so far. How to link "Global Britain" to European foreign and security policy By Major, Claudia; von Ondarza, Nicolai
  41. Supply chain instability threatens security of supplies: Options for industry and policymakers By Maihold, Günther; Mühlhöfer, Fabian
  42. Back to the future? International climate policy in 2021. New constellations for the EU's climate diplomacy By Dröge, Susanne; Schrader, Tessa-Sophie
  43. Optimal cooperative taxation in the global economy By Pedro Teles; V. V. Chari; Juan Pablo Nicolini
  44. A shared responsibility for Northern Ireland: Why the EU and the UK should work together to find flexible solutions after Brexit By von Ondarza, Nicolai
  45. Hedging bets; British business lobbying in the European Union post-Brexit By Coen, David; Katsaitis, Alexander
  46. Turkey-UAE relations: Economic cooperation against the backdrop of geopolitical incompatibility By Dalay, Galip
  47. Making EU-Turkey cooperation on migration sustainable: A greater focus on the Turkish host society is required By Adar, Sinem; Püttmann, Friedrich
  48. India as an ambivalent partner in global digital policy: Potenial and limits of cooperation in the digital economy and internet governance By Voelsen, Daniel; Wagner, Christian
  49. Agricultural Crises and Government Responses Between the World Wars in the Atlantic Trading Network By Price V. Fishback
  50. Expanding Germany's relations with India: Triangular cooperation as the next step in the strategic partnership By Wagner, Christian; Lemke, Jana; Scholz, Tobias
  51. Ukraine's membership bid puts pressure on the European Union: A security policy flanking, not a revision of EU enlargement policy, is advisable By Lippert, Barbara
  52. The Compliance Dilemma of the Global Minimum Tax By Hindriks, Jean; Nishimura, Yukihiro
  53. Bargaining and International Reference Pricing in the Pharmaceutical Industry By Pierre Dubois; Ashvin Gandhi; Shoshana Vasserman
  54. Russia in the global hydrogen race: Advancing German-Russian hydrogen cooperation in a strained political climate By Zabanova, Yana; Westphal, Kirsten
  55. China's health diplomacy during Covid-19: The Belt and Road Initiative (BRI) in action By Rudolf, Moritz
  56. The future of gobal mobility: Why we need a debate about multilateral and digital solutions to prevent the Global South from being excluded from international travel By Angenendt, Steffen; Steinacker, Karl
  57. Commercial performance of the integration of standards in olive oil and agri-food marketing By Rocio Carrillo Labella; Fatiha Fort; Manuel Parras Rosa

  1. By: Holger Breinlich; Elsa Leromain; Dennis Novy; Thomas Sampson
    Abstract: How does import protection affect export performance? In trade models with scale economies, import liberalization can reduce an industry's exports by cutting domestic production. We find this export destruction mechanism reduced US export growth following the normalization of trade relations with China (PNTR). But there was also an offsetting boost to exports from lower input costs. We use our empirical results to calibrate the strength of scale economies in a quantitative trade model. Counterfactual analysis implies that while PNTR increased aggregate US exports relative to GDP, exports declined in the most exposed industries because of the export destruction effect. On aggregate, the US and China both gain from PNTR, but the gains are larger for China.
    Keywords: trade policy, import liberalization, comparative advantage, scale economies, China shock
    Date: 2021–06–30
  2. By: Kym Anderson (Wine Economics Research Centre, School of Economics and Public Policy, University of Adelaide, Australia, and Arndt-Corden Dept of Economics, Australian National University, Canberra ACT 2601, Australia); Glyn Wittwer (Centre of Policy Studies, Victoria University, Australia)
    Abstract: A proposal to reform the United Kingdom’s excise duty on alcohol is under consideration during 2022. The proposal would change the tax base from volume of product to volume of alcohol, which would see a fall in the tax on sparkling wine (by about one-fifth), a rise in the tax on fortified wines of 18% ABV (by about one-sixth), and table wines with more (less) than 11.5% ABV would become dearer (cheaper). With taxes on most beers to be unchanged and taxes on spirits to be lowered slightly, the pattern of UK wine consumption and imports would alter considerably. This article draws on a global model of national alcoholic beverage markets to estimate the likely bilateral trade effects of this proposed reform to UK excise duties. It compares them with the trade effects of the UK’s first two bilateral free trade agreements (FTAs), following the post-Brexit EU–UK Trade and Cooperation Agreement, which allow Australian and New Zealand vignerons tariff-free access to the UK wine market. Those two FTAs are estimated to cause the UK to import far more wine than is lost by the proposed changes in UK excise duties.
    Keywords: Alcohol excise duty, global beverage market modelling, wine alcohol levels, wine export competition
    JEL: F14 F17 H21 Q18
    Date: 2022–05
  3. By: Facundo Albornoz; Irene Brambilla; Emanuel Ornelas
    Abstract: We study how firms react to unexpected increases in import tariffs. We identify our results from a sudden removal of American preferential tariffs applied on Argentine imports under the Generalized System of Preferences, which reflected American retaliation to a dispute over intellectual property between the two countries. Critical for identification, the tariff hike affected a third of Argentine exports enjoying preferential access in the American market, but did nothing to the other two thirds. We find that the higher tariffs reduced export participation of affected Argentine firms in the U.S. market, whereas resilient exporters dealt with the cost increase by reshuffling their export baskets away from the products whose tariffs increased. In fact, affected firms were more likely both to drop suspended products from their export basket and to start exporting new (non-suspended) products to the U.S. Interestingly, the extensive margin effects carry over to third markets, where policy did not change: after the policy shock, affected firms selling to the U.S. were less likely to export to other markets. This happened, however, only for firms that also exited the American market. We develop a framework that rationalizes the observed export interdependencies: while the extensive margin and third-country effects require country and product specific fixed costs, the effect on the sub-extensive and sub-intensive margins require diseconomies of scope, where exporting a product increases the marginal cost of exporting the rest of products in the export mix.
    Keywords: tariffs, export interdependence, GSP, exporting firms, multi-product firms, third-market effects
    Date: 2021–07–28
  4. By: Bellelli, Francesco S.; Xu, Ankai
    Abstract: This study investigates how environmental policies impact trade and innovation in environmental goods. We make two major contributions to the economic debate. First, we extract a set of information from the WTO Environmental Database (EDB) through natural language processing techniques that could be useful for future research and policy analysis. Second, we use this data to test a set of economic hypotheses on how environmental measures impact environmental innovation and trade. Our findings show that environmental measures can be an effective tool for stimulating green innovation and trade in green goods. However, policy design matters. Green innovation is most sensitive to R&D expenditure and measures on intellectual property protection and enforcement, whereas trade in green goods increases with environmental subsidies and support measures. Conversely, we find that non-tariff barriers - such as quarantine requirements, import quotas, regulation affecting movement or transit - reduce both imports and exports of environmental goods. Our findings also highlight strong path dependency in innovation. Hence, the earlier the intervention, the greater the accumulated benefits from green innovation. Conversely, delays in intervention increase the cost of transition by further "locking-in" the economy on dirtier exports and technologies. Finally, our result highlight that there is a clear linkage between innovation and trade. Past patents are a strong predictor of future exports, and nations tend to innovate more in technologies related to their exports. We also find evidence of strong technological spillovers across countries and sectors integrated in Global Value Chains (GVC). Hence, integration in environmental goods' GVCs could provide further channels of green technology diffusion and development.
