The employment effects of trade in manufactured products between developed and developing countries

This paper examines prospective changes in employment associated with the expected expansion of trade in manufactured goods between the developed and developing countries over the next decade. It appears that, on balance, the developed countries would experience net employment creation as a result of this trade, and there would be only relatively small decline of employment in their import-substituting industries. In turn, the developing countries would gain employment through increased export that would further contribute to their economic growth, with favorable indirect effects on employment.     

The demand for protection against exports of newly industrializing countries

Exports of manufacturers from newly industrializing countries have increased dramatically in recent years. Yet, in the importing countries—largely the highly developed, “old” industrial countries—the NICs' exports constitute even now an almost insignificant proportion of total imports of manufacturers. Is there, then, some particular reason why the exports concerned seem to be strongly resented by the importing countries, and particularly likely to be faced with trade barriers? The paper examines this issue, and identifies four possible sources of demand for such protection: (1) the factor content of the NICs' exports—specifically, their relative intensity in unskilled and semiskilled labor; (2) the nature of the exported goods, which consist largely of final consumer goods rather than of machinery and equipment; (3) the NICs' lack of retaliatory power; and (4) the context of a relatively stagnant world economy, suffering from high unemployment, which the expansion of manufactured exports from the NICs has had to face.     

The cost of war: Impact of sanctions on Russia following the invasion of Ukraine

We use a computable general equilibrium model of world trade to quantify the possible impact of economic sanctions imposed by Western and other countries in response to Russia’s invasion of Ukraine. If sender countries chose 100 % import tariffs and export taxes on trade with Russia, Russia’s GDP would decline by 3–7 % due to the resulting significant reduction in exports. By contrast, the GDP loss for those countries would be 0.2 % for the European economies, but only about 0.05 % for Japan. Although unlikely, the effect of China’s participation in the sanctions would be more significant than that of India. There are concerns about food and energy crises due to economic sanctions against Russia, but the effect on food supplies would not be a serious problem for either senders or third parties. The impact on energy supplies would affect all senders to some extent; for example, there would be a 3% reduction of energy consumption and a 3–4 % rise in electricity and town gas prices in Japan.     

Trade and innovation policies: Coexistence and spillovers

The debate over trade’s role in growth and inequality in recent years seems to center on the question of whether the gains from trade are worth the disruption from necessary adjustments. In particular static gains from trade for advanced economies are generally estimated to be small, while empirical evidence around growing employment and inequality challenges suggest trade’s role may be larger than previously thought, though still only one of many contributing factors. The focus on static gains though likely understates substantially the dynamic gains, as trade’s role in spurring faster economic growth, in both developed and developing countries through competitive and innovative forces. The dynamic, competition and innovation angle suggests a need for industrial policies to be revisited and examine how spillovers play out in the global economy. At the same time significant technological disruption is occurring through digital technology, big data, and machine learning/AI techniques that often require advanced capabilities and have significant competition implications. In recent COVID-19 pandemic policy responses governments have dramatically increased spending and liquidity to support stressed firms and households and encouraged many countries to consider strategic efforts to build certain domestic capabilities with the aim of reducing dependence on trade for emergency related goods and services. This paper provides insights on the specific role of innovation policies, and they differ from and are similar to traditional industrial policies, and what that might mean for future trade rules.     

发展服务贸易的思考:问题及其路径选择

货物贸易与服务贸易一直存在着"长短腿"尴尬,如何抓住新一轮国际产业转移的战略机遇,促进服务贸易快速发展,实现货物贸易和服务贸易的协调发展,是我国参与国际分工、提高国际竞争力的重要举措。基于和谐视角,提出应从调整产业结构、政府政策扶持、加快服务贸易人才培养、拓展服务外包寻求服务贸易突破口、实施服务贸易品牌策略、完善政策法规等方面发展服务贸易的相关制度安排。     

Protectionism: An analysis from project LINK

The LINK system of world trade is used to examine present tendencies toward protectionism. In protectionist scenarios we increase the prices of manufactured imports into 13 LINK-OECD countries by 5, 10, and 20 percent respectively, for 1978–1979. If a country's import equations do not depend significantly on relative price, we impose corresponding quantitative import restrictions of 5, 10, and 20 percent. Smaller OECD countries, developing countries, and socialist countries are assumed to be nonprotectionist in these scenarios. The discrepancies between the values of leading variables in the protectionist scenarios and in a baseline case show the effects of the different degrees of protectionism assumed. The results describe and validate Adam Smith's principles of the gains from free trade.     

