Why Do Economies Enter into Preferential Agreements on Trade in Services? Assessing the Potential for Negotiated Regulatory Convergence in Asian Services Markets

More than one-third of the World Trade Organization-notified services trade agreements that were in effect between January 2008 and August 2015 involved at least one South or Southeast Asian trading partner. Drawing on Baier and Bergstrand’s (2004) determinants of preferential trade agreements and using the World Bank’s database on the restrictiveness of domestic services regimes (Borchert, Gootiiz, and Mattoo 2012), we examine the potential for negotiated regulatory convergence in Asian services markets. Our results suggest that Asian economies with high levels of preexisting bilateral merchandise trade and wide differences in services regulatory frameworks are more likely candidates for services trade agreement formation. Such results lend support to the hypothesis that the heightened “servicification” of production generates demand for the lowered services input costs resulting from negotiated market openings.

Why do Countries Enter into Preferential Agreements on Trade in Services? Assessing the Potential for Negotiated Regulatory Convergence in Asian Services Markets

More than a third of the World Trade Organization (WTO)-notified services trade agreements (STAs) in effect over January 2008 - August 2015 have involved at least one (South or Southeast) Asian trading partner. Drawing on Baier and Bergstrand's (2004) determinants of preferential trade agreements and using the World Bank's database on the restrictiveness of domestic services regimes (Borchert et.al. 2012), we examine the potential for negotiated regulatory convergence in Asian services markets. Our results suggest that countries within Asia with high levels of pre-existing bilateral merchandise trade and wide differences in services regulatory frameworks are more likely candidates for STA formation. Such results lend support to the hypothesis that the heightened "servicification" of production generates a demand for the lowered service input costs resulting from negotiated market opening.

CO2 emissions embodied in international trade: A multiregional Inputoutput model for Spain

As a result of globalization and free trade agreements, international trade is enormously growing and inevitably putting more pressure on the environment over the last few decades. This has drawn the attention of both environmentalist and economist in response to the ever growing concerns of climate change and urgent need of international action for its mitigation. In this work we aim at analyzing the implication of international trade in terms of CO2 between Spain and its important partners using a multi-regional input-output (MRIO) model. A fully integrated 13 regions MRIO model is constructed to examine the pollution responsibility of Spain both from production and consumption perspectives. The empirical results show that Spain is a net importer of CO2 emissions which is equivalent to 29% of its emission due to production. Even though the leading partner with regard to import values are countries such as Germany, France, Italy and Great Britain, the CO2 embodied due to trade with China takes the largest share. This is mainly due to the importation of energy intensive products from China coupled with Chinese poor energy mix which is dominated by coal-power plant. The largest portion (67%) of the global imported CO2 emissions is due to intermediate demand requirements by production sectors. Products such as Motor vehicles, chemicals, a variety of machineries and equipments, textile and leather products, construction materials are the key imports that drive the emissions due to their production in the respective exporting countries. Being at its peak in 2005, the Construction sector is the most responsible activity behind both domestic and imported emissions.

The impact of FTAs on MENA trade in agricultural and industrial products

This paper analyses the impact of Free Trade Agreements (FTAs) on Middle East and North African Countries (MENA) trade for the period 1994-2010. The analysis distinguishes between industrial and agricultural trade to take into account the different liberalisation schedules. An augmented gravity model is estimated using up-to-date panel data techniques to control for all time-invariant bilateral factors that influence bilateral trade as well as for the so-called multilateral resistance factors. We also control for the endogeneity of the agreements and test for self-selection bias due to the presence of zero trade in our sample. The main findings indicate that North-South-FTAs and South-South- FTAs have a differential impact in terms of increasing trade in MENA countries, with the former being more beneficial in terms of exports for MENA countries, but both showing greater global market integration. We also find that FTAs that include agricultural products, in which MENA countries have a clear comparative advantage, have more favourable effects for these countries than those only including industrial products. JEL code: F10, F15

Issues in the Transatlantic Trade and Investment Partnership: A critical discourse analysis

