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on International Trade |
| By: | Attouch, Hicham |
| Abstract: | Over the years, globalization and its corollary regionalization have only reinforced free trade trends. Indeed, free trade agreements have multiplied and with them hopes for greater mobility of goods, people and capital. It is within this framework that the implementation of the African Continental Free Trade Area "ZLECAF", which aims to be development and inclusive growth for all the countries of Africa. One of the essential steps for African integration and the achievement of Agenda 2063 is the strengthening of intra-continent trade. Such a strategic objective requires tariff and non-tariff liberalization. Using a computable general equilibrium approach, we analyzed, from the macroeconomic data of Morocco from 2015, the expected effects of a unilateral Morocco / rest of Africa tariff dismantling on foreign trade, growth and well-being. The results of our analysis show that imports from the rest of Africa will increase without the Moroccan economy being truly destabilized with some minor gains in certain sectors and also in household well-being. |
| Keywords: | International Relations/Trade, International Relations/Trade |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ags:pugtwp:333445&r=int |
| By: | Takpara, Moukaila Mouzamilou; Fouopi Djiogap, Constant; Sawadogo, Bouraima |
| Abstract: | This study offers an empirical appraisal of the contribution of trade facilitation for Sub-Saharan Africa (SSA) countries participation in global value chains. We used new value-added data on a panel of 25 countries over the period 2004-2017. The results using pooled ordinary least squares (OLS) regression and instrumental variable-two-stage least squares (IV-2SLS) estimators reveal that trade facilitation indicators such as physical infrastructure, information and communication technology, and border and transport efficiency support SSA countries' participation in global value chains. More interestingly, these results are robust at the sectoral level, particularly in agriculture, food & beverages, and textiles & clothing sectors for physical infrastructure and ICT, while the business environment is conducive to upstream integration of GVCs in the agriculture and textiles & clothing sectors. These results underscore the increased importance of trade facilitation in the era of global value chains and call for well-targeted sectoral policies to reap the benefits of these GVCs. |
| Keywords: | International Relations/Trade |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ags:pugtwp:333499&r=int |
| By: | INADA Mitsuo; JINJI Naoto |
| Abstract: | This study quantifies the role of regional trade agreements (RTAs) in reducing policy uncertainty (PU) on foreign direct investment (FDI) in services. PU regarding local rules and regulations discourages foreign investors from entering the service sector. Service chapters in RTAs become a fresh ingredient in quantifying such PU in host countries by creating legally bound commitments. Focusing on these commitments, this study evaluates how the activities of foreign affiliates of Japanese multinational enterprises are affected by the service chapters in RTAs with sector-specific commitments, such as market access (MA), national treatment (NT), and most favored nation (MFN) signed by Japan between 1995 and 2018. We find that a reduction in PU regarding MFN encourages the establishment of new foreign affiliates. We also find that a reduction in PU regarding NT increases the ownership ratio of foreign affiliates. These findings highlight a new and vital role for RTAs in the extensive and intensive margins of FDI in services. |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:23021&r=int |
| By: | Zembele, Adwell |
| Abstract: | Malawi has been pursuing regional integration at the bilateral, regional and multilateral level for the past four decades. Currently, Malawi is participating in negotiating the African Continental Free Trade Area (AfCFTA). Regional integration has always generated debate among stakeholders as regards its impact on the economy. While some advocate for regional integration arrangements, others are worried that trade openness will bring competition and harm the economy. The current study, therefore, investigated the potential economy-wide effects of AfCFTA on Malawi’s gross domestic product (GDP), trade, industry output, demand for labour, and economic welfare of the population. The study employed the Global Trade Analysis Project (GTAP) model with the GTAP 10 database, the Malawi Revenue Authority (MRA) 2014 tariff book tariff levels, and Malawi tariff offer under AfCFTA for counter-factual simulations. Findings show that AfCFTA will have mixed short-term effects on Malawi. Simulation results indicate that the AfCFTA will increase the gross domestic product (GDP) and welfare on the Malawi population. For example, the 2034 liberalisation scenario shows that GDP may change by 0.71 percent while welfare may increase to USD162.61 million. The impact on trade (imports and exports) is minimal while the effect on industry output and demand for labour is mixed. These findings may be useful in informing the formulation of policies and negotiation positions since negotiations for the AfCFTA are still ongoing. |
| Keywords: | International Relations/Trade, International Relations/Trade |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ags:pugtwp:333393&r=int |
| By: | Harbi, Amina |
| Abstract: | The Agreement on the African Continental Free Trade Area (AfCFTA) effectively came into effect on January 01, 2021. The AfCFTA plans to phase out tariffs as well as all other obstacles on intra-African trade. Through this study, we have tried to initiate a reflection on the expected effects on the Algerian economy, of opening up trade as part of its membership in the AfCFTA. To do this, we used a computable general equilibrium model, which we adapted to data from a Social Accounting Matrix made up of 26 sectors, 8 production factors, 10 household categories and 2 regions (foreign trade). We simulated two trade policy measures: first, a reduction in customs duties on some products (those whose shares in the supply of products from the "Africa" region are the highest) and then, an elimination of all customs duties. Although differentiated, the results obtained are generally negative, particularly in terms of public finances, with the decline in the government revenues. It should also be noted that these impacts are not large-scale, the volume of trade in goods between Algeria and the "Africa" region being relatively low. |
| Keywords: | International Relations/Trade |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ags:pugtwp:333498&r=int |
| By: | Przemyslaw Kowalski; Clarisse Legendre |
| Abstract: | The challenge of achieving net zero CO2 emissions will require a significant scaling up of production and international trade of several raw materials which are critical for transforming the global economy from one dominated by fossil fuels to one led by renewable energy technologies. This report provides a first joint assessment of data on production, international trade, and export restrictions on such critical raw materials from the OECD’s Inventory of Export Restrictions on Industrial Raw Materials covering the period 2009-2020. It presents data on production and trade concentrations, sheds early light on the impact of export restrictions, and discusses possible directions of further work in this area. The evidence presented suggests that export restrictions may be playing a non-trivial role in international markets for critical raw materials, affecting availability and prices of these materials. OECD countries have been increasingly exposed to the use of export restrictions for critical raw materials. |
| Keywords: | Export taxes, Global value chains, GVCs, International supply chains, Licensing requirements, OECD’s Inventory of Export Restrictions on Industrial Raw Materials |
| JEL: | F13 F14 F18 |
| Date: | 2023–04–11 |
| URL: | http://d.repec.org/n?u=RePEc:oec:traaab:269-en&r=int |
| By: | Biyik, Onur |
| Abstract: | This study analyzes the production concept of the Value-Added (VA) chain by implying an alternative framework, as this concept is the main driver of the VA embodied in the intermediate export. VA supply chain spillover (upstream and downstream) of the production activities is investigated. The focal point of this study is to extend Global Value Chains (GVC) based on disaggregated interconnections in relation to the multilevel and bilateral trade flow of the VA spillover. In brief, there are two main contributions of this paper; the first begins with the originality of this work’s theory which reveals the intermediate input journey among sector-country pairs as completed GVC participation, and the second is to introduce the coefficients of the technological spillover effect as well as upstream and downstream effects. In other words, this paper found that different forms of the VA with traveled products multiplier provide more precise (sectoral/regional) integration and optimal estimation method. This paper relies on constructed Global Trade Analysis Project Multi-Region Input-Output (GTAP-MRIO) and patent panel datasets. As a result of the analysis, if the product crosses the border only twice as the product returns home to its origin country, the export/import coefficient of the sectoral linkages, which boosts VA and then causes double-counting, is about 1.54 % in terms of (single) country-level data. With regard to its contributions with the technological spillover effect, traveling intermediate product as twice or infinity is to contribute by 1.6% or 154%. Lastly, its contribution to VA presents 0.8% to 72%. |
| Keywords: | International Relations/Trade, International Relations/Trade |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ags:pugtwp:333417&r=int |
| By: | Pelikan, Janine; Boimah, Mavis; Chibanda, Craig; Deblitz, Claus; Gunarathne, Anoma; Almadani, Isam Mohamad; Schott, Johanna; Thobe, Petra; Weible, Daniela; Zamani, Omid |
| Abstract: | Like many other African countries, Ghana and Senegal import large quantities of meat and dairy products from overseas. As this trend rises, together with critical discussions about the consequences for local producers and food security, the role of exports from Europe to African countries has become an intensively discussed topic. It is often argued that imported products are lowering or impeding domestic production due to increased competition in Africa. In this context, the EU agricultural and trade policies are often criticized. We aim to develop and evaluate measures to avoid or reduce the undesirable effects of these exports. In the group of livestock products, we focus on poultry meat and milk products. We investigate the above-mentioned issues in the areas of politics, trade, production technology, value chains, and consumer preferences. |
| Keywords: | International Relations/Trade, Food Security and Poverty |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ags:pugtwp:333432&r=int |
| By: | Ngavozafy, Antonia; Suarez-Cuesta, David; Latorre, María C. |
| Abstract: | On 15 July 2021, the European Commission made publicly available the tariff elimination schedules of the Association Agreement between the European Union (EU) and Mercosur countries, a mega-regional trade agreement that were concluded on 28 June 2019. Tariff reductions under the EU-Mercosur AA often take the form of linear cuts where both Parties will eliminate or reduce base rates in equal stages from the date of entry into force until the final years of implementation. Tariff-rate quotas (TRQ), either reciprocal or transitional, and specific treatments for some sensitive agri-food products are exceptions to these staging. Although they concern relatively smaller number of national tariff line, liberalization through TRQ is a key element of the EU-Mercosur AA. To evaluate the impacts of the EU-Mercosur AA, we use a standard Computable General Equilibrium (CGE) model with 8 regions and 36 sectors aggregated from the GTAP10 sectoral and regional classifications, which incorporate tariff-rate quotas. We expect a trade creation effect between the EU and Mercosur countries, which will be associated with welfare gains in both sides. The agreement will also have significant impacts on third parties: suppliers of agricultural commodities on the EU market and suppliers of manufactured products on the Mercosur markets will suffer from trade diversion. |
| Keywords: | International Relations/Trade, Agricultural and Food Policy |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ags:pugtwp:333466&r=int |
| By: | Medini, Amal; Ben abderrahmen, Chaima; Baghdadi, Leila |
| Abstract: | COVID-19 pandemic caused significant disruption of trade flows between countries, revealing the vulnerability of global value chains. This unexpected event sparked a public debate on devising new policies to increase the resilience of value chains. This study identifies vulnerabilities related to supply chains with a specific focus on Tunisian imports during the period 2019-2020. To this end, we select three potential drivers of import vulnerability based on post-pandemic reports and discussions and assess their impact on Tunisia’s overall imports using quantitative analysis. We consider, for each product, (1) the market concentration of Tunisia’s suppliers, (2) the intensity of imports and (3) we also consider COVID-19 products – that we call ‘essential products’ – as potential source of import vulnerability and assess their impact separately. These factors are country-specific product characteristics. Then, we identify a model based on first differences estimator to assess the impact of the change in vulnerable imports on the change in total imports at the country-month and country-quarter levels using import data for the period 2019-20. Finally, we use input-output linkages to assess the level of exposure of Tunisia’s local industries to vulnerable supplies from partner countries through a downstream propagation approach. This framework will help us get insights into Tunisia’s most sensitive imports and industries. |
| Keywords: | International Relations/Trade, International Relations/Trade |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ags:pugtwp:333440&r=int |
| By: | Sawadogo, Bouraïma; Fouopi Djiogap, Constant; Ouedraogo, Idrissa; Takpara, Moukaila Mouzamilou |