中韩贸易结构分析

文章从中韩两国的贸易商品构成入手,通过计算中韩产业间和产业内贸易指数指标,来分析中韩两国建交十多年来的贸易发展状况和贸易结构变化,从中发现:中韩两国的产业间贸易水平较低,而代表水平分工的产业内贸易水平则较高且增长很快,这种现象在占中韩贸易主体的工业制成品贸易中表现尤为明显;在产业内贸易中,代表相同质量产品的水平产业内贸易的份额要高于同一产业不同环节有差异产品的垂直产业内贸易。     

Commodity prices and the world distribution of income

Some advocates of a new international economic order recommend raising prices of commodities exported by developing countries as a means of reducing the inequality of world income distribution. A simulation model using commodity trade data and income distribution data for 68 industrial and developing countries examines this policy alternative. Initial data compilation reveals that internal inequality is as important as international: The world income share of the poorest 40% of people would be twice as high in the absence of intracountry inequality. Calculations using actual price experience in the “great inflation” of 1972–1975 show that despite the large relative price changes for some commodities (especially oil), these changes left the world size distribution of income virtually unchanged. Separate policy simulations show that even a quadrupling of the price of ali “equalizing” commodities (those mainly exported by LDCs) would leave the size distribution of world income practically unaltered (even under optimistic assumptions about intracountry distributional incidence), although some individual LDCs would gain. Increasing commodity prices therefore appears to be an ineffective means of increasing international equity, quite apart from questions about the feasibility of cartels or commodity agreements.     

On the Zinov′ev Phenomenon

The Soviet Union occupies a firm place in foreign markets, its foreign trade turnover having moved up to sixth place in the world. Last year its foreign trade turnover topped 42 billion rubles, an increase of 25% as against 1958 in comparable prices. Soviet exports in the same period rose by 27%. This was the peak year for Soviet exports. In absolute figures the export of goods from the USSR amounted to 21.7 billion rubles in 1959 as against 7.2 billion rubles in 1950.     

Does export concentration matter in economic adjustment programs? Evidence from the euro-area

The recent crisis in some euro area countries is intensively fueling the political and economic policy debate about the effectiveness of the applied adjustment programs. This paper aims to contribute to explaining why the results of these programs could be different across countries, flagging the crucial role of exports. In view of recent economic literature about substitution between domestic and foreign sales, helping exports when domestic demand is adjusting, this paper uses panel data techniques to assess the role of the export structure in explaining this substitution effect in the euro area countries. Building a novel indicator for product concentration, the results suggest that domestic demand developments are more relevant to explaining exports in countries with a lower product concentration index (that is, more diversified exports). This contributes to explain why euro area countries under stress registered different economic performance, in particular the clearly less favorable behavior of Greece, where exports structure is concentrated more strongly in some goods and services than in other euro area countries. With different export behavior the final evaluation of the Greek adjustment would be certainly different. These results suggest that export structure should be taken into consideration when designing or evaluating this type of adjustment programs.     

The Social Development Summit and the developing countries

This article discusses some concerns of the 1996 UN Summit on Social Development. Conference organizers identified the three key conference issues as poverty alleviation, social integration of the marginalized and disadvantaged, and expansion of productive employment. The goal of a "society for all" means dealing with the increasing differences between rich and poor countries, the survival of weaker economies in a competitive market system, wide variations in consumption patterns between countries, attainment of political stability while respecting ethnic identity, the rise in social problems among countries with a high human development index, and increasing joblessness. The Human Development Report for 1994 emphasizes human security. Social development is not the equivalent of human resource development nor a side issue of economic growth. The integration of ethnic groups poses social and political problems. There remains a question about what political system and culture would be best for social integration. Developed countries define poverty as the inability of people and government to provide resources and necessary services for people's productive activity. Poverty in developing countries is blamed on colonialism. Globally, developed countries control 71% of world trade. Sharing resources to meet basic needs throughout the world is not an operational ideal. The highest 20% of income earners receive 83% of the world income. The culture of poverty is the strategy used by the poor to survive. Welfare is not an end in itself but does enable the poor to improve their conditions. Development that focuses on productive employment is uncertain. Developed and developing countries do not share similar perceptions of human rights. There is a question as to who should set the priorities for social development. Sustainable social development is related to preservation of natural resources, control of population growth, and promotion of social security.     

