|
on International Trade |
| By: | Jaime de Melo (UNIGE - Université de Genève = University of Geneva); Zakaria Sorgho (ULaval - Université Laval [Québec]); Laurent Wagner (FERDI - Fondation pour les Etudes et Recherches sur le Développement International) |
| Abstract: | The main objective of the African Continental Free Trade Area is to eliminate trade barriers and boost intra-Africa trade. This column argues that implementing the Trade Facilitation Agreement's provisions would be a powerful complement to the free trade area's tariff-reduction agenda. A realistic implementation of TFA measures could reduce time in customs for imports by 2.7 days for exports by 1.7 days. These reductions in time translate into a tariff ad-valorem equivalent reduction in the range 3.6-7% for imports and an 8.1% extra growth for exports. |
| Abstract: | Le principal objectif de la zone de libre-échange continentale africaine est d'éliminer les barrières commerciales et de stimuler le commerce intra-africain. Cet article établit que la mise en œuvre des dispositions de l'accord sur la facilitation des échanges constituerait un complément puissant au programme de réduction tarifaire de la zone de libre-échange. Une mise en œuvre réaliste des mesures de l'accord de facilitation des échanges pourrait réduire de 2, 7 jours le temps passé en douane pour les importations et de 1, 7 jour pour les exportations. Ces réductions de temps se traduisent par une réduction de l'équivalent tarifaire ad valorem de l'ordre de 3, 6 à 7 % pour les importations et par une croissance supplémentaire de 8, 1 % pour les exportations. |
| Keywords: | AfCFTA, Preferential trade agreements, Africa, Accord préférentiel, Zleca |
| Date: | 2024–02–26 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04478013&r=int |
| By: | Paras Kharel (South Asia Watch on Trade, Economics and Environment) |
| Abstract: | This paper contributes to the limited literature on the effects of unilateral trade preferences on exports by assessing the effect of a unilateral duty-free market access scheme offered by the United States to Nepal, a landlocked least developed country, for a 10-year period. Launched in 2016 to support Nepal in the wake of the devastating earthquake of the previous year and having obtained a waiver from a non-discrimination requirement at the World Trade Organization, the Nepal Trade Preference Programme(NTPP) provides duty-free access on 66 products (later converted into 77 products after a change in the tariff classification system) from Nepal. We find that there are overlaps in the product coverage of the NTPP and the Generalized System of Preferences (GSP), the latter applicable to a broader group of developing countries. In 2021, some 21 percent of Nepal’s exports to the US (in value terms) were potentially eligible for GSP only, 5 percent for NTPP only and 3 percent for both. Preference utilization was lower among NTPP products than GSP products. Employing difference-in-differences and triple-difference estimations on detailed product-level data, we do not find conclusive evidence that the introduction of the NTPP led to an increase in Nepal’s exports of the products the scheme granted duty-free market access to. |
| Keywords: | Tariff, trade preferences, GSP, triple-difference estimation, export |
| JEL: | F13 F14 F15 O19 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:saw:wpaper:wp/23/01&r=int |
| By: | Lorenzo Rotunno; Michele Ruta |
| Abstract: | As governments resort to industrial policies to achieve economic and non-economic objectives, the number of subsidies implemented each year has more than tripled in the last decade. Using detailed data across a large number of advanced and emerging economies, we empirically investigate the effects of domestic subsidies on international trade flows. Estimates from a difference-in-difference specification show that on average subsidies promote both exports and imports. These effects are partly driven by selection into subsidies, as governments target export-oriented and import-competing products. The results however mask significant differences across countries. Specifically, exports of subsidized products from G20 emerging markets increase 8 percent more than exports of other products, with no evidence of selection. The gravity estimates confirm that subsidies promote international relative to domestic trade. These spillover effects are concentrated in some industries, such as electrical machinery, and are stronger when subsidies are given through tax breaks than other policy instruments. The subsidy-led rise in trade calls for international cooperation to manage risks of retaliatory actions and possible drifts towards a subsidy war. |
| Keywords: | Subsidies; Industrial Policy; International Trade; Spillovers |
| Date: | 2024–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2024/041&r=int |
| By: | Garred, Jason (University of Ottawa); Yuan, Song (Zhejiang University; CAGE, University of Warwick) |
| Abstract: | The share of Chinese goods in US imports has fallen sharply since 2018, as production for the US market has shifted from China to other countries. Does this trend represent US-China ‘decoupling’, or are other US trade partners playing growing roles as intermediaries in ongoing US-China economic relations? Using firm-level and product-level data, we find that Chinese manufacturing investment and Chinese-produced parts have increasingly flowed to third-country ‘winners’ who have simultaneously increased their US market share. We present evidence that our findings capture expanding indirect relationships linking China and the US rather than broader economic trends within the ‘winners’ themselves. |
| Keywords: | Trade, China, FDI, global supply chains, relocation, decoupling JEL Classification: F14, F21, F23 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:cge:wacage:702&r=int |
| By: | Yoshimichi Murakami (Research Institute for Economics and Business Administration, Kobe University, JAPAN) |