| Abstract: | This paper identifies the dimensions of international trade in services that promote export diversification in an unbalanced panel of 48 countries in Sub-Saharan Africa over the period 1996 - 2020. Using the System-Generalized Method of Moments (GMM), the results show that tourism, services total export, export in transport services, travel services, insurances services, financial services, use of licenses services and other business services promote export diversification in SSA. Governments should improve their business environment and strengthen services sector liberalization to attract more foreign direct investments in services. They should also adopt policies and strategies to develop and orient the services sector towards more efficient and high-value-added services. |
| Keywords: | International Relations/Trade, International Relations/Trade |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ags:pugtwp:333397&r=int |
| By: | Bacchetta, Marc; Bekkers, Eddy; Solleder, J.M.; Tresa, Enxhi |
| Abstract: | Trade liberalization in environmental goods is expected to mitigate climate change by limiting greenhouse gas emissions. In this paper, quantitative modelling is used to generate projections on the trade, GDP, and emission effects of a potential trade liberalization agreement in energy related environmental goods. Two channels reducing greenhouse gas (GHG) emissions are considered: an increase in energy efficiency through the reduction in import prices of energy related environmental goods (EREGs) and a reduction in the costs of intermediate and capital goods used in electricity production from renewable energy sources. We evaluate four scenarios based on combinations of reductions in tariffs and NTMs of EREGs, and environmentally preferable products (EPPs). Simulations with the WTO Global Trade Model project: (i) an increase in exports of EREGs and EPPs both at the global level and in most regions; (ii) a modest increase in GDP in all regions because of falling tariffs, NTMs, and increased energy efficiency; (iii) a modest reduction in global emissions of about 0.3%. |
| Keywords: | International Relations/Trade, Environmental Economics and Policy |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ags:pugtwp:333427&r=int |
| By: | Vincent Chatellier (SMART - Structures et Marché Agricoles, Ressources et Territoires - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Rennes Angers - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement) |
| Abstract: | Dairy products benefit from sustained international demand (+1.8% per year) due to population growth and the gradual modification of diets. This demand dynamic is taking place in a production context that is becoming more delicate due to the impact of global warming on fodder production, soaring raw material prices, the negative environmental impact of dairy production in several geographical areas and, at least in some countries, the difficulty of ensuring the generational renewal of farmers. International prices for dairy products have become highly volatile. After an analysis of the main trends at work, on a global scale, between the supply and demand of dairy products, this communication deals more with the evolution of world trade in dairy products. To do this, it relies on the processing of customs data, both on an international scale (via the BACI database) and at the more restricted level of the European Union (via the Comext database). Mainly dominated by three major zones (the European Union, New Zealand and the United States), world exports of dairy products practically tripled (in current currency) between 2000 and 2020 to reach almost 60 billion euros (excluding intra-European Union trade). The rise of China in world dairy imports, the recent levelling off of New Zealand's exports and the strong diversification of the types of dairy products exported are three significant phenomena of the last decade. The European Union has consolidated its leading position in world dairy exports, accounting for 38% of world trade by value. This communication also focuses on the evolution of trade in dairy products between the Member States of the European Union and the African continent, while identifying the particular case of Tunisia. |
| Abstract: | Les produits laitiers bénéficient à l'échelle internationale d'une demande soutenue (+1, 8% par an) en raison de l'essor démographique et de la modification progressive des régimes alimentaires. Cette dynamique de la demande intervient dans un contexte productif qui devient plus délicat en raison de l'impact du réchauffement climatique sur les productions fourragères, de la flambée du prix des matières premières, des impacts environnementaux négatifs de la production laitière dans plusieurs zones géographiques et, du moins dans certains pays, de la difficulté à assurer le renouvellement générationnel des éleveurs. Les prix internationaux de produits laitiers sont devenus fortement volatils. Après une analyse des principales grandes tendances à l'œuvre, à l'échelle mondiale, entre l'offre et la demande de produits laitiers, cette communication traite plus de la dynamique des échanges mondiaux de produits laitiers. Pour ce faire, elle s'appuie sur un traitement des données des douanes, tant à l'échelle internationale (via la base de données BACI) qu'au niveau plus restreint de l'Union européenne (via la base de données Comext). Dominées pour l'essentiel par trois grandes zones (l'Union européenne, la Nouvelle-Zélande et les Etats-Unis), les exportations mondiales de produits laitiers ont pratiquement triplé (en monnaie courante) entre 2000 et 2020 pour atteindre près de 60 milliards d'euros (hors commerce intra-Union européenne). La montée en puissance de la Chine dans les importations mondiales de produits laitiers, le plafonnement récent des exportations de la Nouvelle-Zélande et la forte diversification des types de produits laitiers exportés constituent trois phénomènes marquants de la dernière décennie écoulée. L'Union européenne conforte sa position de leader dans les exportations mondiales de produits laitiers, en représentant 38% des échanges mondiaux exprimés en valeur. Dans cette communication, une focalisation est également faite sur l'évolution des échanges de produits laitiers entre les Etats membres de l'Union européenne et le continent africain, ce tout en identifiant le cas particulier de la Tunisie. |
| Keywords: | Dairy markets, Dairy products, International trade, Competitiveness, Prices, European Union, Africa, Tunisia, Marchés laitiers, Produits laitiers, Echanges internationaux, Compétitivité, Prix, Union européenne, Afrique, Tunisie |
| Date: | 2023–03–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04038123&r=int |
| By: | Sebastian Benz; Alexander Jaax; Matteo Fiorini; Elisabeth van Lieshout |
| Abstract: | This paper provides evidence on the “when, how and where” of the effects of service trade policy reforms, discussing short-term impacts on services trade as well as on the performance of downstream manufacturing industries. A combination of novel methodological approaches is used to be able to track impacts over time and along the supply chain. The OECD Services Trade Restrictiveness Index serves as the measure for trade policy reform. Results show that reducing policy barriers to services trade can increase services imports already in the short run, and that benefits continue to grow over time. The impact of services trade reforms may still vary significantly depending on the nature of the policy change, the economic context, and the targeted mode of services supply. Finally, services trade reforms can have sizeable spillover effects on the productivity of manufacturing sectors that use services as intermediate inputs. |
| Keywords: | Manufacturing productivity, Services imports, Services trade policy, Short-run gravity, Synthetic control method |
| JEL: | F13 F14 F61 |
| Date: | 2023–04–12 |
| URL: | http://d.repec.org/n?u=RePEc:oec:traaab:271-en&r=int |
| By: | Kniahin, Dzmitry |
| Abstract: | FTA policymakers designate input-output relationships when formulating rules of origin (RoO). These relationships define restricted inputs that can only be sourced from FTA area. Conconi et al. (2018) found a strong trade diversion effect in such inputs in the case of NAFTA. We construct a global dataset by extracting HS6 input-output restrictions from 400 FTAs a la Conconi et al. using Rules of Origin Facilitator/MacMap global database at HS6 level. We document that: (1) Input-output tables diverge across FTAs, driven by political economy of protected inputs; (2) FTAs show heterogeneity in precision of revealed HS6 input-output relationships. Precision is higher in “sensitive” products and in NAFTA-style FTAs (US FTAs, LatAm FTAs and CPTPP); (3) RoO globally divert trade by XX% in restricted inputs, thus the effect is less than in NAFTA (45%); (4) RoO that designate `allowed' inputs result in `trade creation' in such inputs by X%, somewhat compensating trade diversion in restricted inputs. For example, if fabrics are placed on restricted list, it can trigger imports of yarn instead. Finally, we augment the NAFTA-based HS6 input-output matrix with 460 FTAs and publish a more complete, more granular research dataset which enables disaggregated value-chain impact modeling of trade policy changes. |
| Keywords: | International Relations/Trade, International Relations/Trade |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ags:pugtwp:333435&r=int |
| By: | Sofía Fernández Guerrico |
| Abstract: | This paper examines the effect of trade-induced changes in Mexican labor demand on population growth and migration responses at the local level. It exploits cross-municipality variation in exposure to a change in trade policy between the United States and China that eliminated potential tariff increases on Chinese imports, negatively affecting Mexican manufacturing exports to the United States. Municipalities more exposed to the policy change, via their industry structure, experienced greater employment loss. In the five years following the change in trade policy, more exposed municipalities experience increased population growth, driven by declines in out-migration. Conversely, 6 to 10 years after the change in trade policy, exposure to increased trade competition is associated with decreased population growth, driven by declines in in-migration and return migration rates, and increased out-migration. The sluggish regional adjustment is consistent with high moving costs and transitions across sectors in the short term. |
| Keywords: | Trade competition; Job displacement; Population growth |
| JEL: | F16 J23 O12 R12 R23 |
| Date: | 2023–02–27 |
| URL: | http://d.repec.org/n?u=RePEc:ulb:ulbeco:2013/357236&r=int |
| By: | Charlotte Emlinger (CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique); Karine Latouche (SMART - Structures et Marché Agricoles, Ressources et Territoires - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Rennes Angers - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement) |
| Abstract: | The objective of this paper is to estimate the impact of the inclusion of GIs in bilateral agreements on French exports of foodstuffs. To do so, we rely on a unique dataset of firms and products concerned by Geographical Indications (GIs) in the French agri-food industry (excluding wine) for 2012-2017, merged with firm-product level data from French Customs and French National Institute of Statistics. Controlling for markets and firms characteristics, we exploit the time dimension of the agreements and compare GI firms exports before and after the signature of the 13 agreements (25 destination countries) which include GI list to protect. We explore both the impact of the agreements on the probability of firms to export (the extensive margin of trade), their exports in value and quantity (the intensive margin) and their price. We also consider the heterogeneous impact of agreements according to the kind of products (cheese, meat, other), the size of firms and destination characteristics (existence of similar geographical indications for domestic products). |
| Keywords: | Bilateral trade agreements, Firm level data, Export performance, Trade margins |
| Date: | 2023–01–12 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04033399&r=int |
| By: | Fusacchia, Ilaria; Salvatici, Luca; Velazquez, Beatriz |
| Abstract: | We provide a comparison between indicators estimated using two of the main global databases used for macroeconomic analysis of GVCs and trade in VA patterns, namely, the GTAP Data Base in its MRIO version and the OECD-WTO TiVA database, and discuss the reasons for the deviation in the estimates of GVC-related trade based on the two databases. This work compares the main global ICIO databases with official macro-economic statistics, and also among themselves to evaluate their accuracy. The latest versions available of both the databases are considered: Version 10 of GTAP and Edition 2018 for TiVA. We analyze the differences between the two databases - harmonized into the same country and sector classification - in structural economic variables, including production, value added, exports and imports, as well as traded intermediate inputs. The major TiVA indicators are estimated based on the two databases and discrepancies among them are discussed. |
| Keywords: | International Relations/Trade, International Relations/Trade |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ags:pugtwp:333414&r=int |
| By: | Chepeliev, Maksym; Maliszewska, Maryla; Rodarte, Israel Osorio; Pereira, Maria Filipa Seara; van der Mensbrugghe, Dominique |
| Abstract: | Climate change and the respective policies for carbon emission reductions will test the resilience of global value chains and shape them. Shocks in production and trade can be transmitted from one country to another by global value chains, although they can also help to lessen the blow of a domestic shock. This paper explores simulations from the ENVISAGE global computable general equilibrium model to enhance understanding of the potential longer-term impacts of environmental policies. It evaluates the key factors shaping the global economy with stylized scenarios that capture the essential elements of policies to achieve carbon emission reductions that will have an impact on trade. |