    Keywords: trade and environment,environmental policies,innovation
    JEL: F14 F18 O38 Q55 Q58
    Date: 2022
  5. By: Akira Sasahara (Faculty of Economics, Keio University)
    Abstract: Given a number of trade liberalization episodes and the advent of newer empirical methods, there has been a growth in the number of empirical studies on trade. This paper surveys existing studies focused on the impact of import competition, especially from China, on various aspects of the economy. First, it summarizes estimation methods commonly employed to investigate the effect of import competition and clarifies the methodological development. Second, it discusses existing studies on import competition by country and topic. Lastly, it outlines future research directions.
    Keywords: China trade shock;Import competition;Local labor markets;Shift-share instruments
    JEL: F14 F16 F66
    Date: 2022–05–25
  6. By: Holger Breinlich; Valentina Corradi; Nadia Rocha; Michele Ruta; J.M.C. Santos Silva; Tom Zylkin
    Abstract: Modern trade agreements contain a large number of provisions in addition to tariff reductions, in areas as diverse as services trade, competition policy, trade-related investment measures, or public procurement. Existing research has struggled with overfitting and severe multicollinearity problems when trying to estimate the effects of these provisions on trade flows. Building on recent developments in the machine learning and variable selection literature, this paper proposes data-driven methods for selecting the most important provisions and quantifying their impact on trade flows, without the need of making ad hoc assumptions on how to aggregate individual provisions. The analysis finds that provisions related to antidumping, competition policy, technical barriers to trade, and trade facilitation are associated with enhancing the trade-increasing effect of trade agreements.
    Keywords: lasso, machine learning, preferential trade agreements, deep trade agreements
    Date: 2021–06–16
  7. By: Cariola, Gianmarco; Lanz, Rainer
    Abstract: This paper analyses the determinants of preference utilization using a novel WTO dataset that allows us to measure the underutilization of preferences across several importers, exporters and products over time. Building on the previous literature, we confirm that preference utilization is increasing with the size of exports, preference margin and geographical and linguistic proximity. We find that utilization rates tend to be higher for reciprocal preferences compared to non-reciprocal preferences, and that the incentive to use preferences increases with the share of competitors' exports that is eligible for preferential treatment. Our most innovative contribution is the analysis of the relationship between preference utilization and the production structure of the countries that benefit from preferential market access. Using an instrumental variable approach, we show that an increase in value added reduces both underutilization and its sensitivity with respect to the preference margin, making the use of preferences more robust with respect to trade policy changes. Analogously, a change in the preference margin will have a differential impact on sectors depending on their value added content. We explain this finding by introducing the concept of "effective preference margin" to measure the importance of the benefits from preference utilization relative to the value added content of exports.
    Keywords: trade policy,preference utilization,value added trade
    JEL: F13 F14 F15
    Date: 2022
  8. By: Swati Dhingra; Thomas Sampson
    Abstract: The Brexit vote precipitated the unravelling of the UK's membership of the world's deepest economic integration agreement. This paper reviews evidence on the realized economic effects of Brexit. The 2016 Brexit referendum changed expectations about future UK-EU relations. Studying its consequences provides new insights regarding the economic impacts of news and uncertainty shocks. Voting for Brexit had large negative effects on the UK economy between 2016 and 2019, leading to higher import and consumer prices, lower investment, and slower real wage and GDP growth. However, at the aggregate level, there was little or no trade diversion away from the EU, implying that many of the anticipated long-run effects of Brexit did not materialize before the new UK-EU trade relationship came into force in 2021.
    Keywords: Brexit, UK economy, import prices, consumer prices
    Date: 2022–12
  9. By: Emanuel Ornelas; Patricia Tovar
    Abstract: We study, theoretically and empirically, how countries choose intra-bloc tariffs and preferential margins when they form Preferential Trade Agreements (PTAs). Our model indicates that countries should set systematically lower preferential margins when the bloc takes the form of a free trade area (where members set external trade policies independently), relative to a customs union (where members coordinate external tariffs). Moreover, in customs unions (but not necessarily in free trade areas) preferential margins should increase with the supply of partner countries and decrease with the level of preferential imports. These relationships reflect, respectively, the internalization of political-economy goals within the bloc and the desire to curb trade diversion. Using a sample that covers most PTAs formed by Latin American countries in the 1990s, when their popularity in the region shot up, we find empirical support for each of those predictions. These findings make clear that the type of PTA matters significantly for the bloc's tariff structure. Our results carry out important implications for the welfare consequences and the social desirability of different types of PTAs.
    Keywords: regionalism, free trade agreements, customs unions, tariff complementarity, Latin America
    Date: 2021–09–01
  10. By: Thi Nguyet Anh Nguyen; Thi Hong Hanh Pham; Thomas Vallée (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - IEMN-IAE Nantes - Institut d'Économie et de Management de Nantes - Institut d'Administration des Entreprises - Nantes - UN - Université de Nantes - IUML - FR 3473 Institut universitaire Mer et Littoral - ECN - École Centrale de Nantes - UN - Université de Nantes - IFREMER - Institut Français de Recherche pour l'Exploitation de la Mer - CNRS - Centre National de la Recherche Scientifique - UA - Université d'Angers - UM - Le Mans Université - UBS - Université de Bretagne Sud - ONIRIS - École nationale vétérinaire, agroalimentaire et de l'alimentation Nantes-Atlantique - IMT Atlantique - IMT Atlantique Bretagne-Pays de la Loire - IMT - Institut Mines-Télécom [Paris])
    Abstract: This paper investigates trade volatility in the Association of Southeast Asian Nations Plus Three (ASEAN+3) and its links with output volatility, export diversification, and free trade agreements. To achieve this research objective, we apply several econometric estimators to data from all ASEAN+3 member states over the period 1990–2016. We first find evidence of a positive relationship between output volatility and trade volatility. Second, we reveal that the way export diversification is measured can influence its impacts on bilateral export volatility. Moreover, the relationship between income volatility, trade volatility, and export diversification seems to depend on country size and the level of economic development.
    Keywords: ASEAN+3,Export diversification,FTA,Output volatility,Trade volatility
    Date: 2020–09
  11. By: Hilpert, Hanns Günther
    Abstract: With the signing of the Regional Comprehensive Economic Partnership (RCEP) on 15 November 2020, the announcement of the EU-China Comprehensive Agreement on Investment (CAI) on 30 December, and the prospects of enlarging the Compre­hensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), trade policy with and within Asia is gathering speed. In the greater East Asia region, consisting of Japan, South Korea, China and the Association of Southeast Asian nations (ASEAN), economic integration via trade, investment, supply chains and digital connectivity will accelerate. In contrast, regions that remain on the outside - i.e. North America, Europe and India - surely fear that trade flows will be diverted. At the same time, geopolitics have become a determining factor of trade policy. Any agreement also represents political positioning in the context of the Sino-American rivalry, or at least a reinsurance against the risks of economic or technological decoupling. What are the economic and political perspectives of these trade and investment agreements? What goals and strategies are the relevant actors pursuing? And what are the con­sequences for Europe's trade policy?
