To fuse or not to fuse? Assessing the case for convergent disciplines on goods and services trade

Think piece by Pierre Sauvé for the E15 Initiative on Strengthening the Global Trade System In his latest essay for the ICTSD-World Economic Forum E15 initiative on Strengthening the Global Trade and Investment System for Sustainable Development, WTI Director of External Programmes and Academic Partnerships and faculty member Pierre Sauvé explores the case for fusing the law of goods with that of services in a world of global value chains. The paper does so by directing attention to the questions of whether the current architectures of multilateral and preferential trade governance are compatible with a world of trade in tasks; whether the existing rules offer globally active firms a coherent structure for doing business in a predictable environment; whether it is feasible to redesign the structure and content of existing trade rules to align them to the reality of production fragmentation; and what steps can be envisaged to better align policy and realities in the marketplace if the prospects for restructuring appear unfavourable. The paper argues that fusing trade disciplines for goods and services is neither needed nor feasible and may actually deflect attention from a number of worthwhile policy initiatives where more realistic (if never easily secured) prospects of generic rule-making may well exist.

Pitfalls of location choice analysis : the finished goods producer versus the intermediate goods producer

In literature related to firm location choice, estimation equations are derived from the model of finished goods producers, but producer types are generally not considered. Research presented in this paper shows that the use of equations derived from such models against intermediate goods producers results in several problems.

Market Access and Intermediate Goods Trade

The role of importer access to the finished goods market in intermediate goods trade is examined by estimating the gravity-like equation derived from the NEG model. Importer access to demand for finished goods is calculated by using the estimates in the gravity equation for finished goods trade, and then intermediate goods trade is regressed on the importer access. Results indicate that imports of intermediate goods are sensitive not only to the magnitude of importer demand for finished goods but also to the demand of neighboring countries. Using results of the regression, the impact of US finished goods market expansion on intermediate goods trade in each country is simulated.

Chapter 1 Market Access and Intermediate Goods Trade

This paper examines a distinctive feature of intermediate goods trade which the traditional gravity equation fails to capture, i.e., intermediate goods trade is positively related not only to the importing country's demand for finished goods but also to its neighbors' demand for finished goods. We regress a gravity equation for finished goods trade in the first step. Then, introducing the importing country's access to the total demand for finished goods which is calculated by using the estimates in the first step, we regress our gravity equation for trade in intermediate goods. Our regression results confirm such a feature of intermediate goods trade. Using the results of the regression, we simulate how the rise of US consumers' demand for finished goods affects the total imports and exports of intermediate goods in each country.

Bilateral tariff rates in international trade : finished goods versus intermediate goods

In this paper, we examined back-and-forth international transactions through tariff reduction by estimating modified gravity equations for finished goods and intermediate goods separately. Our main findings are as follows. Exports of finished machinery products are negatively associated with not only the importer's tariff rates on finished machinery products but also the exporter's tariff rates on machinery parts. Similarly, exports of machinery parts are negatively associated with not only the importer's tariff rates on machinery parts but also the exporter's tariff rates on finished machinery products. These results imply that tariff reduction in only one production process in an industry has the potential to drastically change the magnitude of trade in the whole industry.

The rise and fall in the price of food, fuel and manufactured goods : interdependency between prices and technology determining comparative advantages and development paths

Green innovation, which enables us to extract energy from food crops, caused a food shortage in 2008. Countries suffering severe damage started to reconsider their agricultural policy with the aim of becoming more autonomous. The food price hike of the time looks like a reversal of the celebrated Singer-Prebisch thesis proposed in the 1950s. This paper examines the consequences of this trend on the comparative advantages and development strategies of developing countries. For that purpose, first, trends and short-run fluctuations in the prices of fuel and bio-energy crops are investigated. It is shown that the price series of fuels and the crops are synchronized only after the fuel extracting technology came into effect. Second, the reversal of the Singer-Prebisch thesis is underpinned by the generic form of an endogenous growth model developed by Rebelo (1991). It is shown that as an economy grows, appreciation of the non-reproducible, such as mineral resources and raw labor, over the reproducible, such as capital goods, is the norm rather than an anomaly. Third, the consequences of the food price hike and underlying capital accumulation on the development strategies of labor-abundant and low-income countries are explored. It is concluded that the impact of the food price hikes on the alteration of a development strategy is only incremental, without reinforcement from raw-labor-saving innovation. A case study of inventions by JUKI Corporation, a world-leader in the sewing machine market exemplifies the fact that, of all the major inventions the company have made, raw-labor-saving inventions have not dominated, although JUKI's machines are sold to one of the most raw-labor-intensive industries.

On the variety of Mexico's export goods

This paper examines the evolution of the variety of Mexico’s export goods using disaggregated trade data. Both the econometric estimation analyses using the raw data and the one using an improved version of Feenstra and Kee's (2004, 2007) methodology proposed in this paper show that NAFTA membership does not enhance the variety of Mexico's export goods. This finding contrasts with NAFTA's positive association with the increase in export variety found in the literature.