| Keywords: | International Relations/Trade, Environmental Economics and Policy |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ags:pugtwp:333405&r=int |
| By: | Faizi, Bushra; Shah, Mohamed Eskandar |
| Abstract: | The paper provides the tariff equivalent (AVEs) of the trade regulations in services from the gravity equation estimated at the sectoral level and access protection by comparing the actual trade values against a benchmark (free trader). The AVEs are calculated using the bilateral trade flows in 19 services sectors for 121 countries from the latest version of the Global Trade Analysis Project (GTAP) database for 2014. We conclude that protection is heterogeneous across the sectors and is indirectly linked with the level of development. The countries with the least protected services are developed countries. On average, the most restrictive sector is the Gas sector with average AVE of 440 percent while the most open sector is Air transport with average AVE of 38 percent. Taking the average of AVEs in all sectors, Luxemburg, Singapore, Belgium, and Ireland are the most open economies while Bangladesh, Zimbabwe, Pakistan, and Tajikistan are more restrictive. As part of services is implicit in merchandise trade, Services value-added accounts for more than 60 percent of global GDP in 2020; liberalization can have spillover effects and welfare gains. Protection is primarily high in developing (emerging) countries; liberalization of the service sector is expected to increase their competitiveness and global trade share. Further, it can decrease the widening inequality amid the pandemic. |
| Keywords: | International Relations/Trade, International Relations/Trade |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ags:pugtwp:333430&r=int |
| By: | Beckman, Jayson; Ivanic, Maros; Shaik, Saleem |
| Abstract: | Aghion et al. (2007) developed a dynamic bargaining model that considers bilateral versus multilateral trade agreements. Employing a ‘Nash in Nash’ applied general equilibrium framework, we provide empirical evidence for their approach. Considering the Trans-Pacific Partnership (TPP), our model determines the welfare maximizing set of bilateral trade agreements by sectors (there are ten) and compares that to an agreement involving all countries/sectors. We find that a multilateral agreement generates more collective welfare than most bilateral agreements and that this welfare gain is unlikely to be achieved by countries’ individual pursuit of bilateral agreements. We find that superadditivity (i.e., additional welfare associated with the expansion of free trade to additional sectors and countries) holds across all regions and all sectors, but not for every pair of regions and sectors. Thus, it is possible for a set of regions to increase their collective welfare by excluding some sectors from their trade agreement. |
| Keywords: | International Relations/Trade, International Relations/Trade |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ags:pugtwp:333437&r=int |
| By: | Thom, Ferike |
| Abstract: | Disruptions of international trade chains are omnipresent: The COVID-19 pandemic, the recent US-Chinese “trade war” and the congestion of the Suez Canal. What are the effects and underlying mechanisms of a comprehensive trade stop? To answer these questions, I used the partial equilibrium model CAPRI and simulated an almost complete stop for all food imports into the EU. In the import stop scenario, EU prices increased for all products, but to different extent. This led to an increase in agricultural production, which caused an increase in GHG emissions. The EU’s trading partners experienced a decrease in income from exports. As also the EU’s exports decreased, the trading partners substituted these through an increase in domestic production. This increase was largest in animal production which is associated with a high value-added and thus income opportunities to the concerned regions. These results clearly show that an EU import stop in food has a substantial negative impact in monetary and environmental terms in- and outside of the EU. However, the results suggest that a reduction of EU exports can foster the economic development in other regions. I could show that the effects of a comprehensive, far-reaching import stop are higher than the sum of the effects of the single product import stops. This finding indicates that the implication of imposing or lifting a trade restriction for a specific product can differ depending on which trade restrictions are in place for other products. |
| Keywords: | International Relations/Trade, Land Economics/Use |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ags:pugtwp:333448&r=int |
| By: | Bagci, Kenan; Bakimli, Esat; Diallo, Abdouramane |
| Abstract: | This study investigates the impacts of alternative trade facilitation measures on trade flows with a special focus on five landlocked African OIC countries, namely Burkina Faso, Chad, Mali, Niger and Uganda. By employing a diverse set of data and methodology, it is found that there are significant gains from trade facilitation and improved logistics infrastructure. This benefit is significantly higher in the case of African countries. While infrastructure investments in logistics generate the largest gains, landlocked countries can attain additional gains from efficiency improvements in trade facilitation measures. Nevertheless, the aggregate impact of logistics performance remains significantly higher than the impacts of soft trade facilitation measures in both landlocked and coastal countries. This study also presents the potential gains for the five landlocked African OIC countries in case of a simulated improvement in their trade facilitation performance. |
| Keywords: | International Relations/Trade, Public Economics |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ags:pugtwp:333447&r=int |
| By: | Islam, Monirul; Tareque, Mohammad; , Abu N.M. Wahid; Alam, Md. Mahmudul (Universiti Utara Malaysia); Sohag, Kazi |
| Abstract: | The net contribution of the decomposed measures of foreign direct investment (FDIs), e.g., the inward and outward flows of FDIs, to domestic investment is still inconclusive in the case of underdeveloped and developing countries. The current literature bears testimony to this fact. Hence, this research examines the impact of inward and outward foreign direct investments (FDIs) on the domestic investment in Bangladesh. This study considers annual time series data from 1976 to 2019 and estimates this data property under the augmented ARDL approach to cointegration. In addition, this research employs the dynamic ARDL simulation technique in order to forecast the counterfactual shock of the regressors and their effects on the dependent variable. The results from the augmented ARDL method suggest that the inward FDI has a positive impact on domestic investment, while the outward FDI is inconsequential in both the long run and the short run. Besides, our estimated findings also show the economic growth’s long-run and short-run favorable effects on domestic investment. At the same time, there is no significant impact of real interest rates and institutional quality on domestic investment in the long run or the short run in Bangladesh. In addition, the counterfactual shocks (10% positive and negative) to inward FDI positively impact domestic investment, indicating the crowding-in effect of the inward FDI on the domestic investment in Bangladesh. As the inward FDI flow is a significant determinant for sustained domestic investment in Bangladesh, the policy strategy must fuel the local firms by utilizing cross-border investment. |
| Date: | 2022–03–08 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:9mfyz&r=int |
| By: | Muhammad Akhtaruzzaman, Muhammad Akhtaruzzaman (Toi Ohomai InstitTechnologyute of) |
| Abstract: | According to Korea’s Ministry of Knowledge Economy (currently the Ministry of Trade, Industry and Energy), foreign investment has now become one of the major economic pillars driving the Korean economy over the past 15 years (Tang 2022). The Korean economy started to open up to rest of the world following the Asian financial crisis in 1997 and was the biggest FDI policy reformer among 40 developed and emerging economies over the period from 1997 to 2010 (Nicolas et al. 2013). Over the last decade, Korea’s outward FDI grew much faster than inward FDI (See Figure 1) and Korea is now a net capital exporter to the world. In 2021, Korea’s outward FDI flows totaled $76.64 billion and a total of 2323 Korean enterprises invested in overseas countries (Korea EXIM Bank 2022). Due to this increased amount of outward FDI, a large number of studies (Kim and Rhee 2009; Park and Jung 2020) investigated what determines Korea’s outward FDI (OFDI). Institutional quality is found to be a major determinant in FDI literature in general. It suggests that political risk (lack of/poor institutional quality) not only deters FDI inflows to host countries but also can lead FDI to countries with higher risks and to ‘pollution heaven’ which might have an adverse impact on long term growth and development in both host and home countries. There are strong empirical evidences in literature that lack of institutional quality or good governance is associated with lower FDI inflows. An extensive literature (Alfaro et al. 2008; Ali et al. 2010; Akhtaruzzaman et al. 2017; Bénassy‐Quéré et al. 2007) investigated FDI response to various types of institutional quality in FDI host countries. Over the last 20 years data evidenced that Korea’s OFDI flowed to developing countries with a sustained large gap existing in institutional quality between host countries and Korea (See, Fig 2 top panel); however; those countries had been offering a higher degree of capital account openness. A sharp increase in capital account openness since the early 2000s coincides with sharp increase in Korea’s OFDI to those host countries. For example, Peru was the least open economy and started to initiate measures to open capital account since the mid-90s and early 2000s. The degree of openness in Peru is now similar to that of developed countries. (the rest omitted) |
| Keywords: | A Gravity Model Analysis; Outward FDI; Institutional Quality |
| Date: | 2023–01–03 |
| URL: | http://d.repec.org/n?u=RePEc:ris:kiepwe:2022_047&r=int |
| By: | Choi, Bo-Young (Kyungpook National University); Heo, Inae (Kyungpook National University) |
| Abstract: | This paper examines the regulatory similarity between APEC economies by NTM types and sectors. We calculate the regulatory distance proposed by Cadot et al. (2015) and identify which industries or NTM type needs further cooperation through the Free Trade Area of Asia-Pacific (FTAAP). We refer to the two pathways of FTAAP, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP) and analyze how FTAAP may incorporate the existing mega FTAs to reduce regulatory disparities among APEC economies. We find that regulatory distance differs across industries and thus focusing on specific industries like CPTPP may be an effective way to mitigate unnecessary trade costs attributed to the heterogeneity of regulations. We also argue that including provisions related to technical assistance and capacity building is essential as regulatory distance is especially big between developed economies and developing economies. |
| Keywords: | Regulatory distance; Free Trade Area of Asia-Pacific; Technical Barriers to Trade; Sanitary and Phytosanitary Measures |
| JEL: | F14 F15 |
| Date: | 2022–12–16 |
| URL: | http://d.repec.org/n?u=RePEc:ris:kiepas:2022_002&r=int |
| By: | Perdana, Sigit; Vielle, Marc |
| Abstract: | Implementation of CBAM to support EU climate neutrality by 2050 has raised several concerns. As the mechanism aims to minimise leakage through equal fairness in global mitigation, imposing carbon tariffs on the EU's imports of energy- intensive goods could curtail the export of EU trading partners. This might be detrimental, especially to the LDCs, due to their high exposures and vulnerability risks. This paper assesses and quantifies the implication of EU-CBAM and analyses eight complementary measures to mitigate the impacts on LDCs. Scenario developments are constructed by projecting the EU's new climate targets relative to the reference scenario of the EU's current policies. A more stringent climate target results in carbon leakage, and implementing CBAM will reduce the rate by one-third by 2040. The analysis also confirms significant welfare loss for LDCs through declining exports. Exempting LDCs from EU CBAM is less justifiable, as this measure results in greater leakage than other options. A further assessment confirms that policy recommendation for CBAM complementary measures should focus on the climate transformation pathway for LDCs. EU CBAM implementation with revenue-redistribution targeted to promote clean and efficient use of energy in LDCs has improved the welfare of recipient countries, substantially reduced leakage, and proven cost-efficient for the EU. |
| Keywords: | Environmental Economics and Policy, International Relations/Trade |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ags:pugtwp:333458&r=int |
| By: | Priyaranjan Jha; Karan Talathi |
| Abstract: | We study the impact of the Indian trade liberalization of 1991 on development at the district level using satellite nighttime lights per capita as a proxy for development. We find that on average trade liberalization increased nighttime lights per capita but there was considerable heterogeneity in the effect. In particular, districts in states with flexible labor laws, districts with better road networks, proximity to the coast, or higher female labor force participation rate seem to have benefited more than other districts. |
| Keywords: | trade liberalization, nighttime lights, per capita income, tariffs, labor laws |
| JEL: | F13 F14 O11 O24 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10294&r=int |
| By: | Niass, Dieynaba |
