Concording EU trade and production data over time. National Bank of Belgium Working Paper No. 239, December 2012

This paper provides concordance procedures for product-level trade and production data in the EU and examines the implications of changing product classifications on measured product adding and dropping at Belgian firms. Using the algorithms developed by Pierce and Schott (2012a, 2012b), the paper develops concordance procedures that allow researchers to trace changes in coding systems over time and to translate product-level production and trade data into a common classification that is consistent both within a single year and over time. Separate procedures are created for the eightdigit Combined Nomenclature system used to classify international trade activities at the product level within the European Union as well as for the eight-digit Prodcom categories used to classify products in European domestic production data. The paper further highlights important differences in coverage between the Prodcom and Combined Nomenclature classifications which need to be taken into account when generating combined domestic production and international trade data at the product level. The use of consistent product codes over time results in less product adding and dropping at continuing firms in the Belgian export and production data.

Financial services and the Transatlantic Trade and Investment Partnership. CEPS Policy Brief No. 302, 20 November 2013

Given the size of the financial markets on both sides of the Atlantic and the symmetry in the follow-up of the G-20 standards, Karel Lannoo argues in this Policy Brief that the Transatlantic Trade and Investment Partnership (TTIP) provides a good opportunity to put in place a more institutionalised framework. He finds that both blocs have reacted in similar ways to the financial crisis in strengthening their regulatory and supervisory frameworks and incorporating the G-20 recommendations into federal law. He also notes that consumer protection has been reinforced, certainly in the US, with the creation of the Consumer Financial Protection Bureau. And on the EU side, the Single Supervisory Mechanism (SSM) will radically change banking supervision. In his view, inclusion of financial services could also be an opportunity to strengthen prudential rules and consumer protection provisions on both sides. Rather than leading to a reduction of consumer protection, as had been feared in the post-crisis environment, it could lead to an examination, exchange and recognition of best practices in regulation and enforcement. Finally, he concludes that inclusion of financial services would make it part of the permanent regulatory dialogue that will be established as a result of a successful TTIP.

Will the Transatlantic Trade and Investment Partnership be a game-changer? EU Centre Singapore Policy Brief No. 5, April 2013

In February 2013, US President Barrack Obama, European Council President Herman Van Rompuy and President of the European Commission José Manuel Barroso announced the decision to go for an ambitious and comprehensive trade and investment agreement between the US and the EU. To be called the Transatlantic Trade and Investment Partnership (TTIP), this agreement would lead to a new stage in the transatlantic relationship and be a much needed boost to the lacklustre economic recovery so far. Some analysts have even argued that TTIP would be a “game changer” – besides the economic gains, it would serve a bigger strategic purpose of promoting EU-US common objective to set higher standards of trade liberalisation, and thereby level the playing field in China and other key emerging markets. This policy brief examines the reasons behind the current push towards TTIP and the possible contents of such an agreement. It also discusses the possible obstacles to the realisation of TTIP, and at the same time, looks into what a successful conclusion of TTIP would mean for Asia and beyond.

Economic Partnership Agreements in the EU's post-Lome trade regime: negotiations with West Africa. ZEI Discussion Paper C214, 2012

Trade is a key element of the development policy of the European Union (EU). As the most important trading partner of developing countries, the EU attempts to facilitate the participation of developing countries in global trade and contribute to economic growth through providing market access and financial assistance. For twenty-five years, the commitment of the EU was largely focused on its former colonies, more specifically in Africa, the Caribbean and the Pacific (ACP). The developing world, in terms of the EU’s trade policy, was therefore divided between ACP states with special provisions under the Lomé Conventions and all other developing countries. With the new millennium, this special relationship came to an end. Pressure from several member states1 and the World Trade Organization (WTO) led to an overhaul of the EU’s trade regime vis-à-vis developing countries and to the loss of the privileged position of ACP countries. The result of this overhaul is still pending. Economic Partnership Agreements (EPAs) – to be negotiated between the EU and several ACP regions – have only been realized in the Caribbean. This article will to examine the negotiations between the EU and West Africa and discuss the interests involved on the African side. Following the introduction, the second part of this article is dedicated to the Lomé Conventions with a focus on the change occurring from the third to the fourth revision in order to understand the current situation. The third part is going to take a look at the Cotonou agreement and the trade regime of the EU in general before turning to the negotiations for an Economic Partnership Agreement between the EU and West Africa. The conclusion summarizes the main findings.

Emergent Brazil and the Curse of the ‘Hen’s Flight’. CEPS Working Document No. 379, 27 February 2013

The ‘Emergent Brazil’ growth model is reaching its limits. Its main engines have been slowing significantly since the beginning of the global financial and economic crisis. Even its much-praised predictable macroeconomic policy has been eroded by political interference. Inflationary pressures are growing and GDP performance is anaemic. As ominous, Brazil cannot compensate for its domestic deficiencies with an export drive. Commodity exports are suffering with the world economic slow-down and the manufacturing industries’ competitiveness is in sharp decline. Brazil has put all its trade negotiation eggs into the South American and WTO baskets, and now its export market share is threatened by the Doha Round paralysis, the Latin American Alianza del Pacífico, and the US-led initiatives for a Trans-Pacific Partnership and a trade and investment agreement with the EU. Paradoxically, this alarming situation opens a window of opportunity. There is a mounting national consensus on the need to tackle head-on the country’s and its industries’ lack of competitiveness. That means finding a solution to the much-decried ‘Brazil Cost’ and stimulating private-sector investment. It also entails an aggressive trade-negotiating stance in order to secure better access to foreign markets and to foster more competition in the domestic one. The most promising near-term goal would be the conclusion of the EU–Mercosur trade talks. A scenario to overcome the paralysis of these negotiations could trail two parallel paths: bilateral EU–Brazil agreements on ‘anything but trade’ combined with a sequencing of the EU–Mercosur talks where each member of the South American bloc could adopt faster or slower liberalisation commitments and schedules.