What best transfers knowledge? : capital, goods, and innovative labor in East Asia

This paper compares three knowledge carriers—trade, foreign direct investment (FDI), and inventors—as knowledge mediums, and investigates their effects on knowledge flow in East Asia from 1996 to 2010. Using patent citations as a proxy for knowledge flow, this paper shows that FDI and inventor mobility have positive effects on increasing patent citations in East Asia when the technological portfolios of two countries are less similar. While trade shows statistical significance, the effect is inconsistent according to the regression models.

Stability of complementarity between Japanese FDI and import of intermediate goods : agglomeration effects and parent-firm heterogeneity

This paper examines the duration of intermediate goods imports and its determinants for Japanese affiliates in China. Our estimations, using a unique parent-affiliate-transaction matched panel dataset for a discrete-time hazard model over the 2000–2006 period, reveal that products with a higher upstreamness index, differentiated goods, and goods traded under processing trade are less likely to be substituted with local procurement. Firms located in more agglomerated regions with more foreign affiliates tend to shorten the duration of imports from the home country. For parent-firm characteristics, multinational enterprises that have many foreign affiliates or longer foreign production experience import intermediate goods for a longer duration.

Gini coefficient, dissimilarity index and Lorenz curve for the spanish port system by type of goods

This paper shows the Gini Coefficient, the dissimilarity Index and the Lorenz Curve for the Spanish Port System by type of goods from 1960 to the year 2010 for business units: Total traffic, Liquid bulk cargo, Solid bulk cargo, General Merchandise and Container (TEUs) with the aim of carcaterizar the Spanish port systems in these periods and propose future strategies.

What if criminals optimize their choice? Optimal strategies to defend public goods

We investigate optimal strategies to defend valuable goods against the attacks of a thief. Given the value of the goods and the probability of success for the thief, we look for the strategy that assures the largest benefit to each player irrespective of the strategy of his opponent. Two complementary approaches are used: agent-based modeling and game theory. It is shown that the compromise between the value of the goods and the probability of success defines the mixed Nash equilibrium of the game, that is compared with the results of the agent-based simulations and discussed in terms of the system parameters.

Constructed Fashion: The Catwalk System as an Architectural Project

Teniendo en cuenta que no hay nada que se escape de la moda 1, y extendiendonos más allá de esta manida discusión sobre intersecciones formales, esta investigación propone la pasarela como un lugar real de mediación entre moda y arquitectura. Asumiendo esta condición, la pasarela encarna nuevos modos de producción apropiándose de su espacio y estructura, y convierténdose en una máquina capaz de generar múltiples y más bien infinitos significados. La moda es sin duda un proyecto creativo, que ha venido utilizando la pasarela como un marco para la reordenación de su narrativa visual, renovándose asi mismo como fenómeno social. Este proyecto de investigación plantea, que contrariamente las tipologías actuales de las pasarelas no nos facilitan la comprensión de una colección – que suele ser el objetivo principal. Presentan en cambio un entorno en el que se acoplan diferentes formatos visuales, -con varias capas-, conviéndolo en una compleja construcción y provocando nunerosas fricciones con el espacio-tiempo-acción durante el proceso de creación de otros territorios. Partiendo de la idea de la pasarela como un sistema, en el que sus numerosas variables pueden producir diversas combinaciones, esta investigación plantea la hipótesis por la cual un nuevo sistema de pasarela se estaría formando enteramente con capas de información. Este escenario nos conduciría a la inmersión final de la moda en los tejidos de la virtualidad. Si bien el debate sobre la relevancia de los desfiles de moda se ha vuelto más evidente hoy en día, esta investigación especula con la posibilidad del pensamiento arquitectónico y como este puede introducir metodologías de análisis en el marco de estos desfiles de moda, proponiendo una lectura de la pasarela como un sistema de procedimientos específicos inherente a los proyectos/procesos de la arquitectura. Este enfoque enlaza ambas prácticas en un territorio común donde el espacio, el diseño, el comportamiento, el movimiento, y los cuerpos son ordenados/organizados en la creación de estas nuevas posibilidades visuales, y donde las interacciones activan la generación de la novedad y los mensajes. PALABRAS CLAVES moda, sistema, virtual, información, arquitectura Considering that there is nothing left untouched by fashion2, and going beyond the already exhausted discussion about formal intersections, this research introduces the catwalk as the real arena of mediation between fashion and architecture. By assuming this condition, the catwalk embodies new modes of production that appropriates its space and turns it into a machine for generating multiple if not infinite meanings. Fashion, as a creative project, has utilized the catwalk as a frame for rearranging its visual narrative and renewing itself as social phenomena. This research disputes, however, that the current typologies of catwalks do not facilitate the understanding of the collection – as its primary goal - but, instead, present an environment composed of multi-layered visual formats, becoming a complex construct that collides space-time-action in the creation of other territories. Departing from the analysis of the catwalk as a system and how its many variables can produce diverse combinations, this research presents the hypothesis that a new system is being formed entirely built out of information. Such scenario indicates fashion´s final immersion into the fabrics of virtuality. While the discussion about the relevance of fashion shows has become more evident today, this research serves as an introductory speculation on how architectural thinking can introduce methodologies of analysis within the framework of the fashion shows, by proposing a reading of the catwalk as a system through specific procedures that are inherent to architectural projects. Such approach intertwines both practices into a common territory where space, design, behaviour, movement, and bodies are organized for the creation of visual possibilities, and where interactions are triggered in the making of novelty and messages. KEYWORDS fashion, system, virtual, information, architectural