| Abstract: | This research aims to analyze the effect of natural resources on the supply portfolio of African exports. Based on COMTRADE data on export products from 2000-to 2015, we apply a methodological approach based on two standard measurements of trade diversification indicators: active lines counting and the standardized Herfindahl-Hirschman index. These indicators are then linked to the status of resources-rich countries (and other controls) in the fixed-effects panel data model. The results of this article suggest that the presence of oil resources (non-renewable resources) has a negative effect on diversification, essentially through the channel of the degradation of institutions. Similarly, agricultural products (renewable resources) negatively affect African exports diversification (count and index). This effect is captured through the exchange rate and degradation of institutions' channels. This shows the need for the African continent to develop its own agricultural sector which could be a good strategy for diversification, but also to strengthen the quality of its institutions for good management of natural resources. |
| Keywords: | International Relations/Trade, International Relations/Trade |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ags:pugtwp:333416&r=int |
| By: | Lorenzo Cresti; Giovanni Dosi; Federico Riccio; Maria Enrica Virgillito |
| Abstract: | How does Italy position inside the European structure of trade relationships? How labour bilateral flows have changed over time? Which type of employment activity has been outsourced? Which insourced? Focusing on a three-country perspective, what are the employment bilateral relationships between Italy-Germany-Poland (descending periphery-core-ascending periphery)? To address these questions we develop a novel set of bilateral labour dependence indicators inside I-O production networks. Overall, we provide evidence of the reconfiguration of Italy as falling into the trap of GVC downgrading, with an increasing number of trade relationships in employment requirements, particularly in the most strategic productions, as insourced from abroad. The offshoring strategy conducted so far has resulted in a weakening of its internal production capacity and employment absorption, even more harshly when compared to other European countries. |
| Keywords: | Input-output; global value chains; international division of labour; core-periphery. |
| Date: | 2023–04–02 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2023/15&r=int |
| By: | Mercy T. Musakwa (University of South Africa) |
| Abstract: | This study examined the causal relationship between poverty and foreign direct investment inflows in Zimbabwe using data from 1990 to 2020. The study was motivated by the need to determine which factor influence the other between FDI and poverty. This would contribute to identifying possible solution to the challenge of low foreign direct investment and high poverty levels in Zimbabwe, despite the government open-door policy for foreign investors. The human development index and household consumption expenditure were used as poverty proxies. Using the autoregressive distributed lag to cointegration test and ECM-based causality test, the study found a unidirectional causal flow from poverty to foreign direct investment in both the short and long run, regardless of the poverty proxy used. The study confirms the importance of preconditions to foreign direct investment inflows. It is recommended that policy makers in Zimbabwe complement the open-door policy for foreign investors with policies that address preconditions such as poverty, infrastructure, education and health, to stimulate high levels of foreign direct investment. |
| URL: | http://d.repec.org/n?u=RePEc:afa:wpaper:aesriwp26&r=int |
| By: | Nath, Ishan |
| Abstract: | This paper combines local temperature treatment effects with a quantitative macroeconomic model to assess the potential for global reallocation between agricultural and non-agricultural production to reduce the costs of climate change. First, I use firm-level panel data from a wide range of countries to show that extreme heat reduces productivity less in manufacturing and services than in agriculture, implying that hot countries could achieve large potential gains through adapting to global warming by shifting labor toward manufacturing and increasing imports of food. To investigate the likelihood that such gains will be realized, I embed the estimated productivity effects in a model of sectoral specialization and trade covering 158 countries. Simulations suggest that climate change does little to alter the geography of agricultural production, however, as high trade barriers in developing countries temper the influence of shifting comparative advantage. Instead, climate change accentuates the existing pattern, known as “the food problem, ” in which poor countries specialize heavily in relatively low productivity agricultural sectors to meet subsistence consumer needs. The productivity effects of climate change reduce welfare by 6-10% for the poorest quartile of the world with trade barriers held at current levels, but by nearly 70% less in an alternative policy counterfactual that moves low-income countries to OECD levels of trade openness. |
| Keywords: | International Relations/Trade, Environmental Economics and Policy |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ags:pugtwp:333404&r=int |
| By: | Thierry Warin |
| Abstract: | The world has changed and companies are facing a perfect storm, with catastrophic risks that have a very low probability of occurrence, but for which the consequences are enormous. The war in Ukraine is impacting global supply chains already constrained by the COVID-19 pandemic. Ukraine is responsible for about 70% of the world's neon and Russia controls 44% of the world's supply of palladium, both of which are essential inputs in semiconductor production. Semiconductors are themselves essential to the manufacture of cars, smartphones or even medical equipment. With Taiwan producing nearly two-thirds of the world's semiconductors, China's move to reunify with the island of Taiwan raises significant concerns. In this complex geopolitical context, some companies are considering reshoring or nearshoring, i.e. the repatriation of specific activities within national ou regional borders. Is this the right solution or not? In this short text, Thierry Warin, Fellow CIRANO and responsible of the CIRANO Pole on Data Science for Trade and Intermodal Transportationfor argues that the solutions to recent complex supply problems must themselves be complex. We need to use the tools we have access to today: massive data, computing power and new methods of analysis. The global trade system must adapt to a new technological paradigm, that of artificial intelligence and data science. The alternative of using the same mental patterns as in the past and proposing binary solutions is no longer acceptable today. There is no more time to lose. Le monde a changé et les entreprises sont confrontées à une tempête parfaite, avec des risques catastrophiques dont la probabilité d'occurrence est minime, mais pour lesquels les conséquences sont énormes. La guerre en Ukraine a un impact sur les chaînes d'approvisionnement mondiales déjà limitées par la pandémie de COVID-19. L’Ukraine est responsable d’environ 70 % du néon sur la planète et la Russie contrôle 44 % des approvisionnements mondiaux en palladium, deux intrants indispensables dans la production des semi-conducteurs. Les semi-conducteurs sont eux-mêmes indispensables à la fabrication de voitures, de téléphones intelligents ou même d’équipements médicaux. Avec Taïwan qui produit près des deux tiers des semi-conducteurs du monde, la velléité de la Chine de procéder à la réunification avec l’île de Taïwan soulève d’importantes inquiétudes. Dans ce contexte géopolitique complexe, certaines entreprises envisagent le rapatriement de certaines activités à l’intérieur des frontières nationales — le reshoring — ou régionales — le nearshoring. Est-ce, oui ou non, la bonne solution ? Dans ce court texte, Thierry Warin, Fellow CIRANO et responsable du Pôle CIRANO en science des données pour les échanges commerciaux et le transport intermodal, soutient que les solutions aux problèmes complexes d'approvisionnement récents doivent elles-mêmes être complexes. Nous devons utiliser les outils auxquels nous avons accès aujourd'hui : les données massives, la puissance de calcul et les nouvelles méthodes d'analyse. Le commerce mondial doit s'adapter à un nouveau paradigme technologique, celui de l'intelligence artificielle et de la science des données. L'alternative qui serait d'utiliser les mêmes schémas mentaux que par le passé et de proposer des solutions binaires n'est plus acceptable aujourd'hui. Il n'y a plus de temps à perdre. |
| Keywords: | Supply chains, data science, relocation, international trade, global value chains, Chaînes logistiques, Science des données, Relocalisation, Commerce international, Chaînes de valeur mondiales |
| Date: | 2022–08–08 |
| URL: | http://d.repec.org/n?u=RePEc:cir:circah:2022pj-06&r=int |
| By: | Ali-Yrkkö, Jyrki; Kuosmanen, Natalia |
| Abstract: | Abstract According to our results the imports of services to Finland have increased. The share of services in total imports in Finland is relatively large compared to many other EU countries. Companies often use imported services as their intermediates, with services accounting for nearly half of the total intermediate imports. It seems that offshoring of services is declining. While in the years 2015–2017 approximately 8.5 % of large and medium-sized service companies offshored their operations abroad, in 2018–2020 the share had decreased to 6.4 %. |
| Keywords: | Service, Outsourcing, Offshoring, Internationalization, Intermediate good |
| JEL: | F14 L8 |
| Date: | 2023–03–30 |
| URL: | http://d.repec.org/n?u=RePEc:rif:report:137&r=int |
| By: | Fournier Gabela, Julio G.; Freund, Florian |
| Abstract: | Achieving climate targets requires more stringent mitigation policies, including the participation of economic sectors beyond energy-intensive industries. However, what this implies for carbon leakage risks remains largely an open question. This paper aims to fill this gap by assessing potential carbon leakage risk for all sectors under varying climate policy scopes covering GHG emissions along global supply chains. To measure this risk, we use the emission-intensity and trade-exposure metric and emission data including CO2 and non-CO2 gasses. Under a uniform carbon price and assuming full carbon cost pass-through, we find that carbon leakage risk in downstream sectors can be as high as in sectors whose direct GHG emissions are subject to carbon pricing. We also find that agri-food and transport sectors have, on average, a higher potential risk than energy-intensive industries. Our results highlight the importance of developing sound anti-leakage mechanisms tailored to each sector’s characteristics. |
| Keywords: | Environmental Economics and Policy, International Relations/Trade |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ags:pugtwp:333468&r=int |
| By: | Alessandro, Gatto; Kuiper, Marijke; van Meijl, Hans |
| Abstract: | Transitioning to a more sustainable food system requires identifying synergies between nutritional targets (SDG2) and FLW generation (SDG12.3), assessing FLW along global FSC when diets shift to more sustainable consumption. Bridging economic and technical modelling of FLW, we trace FLW in physical quantities along global FSC in a global economic model. We compile a new global FLW database and investigate how transitioning towards the EAT-Lancet diet influences FLW magnitude, composition and location along FSC in 2030. The EAT-Lancet diet reduces FLW generation along FSC, enlarging shares of non-processed plant-based products, highly suitable for reuse. Nonetheless, as the diet increases food trade, imports from high-income regions generate large amounts of losses in low- and mid-income regions, requiring complementary policies to achieve SDG12.3 on a global scale. We address current FLW data and methodological inconsistencies, providing a starting point for bridging economic and technical models to assist policies and multidisciplinary investigations on FLW. |
| Keywords: | International Relations/Trade, Food Security and Poverty |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ags:pugtwp:333418&r=int |
| By: | Danila Karpov (Bank of Russia, Russian Federation) |
| Abstract: | This paper assesses the direct and indirect dependence of Russia’s economy on imported inputs across various industries. The author compares these figures with similar data for other economies. Additionally, we indirectly take into account the quality aspect of this dependence, that is, a small number of possibly critical components for industries that might exist. We assess both the direct dependence of industries and their indirect dependence resulting from consumption of other domestic sectors’ products also containing imported components. The findings of the research suggest that the dependence of the sectors of the Russian economy on imported inputs is relatively low, even though the share of imports for certain industries can be high in absolute terms. In most of the sectors, dependence on imports is the same as or does not exceed the average for a similar group of economies. |
| Keywords: | input-output tables, import dependence, intermediate goods imports |
| JEL: | C67 D57 F14 |
| Date: | 2022–12 |
| URL: | http://d.repec.org/n?u=RePEc:bkr:wpaper:wps106&r=int |
| By: | Michael Landesmann (The Vienna Institute for International Economic Studies, wiiw); Sandra M. Leitner (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | This paper estimates conditional demand models to examine the impact of offshoring, technological change, and migration on the labour demand of native workers differentiated by four different types of occupational groups managers/professionals, clerical workers, craft (skilled) workers and manual workers. The analysis is conducted for an unbalanced panel of five economies Austria, Belgium, France, Spain, and Switzerland covering the period 2005-2018. Our results point to important and occupation-specific effects offshoring seems to have beneficial employment effects for native craft workers in this set of economies, while negative effects for native manual workers across a wide set of industries (including manufacturing and services industries) and managers/professionals in manufacturing. Furthermore, there are important distinctions whether offshoring occurs in other advanced economies, in the EU13 or in developing countries. The analysis of the impact of technological change shows the strong positive impact which the additional IT equipment has on most occupational groups of native workers (with the exception of manual workers), while robotisation in manufacturing showed strongly negative impacts on the employment of all groups of workers and especially of craft workers. Increasing immigrant shares in the work forces showed strongly negative impacts on native workers – however, considering only the partial substitution effects and not including the potential for productivity and demand effects – and this is mostly accounted for by immigration from low- to medium-income source countries. |