The implications of the Lima target: Explorations with a world industrialization model

The Second General Conference of the UNIDO held in Lima in 1975 declared that the share of developing countries in total world industrial production should reach 25% by the year 2000. The model presented in this article has been constructed in order to investigate whether this target is consistent with other more generally accepted goals of development and is feasible within the area of production and trade possibilities.The model is a dynamic, multisectoral, multiregional input-output model. It focuses on the impacts and mutual consistency of targets of growth, regional income distribution, industrialization, consumption levels, and trade. In the empirical application three periods, three regions, and nine sectors have been distinguished to produce intersectorally, interregionally, and intertemporally consistent accounts for the main variables. Since the study is concerned with the maximum possible growth of industrial output of the developing countries, a linear programming approach has been used.The report is organized as follows. After an introduction, the second section describes the mathematical model. The third section contains a detailed explanation of the data basis and of the assumptions made to stimulate the model. The numerical results of the model are discussed in the fourth section, and the main conclusions are given in the fifth.     

Trade options for a small open economy: The different impact of Taiwan exports to China and to other countries

This study aims to explore advantageous trade arrangements for a small open economy. To discover the arrangement, the fundamental question to ask is how trade affects a small economy. Due to the differential factor mobility, the two main streams of trade theory—new economic geography and comparative advantage—make divergent predictions of trade effects. This study identifies the differences in factor mobility and distinguishes the differential impacts of exports to China and other countries on Taiwan’s manufacturing clusters. Using Taiwan’s 2006 and 2011 census data and trade statistics, this study applies the two-stage least squares method to test the differential impacts. The findings reveal that the growth in Taiwan’s exports to other countries significantly increased the employment level of manufacturing clusters in Taiwan. However, such effects have not been found for exports to China. The lack of response in Taiwan’s local employment to exports to China can be inferred as a short-term exhibition of the long-run core-periphery effect. The policy implication of this study is that trade involving low factor mobility is more beneficial than that involving high factor mobility for a small open economy. Thus, for a small economy, trade liberalization that will ‘not’ attract large factor outflows from the small economy is more desirable.     

Capital goods imports and long-run growth: Is the Chinese experience relevant to developing countries?

In this paper, we analyze the role played by capital goods imports in the long-run growth of developing countries. We focus in the case of the Chinese economy in the last few decades. We find evidence that the ratio of imported to domestic capital goods, that is, the composition of investment, as well as the capital accumulation (both physical and human), was key determinants of the long-run growth rate of per capita GDP over the analyzed period. Furthermore, our results are also consistent with the hypothesis that the link between trade openness and long-run growth operates mainly through imports. This finding supports some recent developments of Schumpeterian models of growth, and the very specific economic policy recommendations arising thereof. In short, these models state that, in the early stages of growth, government intervention to encourage an investment-based strategy, with emphasis on large investment efforts and the adoption of foreign technology, could be an appropriate strategy for development.     

Some thoughts on the restructuring of North-South interaction

The theory of international trade presents trade as a positive-sum game for all participants. Yet, most of the negotiations between the developed and the developing countries seem to have been conducted under a perception of reality that views North-South relations as a zero-sum game. The purpose of this paper is to suggest a general framework for institutional and structural changes to benefit all participants. A number of original proposals for international reforms to support equitable development in developing countries are presented. The major element of the proposals include a Land Reform Fund, a rural and industrial development package for LDCs, support for trade liberalization of impacts from land reform countries, and an industrial Assistance Fund to help industrial countries to restructure production pattern.The proposals contain obviously far reaching national and international political implications whose impact is assessed in the concluding part of the paper. There the claim is made that unless both sets of countries find cooperation mutually attractive, they will be unable to embark in development strategies characterized by the highest chance of success and with the fewest economic and social disruptions.     