    Date: 2021
  12. By: Nicholas M. Odhiambo; Talknice Saungweme
    Abstract: In this study, the relationship between tourism development and trade in 12 sub-Saharan African (SSA) countries is examined during the period 1995-2019. Three proxies of trade are used, namely the total trade, total exports, and total imports of goods and services to examine this linkage, thereby leading to three separate model specifications. A wide range of modern econometric techniques were also employed to examine the relationship between the various proxies of trade and tourist arrivals. These include i) cross-sectional dependence tests based on Breusch-Pagan (1980) LM, Pesaran (2004) scaled LM, Baltagi et al. (2012) bias-corrected scaled LM, and Pesaran (2004) CD; ii) a slope homogeneity test based on Pesaran and Yamagata (2008); iii) an ECM panel cointegration test based on Westerlund (2007); and iv) a heterogeneous panel causality model based on Dumitrescu and Hurlin (2012), among others. Using the dynamic ordinary least squares (DOLS) and the fully modified ordinary least squares (FMOLS), the study found that, overall, international tourism has a positive and significant impact on trade in SSA countries. This finding is also corroborated by the heterogeneous Granger causality test, which found a distinct unidirectional causal flow from international tourism arrivals to trade. The study, therefore, recommends that SSA countries should implement policies aimed at promoting international tourism in order to increase their international trade and boost their overall trade balance.
  13. By: German Puga (Centre for Global Food and Resources, Wine Economics Research Centre, School of Economics and Public Policy, University of Adelaide, Australia); Alfinura Sharafeyeva (Centre for Global Food and Resources, School of Economics and Public Policy, University of Adelaide, Australia); Kym Anderson (Wine Economics Research Centre, School of Economics and Public Policy, University of Adelaide, Australia, and Arndt-Corden Dept of Economics, Australian National University, Canberra ACT 2601, Australia)
    Abstract: This study uses gravity models to explain the bilateral pattern of global wine trade since 1962.This is, to our knowledge, the first study on global wine trade covering the second wave of globalisation as a whole. The results suggest that the impact of distance, common language, and common coloniser post-1945 on wine trade was lower in the 1991-2019 period than in the 1962-1990 period. We also use gravity models to explain the impact on that bilateral wine trade pattern of similarities across countries in the mix of winegrape varieties in their vineyards. The results suggest that countries trade more wine with each other the closer their mix of winegrape varieties, although our models do not allow us to identify causality.
    Keywords: wine trade, second wave of globalisation, gravity model, varietal similarity index
    JEL: Q17 F14
    Date: 2022–05
  14. By: Diana Van Patten; Esteban Méndez
    Abstract: We exploit a natural experiment to study the extent to which popular attitudes toward trade are driven by economic fundamentals. In 2007, Costa Rica put a free trade agreement (FTA) to a national referendum. With a single question on the ballot, 59% of Costa Rican adult citizens cast a vote on whether they wanted an FTA with the United States to be ratified, or not. We merge disaggregated referendum results with employer-employee data, customs and balance-sheet data, firm-to-firm transactions data, and data on household composition and expenditures. We document that a firm's exposure to the FTA, directly and via input-output linkages, significantly influences the voting behavior of its employees. This effect is greater for voters who are aligned with pro-FTA political candidates. We find that import competition plays a role in explaining votes against openness, and that within-industry heterogeneity is key in explaining votes, as compared with sector-level exposure. We also show that citizens considered the expected decrease in consumer prices when exercising their vote.
    JEL: D72 F13 F14 F68 O24
    Date: 2022–05
  15. By: Alleyne, Antonio; Lorde, Troy; Moore, Winston
    Abstract: It has long been apparent that economic development in the Caribbean could not be sustained on the basis of traditional agricultural exports. Since the 1960s the debate has centered on what should take their place, and what mechanism should be used to achieve, at least in part, sustainable development. One reoccurring topic is the notion of import substitution. Contrary to previous literature, this study evaluates the feasibility of import substitution at the regional rather than at the country level on the basis that it is not economically feasible to supply all the goods that a country may consume on its own. To evaluate the feasibility of this approach, we use a trade database that matches imports (consumption) and exports (production capabilities) of various Caribbean countries. We then conduct counterfactual simulations of the feasibility of import substitution if all of the trade overlaps within the region are exploited. We discuss the implications that this might have for intra-regional trade, economic activity and employment. The overall feasibility of such an approach is also assessed.
    Keywords: trade, import substitution, Caribbean, CARICOM
    JEL: F14 F17
    Date: 2022–04–11
  16. By: Vacu, Nomfundo P; Odhiambo, Nicholas M
    Abstract: This study estimates the determinants of import demand in Tanzania using time-series data for the period from 1985 to 2015.The study applied the ARDL approach on Tanzania?s time-series data to examine the key drivers of import demand. The study used both aggregate import demand model (i.e., Model 1) and disaggregated import demand models, i.e., Model 2 (for consumer goods), Model 3 (for intermediate goods) and Model 4 (for capital goods) to examine this linkage. The study found that in Model 1, aggregate imports in Tanzania are positively influenced by investment and exports, and negatively determined by trade policy. In Model 2, it was found that imports for consumer goods to are positively influenced by consumer spending and foreign reserves, but negatively influenced by trade policy. In Model 3, imports for intermediate goods were found to be positively influenced by exports in the long run. Finally, in Model 4, the study found imports for capital goods to be positively influenced by exports (in the short- and long-run), but negatively influenced by investment (in short run). The study recommends that policymakers in Tanzania should strengthen their macroeconomic policies to ensure that their imports are not consumption based and have an enhancing effect on the country?s economic activities.
    Keywords: Aggregate Imports, Disaggregated Imports, Tanzania, ARDL, Error Correction Model
    Date: 2021–12
  17. By: Stefanie Stantcheva
    Abstract: I study how people understand and reason about trade and which factors shape their views on trade policy. I design and run large-scale surveys and experiments in the U.S. to elicit respondents' knowledge and understanding of trade. I also ask about their perceived economic gains and distributional impacts from trade and their views on trade restrictions and compensatory redistribution for those hurt by trade. People's understanding of the price, wage, and welfare effects of trade is mixed. In general, respondents are optimistic about the efficiency gains from trade, but also understand that there may be adverse distributional consequences from it. Respondents' own exposure to trade through their sector, occupation, skill, and local labor market shapes their perceptions of the impacts of trade on themselves, others, and on the broader U.S. economy. I also find patterns consistent with the idea of "diffuse gains and concentrated losses'': respondents' perceived benefits as consumers are nonsalient and unclear to them, while those in at-risk jobs starkly perceive the threats from trade. Beyond material self-interest, people have broader social and economic concerns that strongly influence their views on trade policy. The belief that is most predictive of support for open trade is that trade generates efficiency gains. Furthermore, people who believe that those hurt by trade can be helped using other tools (compensatory redistribution) do not oppose free trade, even if they think that it will entail adverse distributional consequences. The results highlight the importance of compensatory redistribution as an indissociable part of trade policy in people's minds.
