A disaggregated analysis of the export performance of some industrial and emerging countries

The paper describes the evolution of export shares and quantifies the contribution of geographical and sectoral specialization as well as that of “competitiveness” of some industrial and emerging market economies between 1985 and 2003. While the strong growth of emerging countries as world competitors has lowered the market shares of all industrial countries, the results of a constant-market-share analysis indicate that the latter have benefited from positive specialization effects. Specifically, industrial countries gained from being specialized in fast-growing sectors (high-tech) or destinations (Asia). The magnitude of these effects, however, has been quite diversified across the main countries. Among the emerging economies, the striking export growth of China was determined by a strong rise in competitiveness that allowed the country to gain market shares across all sectors and destinations.     

The changing pattern of foreign trade specialization in Indian manufacturing

This paper examines the pattern of international trade specializationin Indian manufacturing since the mid-1980s by using data ontrade flows. Low-technology sectors still dominate the categoriesfor which India exhibits the largest degree of trade specialization.By contrast, high-technology sectors are prevalent among thecategories for which India is import-dependent. Significantly,India has experienced an improvement in the degree of specializationin some of the most dynamic sectors of world trade.     

Measuring Global and Regional Trade Integration in Terms of Concentration of Access

I apply concentration measures from the inequality literature—the Lorenz curve and Gini coefficient—to the measurement of global and regional integration, and show that these can be derived from the theoretical gravity model in the presence of unequal costs of access for firms from different locations to aparticular market. Overall, comparing nine economies, I find that the United States is the most globalized on these measures, and India and China are the least globalized. The smaller EU economies, which are very open on standard measures, should probably be viewed as regionalized rather than globalized. JEL no. F10, F15, C49     

Measuring Restrictiveness of Bilateral Trade Policies: A Comparison between Developed and Developing Countries

This paper compares the degree of openness to trade of three developed countries markets—the European Union, Japan, the United States—with that of three middle-income countries, namely Brazil, India, and China. A theoretically consistent protection measure—the Mercantilistic Trade Restrictiveness Index (MTRI)—is employed to average tariffs at different levels of aggregation. The computation relies on a comparative static applied general equilibrium model (Global Trade Analysis Project—GTAP) featuring imperfect competition as well as on the bilateral applied tariffs included in the most recent version of the GTAP database. Results provide a different picture from what could have been expected given the widely publicized diffusion of preferential schemes supposedly favoring developing countries exports. JEL no.  F17, C68, Q17     

中国在东亚区域内的进口贸易分析

从"三角贸易"到"新三角贸易",东亚地区贸易模式都未能摆脱对外部市场的高度依赖,特别是对美国市场的依赖。中国作为区域内经济贸易大国,随着经济改革的日益深入及增长方式的转变,其在东亚区域贸易分工模式转变中的地位及作用将不断增强。本文以中国在东亚区域内的重要贸易伙伴国为研究对象,从世界和东亚两个区域范围入手,以进口份额分布与进口增长率分解指标按进口来源地和按产品分类的分布分别进行静态和动态分析,在此基础上对中国市场在东亚区域内的地位及作用进行深入研究。     

Wage and employment effects in the EU of international trade with the emerging economies

The paper investigates whether significant HOS effects are present in the EU from trade liberalization with the emerging economies. Regarding wage inequality, there is only evidence of a trade-induced technological change, but biased towards thelower-skilled-labor-intensive sectors. Relative wages in the EU member states are not affected differently. Trade liberalization under ‘European assumptions’, however, could affect primarily relative factor demand. A flexible cost function approach shows that import competition from the emerging economies influenced relative labor demand in favor of the higher skilled, implying an intrasectoral rather than an intersectoral specialization in skill-intensive activities. JEL no. F11, F14     

Monotonicity of indices of “Revealed“ comparative advantage: Empirical evidence on Hillman’s condition