| Abstract: | Local sourcing of intermediate inputs by foreign affiliates is a major source of the positive spillover effects of foreign direct investments (FDIs) in emerging countries. However, few studies have analyzed the determinants of local sourcing; studies using panel data in a specific emerging country are particularly rare. Considering that Chile is well-integrated into global value chains (GVCs) and that its position in GVCs is relatively upstream compared to that of other Latin American countries, this study empirically analyzes whether foreign affiliates' upstream positions have positive effects on their local sourcing, which is defined as the share of local material inputs to total costs. By matching industry-level panel data, including positions in GVCs, to plant-level panel data, this study constructs a unique dataset for the period from 1995 to 2006. We find that the upstream positions of foreign affiliates in GVCs are positively associated with the share of local material inputs to the total costs. We find that this positive effect is robust to the difference in entry modes between joint ventures and wholly owned subsidiaries, use of lagged affiliate-level variables, exclusion of affiliates with changes in industry affiliation, and different periods of analysis. Moreover, we find that the magnitude of the coefficient of the GVC position index is substantially larger than that of a previous study that analyzed other developing countries. Thus, the findings indicate that foreign affiliates operating in upstream industries have successfully developed backward linkages with local suppliers in Chile, contrary to the traditional view that FDI in natural-resource-related sectors has an enclave nature with very limited backward linkages. Therefore, this study provides new evidence on the role of FDI for productive linkages in resource-based economies. |
| Keywords: | Global value chains (GVCs); Upstream position; Foreign direct investment (FDI); Local sourcing; Chile |
| JEL: | F21 F23 F61 O54 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:kob:dpaper:dp2024-08&r=int |
| By: | Grijalva, Diego F.; Uribe-Terán, Carlos; Gachet, Iván |
| Abstract: | This study analyzes the firm-level impacts of temporary safeguard import tariffs implemented in Ecuador from 2015 to 2017. Employing a difference-in-differences methodology, we explore the policy's effects on a unique dataset combining firm- and product-level data. We focus on the direct effects on importing firms and indirect effects through the value chain. The analysis shows that, while the safeguards significantly reduced imports, they also resulted in short-run negative scale effects on firms. These include reduced sales, employment, labor costs, and material costs, without positive impacts on local firms in import-competing industries. Overall, our findings suggest a contractionary effect of protectionist policies, particularly in a dollarized economy highlighting the complex implications of trade measures on firm performance and economic sectors. |
| Keywords: | trade policy;Protectionism;Input-output linkages;emerging markets;Latin America |
| JEL: | F13 F14 F16 O24 O54 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:idb:brikps:13358&r=int |
| By: | Andrew Greenland; James Lake; John Lopresti |
| Abstract: | Against a backdrop of sharply rising inequality, the Tokyo Round of the GATT resulted in a 1.6 percentage point reduction in average US tariffs – larger than CUS-FTA, NAFTA, and the liberalization accompanying the granting of PNTR to China. We construct a novel IV based on the so-called “Swiss formula” that governed Tokyo Round tariff liberalization to provide the first evidence of its effects on imports and inequality. Instrumented tariff reductions explain 17% of the within-industry rise in income inequality between skilled and unskilled workers between 1979 and 1988. This effect is largest in more technology-intensive industries, suggesting a complementarity between trade liberalization and skill-biased technological change. We also show that tariff liberalization in upstream industries produced a shift away from labor more broadly and towards intermediate inputs. Finally, we show that policymakers dampened the observed impact of tariffs on inequality by assigning smaller tariff reductions to industries more reliant on low-skilled labor. |
| Keywords: | tariffs, Tokyo Round, Swiss formula, inequality, skill biased technological change |
| JEL: | F13 F14 F66 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10983&r=int |
| By: | Mauro Caselli; Jiuli Huang; Chiara Tomasi; Min Zhu |
| Abstract: | We examine the export behavior of Chinese firms, in particular firms’ decision on product quality, in the face of product- and market-specific tariff shocks that arise when importers impose anti-dumping (AD) duties. Exploiting the time-varying trade policy changes from the Global Antidumping Database and transaction-level Chinese customs data between 2000 and 2015, we find that Chinese firms hit by AD duties tend to decrease not only the export flows but also the quality of the targeted products, while no significant effect is found for prices. We show that the results are robust to several sensitivity checks . The estimated impact of quality downgrading continues even after the measure is revoked and it is more pronounced for firms exporting to developing countries. Further results allow us to better understand the underlying mechanism. Specifically, firms exposed to AD duties respond by importing input varieties with lower prices, which contributes to reduce the quality of their products. Back-of-the-envelope calculations show that countries imposing AD measures experience a 5.4% loss in consumer surplus for the targeted products. |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:not:notgep:2023-08&r=int |
| By: | Tomohiro Ara |
| Abstract: | What is the effect of tariffs on the input trade margins when vertically related markets are oligopolistic? To address the question, this paper develops a vertical oligopoly model in which one country specializes in producing a final good while another country specializes in producing an intermediate good by taking into account strategic interactions among firms. We find that, for constant-elasticity demand, a tariff reduction increases the number of trading firms (extensive margin) and average trade value per firm (intensive margin) in the vertically related sectors, raising the intensive margin relative to the extensive margin. To assess the empirical relevance of our theoretical results, we focus on China's WTO accession which was a large policy change to Chinese firms. We find that a tariff reduction significantcantly increases both margins in the post-WTO period, though the effect on the extensive margin is much smaller than that on the intensive margin. |
| Date: | 2024–02 |
| URL: | http://d.repec.org/n?u=RePEc:toh:tupdaa:46&r=int |
| By: | Obst, Thomas; Matthes, Jürgen; Sultan, Samina |