    JEL: D72 D91 F1 F13
    Date: 2022–05
  18. By: Marc J. Melitz; Stephen J. Redding
    Abstract: Two central insights from the Schumpeterian approach to innovation and growth are that the pace of innovation is endogenously determined by the expectation of future profits and that growth is inherently a process of creative destruction. As international trade is a key determinant of firm profitability and survival, it is natural to expect it to play a key role in shaping both incentives to innovate and the rate of creative destruction. In this paper, we review the theoretical and empirical literature on trade and innovation. We highlight four key mechanisms through which international trade affects endogenous innovation and growth:(i) market size; (ii) competition; (iii) comparative advantage; (iv) knowledge spillovers. Each of these mechanisms offers a potential source of dynamic welfare gains in addition to the static welfare gains from trade from conventional trade theory. Recent research has suggested that these dynamic welfare gains from trade can be substantial relative to their static counterparts. Discriminating between alternative mechanisms for these dynamic welfare gains and strengthening the evidence on their quantitative magnitude remain exciting areas of ongoing research.
    Keywords: innovation, growth, international trade
    Date: 2021–06–17
  19. By: Mai, Nhat Chi
    Abstract: U.S. - Vietnam Trade Relations refer to the bilateral trade relationship between the United States of America (U.S.) and the Socialist Republic of Vietnam (Vietnam) from the 1990s to 2012. After more than two decades of no economic relationship since the end of the Vietnam War, the two governments reestablished economic relationships during the 1990s.
    Date: 2022–04–22
  20. By: Sarah Conlisk; Gaston Navarro; Maddie Penn; Ricardo M. Reyes-Heroles
    Abstract: A large body of work suggests that trade affects workers unevenly. By shifting economic activity across occupations, industries, or regions, freer trade can generate gains for some workers and losses for others.
    Date: 2022–05–20
  21. By: Mercy T. Musakwa; Nicholas M. Odhiambo
    Abstract: This study investigates the impact of foreign capital inflows on poverty in Vietnam, using annual time series data from 1990 to 2018. The study was motivated by the need to establish if burgeoning foreign capital inflows in Vietnam can support the poverty alleviation agenda. Foreign direct investment (FDI) and external debt were used as proxies for foreign capital inflows; and infant mortality rate, Human Development Index (HDI) and household consumption expenditure were used as poverty proxies. Using the autoregressive distributed lag (ARDL) approach, the study found foreign direct investment to reduce poverty in the short run and long run when household consumption expenditure was used as a poverty measure. However, the study found FDI to worsen poverty in the short run when infant mortality rate and HDI were used as poverty proxies. The study found external debt to have poverty mitigating effect in the short run regardless of the poverty measure used and in the long run only when household consumption expenditure was used as a poverty measure.
  22. By: Fang, Tony (Memorial University of Newfoundland); Wells, Alex (Memorial University of Newfoundland)
    Abstract: Diasporas are global communities of migrants who retain a sense of connection with their homeland. The concept is ancient but has only recently become an important area of research in economics. Due to their unique transnational characteristics, diasporas can have significant influence over economic exchange in several ways. In this chapter, these economic implications are explored alongside the political involvement of diasporas. It is found that modern technological advancements in communication and transportation are emphasizing the importance of global connections, leading to diaspora populations gaining increased importance in areas such as international trade, foreign policy, and economic development. For many countries, remittances from their diaspora abroad are a key source of capital for development. Global talent mobility is also examined, including its impacts on brain drain, and the competing, more recently explored phenomenon of brain gain. There is evidence showing that members of diasporas are critical to the formation of international entrepreneurial and commercial networks, owing to their ability to help overcome linguistic or cultural barriers. Governments that are best able to effectively harness the economic potential of the diaspora are the biggest winners. Diasporas’ efforts to shape policy, both foreign and domestic, are prominent in modern research, and various examples are examined. Despite the wide body of research on diaspora economics, the subject is still recent and there are many avenues for future research.
    Keywords: economic and political impacts, international migration, diaspora
    JEL: J61 J68
    Date: 2022–05
  23. By: Espa, Ilaria; Imeli, Brigitta
    Abstract: There are substantial sectoral differences in the number and design of Switzerland-based private sustainability standards. Their level of exposure to World Trade Organization (WTO) scrutiny also greatly differs depending on whether and to which extent the standards exhibit a nexus with state measures that restrict foreign competition in the Swiss market. Trade law concerns arise in the sectors of agriculture and cosmetics: the majority of Switzerland-based private sustainability standards in place exclude foreign products from certification. Their trade-restrictive effect is amplified as major retailers source key product lines from certified products. In cases where the discriminating private behaviour is related to state measures, the government’s responsibility cannot be excluded under WTO rules.
    Date: 2022–05–30
  24. By: Philippe Aghion; Antonin Bergeaud; Matthieu Lequien; Marc J. Melitz; Thomas Zuber
    Abstract: We decompose the "China shock" into two components that induce different adjustments for firms exposed to Chinese exports: a horizontal shock affecting firms selling goods that compete with similar imported Chinese goods, and a vertical shock affecting firms using inputs similar to the imported Chinese goods. Combining French accounting, customs, and patent information at the firm-level, we show that the horizontal shock is detrimental to firms' sales, employment and innovation. Moreover, this negative impact is concentrated on low-productivity firms. By contrast, we find a positive effect - although often not significant - of the vertical shock on firms' sales, employment and innovation.
    Keywords: competition shock, patent, firms, import
    Date: 2021–08–09
  25. By: Hüllinghorst, Yannik; Roll, Stephan
    Abstract: Measured in terms of licenses issued, Arab states will again be among the main recipients of German military equipment exports in 2020. This continues a trend that has been evident since the early 2000s and especially since 2010, all despite Germany's recently extended ban on arms exports to Saudi Arabia. From 2018 to 2020, the value of export licences for the five most important Arab buyer countries has decreased compared to the previous period. However, their share of total export licences is still over 25 percent. In view of regional developments, this is problematic. The foreign policies of the biggest customers have changed in recent years as they become less predictable and more willing to use military means to assert their interests. Military equipment exports could thus contribute to further escalation of the numerous interstate conflicts in the Middle East and North Africa, thereby posing great risks to Germany and the EU. Against the backdrop of Germany and the EU's own export guidelines, it is therefore advised to halt exports of military products to these countries.
    Date: 2021
  26. By: Christian Hauenstein; Franziska Holz; Lennart Rathje; Thomas Mitterecker
    Abstract: Steam coal exporters face increasing uncertainty about future coal demand and risks of asset stranding. Nevertheless, new export-oriented coal mine projects are still brought forward. In this study, we use the coal sector model COALMOD-World to assess the economic prospects of investments in the export-oriented steam coal sector, and in particular of coal mines in the Galilee Basin, Australia. We parameterize coal mining in the Galilee Basin based on the Carmichael coal mine and export project specifics. We construct three coal demand scenarios with varying climate policy ambitions based on bottom-up coal sector data of the major coal consuming countries in Asia. We find that, even under most optimistic assumptions, new coal mines in the Galilee Basin are not economically viable in the longrun and prone to become stranded assets. In other Australian basins only very limited investments are required in the most conservative demand scenarios and only to replace exhausted coal mining capacities. Australian steam coal production decreases significantly in all scenarios due to down-phasing domestic demand and shrinking export opportunities. Investments in other world regions are only viable in the most conservative demand scenario. Any new investments in steam coal supply in Australia and globally, and particularly in export-oriented coal supply, are at risk of becoming stranded assets.