Conclusions The necessary and sufficient condition suggested by Hillman [1980] for the index of RCA, when used in cross-country comparisons, to provide a one-to-one relationship between pre-trade comparative advantage and revealed comparative advantage is fulfilled for the great majority of the “commodities” traded in 1985 by 118 developing economies. Given the low level of data aggregation (the lowest for which statistical information is currently available), the large sample of countries and the high percentage of developing economies’ total exports captured in this research, we can conclude that Balassa’s export-performance index, for cross-country comparisons, is a good indicator of comparative advantage as reflected by pre-trade prices. In other words, Hillman’s condition is a useful indicator of the presence of monotonicity in indices of RCA: we have observed that at a 5-digit level of commodity aggregation, increases in Balassa’s export performance index of RCA are likely to correspond to increases in export levels. Aggregation of commodities at a 3-digit and at a 1-digit level suggests that Hillman’s condition is unlikely to be violated if the cause for values of the Hillman’s Index less than one is due to export specialization; on the contrary, the number of cases of a Hillman Index smaller than one due to a large share of world markets is expected to be negatively related to the level of aggregation. Our results suggest that Hillman’s index should be calculated in any empirical investigation trying to assess the long-term implications of trade liberalization negotiations using an export-performance index of RCA. There is evidence that, if used at a disaggregated level, the HI is a tool that may help flag cases in which the RCA index can be a misleading indicator of countries’ comparative advantage, even in cross-country comparisons. It may also help reduce disagreements regarding the most appropriate coefficient of RCA. Further research should be directed toward enlarging the sample of countries to include the entire world and to incorporate at least three years of trade so as to be able to eliminate the possible influence of cycles.     

Structure of Comparative Advantage of China and India： Global and Regional Dynamics

This paper investigates the extent of competition between China and India in the world and ASEAN markets. The analysis is undertaken using the concept of revealed comparative advantage, relative market shares, long‐term trend analysis and statistical tests of convergence. In the context of the ASEAN market the evaluation of competition between India and China has been undertaken with special reference to the prior implementation of the ASEAN‐China Free Trade Area relative to the ASEAN‐India Free Trade Area. The results suggest that threat perceptions at the product level might currently prevail for both economies from each other across all sectors in both markets even though the intensity of the competitive threat varies across products. However, long‐term trend analysis shows that the patterns of comparative advantage of India and China are evolving along divergent paths and, therefore, competition between the two economies might not be a major issue.     

Destructive Trade and Its Effects on the Global Economy

This lecture was offered in honor of Professor Robert Mundell; a most fitting coincidence since the speaker was his classmate at MIT in 1955, exactly 55 years ago, and the topic emanated from our joint study with Professors Kindleberger and Samuelson at that time. The essence of the presentation can be summarized in its significant conclusions. The theory of comparative advantage as applied to real-world phenomena—and its practical free-trade recommendations—must be rejected or at least questioned, especially when it comes to trade between the advanced and the developing economies. The more realistic, even if less elegant mathematically, theory of Destructive Trade—explained in the lecture—should be a better guide in defining world trade solutions and leading us in the long run out of the present global crisis.     

Rise of China and India in International Trade： From Textiles to New Technology

China and India are two demographic giants that have become big developing economic powers. They have maintained their specialization in textiles and developed outward-oriented sectors linked to new technologies, taking advantage of offshoring and outsourcing. Their increasing contribution to international trade is changing the world supply and demand of manufactured goods, primary goods and services. They are new leaders in the international division of labor, but beyond technological catch-up, their challenge is quality upgrading. Both countries are increasingly contributing to global economic growth, but they cannot yet trigger the growth of the rest of the world by themselves.     

Intra-industry trade of India: Trends and country-specific factors

Intra-industry Trade of India: Trends and Country-Specific Factors. — The analysis in this paper confirms that trade liberalization biases trade expansion towards intra-industry trade (IIT) in India. The increased level of IIT is largely exportled, that is, caused by a faster growth of exports than of imports. India’s IIT is more intense with high-income countries and is characterized by a greater extent of complementarity. Further, certain country-specific factors which are found to be crucial in the models of vertical IIT are pertinent in influencing the pattern of India’s bilateral IIT.     

The Dynamics of International Trade Patterns

This paper introduces new dynamic measures for examining changes in international trade patterns. Using data for 20 OECD countries over the 1980–2000 period, we show that inter-industry trade changes contrary to countries’ previous specialization are frequently the dominant form of trade expansion. The econometric analysis indicates that the observed changes in trade patterns were explained by initial endowments of human-capital and industry-specific changes in labour productivity and labour costs. The results also suggest that trade liberalization induced an increase in the previous specialization of larger OECD economies in industries with increasing returns to scale. JEL no. F1, O33, O50     

Recent U.S. economic policies and the Central Caribbean economies

This study examines the trade and investment performances of three economies in the Central Caribbean region since the Caribbean Basin Initiative (CBI) and associated programs. We find that the rapid growth in nontraditional exports from these economies to the United States did not necessarily translate into net foreign exchange earnings. On a per capita basis, export-related investment in Haiti was much lower than in the other two economies — Jamaica and the Dominican Republic. As a percentage of the labor force, gross employment gains for Jamaica have been significantly larger than those in either the Dominican Republic or Haiti. It appears that the policies favoring expansion in the offshore sector may foster employment opportunities of females, especially where traditional sectors are in decline.     

