Retaliatory temporary trade barriers: New facts and patterns

This paper takes a fresh look into the role of Temporary Trade Barriers (TTBs) and whether they are introduced for strategic reasons. We construct a novel sectoral measure of retaliation using daily bilateral data on TTB responses in 1220 subsectors across a panel of 25 advanced and emerging economies over 1989–2015. We use this measure to present novel stylized facts and patterns suggesting that strategic considerations may be more important (in terms of intensity and frequency) than commonly understood from the existing literature, which has tended to ignore within-year responses. Our evidence indicates that retaliation actually often consists of responses across many sectors and indeed that same-sector retaliation is far from being the norm.     

The US–China trade war and Phase One agreement

The Trump administration changed US trade policy toward China in ways that will take years for researchers to sort out. This paper makes four specific contributions to that research agenda. The first is to carefully mark the timing, definitions, and scale of the products subject to the tariff changes affecting US–China trade from January 20, 2017 through January 20, 2021. One result was each country increasing its average duty on the other to rates of roughly 20 percent, with the new tariffs and counter-tariffs covering more than 50 percent of bilateral trade. The second contribution is to highlight two additional channels through which bilateral tariffs changed during this period that received less research attention. One tariff change is through product exclusions, another is trade remedy policies of antidumping and countervailing duties. The third contribution is to provide an initial exploration into why China fell more than 40 percent short of meeting the goods purchase commitments set out under the first year of the Phase One agreement. The last contribution is to consider additional trade policy actions—involving forced labor, export controls for reasons of national security or human rights, and reclassification of trade with Hong Kong—likely to affect US–China trade beyond the Trump administration.     

论我国粮食生产与贸易保护政策的演变趋势

对粮食生产与贸易实行特殊保护 ,是各国政府普遍实行的一种特殊政策。但是 ,以国家干预为特点的粮食保护政策 ,必然会扭曲市场运行机制 ,削弱资源优化配置功能 ,这就要求建立符合我国国情和市场经济规律要求的粮食贸易与保护政策 ,以增强我国粮食的竞争力。     

The role of standards in the policy debate on the EU-US trade agreement

In the context of the public policy debate, we explore firm-level characteristics that influence firms’ preferences related to alternatives to harmonize standards within the Transatlantic Trade and Investment Partnership (TTIP). The options are the implementation of common standards, developed internationally or bilaterally, and mutual recognition. The empirical analysis is based on data from the German Standardization Panel. We identify three dimensions that determine firms’ preferences regarding the various harmonization solutions: (1) company-specific factors, such as size, industry and motives to apply standards, (2) the competitive environment, i.e. the position vis-à-vis other market participants, and (3) the technological environment, i.e. the dynamics of the market the company operates in.     

Currency devaluation and trade balance: Evidence from the US services trade

This study aims to revisit the effectiveness of using currency devaluation as a policy tool to improve trade balance by estimating the exchange rate elasticities of services trade between the US and rest of the world with quarterly disaggregated services trade data from 1999 to 2015. Empirical results reveal that the impacts of currency devaluation on individual services trade are mixed and largely depend on the nature of services. Using currency devaluation to raise export services trade and reduce import services trade seems to be more effective in the long-run but not in the short-run. It is interesting to note that some individual services trades are insensitive to exchange rate changes. The estimates also reveal that most categories of services trade are income elastic and economic growth plays a key role in determining the imports and exports of services trade.     

The impact of trade liberalisation on poverty and inequality: Evidence from CGE models

In this paper we carry out a systematic review of the evidence from CGE models regarding the effect of trade liberalisation on income inequality and poverty in developing countries. The evidence suggests quite strongly that trade liberalisation tends to reduce poverty, but is more likely to increase inequality than reduce it; however, the predicted effects are relatively small. Variation in the size and direction of effects can be explained by the choice of outcome measure, the fiscal response to liberalisation, the type of CGE model, and certain country characteristics – but not the method used to link the CGE model to the distribution of income.     

What accounts for China''s trade balance dynamics?

This paper proposes a structural VAR model which extends the frameworks of Hoffmaister and Roldós [Hoffmaister, A. W., & Roldós, J. E. (2001). The sources of macroeconomic fluctuations in developing countries: Brazil and Korea. Journal of Macroeconomics, 23, 213–239] and Prasad [Prasad, E. S. (1999). International trade and the business cycle. Economic Journal, 109, 588–606]. The model is then used to analyse the sources of China's trade balance fluctuations in the period of 1985–2000. Efforts are made to distinguish the forces which underlie the long-run trend in trade balance from those with transitory impacts. The effects of four types of shock are examined—the foreign supply shock, the domestic supply shock, the relative demand shock and the nominal shock. Among other findings, two emerge as important. First, the movements in China's trade balance are largely the result of real shocks. Second, the Renminbi is undervalued, yet changes in the exchange rate bear little on the trade balance. Therefore, monetary measures would not suffice to redress China's trade ‘imbalance’.     

Who wins from an FTA induced revival of world trade?

The last decade has been characterized by a slowdown in globalization, referred to by some as "slowbalisation" and “deglobalization”. The COVID-19 pandemic has reinforced this impression. To overcome the deadlock in the Doha round negotiations at WTO the major players in world trade are negotiating or have already implemented several free trade agreements (FTAs) as a second-best solution. We analyze within a common framework nine mega FTAs, some of them are already in effect, others will be enacted soon. Overall, not the big players in world trade, the EU and the United States win by a simultaneous implementation of the nine FTAs. Japan would be the winner because it participates in four combinations (overlaps) of FTAs: EU-Japan, USA-Japan, CPTPP and RCEP. The United States hardly gain from further globalization. Similarly, the EU27 cannot profit much from further globalization.     