    Keywords: Coal, international coal trade, stranded assets, numerical modeling, scenarios, Galilee Basin, Australia, Asia
    JEL: Q31 Q37 Q47 L72 C61
    Date: 2022
  27. By: Dutta, Sourish
    Abstract: This paper deals with the problem of measuring intra-industry trade. In section 2, it presents two existing approaches (Balboni, 2007) to measuring intra-industry trade: the so called “recovery of trade”, developed by Balassa (1966); Grubel and Lloyd (1975) & the “type of trade” one initiated by Abd-el Rahman (1986b); Vona (1991). Then this paper presents indicators and empirical methods inspired by these two approaches. Notions of trade recovery & trade type come from two different definitions of the empirical phenomena they aim to measure. This paper also discusses these definitions and the theoretical foundations in the section 3.
    Date: 2022
  28. By: Grinschgl, Julian; Pepe, Jacopo Maria; Westphal, Kirsten
    Abstract: The global implications of a switch to hydrogen (H2) are far-reaching, as hydrogen will, at least in part, gradually replace the oil and gas trade, and new international trade flows will emerge. In addition, hydrogen will transform the industry, and its use will have disruptive effects that reshape the economic geography. Policymakers are being called upon to make far-reaching, fundamental decisions that will decisively shape the contours of the hydrogen world. Germany and the European Union (EU) should consider the geo-economic and political consequences when setting the course.
    Date: 2021
  29. By: Antonio Ciccone; Jan Nimczik
    Abstract: After the end of World War II in 1945, millions of refugees arrived in what in 1949 became the Federal Republic of Germany. We examine their effect on today’s productivity, wages, income, rents, education, and population density at the municipality level. Our identification strategy is based on a spatial discontinuity in refugee settlement at the border between the French and US occupation zones in the South-West of post-war Germany. These occupation zones were established in 1945 and dissolved in 1949. The spatial discontinuity arose because the US zone admitted refugees during the 1945-1949 occupation period whereas the French zone restricted access. By 1950, refugee settlement had raised population density on the former US side of the 1945-1949 border significantly above density on the former French side. Before the war, there never had been significant differences in population density. The higher density on the former US side persists entirely in 2020 and coincides with higher rents as well as higher productivity, wages, and education levels. We examine whether today’s economic differences across the former border are the result of the difference in refugee admission; the legacy of other policy differences between the 1945-1949 occupation zones; or the consequence of socio-economic differences predating WWII. Taken together, our results indicate that today’s economic differences are the result of agglomeration effects triggered by the arrival of refugees in the former US zone. We estimate that exposure to the arrival of refugees raised income per capita by around 13% and hourly wages by around 10%.
    Keywords: Immigration, productivity, wages, refugees, long-run effects
    JEL: O4 O11 R11
    Date: 2022
  30. By: Sabine Pitteloud (Harvard Business School, General Management Unit)
    Abstract: This working paper investigates unintended consequences of U.S. FDI in Switzerland in the 1950s-1960s: the increased competition that U.S. firms generated within the national labor market and the challenge their hiring practices constituted for the institutional settings in which labor relations were embedded. It therefore contributes to two bodies of literature: one that deals with the arrival of U.S. firms in Europe after 1945 and another that tackles the contribution of business history to the variety of capitalism (VOC) scholarship.
    Keywords: multinationals; capitalism; business & government relations; foreign direct investment; immigration policy; history; Switzerland; Americanization; R&D; labor history; labor market institutions; tax havens; USA; business interest association; lobbying;
    Date: 2022–06
  31. By: Eldem, Tuba
    Abstract: On June 26, the Turkish government began constructing the first bridge over Canal Istanbul, the huge waterway project designed to run parallel to the Bosporus Strait. Ankara has presented the megaproject as a strategic move that will turn Turkey into a logistics base and grant it geopolitical leverage over both regional and international trade and transportation routes. However, Turkey's political opposition considers Canal Istanbul to be a rent-seeking project designed to attract international - prob­ably Chinese and Arab - investment in the hope of reviving Turkey's deteriorating economy. The Canal may also affect the Montreux Convention, the decades old treaty that governs the Turkish Straits. Given the rivalry between the US and Russia, questions around the Montreux Convention will add another point of contention, increase tensions and may also present serious consequences for Turkey.
    Date: 2021
  32. By: Benny Kleinman; Ernest Liu; Stephen J. Redding
    Abstract: We develop a dynamic spatial general equilibrium model with forward-looking investment and migration decisions. We characterize analytically the transition path of the spatial distribution of economic activity in response to shocks. We apply our framework to the re-allocation of US economic activity from the Rust Belt to the Sun Belt from 1965-2015. We find slow convergence to steady-state, with US states closer to steady-state at the end of our sample period than at its beginning. We find substantial heterogeneity in the effects of local shocks, which depend on capital and labor dynamics, and the spatial and sectoral incidence of these shocks.
    Keywords: spatial dynamics, economic geography, trade, migration
    Date: 2021–07–28
  33. By: Ha Bui; Zhen Huo; Andrei A. Levchenko; Nitya Pandalai-Nayar
    Abstract: We introduce information frictions into a tractable quantitative multi-country multi-sector model with global value chains. Producers in a sector do not perfectly observe contemporaneous shocks to other countries and sectors, and their output decisions respond to their idiosyncratic beliefs about worldwide productivity innovations. We discipline agents' information sets with new quarterly data containing the frequencies of country-industry-specific economic news reports by 11 leading newspapers in the G7 plus Spain. Newspapers in each country publish articles on select events in both domestic and partner-country sectors, and not every event is reported worldwide. We show that (i) greater news coverage is associated with smaller GDP forecast errors by professional forecasters; (ii) the dispersion of forecast errors shrinks with higher news coverage; and (iii) sectors more covered in the news exhibit stronger hours growth synchronization, and more so if they trade more with each other. We use these reduced form facts to discipline the key parameters in the new theory---the precision of the vectors of public and private signals about country-sector productivities. We find that (i) imperfect ``news'' about economic fundamentals can be a quantitatively important source of international fluctuations and (ii) the effects of information frictions are amplified by the global production network. These information frictions appear as correlated labor wedges in standard models without dispersed information.
    JEL: F4 F41 F44
    Date: 2022–05
  34. By: Zsolt Darvas
    Abstract: This Working Paper is an output from the MICROPROD project, which received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement no. 822390. Ensuring prosperity and fairness is a dual challenge with major policy implications. Using various micro datasets, Work Package 5 of the MICROPROD project made significant contributions to our understanding of the distributive implications of trade and technological change. New research found that...