| Keywords: | Employment, occupational groups, offshoring, technological change, immigration |
| JEL: | F16 F22 F66 O33 |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:wii:wpaper:226&r=int |
| By: | Lim, Jing Zhi; Toh, Mun-Heng; Xie, Taojun |
| Abstract: | Technology strategy and governance have turned from a priority to an imperative for firms and governments alike in today's digital economy. Paving the way for the future, ASEAN has entered discussions for an ASEAN Digital Masterplan in 2025 to improve economic integration, and promote inclusive, sustainable growth for the region. We conduct a computable general equilibrium analysis of the impacts of the DEA on the signatories' economies, the ASEAN region, and the world. We find that DEAs will positively increase the output of the ICT sector and has downstream benefits for the business services & financial sector, increasing their output by an average of 6.78%. The DEAs which aim to improve the interoperability of digital systems between countries will also increase inter-regional trade by an average of 7.27%. Data localization clauses that are overly restrictive may be counterproductive and decrease the ICT sector's sectoral output. We also find that countries with a higher proportion of unskilled labor would see the most considerable growth in demand for skilled labor in ICT, reiterating the importance of reskilling the workforce. |
| Keywords: | International Relations/Trade, International Relations/Trade |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ags:pugtwp:333441&r=int |
| By: | Khan Jaffur, Zameelah; Seetanah, Boopen; Tandrayen-Ragoobur, Verena; Fauzel, Sheereen; Teeroovengadum, Viraiyan |
| Abstract: | This study sets out to empirically examine the effect of the outbreak of the global COVID-19 pandemic on the foreign direct investment flows of a small open economy, Mauritius. A preliminary analysis of the monthly gross direct investment flows data clearly shows that in general, the series departed from their original trends after the outbreak of the pandemic. As such, we employ the newly developed Bayesian structural time series (BSTS) framework for causal analysis to determine the initial impact of the pandemic on the gross direct investment flows of the country. The results indicate that the outbreak of the pandemic negatively affected investments coming from South Africa, Switzerland, Belgium, China and Reunion and those in the “Real Estate Activities” sector. Surprisingly, a considerable increase was observed for the “Manufacturing” sector. Our findings also reveal that in the long run, gross direct investment flows from some countries and in some sectors will surely be influenced by the pandemic although this was not obvious at the time of the investigation. However, this will be highly dependent upon the measures taken by the country and worldwide to contain the spread of the pandemic. |
| Keywords: | International Relations/Trade, International Relations/Trade |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ags:pugtwp:333443&r=int |
| By: | OECD |
| Abstract: | Industrial subsidies take on a growing importance in trade discussions. Yet assessing the scope and scale of government interventions in manufacturing remains notoriously difficult due to a persistent lack of reliable and comparable data. With many governments failing to provide sufficient information, attention has increasingly turned to firm-level data as a possible alternative for measuring industrial subsidies. Using this approach, recent OECD work has identified and quantified government support across key industrial sectors and policy instruments. The results show that: (i) the type of support received by firms can differ greatly across sectors; (ii) state enterprises obtain relatively more support and can serve as providers of support to other firms; and (iii) the complexity of supply chains implies that it can be hard to identify the ultimate beneficiaries of government support. These findings have important policy implications in the context of discussions at the WTO and elsewhere as they provide indications as to the possible nature of gaps in trade rules. |
| Keywords: | Competition, Distortions, Subsidies, Trade, WTO |
| JEL: | F13 F23 H25 L52 L60 O25 |
| Date: | 2023–04–07 |
| URL: | http://d.repec.org/n?u=RePEc:oec:traaab:270-en&r=int |
| By: | Gupta, Krisna; Gretton, Paul; Patunru, Arianto |
| Abstract: | Indonesia has been trying to improve its investment climate. The most recent development in this process is the enactment of a ‘Job Creation Law’ which aims to improve the investment climate through simplifying complicated red tape, eliminating large numbers of overlapping regulations and the adoption of a Risk Based Assessment approach to business licensing. In parallel to this development, the Indonesian Government is pursuing an Import Substitution Strategy to preserve external balance while fostering local activity. This paper discusses the changes introduced by these policies and how each may be captured in policy simulations. It then looks to simulate the potential national and sectoral impacts of the policies using the recursive dynamic GDyn-FS model of the global economy. It highlights impacts of the policies on national investment and trade over time and the flow-on impacts to industries and households. The analysis also takes into account changes caused by the COVID-19 pandemic to Indonesia’s economy in the baseline scenario. The result of the policy simulations reflects a new and materially higher growth trajectory for the Indonesian economy in the situation where institution and country risk is lowered through better regulation. On the other hand, the projections indicate that the pursuit of an import substitution strategy, while possibly favouring individual protected activities, is likely to act as a drag on the wider economy. |
| Keywords: | International Relations/Trade |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ags:pugtwp:333472&r=int |
| By: | Huynh, Pham Duy Anh |
| Abstract: | The research uses a qualitative methodology design, by which data was collected primarily using desk-based study, supplemented by interviews with anti-dumping experts, Vietnamese exporters and government officials. It involves the examination of international law pertaining to anti-dumping, the US and EU anti-dumping laws and investigation procedures, analysis of the WTO anti-dumping dispute settlement procedures and related jurisprudence, as well as the analysis of Vietnam’s transition to a market economy. The research has found that both the US and EU treat Vietnam as a NME and have developed their own specific methodologies for anti-dumping investigations on exports from Vietnam. Furthermore, it highlights the wide discretion of the US and the EU under their domestic laws in many stages of anti-dumping investigations. The findings also show that the WTO Dispute Settlement Body generally considers the US and the EU practices to be consistent with the ADA provisions. However, certain US and EU practices were found to be inconsistent with the ADA, including ‘zeroing’, limited examination, surrogate country selection, and the imposition of the ‘entity-wide rate.’ Further, by applying these practices, investigating authorities might establish unpredictable normal values that may inflate the estimated dumping margins and ultimately lead to the imposition of a higher than appropriate anti-dumping duty. The analysis concludes that the NME status of countries such as Vietnam disadvantages them when facing claims of dumping. Finally, this thesis provides recommendations for Vietnamese exporters that will serve to improve their competence as defendants/respondents in anti-dumping investigations and proceedings and more effectively demonstrate the degree to which their operations are based on market-based principles. Recommendations are also provided to the Vietnam Government on ways in which it can support Vietnamese exporters in anti-dumping investigations and proceedings. |
| Date: | 2023–03–04 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:esw4b&r=int |
| By: | Sy, Deborah Kim; Hosoe, Nobuhiro |
| Abstract: | Minimum wage is used as a support for low-wage workers, but it is expected to increase unemployment and cause deterioration of the welfare of the unemployed. While earlier studies identify negative side effects of minimum wage, that may not be the case in the Philippines, where many workers migrate and send home large remittances. This study uses a computable general equilibrium model to examine the impacts of an increase in the domestic minimum wage on unemployment, migration, and output, as well as on welfare and inequality, in the Philippines. Our simulation results show that a minimum wage increase would indeed reduce domestic labor demand and prompt many unemployed workers to migrate out, leaving relatively few unemployed at home. While an increased volume of remittances would improve household welfare, it would also have some unintended effects, such as currency appreciation; decreased domestic production in labor-intensive and export-oriented industries; greater income disparity; and tax base erosion. |
| Keywords: | Labor and Human Capital, Agricultural and Food Policy |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ags:pugtwp:333454&r=int |
| By: | Olga Pindyuk (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | Although China has become a major trading partner of the EU, the EU-China relationship has deteriorated over the last decade. This has been demonstrated, for example, by disputes over trade issues, unequal treatment of EU investors by Beijing, frictions over the transfer of intellectual property, and human rights violations. The EU’s critical dependency on supplies from China, which became evident during the COVID-19 pandemic, further complicates the relationship. The issue of the green transition has a central importance in the context of intensified geo-economic competition and possible decoupling from China, as here the EU has critical dependencies on the country, which is responsible for about 60% of global extraction of rare earth elements, about 60-65% of global processing of lithium and cobalt, and nearly 90% of global processing of rare earth elements. So far, EU policy with respect to China has lacked co-ordination and solidarity, with the splits running across countries, institutions and economic sectors. This makes it challenging for the EU to develop a unified strategy toward Beijing. This paper examines the issues and sets out our suggestions for the policies the EU and Austria can undertake to decrease the bloc’s dependency on China in supplies of critical inputs for its green transition and to minimise the vulnerabilities of their economies. |
| Keywords: | China, European Union, Geopolitics, Geo-economic policy, Renewable energy, Energy security, Energy transition, Critical materials, Rare earth elements |
| JEL: | F02 F50 F52 F64 Q28 Q48 Q58 |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:wii:pnotes:pn:67&r=int |
| By: | Rudik, Ivan; Lyn, Gary; Tan, Weiliang; Ortiz-Bobea, Ariel |
| Abstract: | We develop a dynamic-spatial equilibrium model to quantify the economic effects of climate change with a focus on the United States. We find that climate change reduces US welfare by 4% and global welfare by over 20%. Market-based adaptation through trade and labor reallocation increases US welfare, but with substantial spatial heterogeneity. Adaptation through labor reallocation and trade are complementary: together they boost welfare by 50% more than their individual effects. We additionally develop a new dynamic envelope theorem method for measuring welfare impacts in reduced form and to validate our quantitative model. We find that welfare distributions from our two approaches are consistent, indicating that our quantitative model captures the first-order factors for measuring the distributional impacts of climate change. The level and distribution of the economic impacts of climate change depends the sectoral and spatial structure of the economy, and the extent to which different markets can adapt. |
| Keywords: | Environmental Economics and Policy, International Relations/Trade |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ags:pugtwp:333486&r=int |
| By: | Norman-Lopez, Ana; Wojtowicz, Krzysztof; Garaffa, Rafael; Tamba, Marie |
| Abstract: | In the Global Trade Analysis Project (GTAP) data base (Aguiar et al., 2019), transport sectors (air, land and maritime) are too aggregated for modelling transport policies for specific modes (aviation/rail/road) and operations (passenger/freight). This limitation is already recognised in the literature, with a number of studies focusing on data quality and transport analysis (e.g., Karkatsoulis et al., 2017, Nuno-Ledesma and Villoria, 2019, Robson et al., 2018). This study splits the air and maritime sectors into two sectors each (air passenger, air freight, water passenger, water freight) and the land transport sectors into four new sectors (road passenger, road freight, rail passenger and rail freight). Our contribution to the literature is an open discussion of the data available paying particular attention to GTAP’s structure, and a step by step procedure on how to split the transport sectors and the data we use. Finally, this paper will discuss baseline projections of the disaggregated transport components. Our methodology to split GTAP database is a simple RAS method, which is used twice (separately for each aggregated sector and each region): first to disaggregate the cost structure of a sector and then to disaggregate its use (sales). We run RAS starting with an already aggregated GTAP database (35 sectors and 49 regions), but the method can be applied to any other dimensions. |
| Keywords: | International Relations/Trade, International Relations/Trade |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ags:pugtwp:333415&r=int |
| By: | Malliet, Paul; Reynès, Frédéric G. |