The effects of free trade areas on non-members: Modelling Kemp–Vanek admissibility

A multi-sector multi-country Numerical General Equilibrium model is used to endogenously determine the trade taxes that FTA members need to charge on non-member trade so that after the FTA is formed, FTA-member trade volumes with non-members remain at their pre-FTA level. We apply the notion of Kemp–Vanek admissibility in McMillan [McMillan, J. (1993), Does regional integration foster open trade? Economic theory and GATT's Article XXIV” In Anderson, K. & R. Blackhurst (Eds.), Regional Integration and the Global Trading System. London: Harvester-Wheatsheaf] to construct an FTA which does not make non-members of the FTA worse off, ensuring that the FTA is necessarily a building block and not a stumbling block to global free trade. We implement the path-independent welfare decomposition in Harrison et al. [Harrison, G., Rutherford, T. & Wooton, I. (1993). An alternative welfare decomposition for customs unions. Canadian Journal of Economics, 26(4), 961–68]. Results of such experiments are relevant to the current debate under the WTO's Doha Round of trade negotiations over GATT (1994) Article XXIV which evaluates the consistency of FTAs with the WTO.     

The impact of US fresh milk production standards on dairy trade

We examine the impact of proposed changes in US legislation to allow greater use of concentrated dairy products when producing fresh milk commodities. Although this change will allow dairy producers to partially circumvent high tariff-rate quotas (TRQs) for fresh milk products, changes in dairy production and trade are small, reflecting limited use of concentrated dairy products as inputs to fresh milk products. We also show that, at the global level, high trade barriers on other dairy commodities do not have a significant impact on trade in concentrated milk products. We conclude that trade negotiations should focus on the removal of tariffs and TRQs.     

Price controls, trade protectionism and political business cycles in the U.S. steel industry

The U.S. steel industry is subject to a microeconomic political business cycle resulting from U.S. Presidents designing protectionist policies on behalf of the steel industry; experiencing complaints from consumers and foreign producers as a result of the policy; modifying the policy which results in complaints from the steel industry; and finally, maneuvering policy back in favor of the industry to achieve re-election. Using a cointegrating vector error correction framework, this paper tests the hypothesized political business cycle for its effect on steel prices. We find that trade protectionism does not seem to have succeeded in its primary objective of supporting prices. By expending so much political capital on ineffective trade protection, the steel industry may have lost the opportunity to focus on more substantive issues that might have restrained factor cost and enhanced its competitive ability. The devolution of the steel industry, ironically, may have resulted from it's persistent pleas for protection. Political business cycles in the steel industry, with all its attendant negative consequences, would not occur if the steel industry did not continually lobby for protection.     

The impact of the Doha trade proposals on farmers’ incomes in China

This paper analyzes the potential impacts of the Doha trade proposals (those of the USA, EU and G20) on agricultural production and incomes of China's farmers by region and income group. By linking a global trade model to a national policy model which itself is connected to a set of disaggregated household data, we are able to assess the effects of the proposed Doha trade liberalizations on households both at the national and regional levels. According to the results of the model, the impacts of a Doha Round agreement on households differ significantly from those of China's WTO accession. China's economy would benefit from the trade liberalization associated with the Doha Round. The overall impacts, however, are relatively minor. Although farmers will benefit at the national level, the gains among farmers vary largely by income group and province. Also, the impacts on households that produce different types of crops differ.     

加入WTO后过渡期中国服务贸易的发展

中国服务贸易发展迅速,收支均出现了大幅度增长,不过按照比较优势指数衡量,服务贸易国际竞争力出现了轻微下滑,各服务行业的国际竞争力发展不平衡。众多行业的竞争力得到了提升,但是也有一些行业的竞争力出现了较大幅度的下降。按照今后三年中国加入WTO承诺的放开步骤,我们必须强化服务业与其他行业的连接、对内放开垄断市场和积极发展资本市场。     

On the dynamic measurement of economic openness

The empirical relationship between economic openness and economic performance is much debated in the economic literature. No definitive conclusions seem to be reached yet, part of the problem being the very measurement of economic openness of a national economy. In their article in the Journal of Policy Modeling, Ruíz Estrada & Yap (2006) propose a new method to measure economic openness and to empirically assess the openness–growth nexus as a new tool for policy-makers: the Openness Growth Monitoring Model (OGM-Model). The authors claim: (i) that their method is different from and more flexible than existing empirical methods, (ii) that higher levels of openness do not lead to income growth, and (iii) that customs unions perform better than free trade areas. This short article challenges the three claims of the authors.     

Free trade,food-processing,and migration: An analysis of Mexican immigration in the U.S. Great Plains Region

This paper empirically identifies the factors driving Mexican immigration into the U.S. Great Plains region, focusing especially on the role of work in the Mexican and U.S. food-processing sectors, which in the context of NAFTA-induced foreign direct investments, opens up paths for migration along occupational lines into the U.S. from Mexico. Using a unique dataset on Mexican migration, the study addresses three related questions in a series of multivariate logistic regression analyses. First, is employment in the U.S. food-processing sector associated with Mexican migration into the Great Plains region? Second, does employment in the Mexican food-processing sector predict employment in the Great Plains food-processing sector? Finally, is the political–economic context linking Mexico and the U.S. related to the formation of occupational channels linking the food-processing sectors in Mexico and the U.S.? The findings demonstrate that the U.S. food-processing sector is a strong predictor of Mexican migration to the Great Plains region; Mexican migration is strongly channeled along occupational lines from Mexico to the U.S.; and the implementation of NAFTA, a period of intensive political–economic integration, strengthens the occupational channel between the food-processing sectors.