Slow fashion and sustainability in Spain: How can local manufacturing improve sustainability and how do consumers respond?

"Slow Fashion" attempts to offset the demand for fast fashion and mass production (Fletcher, 2007). Consumers' response to sustainability-based practices is a limited discourse and studies for slow fashion concept are scarce. This study thus aims to enlighten the subject of how slow fashion concept could improve local economies and how Spanish consumers respond to such initiatives. This paper is based on an exploratory qualitative research for which focus group interviews including three group discussions with Spanish consumers were held. The data was examined by constant comparison analysis to present consumer insights. Moreover, a case study was conducted with a Spanish apparel brand. Saint Brissant was chosen since it manufactures in Spain to (i) ensure its products? high quality and (ii) to empower Spanish economy. This paper provides empirical insights. Even though local manufacturing was perceived to have a higher quality, Spanish consumers? behavioural intentions of using local brands were not high.Self-interest, mainly price and design, was recorded as the most influential purchase criteria. Furthermore, Saint Brissant case demonstrated that local manufacturing could boost local economies by creating workforce. However, governmental subsidies should be rearranged and consumers? perceptions should be improved to support local manufacturers in Spain.

Interregional trade changes in Spain caused by the introduction of a road fee charge for heavy goods vehicles

The introduction of a homogeneous road charging system according to the Directive 2011/76/EU for the use of roads is still under development in most European Union (EU) member states. Spain, like other EU members, has been encouraged to introduce a charging system for Heavy Goods Vehicles (HGVs) throughout the country. This nationwide charge has been postponed because there are serious concerns about their advantages from an economic point of view. Within this context, this paper applies an integrated modeling approach to shape elastic trade coefficients among regions by using a random utility based multiregional Input- Output (RUBMRIO) approach and a road transport network model in order to determine regional distributive and substitutive economic effects by simulating the introduction of a distance-based charge (?/km) considering 7,053.8 kilometers of free highways linking the capitals of the Spanish regions. In addition, an in-depth analysis of interregional trade changes is developed to evaluate and characterize the role of the road charging approach in trade relations among regions and across freight intensive economic sectors. For this purpose, differences in trade relations are described and assessed between a base-case or ?do nothing? scenario and a road fee-charge setting scenario. The results show that the specific amount of the charge set for HGVs affect each region differently and to a different extent because in some regions the price of commodities and the Generalized Transport Cost will decrease its competiveness within the country.

Fashion in Actions on Social Media – Spanish SME Fashion Brands Case Studies

Fashion is one of the most vibrant sectors in Europe and important contributors to the European Union (EU) economy. In particular, Small and Medium Enterprises (SMEs) play a major part in European fashion industry (EU 2012). Just like fashion, where people¿s style has inherently meant to be shared as it is foremost a representation of one¿s self-image, social media allow the reflection of ones' personality and emotions. Although fashion practitioners have embraced social media in their marketing activities, it is still relatively few known at an academic level about the specificities of fashion industry when approaching social media marketing (SMM) strategies. This study sets out to explore fashion companies' SMM strategy and its activities. From an exploratory approach, we present case studies of two Spanish SME fashion companies, anonymously named hereafter as Company A and Company B, to deepen our understanding on how fashion brands implement their SMM strategy. Company A offers high-end fashion products while Company B produces medium fashion products. We analyzed the case studies using qualitative (interviews to companies' executives) and a mix of qualitative and quantitative (content analysis of companies' social media platform) methods. Public posts data of both companies' Facebook brand pages were used to perform the content analysis. Our findings through case studies of the two companies reveal that branding-oriented strategic objectives are the main drivers of their SMM implementations. There are significant differences between both companies. The main strategic action employed by Company A is engaging customers to participate into brand's offline social gathering events by inviting them through social media platform, while Company B focuses its effort on posting product promotion related contents and engaging influencers such as fashion bloggers. Our results are expected to serve as a basis of further investigations on how SMM strategy and strategic actions implemented by fashion brands may influence marketing outcomes.