| Abstract: | The outcome of Computable General Equilibrium models applied to climate crucially rely on the estimation of elasticities of substitution. We use a generalized production function that overcomes the restriction imposed by a nesting structure of the Constant Elasticity of Substitution (CES) production function assumed in most CGE models. Constructing a panel of 44 countries and 14 periods from the World Input-Output Database (WIOD) tables, we estimate the production functions for 54 sectors using a \textit{Seemingly Unrelated Regression} model. We compare these results to two standard KLEM nesting structures used in CES specification and find direct implications on the estimation results, especially for Capital-Energy substitutability. The more general form of the CES production function on which we rely, the Variable Output Elasticity-Cobb Douglas (VOE-CB) supports substitution between these two inputs. |
| Keywords: | International Relations/Trade, Research and Development/Tech Change/Emerging Technologies |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ags:pugtwp:333423&r=int |
| By: | Rosa Sanchis-Guarner (Universitat de Barcelona & IEB) |
| Abstract: | Immigrant inflows affect local house prices by increasing housing demand when housing supply is fixed. In this paper, I show that we can formally decompose total demand changes into changes stemming from an immediate increase in population due to new arrivals (“partial effect”) and additional changes in demand from relocated natives (“induced effect”). I propose a methodology to separately estimate these two effects using Spanish provinces’ data from 2001- 2012. Applying an instrumental variables approach, I find that a 1 p.p. increase in the immigration rate increases average house prices by 3.3% and rents by 1%. Partial demand estimates are 24% smaller than the total estimates, due to immigrants and natives locating in the same provinces. The results show that accounting for the impact of immigration on native location choices is key to understanding net demand adjustments, as partial and total effects can significantly differ depending on native population mobility. |
| Keywords: | Immigration, House Prices, Spain |
| JEL: | J61 R12 R21 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:doc2022-10&r=int |
| By: | Jacek Rothert (United States Naval Academy; Group for Research in Applied Economics (GRAPE)); Alexander McQuoid (United States Naval Academy); Katherine Smith (United States Naval Academy) |
| Abstract: | We document a robust negative relationship between bilateral RER volatility and bilateral FDI flows in the European Union. We then extend the standard international business cycle model to allow for domestic and foreign ownership of physical capital stock to be less than perfect substitutes. This allows the model to have meaningful predictions about the behavior of gross FDI flows. We characterize the conditions under which lower RER volatility coincides with larger bilateral FDI flows. We also show, both theoretically, and using numerical simulations, that the magnitude of the relationship between the RER volatility and FDI flows depends crucially on one parameter: the elasticity of substitution between domestic and foreign ownership of capital stock used in production. Our results suggest the existence of a new channel through which a reduction in RER volatility can be welfare improving: more efficient allocation of capital across countries (capital diversity). |
| Keywords: | FDI, real exchange rates, international financial integration, exchange rate risk |
| JEL: | E F |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:fme:wpaper:79&r=int |
| By: | Boimah, Mavis; Weible, Daniela |
| Abstract: | The growing exports of European dairy products to West Africa is raising concerns globally with regards to its role in the retarded growth of the dairy sectors in recipient nations. Focusing on consumers, this study examines the influence of product origin on consumer behavior in Ghana and Senegal, two developing countries with high patterns of dairy imports mainly from Europe. A total of 312 and 532 households were sampled for the study in Ghana and Senegal respectively. In the analysis, we used descriptive statistics, Principal Component Analysis, and a logit model. The results show that socio-demographic characteristics, especially age, household size, education and income play crucial roles in the consumption of local, domestic and imported dairy products. Moreover, product origin influence consumer perceptions, and hence preferences. Consumers generally reveal a positive attitude towards local dairy products in both countries. However, final purchase decisions as the study show are to a large extent influenced by product price and availability, encouraging the consumption of imported and domestic products. Milk powder and its domestically processed products obviously play a crucial role in ensuring a reliable access to affordable dairy products in developing countries, and in this facet, their imports are encouraged. However, hygienic handling and processing of local milk in addition to good packaging and labelling are essential. |
| Keywords: | International Relations/Trade, International Relations/Trade |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ags:pugtwp:333409&r=int |
| By: | Wei, Taoyuan; Glomsrød, Solveig; Asbjørn, Aaheim; Ma, Lin |
| Abstract: | The Model for Global Responses to Anthropogenic Changes in the Environment (GRACE) was developed for economic analysis of climate change issues including mitigation, impacts, and adaptation. Since 2005, GRACE has been updated in line with the latest Global Trade Analysis Project (GTAP) database. So far, Norway has not been a specific region in GRACE. To include Norway in a new version of GRACE, we need a GTAP database that ensures consistency with the official national accounting data of Norway. This study describes how we adjust the GTAP v. 10 data to achieve this consistency. For this purpose, we apply the official input-output (IO) table of Norway for the year 2014 and the annually updated Table 11123 of the National accounts to adjust macroeconomic data of the original GTAP database for components of GDP like production, income, and expenditure. The balance between supply and demand of products is finally taken care of by introducing an additional parameter in the adjusted GTAP data as “changes in inventory” for all regions. The official energy accounts and CO2 emissions data of Norway are used to replace the corresponding data of Norway in the GTAP database. |
| Keywords: | International Relations/Trade, Agricultural and Food Policy |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ags:pugtwp:333436&r=int |
| By: | ALVES DIAS Patricia (European Commission - JRC); AMOROSO Sara (European Commission - JRC); BAUER Peter (European Commission - JRC); BESSAGNET Bertrand (European Commission - JRC); CABRERA GIRALDEZ Marcelino (European Commission - JRC); CARDONA Melisande (European Commission - JRC); CARRARA Samuel (European Commission - JRC); CHRISTOU Michail (European Commission - JRC); CIANI Andrea (European Commission - JRC); CONTE Andrea (European Commission - JRC); DE PRATO Giuditta (European Commission - JRC); DI GIROLAMO Francesca (European Commission - JRC); DIAZ LANCHAS Jorge (European Commission - JRC); DIODATO Dario (European Commission - JRC); DIUKANOVA Olga (European Commission - JRC); DOMNICK Clemens (European Commission - JRC); FAKO Peter (European Commission - JRC); FAZIO Alessandro (European Commission - JRC); GAVIGAN James (European Commission - JRC); GENTILE Stefano (European Commission - JRC); GENTY Aurelien (European Commission - JRC); GEORGAKAKI Aliki (European Commission - JRC); GKOTSIS Petros (European Commission - JRC); GOENAGA BELDARRAIN Xabier (European Commission - JRC); GONZALEZ VAZQUEZ Ignacio (European Commission - JRC); GREGORI Wildmer (European Commission - JRC); HERVAS SORIANO Fernando (European Commission - JRC); HIRSCHBUEHL Dominik (European Commission - JRC); LACAL ARANTEGUI Roberto (European Commission - JRC); LEWIS Adam (European Commission - JRC); LOPEZ COBO Montserrat (European Commission - JRC); MAGHIROS Ioannis (European Commission - JRC); MANDRAS Giovanni (European Commission - JRC); MARSCHINSKI Robert (European Commission - JRC); MARTINEZ CILLERO Maria (European Commission - JRC); MARTINEZ TUREGANO David (European Commission - JRC); NARDO Michela (European Commission - JRC); NDACYAYISENGA Nathalie (European Commission - JRC); PAGANO Andrea (European Commission - JRC); PREZIOSI Nadir (European Commission - JRC); PUGLIESE Emanuele (European Commission - JRC); PUNIE Yves (European Commission - JRC); RIGHI Riccardo (European Commission - JRC); RUEDA CANTUCHE Jose (European Commission - JRC); SAMOILI Sofia (European Commission - JRC); SHAMUILIA Sheron (European Commission - JRC); SHEVTSOVA Yevgeniya (European Commission - JRC); TACCHELLA Andrea (European Commission - JRC); TELSNIG Thomas (European Commission - JRC); TESTA Giuseppina (European Commission - JRC); THIEL Christian (European Commission - JRC); TRAVAGNIN Martino (European Commission - JRC); TUEBKE Alexander (European Commission - JRC); VAZQUEZ-PRADA BAILLET Miguel (European Commission - JRC); VIGNATI Elisabetta (European Commission - JRC) |
| Abstract: | As shown by first JRC China Flagship report, China's improvements and performance in high-tech sectors appear to originate from a combination of productivity-enhancing investments and technological developments while benefiting from sheltering foreign investment conditions. The second Flagship report – ‘China 2.0’ – adopts a holistic approach to analyse China's performance on international and capital markets as well as technological developments. Such an approach combines information on three pillars of analysis often found disconnected in the literature: economic, financial and trade statistics (1); innovation and patent data (2); energy and environmental policy (3). Furthermore, the second Flagship report encompasses all levels of (dis)aggregation, ranging from macro-country statistics to sectors, firms, and product –level information. Most importantly, it does so by consistently comparing China vis-à-vis the EU and including the US whenever suitable. The extent and granularity of the data used as well as the multi-country (China-EU-US), -level (country-sector-product), and -field (economy – innovation system – energy and environment) analytical approach aim to provide scientific evidence to a policy audience on a wide range of issues and allow to draw policy relevant conclusions. |
| Keywords: | China, Global Value Chains, M&As, FDI, Venture Capital, R&I, Industrial Leadership, Artificial Intelligence, Quantum, New Vehicles, Wind Energy, Circular Economy, Air Quality, COVID19, import dependence, input-output |
| Date: | 2022–12 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc131882&r=int |
| By: | Shakib, Mohammed; Yumei, Hou; Rauf, Abdul; Alam, Md. Mahmudul (Universiti Utara Malaysia); Murshed, Muntasir; Mahmood, Haider |
| Abstract: | The Belt and Road Initiative (BRI) is an ambitious development project initiated by the Chinese government to foster economic progress worldwide. This study aims to investigate the dynamics of energy, economy, and environment among 42 BRI developing countries using an annual frequency panel dataset from 1995 to 2019. The major findings from the econometric analysis revealed that higher degrees of energy consumption, economic growth, population growth rate, and FDI inflows exhibit adverse environmental consequences by boosting the CO2 emission figures of the selected developing BRI nations. However, it is interesting to observe that exploiting renewable energy sources, which are relatively cleaner compared to the traditionally-consumed fossil fuels, and fostering agricultural sector development can significantly improve environmental well-being by curbing the emission levels. On the other hand, financial development is found to be ineffective in explaining the variations in CO2 emission figures of the selected BRI member countries. Besides, the causality analysis shows that higher energy consumption, FDI inflows, and agricultural development cause environmental pollution by boosting carbon dioxide emissions. However, economic growth, technology development, financial progress, and renewable energy consumption are evidenced to exhibit bidirectional causal associations with carbon dioxide emissions. In line with these findings, several relevant policies can be recommended. |
| Date: | 2022–03–08 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:ktj5n&r=int |
| By: | Anatoliy Kostruba (Vasyl Stefanyk Precarpathian National University, Vilnius University [Vilnius]) |
| Abstract: | La nature juridique de l'arbitrage commercial international en Ukraine est analysée dans l'article. La recherche est consacrée à la divulgation de l'essence et du fonctionnement de l'arbitrage. La question de l'arbitrage commercial international est extrêmement pertinente aujourd'hui et est que l'arbitrage commercial international est un moyen efficace, pratique et acceptable pour les parties comme moyen alternatif de résoudre les différends. L'augmentation rapide du nombre de différends économiques étrangers nécessite leur règlement efficace et impartial. Chaque année, l'arbitrage commercial international en Ukraine devient de plus en plus populaire en tant qu'organisme qui examine les litiges impliquant un élément étranger. L'auteur analyse les travaux scientifiques des scientifiques nationaux et les réglementations sur le fonctionnement de l'arbitrage commercial international. Les questions de conclusion d'une convention d'arbitrage, le principe de l'autonomie de la volonté, la procédure de formation des arbitres, les particularités de l'arbitrage, l'arbitrage, la reconnaissance et l'exécution des décisions des États étrangers sont examinés. Les questions d'arbitrage commercial international en Ukraine sont principalement liées à des tâches pratiques telles que la mise en oeuvre du litige par l'autorité compétente avec un maximum d'efficacité et de commodité pour les parties, la réduction des coûts, l'élimination des phénomènes négatifs qui compliquent l'exécution de la décision de justice. |
| Keywords: | arbitrage, contentieux, l'arbitrage commercial international, commerce extérieur, différends arbitrables, Kostruba, Litigation, Mediation, Commertial court |
| Date: | 2023–03–21 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04042566&r=int |