The Shaping of EU-Mercosur Relations: From Altruism to Pragmatism and Liberalism to Illiberalism. Pittsburgh Papers on the European Union Vol. 1, (2012)

Deeply-embedded norms of liberalism and protectionism alongside EU policies focusing on promoting development and regional integration have shaped EU-Mercosur relations. These stand in stark contrast to the policies of the US, the historic hegemon in the region. This paper utilizes historical institutionalism to understand how the liberal tenets of EU competition policy and the protectionism of Common Agricultural Policy (CAP) have affected EU-Mercosur relations. Particular foci include Spain’s role in spearheading efforts to promote EU-Latin American relations and the way EU competition policies directed against monopolies in Europe spurred increased investment in Latin America, especially the Southern Cone. The latter prompted the EU to forge closer ties with Mercosur, encouraged cooperation and development programs and spurred regional integration and liberal trade regimes in Latin America.

An economy with unrealistic indicators: an evaluation of the economic situation in Belarus and a forecast for 2013. OSW Commentary No. 103, 2013-02-20

The macroeconomic results achieved by Belarus in 2012 laid bare the weakness and the inefficiency of its economy. Belarus’s GDP and positive trade balance were growing in the first half of last year. However, this trend was reversed when Russia blocked the scheme of extremely lucrative manipulations in the re-export of Russian petroleum products by Belarus and when the demand for potassium fertilisers fell on the global market. It became clear once again that the outdated Belarusian model of a centrally planned economy is unable to generate sustainable growth, and the Belarusian economy needs thorough structural reforms. Nevertheless, President Alyaksandr Lukashenka consistently continues to block any changes in the system and at the same time expects that the economic indicators this year will reach levels far beyond the possibilities of the Belarusian economy. Therefore, there is a risk that the Belarusian government may employ – as they used to do – instruments aimed at artificially stimulating domestic demand, including money creation. This may upset the relative stability of state finances, which the regime managed to achieve last year. The worst case scenario would see a repeat of what happened in 2011, when a serious financial crisis occurred, forcing Minsk to make concessions (including selling the national network of gas pipelines) to Moscow, its only real source of loans. It thus cannot be ruled out that also this time the only way to recover from the slump will be to receive additional loan support and energy subsidies from Russia at the expense of selling further strategic companies to Russian investors.

Japan and China: Bitter Rivals and Close Partners. Asia Policy Brief 2013/03, June 2013

Japan and China trade a lot between each other. Unfortunately, however, they also argue a lot with each other. Since Tokyo’s purchase of three uninhabited Japanese-controlled islets in the East China Sea from their private owner in September 2012, the main subject of dispute has been that of sovereignty over maritime territories. While bilateral trade amounted to an impressive $333 billion in 2012 (slightly less than in 2011, when bilateral trade reached $345 billion), a bilateral territorial dispute over control and sovereignty of what Tokyo calls Senkaku and Beijing calls the Diaoyu Islands will most probably continue to remain at the very top of the agenda of Sino-Japanese relations in the months ahead.

Tomorrow’s Silk Road: Assessing an EU-China Free Trade Agreement

This book provides an independent and in-depth contribution on the status of bilateral economic exchanges and persistent trade barriers between the European Union and China. A second objective is to encourage a frank and open dialogue, based on a scientific evaluation and without prejudice, of the possibility of a preferential trade agreement between the two sides. The study, commissioned by the Foreign Trade Association, was carried out by CEPS, in cooperation with the World Trade Institute (WTI) at the University of Bern. Jacques Pelkmans, CEPS Senior Research Fellow, served as overall study leader and Joseph Francois, Managing Director and Professor of Economics at the World Trade Institute, led the WTI team.

Tomorrow's silk road: Assessing an EU-China Free Trade Agreement.

Foreword. The Foreign Trade Association, which represents the European and international distribution and retail sector, commissioned this study in light of the importance of China as a sourcing country and its attractiveness as a rapidly growing consumer market. We believe that open borders and free trade can contribute to a broader choice and lower costs for consumers and create growth and employment in both Europe and China. This independent study aims to provide an in-depth contribution on the status of bilateral economic exchanges and persistent trade barriers that exist between the European Union and China. The second objective of the report is to encourage a frank and open dialogue, based on a scientific evaluation and without prejudice, on the possibility of a preferential trade agreement between the two sides. This study should be read by anyone who is interested in economic relations between the EU and China and in trade policy in general. The report provides many interesting findings and raises a number of surprising points. Overall, this study is one of the most significant contributions to the discourse on EU-China relations in recent years. We hope that this study will stimulate fresh thoughts on the benefits of closer future cooperation between two regions that have been interlinked since the times of antiquity and the first Silk Road.