Negotiating trade agreements is an important part of government trade policies, economic planning and part of the globally operating trading system of today. European Union and the United States have been active in the formation of trade agreements in global comparison. Now these two economic giants are engaged in negotiations to form their own trade agreement, the so called Transnational Trade and Investment Partnership (TTIP). The purpose of this thesis is to understand the reasons for making a trade agreement between two economic areas and understanding the issues it may include in the case of the TTIP. The TTIP has received a great deal of attention in the media. The opinions towards the partnership have been extreme, and the debate has been heated. The purpose of this study is to introduce the nature of the public discussion regarding the TTIP from Spring 2013 until 2014. The research problem is to find out what are the main issues in the agreement and what are the values influencing them. The study was conducted applying methods of critical discourse analysis to the chosen data. This includes gathering the issues from the data based on the attention each has received in the discussion. The underlying motives for raising different issues were analysed by investigating the authors’ position in the political, economic and social circuits. The perceived economic impacts of the TTIP are also under analysis with the same criteria. Some of the most respected economic newspapers globally were included in the research material as well as papers or reports published by the EU and global organisations. The analysis indicates a clear dichotomy of the attitudes towards the TTIP. Key problems include lack of transparency in the negotiations, the misunderstood investor-state dispute settlement, the constantly expanding regulatory issues and the risk of protectionism. The theory and data does suggest that the removal of tariffs is an effective tool for reaching economic gains in the TTIP and even more effective would be the reducing of non-tariff barriers, such as protectionism. Critics are worried over the rising influence of corporations over governments. The discourse analysis reveals that the supporters of the TTIP have values related to increasing welfare through economic growth. Critics do not deny the economic benefits but raise the question of inequality as a consequence. Overall they represent softer values such as sustainable development and democracy as a counter-attack to the corporate values of efficiency and the maximising of profits.

Political economy of preferential trade agreement: the case of bilateral asymmetric negotiation

The purpose of this paper is to analyse the political economy of preferential trade agreements based on a sequential non-cooperative Stackelberg political game between a large economy and a small one, in which the political dispute of rival lobby groups defines the unilateral stance of both governments in the first stage; and the Stackelberg "coalition-proof" equilibrium defines the free trade agreement format in the second stage. Finally, a few modifications in the initial game structure are discussed in order to enhance the small economy's negotiation power. The political economy model is applied to FTAA case.

Re-Framing Trade

Given the substantial and increasing encroachment of trade agreements into almost every aspect of economic and social life, there is a pressing need for research that provides a more coherent framework for understanding the source and effectiveness of organised labour ’s power and capacity to influence international trade policy. Taking the union protests against the General Agreement on Trade in Services (GATS) as a case study, this research uses core concepts derived from social movement theory to analyse the opportunities that existed for unions to influence these trade negotiations and their capacity to identify and take advantage of such opportunities. Importantly, it adds a power analysis designed to reveal the sources of power that unions draw on to take action. The research demonstrates that even where unions faced considerable constraints they were able to re-frame trade issues in a way that built broad support for their position and to utilise opportunities in the trade negotiation process to mobilise resistance against the GATS and further liberalisation of services. The theoretical framework developed for the research provides conceptual tools that can be developed for improving strategic campaign planning and for analytical assessment of past campaigns. The theoretical framework developed for this research has potential for further application as an analytical and strategic planning tool for unions.

Bilateral trade between New Zealand & the pacific alliance: perspectives and possibilities for further trade engagement

Due to the rapid and effective success of countries in the Pacific Rim for the last two decades, current world trade attention has been focussed on what appears to be the common vision of the ‘Pacific Century’. Reducing attention from the Atlantic and focusing it on the Pacific represents a new challenge for countries touching this ocean. The main Latin American economies bordering the pacific have taken upon this challenge with the creation of the Pacific Alliance in 2011. In this way, Chile, Colombia, Mexico and Peru intend to penetrate and increase trade with the region by forming a coalition. The Pacific Alliance has attracted international attention, interest and support from nations around the world, counting 32 countries as observers; 7 are actually located in the region and six of them rank amongst the Top 15 world economies. As is expected, the possibility of closer trade engagement with big players such as China, India, Japan, South Korea or Australia absorb the main attention of media, governments and academics alike, leaving behind other feasible and possible opportunities unattended. That is precisely the case of New Zealand and its favourable commerce opportunities with the Pacific Alliance. The following document will study the major trends and variations in trade between New Zealand, the Pacific Alliance and its members between 2010 and 2014. Proving that mutual trade is most likely to keep on growing.