    Date: 2022–05
  35. By: Gabor Hunya (The Vienna Institute for International Economic Studies, wiiw); Branimir Jovanović (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: ​This issue of the wiiw Monthly Report replaces our earlier series of the wiiw FDI Report. FDI in Central, East and Southeast Europe Chart of the month Austrian greenfield investments in CESEE defy the COVID-19 crisis by Gábor Hunya Fragile post-COVID FDI bounce-back in CESEE by Gábor Hunya Foreign direct investment (FDI) inflows and greenfield investment commitments have experienced a COVID-related boom-bust-boom cycle over the past two years. But the resurgence in greenfield investment commitments has been less robust than that in FDI inflows, and this recovery has not reached all CESEE regions. FDI in manufacturing has declined somewhat, while commitments to ICT investments in producer-related business services have been on the rise. Investor confidence is expected to remain volatile in the months to come, but large investments are needed in technological upgrading, greening and automation. Are we already seeing some near-shoring to the Western Balkans? by Branimir Jovanović Inflows of foreign direct investment to the Western Balkans grew by 20% year on year in the first half of 2021, exceeding the level of two years ago. Most of this increase was investment that was postponed during the early stages of the pandemic, but part of it may also be attributable to post-pandemic near-shoring, especially in Bosnia and Herzegovina, Montenegro and Kosovo. Monthly and quarterly statistics for Central, East and Southeast Europe
    Keywords: FDI inflows, FDI stocks, greenfield investments, COVID-19, FDI by economic sector, greenfield FDI, supply chain disruptions, near-shoring
    Date: 2021–11
  36. By: Bendiek, Annegret; Stürzer, Isabella
    Abstract: Given the strong economic interdependencies between the United States (US) and Europe as well as the shared commitment to safeguard civil liberties online and combat disinformation and unfair market practices, European Union (EU) cooperation with the US on digital markets is crucial. Thus, the EU-initiated transatlantic Trade and Technology Council (TTC) was established to navigate European and American understandings of 'digital sovereignty' and the resulting market regulations. The first TTC meeting took place in September 2021 and demonstrated both a shared commitment to building an alliance on 'democratic technology' and diverging ideas on how to best regulate the digital market and its biggest players. As the COVID-19 pandemic has revealed vulnerabilities of international supply chains and accelerated digitalisation, European policymakers are well-advised to continue pursuing their digital foreign policy strategy of advancing digital sovereignty by leveraging the 'Brussels effect', which also fosters the further integration of EU digital policy and contributes to the deepening of the transatlantic digital market.
    Date: 2022
  37. By: Mintel, Julina; von Ondarza, Nicolai
    Abstract: Since Brexit, the United Kingdom (UK) has been increasing its focus on bilateral rela­tions with EU member states, in particular in the field of foreign and security policy. One year after the end of the transition period, London has achieved its first successes: The UK has won over Germany and a number of European Union (EU) member states in its efforts to deepen bilateral relations and has agreed on new coordination structures. In order to demonstrate their importance to European security, the British have engaged intensively in crisis situations, such as the one on the Polish/Lithua­nian EU external border with Belarus as well as the Russian military build-up around Ukraine. The EU, on the other hand, has no interest in this bilateralisation. Instead of insisting on a standard third-country model that does not suit London and faced with the possible return of a large-scale war in Europe, the EU and the UK should urgently work towards a joint security partnership.
    Date: 2022
  38. By: WATANABE Shota
    Abstract: As digitalization of the economy progress, data utilization has huge influence on the competitiveness of goods or services. Emerging countries are introducing or planning to introduce data-sharing policies with specific companies, where domestic companies, in most cases, are offered the use of such data for free or at lower than market price. These companies produce products or services based on that shared data. If these goods or services are then allowed to compete with foreign products within a market, that market lacks fair competition. This research analyzed the practical applicability and limits of the WTO Agreement on Subsidies and Countervailing Measures as it relates to these practices, with a focus on trade in goods. This analysis concluded the following. Data sharing with specific companies can be categorized as a service provided by the government, and if it has specificity and financial benefit, it can be regarded as a subsidy, and if causation and serious prejudice are established, government granting that subsidy shall take appropriate steps to remove the adverse effects or shall withdraw the subsidy. Some limits were also found in the analysis, including that as there is a large variety of factors that relate to the competitiveness of digital products, including UI/UX, accuracy or efficiency, etc., it is difficult to analyze the impact of data sharing on the competitive advantage of those products via conducting the causation analysis. In addition, this article suggests several policy implications for trade and digital policies. First, as data sharing has a larger influence on trade in services than in goods, current WTO agreements, which lack regulations related to subsidies for trade in services, cannot fully regulate such market distortions. Second, while many governments, including Japan, are promoting open data policies, they should carefully consider the consequences of such market distortions when designing those policies.
    Date: 2021–05
  39. By: Lebdioui, Amir
    Abstract: This article investigates the role of industrial policy in promoting upgrading in commodity sectors by examining the case of the petroleum, rubber, and palm oil industries in Malaysia. By doing so, it aims to contribute to an emerging scholarship that bridges the developmental state and the global value chains literature. Several findings emerge from this study. First, linkages do not unfold through market forces alone. Commodity value addition processes can be hindered by a range of barriers, including power dynamics alongside global commodity chains. The existence of high barriers for linkage development in developing nations justifies the need of state interventions. Second, successful government interventions for commodity value addition in Malaysia have gone far beyond fixing market failures and a ‘facilitative’ role of the state. Instead, the productive capabilities necessary for value addition were accumulated through coherent industrial policies and the strategic orientation of rents towards achieving productivity gains and learning. Third, political considerations, such the base of the ruling coalition, the regime type (marked by both executive dominance and political competition), and the influence of the regional intellectual climate, are essential to understanding both the policy will and ability to pursue a developmental approach towards commodity value addition.
    Keywords: global value chains; heterodox economics; industrial policy; macroeconomic analyses of economic development; natural resources
    JEL: O11 O13 O14 O53 Q17
    Date: 2020–11–18
  40. By: Major, Claudia; von Ondarza, Nicolai
    Abstract: Under the narrative of 'Global Britain', the United Kingdom (UK) aims to position itself after Brexit as an independent leading power with global reach. The Integrated Review of Security, Defence, Development and Foreign Policy, published in March 2021, seeks to implement this goal. By making the G7 and COP26 presidencies in 2021 a success and by increasing its defence spending, London wants to show what Global Britain means in practice, while also convincing the new US administration of its stra­tegic value. With regard to the European Union (EU), however, the Johnson govern­ment rejects institutionalised cooperation in foreign and security policy and prefers flexible formats with individual EU states. This presents Germany with a dilemma: On the one hand, it wants to involve London in European foreign and security policy, but on the other hand, this involvement must not be at the expense of the EU and European unity. In view of the currently strained EU-UK relationship, institutional­ised cooperation only seems possible in the long term. In the medium term, the focus should be on informal bilateral and multilateral formats.
    Date: 2021
  41. By: Maihold, Günther; Mühlhöfer, Fabian
    Abstract: The Covid pandemic has severely upset global supply chains. This disruption has now spread to many branches of industry, and consumers are starting to feel the impact. No short-term improvement is in sight, which has serious implications for manufacturing processes all over the world. To begin with, the pandemic primarily affected personal protective equipment; however, the collapse in international trade has also created delivery bottlenecks in other sectors.decisions that will decisively shape the contours of the hydrogen world. Germany and the European Union (EU) should consider the geo-economic and political consequences when setting the course.