| Abstract: | A possible re-election of Donald Trump as US president in November 2024 could entail a significant upheaval for the world trading order, if he fulfills his announcements to raise tariffs, mainly in order to reduce the US trade deficit. Such steps would not only have a negative effect on the world economy - and this at a time of significant global strains. They would also deal a further blow to the WTO, as the envisaged tariff increases would clearly violate international trade rules. Transatlantic relations with the EU are also likely to suffer. First, old trade disputes that were largely settled with the Biden administration could flare up again, e.g. regarding steel and aluminum. Second, Trump could abolish co-operative measures by the Biden administration that mitigate the protectionist elements of the US Inflation Reduction Act for EU exporters. Third, the future of the EU-US Trade and Technology Council (TTC) might be jeopardised. This report simulates the impact of two scenarios. Scenario 1 entails an increase of US tariffs to 10 per cent on all US imports and to 60 per cent on US imports from China in 2025. These threats have been publicly envisaged by Donald Trump and his former trade advisers. In scenario 2, in reaction to scenario 1, China would retaliate with a tariff increase of 40 percentage points on imports from the US. |
| Abstract: | Eine mögliche Wiederwahl von Donald Trump zum US-Präsidenten im November 2024 könnte der Welthandelsordnung erheblich schaden, falls Trump wie angekündigt die US-Zölle anheben würde, um vor allem das Handelsdefizit der USA zu verringern. Ein solches Szenario würde sich nicht nur negativ auf die Weltwirtschaft auswirken - in einer Zeit erheblicher globaler Spannungen. Auch die Welthandelsorganisation (WTO) würde einen weiteren Schlag erleiden, da die von Trump vage angekündigten Zollerhöhungen klar gegen die internationalen Handelsregeln verstoßen. Auch die transatlantischen Beziehungen zur Europäischen Union (EU) dürften darunter leiden. Erstens könnten alte Handelsstreitigkeiten wieder aufflammen, die mit der BidenAdministration weitgehend beigelegt wurden, zum Beispiel in Bezug auf Stahl und Aluminium. Zweitens könnte Trump die kooperativen Maßnahmen der Biden-Regierung aufheben, die die protektionistischen Elemente des US Inflation Reduction Act (IRA) für EU-Exporteure abschwächen. Drittens wäre die Zukunft des EU-US-Handels- und Technologierats (Trade and Technology Council TTC) womöglich gefährdet. In diesem Report werden die Auswirkungen von zwei Szenarien simuliert, die per Annahme Anfang 2025 umgesetzt werden könnten. Szenario 1 beinhaltet eine Erhöhung der US-Zölle auf 10 Prozent auf alle USEinfuhren und auf 60 Prozent auf US-Einfuhren aus China, was einer Zollerhöhung um 40 Prozentpunkte entspricht. Diese Drohungen wurden von Donald Trump und seinen früheren Handelsberatern öffentlich in Aussicht gestellt. In Szenario 2 würde China als Reaktion auf Szenario 1 mit einer Zollerhöhung um 40 Prozentpunkte auf seine Einfuhren aus den USA antworten. Diese beiden Szenarien werden mit dem Global Economic Model von Oxford Economics für die vier Jahre einer möglichen zweiten Amtszeit Trumps von 2025 bis 2028 simuliert und ergeben folgende Ergebnisse. |
| JEL: | E17 F14 F17 F52 F68 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iwkrep:285358&r=int |
| By: | Wagner, Joachim |
| Abstract: | The use of cloud computing by firms can be expected to go hand in hand with higher productivity, more innovations, and lower costs, and, therefore, should be positively related to export activities. Empirical evidence on the link between cloud computing and exports, however, is missing. This paper uses firm level data for manufacturing enterprises from the 27 member countries of the European Union taken from the Flash Eurobarometer 486 survey conducted in February - May 2020 to investigate this link. Applying standard parametric econometric models and a new machine-learning estimator, Kernel-Regularized Least Squares (KRLS), we find that firms which use cloud computing do more often export, do more often export to various destinations all over the world, and do export to more different destinations. The estimated cloud computing premium for extensive margins of exports is statistically highly significant after controlling for firm size, firm age, patents, and country. Furthermore, the size of this premium can be considered to be large. Extensive margins of exports and the use of cloud computing are positively related. |
| Keywords: | Cloud computing, exports, firm level data, Flash Eurobarometer 486, kernel-regularized least squares (KRLS) |
| JEL: | D22 F14 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:kcgwps:285359&r=int |
| By: | UMEJIMA Osamu |
| Abstract: | This paper discusses actions that WTO may take to achieve the SDGs: WTO Members should further improve preferential treatment to increase exports from and production in least developed countries (“LDCs†) by including major LDC export goods, such as agricultural goods and dairy products, in their DFQF lists, relaxing the rules of origins applicable to LDC goods, and not imposing countervailing duties against subsidies, including third-country subsidies, granted directly or indirectly by LDCs; WTO Members should continue working on food security and access to essential medicines and vaccines for LDCs; WTO Members should relaunch the EGA negotiation; to effectuate the prohibition of forced labor and child labor, WTO Members should discuss guidelines of measures that would be permissive under the Article XX; WTO Members should explore the permissive import carbon import fees, establishing a dedicated forum in the WTO; and WTO Members should not impose countervailing duties against temporary exemptions from environmental obligations while other Members are taking efforts to achieve their final goals. |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:24031&r=int |
| By: | Besedeš, Tibor; Goldbach, Stefan; Nitsch, Volker |
| Abstract: | We examine the extent to which financial sanctions imposed by Germany through its European Union and United Nations commitments cause collateral damage on Germany's trade in goods and services. Financial sanctions reduce Germany's inflows and outflows of financial assets, as well as imports and exports of goods and services. The relative effects on trade in goods and services are weaker than on financial assets, about half as large in the case of goods and two-thirds as large in the case of services. The effect on trade in goods is entirely due to episodes where financial sanctions are accompanied by export restrictions of specific goods. In the case of services trade, only exports are affected by financial sanctions once export restrictions are considered. The primary channel through which sanctions affect the three types of cross-border flows is the extensive margin. Anticipation effects are quite strong for financial assets and weak for services and goods. |
| Date: | 2023–09–04 |
| URL: | http://d.repec.org/n?u=RePEc:dar:wpaper:139194&r=int |
| By: | Hoste, J.; Verboven, F. |