Essays on International trade and economic growth

At present, we are witnessing globalization as a truly worldwide phenomenon. Trade agreements among differing countries, a reduction in trade costs, the mobility of production factors, the free flow of information and so on are all proof of the present day era of globalization. Countries are trading with one another more and more every day and the effects of international trade on economies represent a central discussion in all economic spheres. In spite of increasing trade around the world and the promotion of globalization by multilateral organisms such as WTO and IMF, the effects of international trade are not yet clear. Economics literature concerning the effects of international trade on economic growth and welfare remains ambiguous in terms of both theoretical models and empirical research. The present thesis tries to contribute to the theoretical debate surrounding the effects of dynamic international trade, focusing in particular on the implications for economic growth, welfare and changes in the preferences of individuals.

The post-Lisbon role of the European Parliament in the EU's Common Commercial Policy: Implications for bilateral trade negotiations. EU Diplomacy Paper 05/2012, July 2012

This paper sets out to conduct an empirical analysis of the post-Lisbon role of the European Parliament (EP) in the EU’s Common Commercial Policy through an examination of the ‘deep and comprehensive’ bilateral Free Trade Agreements (FTAs) currently negotiated as part of the EU’s Global Europe strategy. The EU-Korea and EU-India FTAs are used as case studies in order to determine the implications of the EP’s enhanced trade powers on the processes, actors and outcomes of EU bilateral trade policy. The EP is now endowed with the ‘hard power’ of consent in the ratification phase of FTAs, acting as a threat to strengthen its ‘soft power’ to influence negotiations. The EP is developing strategies to influence the mandate and now plays an important role in the implementation of FTAs. The entry of this new player on the Brussels trade policy field has brought about a shift in the institutional balance of power and opened up the EP as a new point of access for trade policy lobbyists. Finally, increased EP involvement in EU trade policy has brought about a politicisation of EU trade policy and greater normative outcomes of FTAs.

Brazilian international and inter-state trade flows: an exploratory analysis using the gravity model

Recent efforts toward a world with freer trade, like WTO/GATT or regional Preferential Trade Agreements(PTAs), were put in doubt after McCallum's(1995) finding of a large border effect between US and Canadian provinces. Since then, there has been a great amount of research on this topic employing the gravity equation. This dissertation has two goals. The first goal is to review comprehensively the recent literature about the gravity equation, including its usages, econometric specifications, and the efforts to provide it with microeconomic foundations. The second goal is the estimation of the Brazilian border effect (or 'home-bias trade puzzle') using inter-state and international trade flow data. It is used a pooled cross-section Tobit model. The lowest border effect estimated was 15, which implies that Brazilian states trade among themselves 15 times more than they trade with foreign countries. Further research using industry disaggregated data is needed to qualify the estimated border effect with respect to which part of that effect can be attributed to actual trade costs and which part is the outcome of the endogenous location problem of the firm.

Agreements and disputes over non-tariff measures

In trade agreements, governments can design remedies to ensure compliance (property rule) or to compensate victims (liability rule). This paper describes an economic framework to explain the pattern of remedies over non-tariff restrictions—particularly domestic subsidies and nonviolation complaints subject to liability rules. The key determinants of the contract form for any individual measure are the expected joint surplus from an agreement and the expected loss to the constrained government. The loss is higher for domestic subsidies and nonviolations because these are the policies most likely to correct domestic distortions. Governments choose property rules when expected gains from compliance are sufficiently high and expected losses to the constrained country are sufficiently low. Liability rules are preferable when dispute costs are relatively high, because inefficiencies in the compensation process reduce the number of socially inefficient disputes filed.

Opportunities for trade and investment between Latin America and Asia-Pacific: the link with APEC

Includes bibliography

The United States and Latin America and the Caribbean: Highlights of economics and trade

Foreword by Alicia Bárcena