| By: | van der Mensbrugghe, Dominique |
| Abstract: | This short note describes one way of taking advantage of the multiple cores on most desktop computers. It describes running one of the processes in the GTAP build procedure called ’FIT’. The input to ’FIT’ is a balanced input-output table (IOT), which is adjusted to a number of exogenous elements including aggregate domestic absorption and import and export vectors. It is run for each of the countries/regions in the build, but there is no interaction across countries/regions and thus can be run in parallel. The procedure uses a Python script to run the ’FIT’ procedure, either sequentially or in parallel. Most of the code is generic and thus it can be easily adapted to other programs that can take advantage of parallelism, for example Monte Carlo simulations. For the tested ’FIT’ procedure, it reduces the runtime from 75 minutes to 14 minutes on a relatively new desktop with a 12th Generation Intel Core I-9 CPU with 16 physical cores. |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:gta:techpp:6826&r=int |
| By: | Thube, Sneha; Peterson, Sonja |
| Abstract: | Computable general equilibrium (CGE) models are widely used to conduct ex-ante policy impact evaluations. However, in addition to policy design and policy stringency, structural features of the CGE models also affect the resulting estimates of policy costs. We use harmonized policy analysis results from 15 CGE models and meta-regression analysis to identify the structural variables that are significant determinants of the global and regional marginal abatement costs (MAC) for fulfilling the initial Nationally Determined Contributions (NDCs). Our results show that models with dynamic characteristics, higher regional disaggregation and with a representation of different electricity technologies estimate higher MACs. On the contrary, modelling endogenous technological change lowers the MAC estimates. Additionally, as to policy design, a statistically significant reduction in global MAC is observed with a fully linked global carbon market (45% reduction) and a climate-club of China, Japan and South Korea (4% reduction). This meta-analysis provides robust quantitative insights can help to provide a more useful and understood tool to inform policy relative to the results from a single model. |
| Keywords: | Environmental Economics and Policy, International Relations/Trade |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ags:pugtwp:333459&r=int |
| By: | M. Khabbazan, Mohammad |
| Abstract: | The EU has established the world's first and biggest emission-trading systems (ETS) covering aviation, emission-intensive sectors, and electricity (EITE). This paper employs a multi-regional multi-sectoral CGE model with two simultaneous international emission permit markets. After examining the abatement costs for the EU regions, various policy scenarios are implemented to study the welfare effects of forming an ETS covering NEIT sectors and its linking with the EITE sectors under two different baselines and four emission reduction targets. The results provide several important insights: i) Marginal abatement costs in Germany and the Eastern European Union region (EEU) are significantly lower than in the rest of the EU regions. ii) The carbon price in the emission permit market covering NEIT is significantly higher than the carbon price in the emission permit market covering EITE. iii) Germany and EEU appear as notable suppliers of emission permits in both markets. iv) There is a significant aggregate welfare gain under the scenario in which the ETS covering NEIT co-exists parallel with the ETS covering EITE. v) The aggregate welfare in the EU under the full integration of EITE and NEIT may fall below its value under the scenario with two parallel emission permit markets. |
| Keywords: | Environmental Economics and Policy, International Relations/Trade |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ags:pugtwp:333489&r=int |
| By: | Andre Sanchez Pacheco (Department of Economics, Trinity College Dublin) |
| Abstract: | This paper presents novel estimates of foreign holdings from a consolidated-by-nationality perspective for a sample of fourteen developed countries over multiple years. It describes the stylized facts that emerge from this new data-set on the international exposure of countries. It shows that aggregate international financial integration is larger from a nationality-based approach relative to the conventional residence-based data. These novel data are used to analyze (1) profit shifting activities and (2) spillovers from U.S. monetary policy shocks. I find evidence suggesting that nationals of relatively high-tax countries may shift assets to low-tax countries in ways not fully captured in residence-based statistics. I also find that a tightening in U.S. monetary policy is associated with a decline in consolidated-by-nationality foreign asset holdings by non-financial multinational enterprises. Such findings highlight the usefulness of this new data-set in international macroeconomics. |
| Keywords: | Internationalfinancialintegration, financialglobalisation, consolidated-by-nationalitystatistics |
| JEL: | F36 F21 F23 |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:tcd:tcduee:tep0623&r=int |
| By: | Eckhard Janeba; Guttorm Schjelderup |
| Abstract: | The OECD’s proposal for a global minimum tax (GMT) of 15% aims for a reversal of a decline of corporate tax rates. We study the revenue effects of the GMT by focusing on strategic tax setting effects. The direct effect from less profit shifting increases revenues in high-tax countries. A secondary effect, however, is that the value of attracting foreign investments increases, which intensifies tax competition. We show that when governments compete via firm-specific or uniform subsidies, the revenue gains from less profit shifting are exactly offset by higher subsidies. When competition is by tax rates, revenues may increase however. |
| Keywords: | global minimum tax, tax competition, OECD BEPS, Pillar II |
| JEL: | F23 F55 H25 H73 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10318&r=int |
| By: | Britz, Wolfgang; Roson, Roberto; Ferrari, Emanuele |
| Abstract: | We detail an approach to update country specific data in a (dis)aggregated GTAP Data Base, starting from a single country SAMs. Whereas data contributors to the GTAP Data Base deliver country specific IO-tables to the GTAP for inclusion in the build process of the GTAP Data Base, our approach starts from the given GTAP Data Base and updates macro totals, output, intermediate and final demand, imports and exports by product, tax rates etc. for the specific country, in order to keep as much information as possible from the available national SAM. The process is based on four steps. We first derive a GTAP Data set by aggregation, which comprises a single country and typically one Rest-Of-the-World aggregate, with products and sectors aggregated, such as to match as closely as possible the detail of the national SAM. If deemed useful and if data for the Rest-Of-the-World are available, we split the GTAP data to a finer product and sector detail. Second, we derive preliminary estimates at the country level, for the relevant aggregates in GTAP (demand of agents for imports and domestic production at market and agent prices, factor demands etc.). Third, we balance the resulting data, such as to match the values for the given single country SAM at its sector/product level, keeping consistency, for instance, regarding exhaustion conditions and market balancing. Fourth, the balanced single country data overwrite the given GTAP original data, and the whole framework is balanced again. |
| Keywords: | Research Methods/ Statistical Methods, None/Blank |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ags:pugtwp:333453&r=int |
| By: | Jacek Rothert (United States Naval Academy; Group for Research in Applied Economics (GRAPE)); Ayse Kabukcuoglu Dur (North Carolina State University) |
| Abstract: | We analyze the welfare effects of various policies aimed at global rebalancing --- the elimination of persistent current account surpluses and deficits, and/or elimination of large positive and negative net foreign asset positions. Specifically, we study how these policies will affect the welfare of different groups of households, as well as overall wealth inequality within both debtor and creditor countries. We use a two-country version of a workhorse heterogeneous agents framework of Aiyagari (1994), calibrated to the U.S. (largest debtor) and a composite of its trading partners, the Rest of the World (ROW). Our results show that, relative to full financial integration, policies that reduce global imbalances via an increase in U.S. savings rates will lower global interest rates, increase capital-output ratio and total output in both countries. They will improve welfare of the poorest households and reduce wealth inequality in both countries. Conversely, policies that operate via a decrease in ROW's savings will raise global interest rates, reduce the capital-output ratio and total output in both countries. The rise in interest rates will reduce the welfare of the poor households, even though the overall wealth inequality will decline. |
| Keywords: | Global imbalances, wealth inequality, rebalancing, heterogeneous agents, international capital flows |
| JEL: | E21 F3 F32 F41 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:fme:wpaper:80&r=int |
| By: | Ballbach, Eric J. |
| Abstract: | South Korea has been late to embrace the concept of the Indo-Pacific. Its strategic approach developed from initial neglect to mere tactic acknowledgment and careful engagement under the Moon administration (2017-2022), to the now clear support for a distinct Indo-Pacific strategy under the Yoon administration (since 2022). While South Korea's Indo-Pacific strategy represents an important step in formulating its own interests in the region, its implementation will be influenced by the larger strategic environment, the dynamic relationships between a network of different actors in the region, and the coordination of its approach with like-minded partners. Despite the Yoon administration's closer alignment of its Indo-Pacific strategy with that of the US, there are ample opportunities to strengthen cooperation between the EU and the Republic of Korea (ROK or South Korea) on the Indo-Pacific. This is a consequence of overlapping interests regarding the Indo-Pacific region, which are expressed through strong similarities in the respective strategy papers of South Korea and the EU. Building on a solid existing basis of bilateral cooperation enabled by their strategic partnership, cooperation between the EU and the ROK should now be deepened beyond their already well-developed bilateral frameworks within the economic realm to the wider field of security cooperation. As South Korea's and the EU's Indo-Pacific strategies highlight similar areas of action, economic security, maritime security and cyber security are the most likely issue-areas in which the two sides will expand their links. |
| Keywords: | South Korea, North Korea, Strategy for a Free, Peaceful, and Prosperous Indo-Pacific Region (SFPPIP), Moon Jae-in, EU, USA, Russia, China, New Southern Policy (NSP), Free and Open Indo-Pacific (FOIP) |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:swprps:22023&r=int |
| By: | Sahin, Sebnem |
| Abstract: | The aim of this paper is to estimate how the role of the private sector in the Western Balkans aligns with the European Green Deal. For this purpose, we developed an economy-wide Computable General Equilibrium (CGE) model based on the net economic and environmental benefits obtained from climate finance projects in North Macedonia. We focus on two types of investments: those that target green/digital startups and innovative SMEs (MSME Fund), and others that support large enterprises and infrastructure PPP SPVs (Special Purpose Vehicle) in European Green Deal (EGD) sectors (GSIF). Our analysis focuses on the time frame 2023-2050; the rate of return of those two investments at the end of 5 cycles of investment is around 1.15 to 1.16 for the MSME and GSIF. Both Funds contribute towards decoupling in the approach to 2050. GDP increases by around 1.22 and 2.67 percentage points above the baseline in 2050 while CO2 emissions decrease by about 5.28 and 6.6 (under MSME and GSIF respectively). Overall effects on GDP components (consumption, exports, imports) are positive and higher for GSIF which is a larger fund than MSME. The model estimates a cross-economic increase by 0.69% (or 9, 468 jobs) for the MSME Fund and a 1.36% increase (or 18, 648 jobs) for the GSIF when above the baseline in 2050. This estimate includes a 0.38% increase in employment in the “sectors within the MSME portfolio”, hence an additional 867 jobs above the baseline in 2050. Regarding the “sectors within the GSIF portfolio”, the model estimates a 1.35% increase in employment, equivalent of 17, 867 new jobs in 2050 compared to the baseline. |
| Keywords: | Environmental Economics and Policy, International Relations/Trade |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ags:pugtwp:333471&r=int |
| By: | Guttorm Schjelderup; Frank Stähler |
| Abstract: | This paper shows that the OECD inclusive framework of Pillar Two fails to implement the claimed 15% minimum corporate tax for all subsidiaries of multinational corporations that are not shell companies. The reason is that the Substance-based Income Exclusion of Pillar Two allows to tax-deduct payroll costs and user costs of intangible assets twice from the tax base of the top-up tax. Employing a standard multinational firm model, we show that Pillar Two changes the employment, investment and import incentives. For a sufficiently large cost share of labor and/or capital, the Substance-based Income Exclusion is equivalent to a production subsidy. |
| Keywords: | corporate taxation, BEPS, Pillar Two, minimum tax |
| JEL: | F23 F55 H25 H73 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10319&r=int |
| By: | Pascal Michaillat |