| Abstract: | We develop a new approach to measure the sources of cross-border goods market segmentation. Our cost-of-living approach uncovers the relative importance of price and product availability differences, while accounting for taste differences. We implement our methodology on regionally disaggregated consumer goods data in the EU and US. The analysis reveals that price, and especially, product availability differences are much larger between than within European countries, and are only marginally larger between than within US states. Our findings imply that US states are geographically integrated, whereas EU countries remain segmented, due to trade frictions that mainly relate to fixed costs. |
| Keywords: | Geographic Market Integration, LOP Deviations, Product Availability Differences |
| JEL: | D12 F15 R32 |
| Date: | 2024–03–11 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:2402&r=int |
| By: | Moritz Wolf (Friedrich Schiller University Jena) |
| Abstract: | Economic development in Africa is among the most important global challenges today. Meanwhile, the G7 is under pressure due to system competition and the question of legitimacy and effectiveness. The recent PGII initiative uses investment to improve economic development in Africa. But what about other tools, like trade? While the literature suggests positive effects of trade on economic development, the trade efforts by the G7 have been underwhelming. Moreover, the trade share between Africa and the G7 has decreased over the last two decades. The question if both sides have incentives to reinforce trade links remains and leads to another question, namely if trading with the G7 countries offers specific benefits to African countries. This paper answers this question by using a system-GMM estimator and G7-specific trade data between 1997 and 2020. Using the relative G7 trade share as the explanatory variable and GDP and the HDI as indicators for economic development, the results suggest that both economic growth and human development have been positively affected by G7 trade shares. Moreover, this paper identifies potential channels and concludes that reinforcing the trade relations between the G7 countries and Africa is beneficial for both sides. |
| Keywords: | Africa, Economic Development, Trade, International Organizations |
| JEL: | I31 O19 O24 O55 |
| Date: | 2024–03–27 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2024-005&r=int |
| By: | Crowley, M. A.; Han, L.; Son, M. |
| Abstract: | Using administrative transactions data from the United Kingdom, we document a swift decline in sterling use among British exporters after the 2016 Brexit vote. Through a novel decomposition, we document most of this decline comes from two sources: (i) continuously-operating firms switching from sterling to dollars or local currencies and (ii) reductions in transactions for sterling-loyal firms. In contrast, new entrants into exporting primarily invoice in sterling before and after the Brexit vote. Our findings provide the first evidence on the quantitative relevance of new channels that contribute to changes in aggregate invoicing shares amidst political upheaval. |
| Keywords: | Invoicing Currency, Trade Transactions, Sterling, Brexit |
| JEL: | F14 F31 F41 |
| Date: | 2024–03–11 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:2413&r=int |
| By: | Rottner, Elisa |
| Abstract: | Rising energy prices might lead to adjustments along the supply chain and make firms outsource energy-intensive processes. This could lead to carbon leakage. I provide empirical evidence whether energy price-induced offshoring occurs using firm-level data on energy use, imports, and material purchases. I document that import shares in German industry have increased between 2009 and 2013, and that energy prices correlate positively with imports. Despite this positive correlation, I show in a quasi-experimental setup that a sudden drastic drop in electricity prices has not led firms to significantly reduce their imports or their domestic material purchases relative to an unaffected control group. This holds for very electricityintensive firms; for firms using easily tradable goods; and both for regular importers with a trade network and occasional/non-importers. |
| Keywords: | Offshoring, Energy Prices, Climate Policy, Manufacturing |
| JEL: | F14 F18 L60 Q41 Q56 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:283593&r=int |
| By: | Tomohiro AraAuthor-Name: Jun Nagayasu |
| Abstract: | How does an increase in tariff on intermediate input affect different margins of trade and what in turn are consequences for optimal tariff? We address this question in a setting with vertical specialization where oligopolistic, downstream Home firms procure input from perfectly competitive, Foreign upstream firms. Our key focus is to understand how Home optimal tariff departs from the competitive benchmark (inverse of foreign export supply elasticity). While underproduction in oligopoly puts a downward pressure on tariff, welfare improvement arising from rationalization (in presence of entry) and possible reallocation (in presence of cost heterogeneity) can put an upward pressure on tariff. Hence, in general, optimal tariff can be higher or lower than the competitive benchmark. |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:toh:tupdaa:47&r=int |
| By: | Michael Jakob (MCC - Mercator Research Institute on Global Commons and Climate Change - PIK - Potsdam Institute for Climate Impact Research); Stavros Afionis (Cardiff University, University of Leeds); Max Åhman (Lund University); Angelo Antoci (UNISS - Università degli Studi di Sassari = University of Sassari [Sassari]); Marlene Arens (Lund University); Fernando Ascensão (cE3c - Centre for Ecology - Evolution and Environmental Changes - ULISBOA - Universidade de Lisboa = University of Lisbon); Harro van Asselt (University of Eastern Finland, Universiteit Utrecht / Utrecht University [Utrecht]); Nicolai Baumert (Lund University); Simone Borghesi (EUI - European University Institute, UNISI - Università degli Studi di Siena = University of Siena); Claire Brunel; Justin Caron (HEC Montréal - HEC Montréal); Aaron Cosbey (IISD - International Institute for Sustainable Development); Susanne Droege (Stiftung Wissenschaft und Politik); Alecia Evans (Purdue University [West Lafayette]); Gianluca Iannucci (UniFI - Università degli Studi di Firenze = University of Florence); Magnus Jiborn (Lund University); Astrid Kander (Lund University); Viktoras Kulionis (ETH Zürich - Eidgenössische Technische Hochschule - Swiss Federal Institute of Technology [Zürich]); Arik Levinson (GU - Georgetown University [Washington]); Jaime de Melo (UNIGE - Université de Genève = University of Geneva); Tom Moerenhout (Columbia University [New York]); Alessandro Monti (UCPH - University of Copenhagen = Københavns Universitet); Maria Panezi (UNB - University of New Brunswick); Philippe Quirion (CIRED - Centre International de Recherche sur l'Environnement et le Développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École des Ponts ParisTech - Université Paris-Saclay - CNRS - Centre National de la Recherche Scientifique); Lutz Sager (GU - Georgetown University [Washington]); Marco Sakai (University of York [York, UK]); Juan Sesmero (Purdue University [West Lafayette]); Mauro Sodini (University of Pisa - Università di Pisa, VSB - Technical University of Ostrava [Ostrava]); Jean-Marc Solleder (UNIGE - Université de Genève = University of Geneva); Cleo Verkuijl (FERDI - Fondation pour les Etudes et Recherches sur le Développement International); Valentin Vogl (Lund University); Leonie Wenz (MCC - Mercator Research Institute on Global Commons and Climate Change - PIK - Potsdam Institute for Climate Impact Research); Sven Willner (PIK - Potsdam Institute for Climate Impact Research) |