    Date: 2021
  42. By: Dröge, Susanne; Schrader, Tessa-Sophie
    Abstract: In 2021 the international climate policy agenda will need to catch up on much that was not accomplished in 2020. Because of the pandemic, deadlines were postponed and processes slowed down. What is the position of major climate policy powers in early 2021, and what momentum can we expect for international negotiations? The most important impetus this year will come from the EU, the US and China. However, since these three powers are also competitors, the EU and its member states will have to strengthen multilateral cooperation overall so as to push for reaching the Paris Agreement targets, formulate clear expectations, and ensure that all actors remain on equal terms. For Germany and the EU it will therefore be crucial to continue to focus decisively on joint action with partner countries within networks, and to concentrate on core issues with the US. Obvious areas for cooperation with Washington are a joint diplomatic approach for the next international climate conference (COP26), and reconciling climate and trade policy.
    Date: 2021
  43. By: Pedro Teles; V. V. Chari; Juan Pablo Nicolini
    Abstract: How should countries cooperate in setting fiscal and trade policies when government expenditures must be financed with distorting taxes? We show that even if countries cannot make explicit transfers to each other, every point on the Pareto frontier is production efficient, so that international trade and capital flows should be effectively free. Trade agreements must be supplemented with fiscal policy agreements. Residence-based income tax systems have advantages over source-based systems. Taxing all household asset income at a countryspecific uniform rate and setting the corporate income tax to zero yield efficient outcomes. Value-added taxes should be adjusted at the border.
    JEL: E60 E61 E62
    Date: 2022
  44. By: von Ondarza, Nicolai
    Abstract: Even after the Brexit treaties have come into effect, the conflict over how to deal with Northern Ireland is still straining relations between the European Union and the United Kingdom. From London's perspective, the Northern Ireland Protocol leads to unacceptable economic, political, and social disruptions, which is why it is calling for a fundamental renegotiation. The EU, for its part, is accusing the British government of failing to fully comply with its obligations under the protocol. The recent extension of some of the protocol's grace periods has mitigated the conflict somewhat, but it only works to postpone the difficult decisions into the future. A serious political dispute continues to simmer in the background, with negative implications for the still difficult UK-European relationship. But simply insisting on London's legal obliga­tions is insufficient – the EU should show flexibility in implementation but demand that London unequivocally accepts the protocol.
    Date: 2021
  45. By: Coen, David; Katsaitis, Alexander
    Abstract: In Brexit's aftermath, appreciating how UK business will interact with Brussels is vital to understanding the mechanics of future economic and trade relations. Drawing from work on corporate political activity, the article outlines changes that UK business lobbying faces in Brussels post-Brexit, focussing on three key aspects: (i) changes at the institutional-systemic level; (ii) variance across policy fields; (iii) engagement with other organisations. The article discusses potential strategic responses for UK business and argues that lobbying for UK private interests will become a costlier and more complicated enterprise. While policy making access via political doors will become harder, demand for reliable technical expertise allows UK business to maintain its presence and influence in regulatory policy areas. Targeted lobbying and diversified mobilisation offer the safest way forward for UK business lobbying in Brussels.
    Keywords: Brexit; business; corporate political activity; European Union; interest groups; lobbying
    JEL: L81
    Date: 2022–04–15
  46. By: Dalay, Galip
    Abstract: Turkey and the United Arab Emirates (UAE) are taking steps to mend their ties. The UAE, it seems, is eager to refashion its image as a bridge-builder in regional politics and hedge its options in the face of the US downsizing its regional security commitments in the Middle East. Turkey, on its end, is eager to get out of the political/ideo­logical box that it has found itself in since the onset of the Arab Uprisings and to lessen the economic cost of its geopolitical activism in the time of a deepening eco­nomic crisis at home. Though economic interests can bring the two countries closer, geopolitics can just as easily drive them apart. In spite of a seeming thaw, major sources of tension in these relations remain.
    Date: 2022
  47. By: Adar, Sinem; Püttmann, Friedrich
    Abstract: Managing irregular migration is a focal point of EU-Turkey relations today. European perspectives on this issue, for the most part, are split into two camps: a 'caring' one, which concentrates on the well-being of refugees, and a 'concerned' one, which focusses on the external border security of the European Union (EU) and the anxieties of EU citizens. Widely overlooked in the European discussions is the mounting social and political discontent in Turkey, which is hosting the largest refugee population worldwide while facing a serious economic crisis alongside a severe governance dead­lock. To bear fruits in the long run, any EU-Turkey migration cooperation should account for this growing discontent. After all, neither the advancement of the rights of refugees in Turkey nor reliable security cooperation is possible without accord by the Turkish political class and society. To this end, the EU should signal to Turkey its intention to resettle more refugees and support local integration efforts more proactively.
    Date: 2022
  48. By: Voelsen, Daniel; Wagner, Christian
    Abstract: Cooperation in global digital policy is considered one of the most promising fields in the strategic partnership between India and the European Union (EU). However, pro­found differences are apparent in terms of implementation, for example with regard to data protection, competences of security authorities and the future global digital order. Meanwhile, similar problems are being addressed in the EU's negotiations with the US on digital trade issues. Possible compromises there could also form components of an understanding with India. Shared democratic values are consistently referred to as a justification for efforts to strengthen Europe's cooperation with India. In their Roadmap 2025, India and the EU affirm their interest in promoting an 'open, free, stable and secure cyber-space' and fighting cybercrime. But the road to this goal is proving to be rocky.
    Date: 2022
  49. By: Price V. Fishback
    Abstract: The paper summarizes research on the heterogeneous experiences of actors in agriculture in Europe and the Americas between the First and Second World Wars. Following a period of increasing globalization of agricultural markets, the First World War sharply limited farming in the main combatant nations, which led to sharp increases in agricultural prices and farm incomes in countries outside the combat zones. During the 1920s the combatants experienced a return to normalcy, while farmers that experienced booms during the war went through hard times. During the Great Depression that followed, farm prices for most goods fell sharply and farm regions were flooded with unemployed workers. During both decades, most countries responded by raising tariffs and setting quotas on farm imports in an attempt to protect farmers, most often large farmers, against the drops in prices. After experimenting with aiding farmers through price guarantees in the 1920s, nearly every government in the 1930s regulated agriculture in some new way: by providing subsidies, setting minimum prices, purchasing surpluses, or limiting output. Often the regulations led to problems that led to new regulatory fixes while setting the precedents for the domestic farm programs that continue to protect farmers in the modern era.
    JEL: N50 Q17 Q18
    Date: 2022–05
  50. By: Wagner, Christian; Lemke, Jana; Scholz, Tobias
    Abstract: India is a central partner for German and European foreign policy in the Indo-Pacific. The German Federal Government's autumn 2020 guidelines and the November 2021 coalition agreement both emphasise the importance of expanding relations with India. To advance the common cause of a multilateral and rules-based order in the Indo-Pacific, both sides should - in addition to deepening their bilateral relations - extend their cooperation to third countries. Such triangular cooperation could herald a new phase of the Indo-German strategic partnership.