Empirical aspects of protectionism: LINK results

General aspects of protectionism as they are revealed or treated in the LINK system are discussed in this paper. Attention is focused on the macroeconomic aspects of protection, about which relatively little is known: most of the vast body of knowledge on this subject concerns the microeconomic aspects of protection. Some simulations of trade liberalization (opposite of protectionism) and of protection within the context of the LINK system are reported. A movement away from protection would benefit the present world economy but not by a large enough extent to deal effectively with pressing international economic problems; therefore, trade liberalization within the context of a larger program of coordination policy among major industrial countries is examined. Finally, the relationship between protectionism and inflation is explored.     

Fruit safety regulations in the transatlantic region: How are Africa’s exports faring with the regulations?

The regulations of fruit trade for safe consumption are taken seriously in the EU and US markets to protect the health of the consumers, animals, plants and environmental safety, and thereby reduce health expenditures. The fruit safety regulations as trade policy measures could be either trade-promoting or -impeding. The extensiveness and intensiveness of fruit safety regulations in these markets often have consequences for exporters from Africa and their desire to attain sustainable economic development. The effects of fruit safety regulations are heterogeneous across economic agents. To this end, many stakeholders in Africa’s food system have perceived compliance with these food regulatory measures as necessary conditions to access the developed countries’ markets, particularly in the EU and US. Besides, the competitiveness of Africa’s fruit exports has been impacted by the preponderance of the measures despite its comparative advantages in the fruits sub-sector. Therefore, this study aims to investigate the impact of the EU and US sanitary and phytosanitary measures on Africa’s fruit exports. The empirical strategy involves the use of an augmented gravity model which explore the disentangling of these impact at the extensive and intensive margins of exports. Given the nature of trade data and specifically for this study, the zero trade flows are considered at both margins of exports for 45 African countries from 1995 to 2017. This study finds that the US market is more trade-impeding to Africa’s fruit exports than the EU market. Thus, Africa needs policies tweaking in the fruit value chain quality infrastructure, fruits’ quality and standards enforcement, capacity development, continuous update and modernisation of the fruits’ safety laws, directives and/or regulations. This will enhance the fruits’ quality to propel their access to the transatlantic markets.     

Rent seeking and the North-South terms of trade

In this paper results are reported for a series of counterfactual experiments with an eight- region numerical general equilibrium model of world trade, production, and welfare. In these analyses trade restrictions in the developing world are modeled as quantity constrained import licensing, which generates competitive rent-seeking behavior. Model experiments concentrate on the implications of differential factor endowment growth for the North-South terms of trade, and the effects of alternative trade policy changes in developing countries.     

论东北地区外贸发展方式创新

外贸发展方式创新,是我国"十二五"时期经济发展方式转变的重大而关键的任务。长期以来,东北地区外贸发展主要依据传统的比较优势理论,以出口数量扩张、劳动密集型产品出口和低价格战略形成竞争优势。目前,面临后金融危机影响,全球经济增长乏力、大宗商品价格高企、资源环境压力加大、出口难度增加,更显露出其粗放性和难以持续性。东北地区外贸发展亟待打破原有传统贸易理论束缚,创新外贸发展方式,即从扩大出口创汇转向提高经济效益上来,从粗放式增长转向集约式增长上来,从出口创汇型转向依靠国际化经营能力上来。要遵循国际贸易规则,创新对外贸易制度安排;发挥东北地区优势,开拓多元化国际市场;优化出口产品结构,积极引导产业升级;加强与周边国家和地区的合作,促进外贸经济协调发展;集合各方力量,积极应对贸易摩擦。     

The Sale of Goods to The Public on Credit

Credit sales to the public, i.e., on an installment basis, are acquiring more and more significance for the development and improvement of retail trade in our nation. The constant and considerable growth in the production of consumer goods, especially durable goods, and the steady rise in the organizational and cultural level of Soviet trade are the basic prerequisites for the expansion of the sale of goods on this basis. At the same time, the development of consumer credit is itself stimulating the expansion and increased effectiveness of the production and sale of consumer goods. By way of example, it can be noted that the sale of goods on a deferred-payment basis furthers the expansion of progressive forms of trade (on the basis of samples, advance orders, home deliveries of goods, etc.) and exerts a considerable positive impact on the expansion of production and sale of consumer goods. With the absolute domination of public ownership, the sale of goods on credit becomes one of the methods of attaining the goal of socialist production, i.e., the constant improvement of the well-being of the working people.