| Abstract: | Economic analysis has produced ample insights on how international trade and climate policy interact (1). Trade presents both opportunities and obstacles, and invites the question of how domestic climate policies can be effective in a global economy integrated through international trade. Particularly problematic is the potential relocation of production to regions with low climate standards. Measures to level the playing field, such as border carbon adjustments (BCAs), may be justified for specific emissions-intensive and trade-exposed sectors but need to be well-targeted, carefully navigating tensions that can arise between the desire to respect global trade rules and the need to elaborate and implement effective national climate policies. The conformity of specific trade measures with international trade and climate change law is not entirely clear. Yet, clarity is needed to ensure that the industry actors affected will find the rules predictable and be able to adhere to them. |
| Date: | 2022–06–24 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04466107&r=int |
| By: | Bruno Conte |
| Abstract: | How will future climate change affect rural economies like sub-Saharan Africa (SSA) in terms of migration and welfare losses? How can policy enhance SSA’s capacity to adapt to this process? I answer these questions with a quantitative framework that, coupled with rich spatial data and forecasts for the future, estimates millions of climate migrants and sizeable and unequal welfare losses in SSA. Investigating migration and trade policies as mitigating tools, I find a tradeoff associated with the former: reducing SSA migration barriers to the European Union (EU) standards eliminates aggregate welfare losses at the cost of more climate migration and high regional inequality. Reducing tariffs to the EU levels attenuates this cost. |
| Keywords: | climate change, migration, economic geography |
| JEL: | O15 Q54 R12 |
| Date: | 2023–10 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:1880&r=int |
| By: | Samuel Pienknagura |
| Abstract: | This paper assesses the role of climate policies as a catalyst of low carbon technologies deployment through foreign direct investment (FDI). Leveraging detailed cross-border project-level information, it identifies “green” FDI and finds that a higher number of active climate policies is associated with higher levels of green FDI inflows. Importantly, climate policies do not appear to be linked to lower levels of non-green projects, suggesting relatively small overall costs from the green transition. The paper also finds heterogeneity across sectors and policy instruments. The association between climate policies and green projects is particularly strong in energy and manufacturing, and when the composition of the recipient's climate portfolio is tilted towards binding policies (e.g., taxes and regulation) and expenditure measures. Finally, results point to policy spillovers, whereby larger climate policy portfolios in the source country are linked to higher green FDI outflows, but green subsidies can discourage them. This, in turn, implies that subsidies could hamper efforts to deploy low-carbon technologies across countries. |
| Keywords: | Climate policies; FDI; low carbon technologies; renewable energy |
| Date: | 2024–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2024/046&r=int |
| By: | Ms. Gabriela Cugat; Andrea Manera |
| Abstract: | We construct a novel measure of technology adoption, the Embodied Technology Imports Indicator (ETI), available for 181 countries over the period 1970-2020. The ETI measures the technological intensity of imports of each country by leveraging patent data from PATSTAT and product-level trade data from COMTRADE. We use this index to assess the link between capital flows and the diffusion of new technologies across emerging economies and low-income countries. Through a local projection difference-in-differences approach, we establish that variations in statutory capital flow regulations increase technological intensity by 7-9 percentage points over 5 to 10 years. This increase is accompanied by a significant 28-33 pp rise in the volume of gross capital inflows, driven primarily by foreign direct investment (21 pp increase), and a 9 to 12 percentage points shift in the level of Real GDP per capita in PPP terms. |
| Keywords: | Technology measurement; Technology diffusion; Capital flows; Capital account openness. |
| Date: | 2024–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2024/044&r=int |
| By: | Illescas, Nelson; McNamara, Brian; Piñeiro, Valeria; Rodriguez, Agustín Tejeda |
| Abstract: | Intraregional agrifood trade in Latin America and the Caribbean (LAC) offers untapped opportunities for expansion. Comparative advantages in food production as well as variation in consumption patterns create a high degree of complementarity across many LAC countries. Making use of this variation to expand trade within the region could improve access to, availability, and diversity of food, as well as ensure more stable food supplies. Stable supplies are particularly important for food security given the likelihood of continued shocks, such as conflicts, epidemics, economic crises, and extreme weather events. Although trade between countries in the region plays an important role as a source of imports, more than 60 percent of LAC’s food purchases come from extraregional suppliers. However, the shares of intra- and extraregional imports vary by subregion. About 60 percent of South American food imports come from regional suppliers, but only 20 percent of Mexican and Central American imports come from LAC suppliers. In the Caribbean, the share of regional suppliers in food imports has increased over the past five years but is currently only 29 percent (UN Statistics Division, UN Comtrade 2022). Most intraregional trade takes place within subregions, meaning that trade between countries from different LAC subregions is less common and thus presents the greatest opportunities for expansion. In this