    Date: 2022
  51. By: Lippert, Barbara
    Abstract: As Russian tanks and artillery advanced on Kharkiv and Kyiv, President Volodymyr Zelensky signed an application to join the European Union. He called for a special admission procedure to secure swift accession for Ukraine, yet Ukraine did not first aspire to EU membership under missile fire. Much like Moldova and Georgia, it sees its current status of association with the EU as a precursor to accession. The 28 Feb­ruary application was a call for help from the dreadful war. Initial responses from the European Commission and the European Parliament indicated much political sym­pathy for Ukraine's urgent call, but the EU leaders do not hold forth the prospect of swift accession. This restraint results from the experience that membership negotiations are generally challenging and protracted and that there are no short cuts to the goal. There are, indeed, EU interests that run counter to an explicit memership per­spective. The EU should in any case add a security component flanking its policy of integration and cooperation with Eastern Partnership countries.
    Date: 2022
  52. By: Hindriks, Jean (Université catholique de Louvain, LIDAM/CORE, Belgium); Nishimura, Yukihiro (Osaka University)
    Abstract: To tackle profit shifting, the OECD/G20 Inclusive Framework proposes a Global Minimum Tax that requires that if a multinational en- terprise (MNE) declares its operations in a jurisdiction taxing less than the global minimum tax, the countries where the real economic activity takes place would have the right to tax the difference. The general presumption is that (unconstrained) high-tax countries will gain and low-tax countries will lose because the constrained taxes will reduce their inward profit shifting. The purpose of this paper is to show, by means of a formal model of international tax competition with heterogeneous countries, that the consequences of the global minimum tax can be just the opposite. The key feature of our analysis is that the minimum tax will change the dynamics of tax competition together with the enforcement incentives. We show that in this broader framework, the low-tax country always gain and that there exists a critical threshold for the minimum tax beyond which enforcement cooperation will break down making the high-tax country worse off with minimum tax. The minimum tax threshold is decreasing in the extent of the tax asymmetry. We call this new effect the compliance dilemma.
    Keywords: Profit shifting ; Tax competition ; Tax enforcement
    JEL: C72 F23 F68 H25 H87
    Date: 2022–03–03
  53. By: Pierre Dubois; Ashvin Gandhi; Shoshana Vasserman
    Abstract: The United States spends twice as much per person on pharmaceuticals as European countries, in large part because prices are much higher in the US. This fact has led policymakers to consider legislation for price controls. This paper assesses the effects of a US international reference pricing policy that would cap prices in US markets by those offered in reference countries. We estimate a structural model of demand and supply for pharmaceuticals in the US and reference countries like Canada where prices are set through a negotiation process between pharmaceutical companies and the government. We then simulate the counterfactual equilibrium under such international reference pricing rules, allowing firms to internalize the cross-country externalities introduced by these policies. We find that in general, these policies would result in much smaller price decreases in the US than price increases in reference countries. The magnitude of these effects depends on the number, size and market structure of references countries. We compare these policies with a direct bargaining on prices in the US.
    JEL: C51 C57 I11 I18 L11 L13 L22
    Date: 2022–05
  54. By: Zabanova, Yana; Westphal, Kirsten
    Abstract: In October 2020, Russia adopted a roadmap for hydrogen development, and a full-length Hydrogen Development Concept is expected soon. Even though Russia remains somewhat sceptical about hydrogen's much-vaunted transformative potential, it is interested in using its natural gas wealth to become a leading exporter of this new energy carrier and views Germany as a key partner in this effort. In the absence of a serious national decarbonisation agenda in Russia, stimulating hydrogen production primarily for exports and without significant domestic demand will be a challenge. Still, amid Russia's steadily worsening political relations with the West, clean energy (and hydrogen in particular) is one of the few promising areas of cooperation between Germany and Russia, with the potential to become a major steppingstone for the development of hydrogen value chains in both countries.
    Date: 2021
  55. By: Rudolf, Moritz
    Abstract: International cooperation in the health sector has been a firm component of China's Belt and Road Initiative (BRI) for over five years. Since the outbreak of the Covid-19 pandemic, the Chinese leadership has been promoting this aspect of the initiative ("health silk road") as essential to building a "global community of common destiny". The pandemic has revealed the strengths of the BRI and the way it functions. China's health diplomacy is farsighted and strategic. Beijing has been linking measures to combat the Covid-19 pandemic in aid recipient countries with the prospect of post-pandemic cooperation within the BRI framework. Above all, Beijing wants to be perceived internationally as a "responsible great power". The West's often narrow focus on the qualitative defects of Chinese aid fails to recognise that, in the absence of traditional aid donors, Beijing has supported many third countries effectively and extensively. To counter China's increasing influence in regions that are strategically important for Germany and Europe, greater sensitivity is needed to the geopolitical implications of the pandemic, as well as specific European proposals for third countries for the post-pandemic period. In parallel with more commitment at the multilateral level (for instance within the World Health Organisation, WHO), other options include strengthening bilateral initiatives (e.g. via regional EU+x formats) and coordination with the new US government under Joe Biden.
    Date: 2021
  56. By: Angenendt, Steffen; Steinacker, Karl
    Abstract: The Covid-19 pandemic has greatly reduced international travel. The economic, social and human consequences of border closures and travel restrictions cannot be fully estimated yet, but they are dramatic. The gap is widening between countries of the Global North, which want to control travel and prevent unregulated mobility, and those of the Global South, which are demanding more legal mobility for their citizens. The freedom to travel is a desirable good that all should be able to access, and is also the object of political negotiations. Unilateral decisions should be complemented or superseded by international agreements between countries about common rules and procedures for a trust-based system. In the meantime, countries should modernise their visa processes and build digital identification systems that create trust. This applies to Germany as well, especially since the coalition government has decided to speed up the issuing of visas.
    Date: 2022
  57. By: Rocio Carrillo Labella (Department of Business Organization, Marketing and Sociology - UJA - Universidad de Jaén); Fatiha Fort (UMR MoISA - Montpellier Interdisciplinary center on Sustainable Agri-food systems (Social and nutritional sciences) - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - IRD - Institut de Recherche pour le Développement - CIHEAM-IAMM - Centre International de Hautes Etudes Agronomiques Méditerranéennes - Institut Agronomique Méditerranéen de Montpellier - CIHEAM - Centre International de Hautes Études Agronomiques Méditerranéennes - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro - Montpellier SupAgro); Manuel Parras Rosa (Department of Business Organization, Marketing and Sociology - UJA - Universidad de Jaén)
    Abstract: Globalisation has led to more and more companies in the agri-food sector turning to accreditations such as those guaranteeing quality (ISO 9001), environmental sustainability (ISO 14001) and food safety (ISO 2200, BRC and IFS) for commercial purposes. However, these changes may not lead to an improved economic and commercial performance for olive oil companies. This study, therefore, has two specific objectives: first, to find out if there are groups of accreditations that determine company profiles; and, secondly, to analyse whether these profiles have any kind of influence on the economic and commercial performance of the olive oil industry. A quantitative investigation was carried out using ANOVA and among the main results, a bipolarity was observed between those that have no certification and those that are highly accredited for quality, environment, and food safety. Regarding the second objective, the results uphold the commercial function of accreditation in terms of improving commercialisation. It was not possible however to confirm such positive results in operative earnings, but it was observed that the companies with the strongest results invest more in accreditations, especially in food safety.
    Date: 2022–01–20

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