| Abstract: | Immigrants are always accused of stealing people's jobs. Yet, in a neoclassical model of the labor market, there are jobs for everybody and no jobs to steal. (There is no unemployment, so anybody who wants to work can work.) In standard matching models, there is some unemployment, but labor demand is perfectly elastic so new entrants into the labor force are absorbed without affecting jobseekers' prospects. Once again, no jobs are stolen when immigrants arrive. This paper shows that in a matching model with job rationing, in contrast, the entry of immigrants reduces the employment rate of native workers. Moreover, the reduction in employment rate is sharper when the labor market is depressed -- because jobs are more scarce then. Because immigration reduces labor-market tightness, it makes it easier for firms to recruit and improves firm profits. The overall effect of immigration on native welfare depends on the state of the labor market. It is always negative when the labor market is inefficiently slack, but some immigration improves welfare when the labor market is inefficiently tight. |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2303.13319&r=int |
| By: | Patrick Guillaumont (FERDI - Fondation pour les Etudes et Recherches sur le Développement International) |
| Abstract: | The Summit's focus on financing vulnerable countries or the fight against vulnerability highlights the fact that the allocation of concessional financing between countries must be considered alongside the mobilization of new resources. This note identifies four principles: (i) the countries ultimately receiving this funding must be identified based on criteria rather than categories of countries: the allocation between countries matters as well as the eligibility for this funding; (ii) the vulnerability of countries, if properly defined, is a major criterion for assessing their needs, without being the only criterion for allocation, or even eligibility; (iii) the vulnerability to be taken into account must be multidimensional and not only linked to climate change; (iv) the allocation criteria must be adapted to the goals of the financial instruments, which is illustrated in particular by the case of "climate" financing. |
| Abstract: | Le fléchage du Sommet sur le financement des pays vulnérables ou de la lutte contre la vulnérabilité met en lumière le fait que l'allocation entre pays de financements concessionnels doit être examinée en même temps que la mobilisation de nouvelles ressources. La présente note dégage quatre principes : (i) les pays finalement destinataires de ces financements ne peuvent être identifiés seulement par l'appartenance à des catégories de pays : l'allocation à l'intérieur des catégories est aussi importante que l'éligibilité aux financements ; (ii) la vulnérabilité des pays, si elle est convenablement définie, est un critère majeur pour l'évaluation de leurs besoins, sans pouvoir être le seul critère d'allocation, ni même d'éligibilité ; (iii) la vulnérabilité à prendre contre en compte doit être multidimensionnelle et pas seulement liée au changement climatique ; (iv) les critères d'allocation doivent être adaptés aux objectifs des instruments financiers, ce qu'illustre en particulier le cas des financements « climat ». |
| Keywords: | Pays les moins avancés, Vulnérabilité |
| Date: | 2023–03–09 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-04023291&r=int |
| By: | Patrik Vanek (Department of Economics, Faculty of Business and Economics, Mendel University in Brno, Zemedelska 1, 613 00 Brno, Czech Republic) |
| Abstract: | We explore the large corporations' corporate headquarters based on their geographical location, age, and sector composition. Companies are divided by global regions, countries, metropolitan areas, and cities to provide a detailed analysis of the ability to produce large companies. It is a descriptive study using a cross-sectional design. The unit of research consists of the world's 2000 largest companies (champions), as reported by Forbes Global 2000 in 2008 and 2022. Our results indicate that East and South Asia strengthened their significance since the Great Recession, North America remained stable, and other regions, including Western Europe, have weakened due to China's rapid growth. We suggest that focusing only on the country and city levels is misleading, and future research should consider the metropolitan regions instead. Our results might interest economic geography researchers and policymakers as they indicate the relative competitiveness of regions in supporting the emergence and growth of champions. |
| Keywords: | Geography of IB activities; MNE performance; headquarters' distribution; corporate demographics; Forbes Global 2000 |
| JEL: | F02 F23 |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:men:wpaper:85_2023&r=int |
| By: | Food Security Information Network (FSIN) |
| Abstract: | By mid-2022, the magnitude and severity of acute food insecurity in countries with available data reached alarming levels, but data gaps continued to obscure the full picture. In 2021, the population in the three highest phases of acute food insecurity was the largest in the six-year history of the GRFC. By September 2022, these numbers increased again to 201.4– 205.1 million people, making 2022 the fourth consecutive year of rising levels of acute hunger. The number of acutely food-insecure people in Crisis or worse (IPC/CH Phase 3 or above) or equivalent is actually higher than this estimate, but data gaps continue to limit reporting of timely, comparable and consensual data. Data was missing for 2022 in eight countries/territories, including Bangladesh (Cox’s Bazar), Palestine and the Syrian Arab Republic. Were the 2021 figures for these eight countries/territories included, 17.3 million people would be added to the total number in Crisis or worse (IPC/CH Phase 3 or above) or equivalent. |
| Keywords: | food insecurity, food crises, nutrition, malnutrition, resilience, Coronavirus, coronavirus disease, Coronavirinae, COVID-19, hunger, weather extremes, economic shocks |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:issbrf:136365&r=int |
| By: | Kate Schneider (Johns Hopkins University); Jessica Fanzo (Johns Hopkins University); Lawrence Haddad (Global Alliance for Improved Nutrition); Mario Herrero (Cornell University); Jose Rosero Moncayo (Food and Agriculture Organization of the United Nations); Anna Herforth (Harvard University); Roseline Reman (Alliance of CIAT-Bioversity); Alejandro Guarin (International Institute for Environment & Development); Danielle Resnick (Brookings Institution); Namukolo Covic (International Livestock Research Institute); Christophe B\'en\'e (Alliance of CIAT-Bioversity; Wageningen Economic Research Group); Andrea Cattaneo (Food and Agriculture Organization of the United Nations); Nancy Aburto (Food and Agriculture Organization of the United Nations); Ramya Ambikapathi (Cornell University); Destan Aytekin (Johns Hopkins University); Simon Barquera (Instituto Nacional de Salud P\'ublica); Jane Battersby-Lennard (University of Cape Town); Ty Beal (Global Alliance for Improved Nutrition); Paulina Bizzoto Molina (European Centre for Development Policy Management); Carlo Cafiero (Food and Agriculture Organization of the United Nations); Christine Campeau (CARE); Patrick Caron (University of Montpellier, Cirad, ART-DEV); Piero Conforti (Food and Agriculture Organization of the United Nations); Kerstin Damerau (Cornell University); Michael DiGirolamo (Johns Hopkins University); Fabrice DeClerck (EAT Forum); Deviana Dewi (Johns Hopkins University); Ismahane Elouafi (Food and Agriculture Organization of the United Nations); Carola Fabi (Food and Agriculture Organization of the United Nations); Pat Foley (United Nations World Food Programme); Ty Frazier (Oakridge National Laboratory); Jessica Gephart (American University); Christopher Golden (Harvard University); Carlos Gonzalez Fischer (Cornell University); Sheryl Hendriks (University of Greenwich); Maddalena Honorati (World Bank); Jikun Huang (Peking University); Gina Kennedy (Global Alliance for Improved Nutrition); Amos Laar (University of Ghana); Rattan Lal (Ohio State University); Preetmoninder Lidder (Food and Agriculture Organization of the United Nations); Brent Loken (World Wildlife Fund); Quinn Marshall (International Food Policy Research Institute); Yuta Masuda (Vulcan); Rebecca McLaren (Johns Hopkins University); Lais Miachon (Johns Hopkins University); Hern\'an Mu\~noz (Food and Agriculture Organization of the United Nations); Stella Nordhagen (Global Alliance for Improved Nutrition); Naina Qayyum (Tufts University); Michaela Saisana (Joint Research Centre); Diana Suhardiman (KIT Royal Tropical Institute); Rashid Sumaila (University of British Columbia); Maximo Torrero Cullen (Food and Agriculture Organization of the United Nations); Francesco Tubiello (Food and Agriculture Organization of the United Nations); Jose-Luis Vivero-Pol (United Nations World Food Programme); Patrick Webb (Tufts University); Keith Wiebe (International Food Policy Research Institute) |
| Abstract: | Transforming food systems is essential to bring about a healthier, equitable, sustainable, and resilient future, including achieving global development and sustainability goals. To date, no comprehensive framework exists to track food systems transformation and their contributions to global goals. In 2021, the Food Systems Countdown to 2030 Initiative (FSCI) articulated an architecture to monitor food systems across five themes: 1 diets, nutrition, and health; 2 environment, natural resources, and production; 3 livelihoods, poverty, and equity; 4 governance; and 5 resilience and sustainability. Each theme comprises three-to-five indicator domains. This paper builds on that architecture, presenting the inclusive, consultative process used to select indicators and an application of the indicator framework using the latest available data, constructing the first global food systems baseline to track transformation. While data are available to cover most themes and domains, critical indicator gaps exist such as off-farm livelihoods, food loss and waste, and governance. Baseline results demonstrate every region or country can claim positive outcomes in some parts of food systems, but none are optimal across all domains, and some indicators are independent of national income. These results underscore the need for dedicated monitoring and transformation agendas specific to food systems. Tracking these indicators to 2030 and beyond will allow for data-driven food systems governance at all scales and increase accountability for urgently needed progress toward achieving global goals. |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2303.13669&r=int |
| By: | Farag, Markos (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI)); Jeddi, Samir (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI)); Kopp, Jan Hendrik (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI)) |
| Abstract: | This paper analyzes the integration of the American, European, and Asian natural gas markets over the period 2016-2022, with a focus on how the demand shock caused by the COVID-19 pandemic and the supply shock caused by geopolitical tensions in the European market affected this integration.We also examine which regional market is leading in reflecting new information and shocks into the market price. Our analysis indicates that the market integration process has been impacted by external shocks, leading to a decrease in the degree of integration between the European and Asian markets. Additionally, we find that the American market is no longer integrated with the other two markets after the supply shock, potentially due to the US's congested and fully utilized LNG infrastructure. Our analysis also shows that the gas price differentials adjust asymmetrically in response to disturbances, suggesting that markets respond differently to positive and negative shocks. Moreover, we show that the lead/lag relationship changes over time and exhibits a dynamic behavior. Finally, we discuss the fundamental changes in the global gas market that align with our empirical results. |
| Keywords: | Natural gas markets; Market integration; Threshold Co-integration; Time-varying causality |
| JEL: | C32 D40 D58 F21 F41 G13 G14 L95 Q35 Q41 |
| Date: | 2023–04–05 |
| URL: | http://d.repec.org/n?u=RePEc:ris:ewikln:2023_003&r=int |
| By: | O'Reilly, Rohan; Humphreys, Lee; Prendiville, Siobhan |
| Abstract: | The production structure of GTAP-E includes an energy and capital composite alongside other factors of production. Both the elasticity of substitution between capital and energy and the elasticities of substitution between different fuel sources are therefore highly important to the output of the model. However, they are by default set to the same value across all sectors and countries. This paper uses OECD panel data from 2005-2016 to estimate elasticities for capital-energy substitution and substitution between the fuel commodities included in the GTAP-E 7 database. Estimates are produced over 32 countries, and for capital-energy substitution over 16 sectors. These estimated parameters are then used in an FTA model, and the results are compared with both the default GTAP-E parameters and less specific estimated values from existing literature. This allows us to determine the magnitude of impact on model output from using statistically estimated parameters, and from using parameters disaggregated by country and sector. |
| Keywords: | Environmental Economics and Policy, Research and Development/Tech Change/Emerging Technologies |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ags:pugtwp:333429&r=int |
| By: | Steven Fries (Peterson Institute for International Economics) |
| Abstract: | Over the next three decades, emerging markets and developing economies (EMDEs), and especially middle-income countries, are projected to account for much of the growth in global economic activity and energy use. While a decisive move to low-carbon technologies and energy efficiency would advance both their development goals and a stable climate, the countries have yet to fully tap this opportunity. The multilateral development banks (MDBs) are in a unique position to help lower barriers to low-carbon investments in EMDEs and unlock these sustainable development opportunities. Their differentiating governance, financial and technical capabilities, and financing instruments would enable MDBs to support the necessary business environment and energy reforms and to cofinance low-carbon and energy efficiency investments alongside other investors to reduce and manage risks. |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:iie:pbrief:pb23-2&r=int |