analysis of trade opportunities and challenges, the authors show there is potential to expand intraregional agrifood trade in major products such as corn, soybeans, soybean meal, wheat, poultry meat, milk, and concentrated cream. Facilitating intraregional trade and establishing new trade relations between LAC countries (the extensive margin of trade) where complementarities have been identified would provide opportunities for growth in the agrifood sec tors of these countries, make LAC food systems more resilient to supply shocks, and reduce food insecurity by ensuring efficient and reliable food supplies for consumers. However, despite progress in recent years, a number of factors — including high tariff rates, nontariff measures, origin requirements, government procurement rules, government support, and high transportation costs — continue to hamper the expansion of intraregional trade. This analysis focuses exclusively on intraregional trade; it does not examine opportunities for trade with partners outside the LAC region or compare opportunities for intra regional trade to extraregional trade. While such analysis could be valuable for informing trade policy, one of our primary objectives is to encourage stronger linkages between the economies of LAC countries regardless of trade opportunities outside the region. This goal reflects the expectation that improving these linkages among neighboring countries will have positive spillovers in the form of improved resilience to shocks, stronger political cohesion, and broader cooperation across these economies. \To accurately contextualize this analysis, it is necessary to highlight the diversity of food systems within LAC. While “LAC†is a standard regional classification and our analysis includes all LAC countries, the agrifood sectors, and especially agrifood trade, in the various LAC subregions face diverse challenges and opportunities. For example, these challenges and opportunities differ markedly between the Caribbean island countries and the larger Latin American countries, most notably Brazil and Argentina. These distinctions should inform the interpretation and implementation of our findings. |
| Keywords: | trade; food production; consumption; food security; Latin America and the Caribbean |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:polbrf:march2024&r=int |
| By: | Joe, Dong-Hee |
| Abstract: | Because international trade is essential for the Republic of Korea’s economic growth and development, the government actively promotes exports by large companies and especially by small and medium-sized enterprises (SMEs). Several programmes support participation by SMEs in cross-border e-commerce, which may have contributed to their rapidly rising exports through this channel. This report reviews selected programmes implemented by the Korea SMEs and Startups Agency (KOSME) and the Korea Trade-Investment Promotion Agency (KOTRA). To maximize the programmes’ impact, KOSME and KOTRA apply a circular process of assigning the required budget, selecting the most promising SMEs, coordinating with private sector stakeholders, and evaluating results. This document reviews each of these aspects in detail for a selection of the programmes. |
| Date: | 2024–01–26 |
| URL: | http://d.repec.org/n?u=RePEc:ecr:col022:68862&r=int |
| By: | Philipp Harms (Johannes Gutenberg University Mainz) |
| Abstract: | This is the manuscript of a keynote speech which I gave in October 2023 at a conference that celebrated 30 years of the Polish-German Academic Forum at the Warsaw School of Economics. The text reviews the evolution of globalization in the past decades, covering various dimensions of economic integration and devoting particular attention to the experiences of Poland and Germany. It then discusses the theoretical merits of free trade and international capital mobility, but also its distributional consequences, and eventually summarizes the empirical evidence on the effects of economic globalization. Finally, it sheds light on the recent anti-globalization backlash and analyzes the forces and motivations that determine individuals’ attitudes. The text concludes with the assessment that, if globalization is to persist, it has to be perceived as more than a purely economic project. |
| Date: | 2024–03–26 |
| URL: | http://d.repec.org/n?u=RePEc:jgu:wpaper:2406&r=int |
| By: | Carballo, Jerónimo; Marra de Artiñano, Ignacio; Sztajerowska, Monika; Volpe Martincus, Christian |
| Abstract: | Sustainability has become an imperative. Understanding the effects of countries policies thereon has therefore acquired vital importance. This is particularly the case with ubiquitous policies such as investment promotion. In this paper, we address this timely policy question from an environmental perspective. We examine whether and how investment promotion policies affect Latin American economies emissions of pollutants. To do so, we create and use a unique dataset that combines data on multinational firms location, investment promotion agencies (IPAs) assistance, and pollutant-specific emission intensities across countries and sectors over time. Our analysis yields three main findings. First, multinational firms operating in Latin America have higher emission intensities than those located in Europe and that this is primarily driven by their sectoral distribution. Second, IPA client portfolios are biased toward more polluting multinational firms and this is mainly associated with the type of sectors targeted by the IPAs. Third, while on average the effects of IPA assistance are similar across multinational firms with different pollution levels, these are stronger on more polluting ones within priority sectors. These findings highlight the need and relevance of data-based evidence to uncover potential tensions and balance different economic and sustainability goals. |
| Keywords: | Investment Promotion;Multinational Production;Sustainability |
| JEL: | F23 F14 F13 L23 L25 L52 O25 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:idb:brikps:13306&r=int |
| By: | Mr. Brad J. McDonald; Michele Ruta; Ms. Elizabeth Van Heuvelen |
| Abstract: | With the use and complexity of industrial policy rising, along with the need for active policies to address climate, food, health, and other emergencies, IMF staff are often expected to provide policy and technical advice on trade-related industrial policies to national authorities. This note aims to support country teams with staff guidance, useful questions for engagement with national authorities, and resources on trade related aspects of industrial policies. |
| Keywords: | Industrial Policy; World Trade Organization; Trade Policy; IMF Surveillance |
| Date: | 2024–03–11 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfhtn:2024/002&r=int |
| By: | Annabelle Mourougane; Emmanuelle Guidetti; Graham Pilgrim |
| Abstract: | Rising uncertainties and geo-political tensions, together with increasingly complex trade relations have increased the demand for monitoring global trade in a timely manner. Although it was primarily designed to ensure vessel safety, information from the Automatic Information System, which allows for the tracking of vessels across the globe, is particularly well suited for providing insights on port activity and maritime trade developments, which accounts for a large share of global trade. Data are available in quasi real time but need to be pre-processed and validated. This paper contributes to existing research in this field in two major ways. First, it proposes a new methodology to identify ports, at a higher level of granularity than in past research. Second, it builds indicators to monitor port congestion and trends in maritime trade flows and provides more granular information to better understand those flows. Those indicators will still need to be refined, by complementing the AIS database with additional data sources, but already provide a useful source of information to monitor trade, at the country and global levels. |
| Keywords: | big data, maritime trade, port activity, port congestion |
| JEL: | C55 F17 C81 |
| Date: | 2024–03–19 |
| URL: | http://d.repec.org/n?u=RePEc:oec:stdaaa:2024/02-en&r=int |
| By: | Kazunobu Hayakawa (Institute of Developing Economies); Nuttawut LAKSANAPANYAKUL (Thailand Development Research Institute); Toshiyuki Matsuura (Keio Economic Observatory, Keio University); Taiyo Yoshimi (Faculty of Economics, Chuo University) |
| Abstract: | This study explores the evolution of invoicing currency choice, focusing on inertia in invoicing currency and the role of export experience. We theorize that inertia in the producer fs currency pricing (PCP) weakens with lower forex risk management costs, whereas inertia in foreign currency pricing is more pronounced under similar conditions. For the export experience, exporters tend to adopt PCP when they start exporting if the costs are significant. Empirical analysis using firm-level export data in Thailand from 2007 to 2014 supports these predictions. Specifically, we show that the inertia in PCP diminishes with access to forward exchange contracts or when the importer fs currency has a higher forex turnover than the Thai baht. We also show that the tendency to adopt PCP in first exports diminishes under these conditions. Our findings imply that exporters initially prefer invoicing in their own currency, but this preference decreases as export experience accumulates or if there are financial tools or favorable currency turnover conditions. |
| Keywords: | Invoicing currency, Export dynamics, Inertia, Learning effect, Customs data |
| JEL: | F14 F31 F39 |
| Date: | 2024–03–03 |
| URL: | http://d.repec.org/n?u=RePEc:keo:dpaper:2024-005&r=int |
| By: | Hwang, Euisik (GS & J Institute); Suh, Jinkyo (GS & J Institute); Kang, , Hyungjun (GS & J Institute); Pyo, Yuri (GS & J Institute); Woo, Gayoung (GS & J Institute) |
| Abstract: | 최근까지 WTO 협상 전반의 동향을 고려할 때 제13차 WTO 각료회의에서 큰 성과를 기대하기는 어려울 전망이다. 이에 이번 각료회의는 지금까지의 협상 결과를 정리하고 향후의 구체적인 협상 계획을 제시함으로써 다자협상의 동력을 유지하는 수준에서 마무리될 가능성이 높다. 우리나라는 회원국간 이견이 많이 좁혀진 의제에 초점을 맞추어 합의 도출에 기여하는 방향으로 협상에 임하되, 각료회의 마지막 순간 주요국 간에 주고받기식 절충이 일어날 가능성에 대해서도 유의해야 한다. The WTO’s 13th WTO Ministerial Conference (MC13) will take place from 26 to 29 February 2024 in Abu Dhabi, United Arab Emirate. The Ministerial is expected to discuss follow-up agenda items from the 12th WTO Ministerial Conference (MC12), such as fishery subsidies, the e-commerce moratorium, whether to extend intellectual property rights exemptions to diagnosis and treatment for COVID-19, and WTO reform. In addition, there may also be an attempt to incorporate into the Investment Facilitation for Development (IFD) into WTO law. Additionally, the e-commerce Joint Statement Initiative (JSI) may also attempt to conclude the negotiations at MC13. Agriculture and development, traditional issues in WTO multilateral negotiations, are also expected to be discussed at MC13 regardless of whether there is an agreement or not. Finally, issues such as women and trade, climate change, and industrial policy (subsidies), which has recently attracted much international attention, are expected to be discussed at MC13. The direction of Korea’s negotiation response in preparation for MC13 can be summarized as follows. First of all, the possibility of reaching a consensus at MC13 must be analyzed first. In other words, since the negotiation period for a ministerial meeting is only 3 to 4 days, it is virtually impossible to reach an agreement through short negotiations unless the agenda is one in which the differences among member countries have been significantly narrowed in advance. Therefore, it is necessary to identify the possibility of reaching agreement on each agenda and to focus negotiating strength on those agendas on which agreement can be reached. From this perspective, the fisheries subsidies negotiations and the e-commerce JSI are agendas that have narrowed much of the differences between member countries through previous intensive negotiations. It is expected that most fisheries subsidies that contribute to overcapacity and overfishing (OC/OF) will be prohibited. In addition, Korea is likely to be amongst the 20 largest providers of fisheries subsidies, so it will be subject to additional regulations.(the rest omitted) |
| Keywords: | Economic integration; international trade; WTO; Ministerial Conference; MC13; multilateral trade |
| Date: | 2024–02–20 |
| URL: | http://d.repec.org/n?u=RePEc:ris:kieppa:2023_017&r=int |
| By: | Hugo Rojas-Romagosa |
| Abstract: | Russia’s war in Ukraine has disrupted the supply of natural gas for many European countries, triggering an energy crisis and affecting energy security. We simulate the medium-term effects of these trade disruptions and find that most European countries have limited GDP losses but those more dependent on Russian natural gas face moderate losses. European fossil fuel consumption and emissions are reduced and after accounting for the war impacts, achieving Europe’s emission targets becomes slightly less costly. In terms of energy security, the war eliminates European energy dependency from Russian imports, but most of the natural gas and oil imports will be substituted by other suppliers. We also find that constructing a new Russian pipeline to China does not provide significant macroeconomic benefits to either country. |
| Keywords: | Energy supply; energy security; trade disruptions; greenhouse gas emissions; computable general equilibrium |
| Date: | 2024–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2024/039&r=int |
| By: | Willem THORBECKE |
| Abstract: | Japan exports sophisticated capital goods. Since the Global Financial Crisis (GFC) Japanese companies have offshored the production of lower-end goods and parts and components to Asian countries. Because of this, Sato and Shimizu (2015) argued that a weaker yen no longer stimulates machinery exports as much because an increase in Japanese exports increases parts and components imports from overseas Asian subsidiaries. This paper finds that, after the GFC, a weaker yen no longer increases Japanese machinery exports to Asia but continues to stimulate exports outside of Asia. It also finds that, independent of its impact on exports, a weaker yen increases stock prices for many Japanese machinery producers. Thus the weaker yen since 2020 does not help Asian firms to import vital Japanese capital goods but does increase the profitability of Japanese manufacturers and their exports to non-Asian countries. |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:24033&r=int |
| By: | Gabriele Lucchetti; Alessandro Ruggieri |
| Abstract: | This paper studies how aggregate labor market conditions affect the intra-generational assimilation of immigrants in the hosting country. Using data from the American Community Survey, we leverage variation in the national unemployment rates in the U.S. at the time of arrival of different cohorts of immigrants to identify short- and long-run effects of recessions on their careers. We document that immigrants who enter the U.S. when the labor market is slack face large and persistent earnings reductions: a 1 p.p. rise in the unemployment rate at the time of migration reduces annual earnings by 4.9 percent on impact and 0.7 percent after 12 years since migration, relative to the average U.S. native. Change in the employment composition across occupations with different skill contents is the key driver: were occupational attainment during periods of high unemployment unchanged for immigrants, assimilation in annual earnings would slow down on average by only 3 years, instead of 12. Slower assimilation costs between 1.7 and 2.4 percent of lifetime earnings to immigrants entering the U.S. labor market when unemployment is high. |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:not:notgep:2023-09&r=int |
| By: | Yeh, D. Adeline; Kramer, Jaclyn; Calvin, Linda; Weber, Catharine |
| Abstract: | Fruits are vital to consumer diets and an important part of the U.S. agricultural industry. Two berries (strawberries and blueberries) are among the most economically important fruits. With more than $2 billion in annual farm gate sales and accounting for a 13-percent share of the total production value of fruit, strawberries rank third for all fruit produced in the United States in 2020. Blueberries account for 5 percent of the total fruit production value. This report examined changes in domestic production, consumption, prices, and trade for strawberries and blueberries over two decades. This study helps explain how the major berry markets evolved in a short time and examines opportunities and challenges these markets face. |
| Keywords: | Crop Production/Industries, Food Consumption/Nutrition/Food Safety, International Relations/Trade, Labor and Human Capital, Marketing, Production Economics, Productivity Analysis, Research and Development/Tech Change/Emerging Technologies |
| Date: | 2023–09 |
| URL: | http://d.repec.org/n?u=RePEc:ags:uersib:340564&r=int |
| By: | Parrado, Eric; Heresi, Rodrigo |
| Abstract: | Singapore's unique monetary policy consists of a managed exchange rate framework that can be characterized as a Taylor-like reaction function with the nominal devaluation rate instead of the nominal interest rate as the main policy instrument. We build a small open economy New Keynesian model to estimate and characterize such a monetary rule from a welfare perspective. Welfare gains under an exchange rate rule (ERR) relative to the more standard interest rate-based Taylor rule (IRR) are unambiguously increasing in the degree of trade openness (defined as exports plus imports as a share of GDP). For Singapore, where trade openness is 280% of GDP, we estimate welfare gains of 1.48% of permanent consumption under an ERR. In a counterfactual thought experiment, we find that Chile, an established inflation-targeting economy using an IRR, would be better off under an ERR for any degree of openness above 100% (currently at 70%). |
| Keywords: | Monetary policy;Exchange rate management;Open economy macroeconomics |
| JEL: | E52 E58 F41 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:idb:brikps:13346&r=int |
| By: | Yvonne Giesing; Björn Kauder; Lukas Mergele; Niklas Potrafke; Panu Poutvaara |
| Abstract: | We examine how cultural norms shape attitudes toward immigration. Our causal identification relies on comparing students who moved across the East-West border after German reunification with students who moved within former East Germany. Students who moved from East to West became more positive toward immigration. Results are confirmed among students whose move was plausibly exogenous due to national study place allocation mechanisms. Evidence supports horizontal transmission as the difference between East-West movers and East-East movers increases over time and is driven by East German students who often interacted with fellow students. Effects are stronger in less xenophobic West German regions. |
| Keywords: | cultural transmission, migration, attitudes toward immigration, German division and unification, political socialization |
| JEL: | D72 D91 J15 J20 P20 P51 Z10 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10985&r=int |
| By: | Torres, Javier; Beverinotti, Javier; Canavire-Bacarreza, Gustavo |
| Abstract: | In a span of six years, the proportion of Venezuelans in Peru has surged nearly fourfold, rising from virtually zero to over 4% of the population. This study delves into the dynamics of medium- and long-term labor market integration in Peru, combining data from the Venezuelan Population Residing in Peru Survey and the Peruvian National Household Survey. Our findings reveal that Venezuelan workers experience low returns on foreign postsecondary education and there is minimal relation between foreign work experience and monthly income. Importantly, these outcomes remain consistent irrespective of the time spent in the host country, indicating a gradual economic assimilation process. Lastly, our estimation demonstrates that if Venezuelans human capital yielded returns equivalent to Peruvian human capital, the average income of Venezuelans would witness a substantial increase of 20%. |
| Keywords: | Immigration;Economic Assimilation;Wage Discount |
| JEL: | J15 J24 J31 J70 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:idb:brikps:13361&r=int |