The growth of China and India: implications and policy reform options for Malaysia

This study explores the trade‐related impacts of rapid growth of China and India on the Malaysian economy and evaluates policy options to better position Malaysia to take advantage of these changes. Higher growth in China and India is likely to raise Malaysia's national income and to expand Malaysia's natural resource and agricultural exports, while putting downward pressure on exports from some manufacturing and service sectors. Increases in the quality and variety of exports from China and India are likely to increase substantially the overall gains to Malaysia. The expansion of the natural resource sectors and the contraction of manufacturing and services reflect a Dutch‐disease effect that will raise the importance of policies to facilitate adaptation to the changing world economy and improve competitiveness. Most‐favoured‐nation (MFN) liberalisation would increase welfare, and, by increasing competitiveness, raise output and exports of key industries. Preferential liberalisation with India and completely free trade with China would provide greater market access gains than MFN reform, but neither would be as effective in increasing income as MFN liberalisation, and free trade agreements would lead to greater competitive pressure on many of Malaysia's industries than MFN liberalisation. Increased investments in education and infrastructure could boost manufacturing and services sectors in Malaysia, while improving trade logistics would benefit sectors with high transport costs, including the agricultural and resource‐based industries.     

How will growth in China and India affect the world economy?

China and India are rapidly growing, labor-abundant economies with very different export mixes. China is more integrated into global production sharing for manufactures, while services exports are more important for India. Even assuming India integrates more comprehensively into global production chains, there will be opportunities for rapid growth in both countries. Improvement in the range and quality of their exports can create substantial welfare benefits for the world, and for China and India, and can offset the terms-of-trade losses otherwise associated with rapid export growth. Most countries will need to respond to increased competition in some sectors, and to greater opportunities in others.     

中日韩自由贸易区的经济效应及推进路径——基于SMART的模拟分析

本文在SMART模型框架下建立了一个局部均衡模型,基于HS6分位数据模拟中日韩三国间不同的阶段性双边关税减让方案和长期内关税的全部减让对三国经济的影响。结果表明,中日韩自由贸易协定启动后,三国的农业部门、日本和韩国的纺织品部门以及中国的汽车部门将受到来自其他两国较为明显的冲击。机电产品及其零部件的区域内贸易增长潜力有限,但三国在该领域的垂直专业化分工尚具备进一步拓展的潜力。中日韩自由贸易区谈判首先要克服来自当前高度保护部门的阻力,而在机电产品领域应重点促进区域内投资和技术贸易的便利化,运用发达的地区分工网络提升各国在后危机时代的全球竞争力。     

Using home-biased demand to test trade theories

Using Home-Biased Demand to Test Trade Theories. — This paper proposes a discriminating hypothesis that distinguishes between two paradigms of international trade: (1) constant returns and perfect competition (CRS-PC) and (2) increasing returns and monopolistic competition (IRS-MC). The discriminating hypothesis rests on the different degree of home bias among “consumers.” It predicts a positive relationship between a country’s share in world output and a country’s share in the world home-biased expenditure if the sector is IRS-MC and no relationship if the sector is CRS-PC. Accordingly, 7 sectors (covering 54.86 per cent of industrial output) of the eight countries under investigation were associated with the IRS-MC and 10 sectors (41.15 per cent) with the CRS-PC paradigm.     

Flying with the Dragon: Estimating Developing Countries’ Gains from China's Imports

As a large trading nation, China competes with importing countries’ domestic and third‐country markets but also creates growth opportunities for exporters. Most studies on China trade shocks or “China shocks” focuse on the impacts of import competition on developed economies. The present paper complements research on China shocks by exploring the other side of the trade exposure to China – China as the largest importer, rather than as an exporter. We analyze the effects of export expansion into China on the local labor markets of the exporting developing countries for the years 1992 to 2018. Using detailed export and employment data, we estimate employment pattern variations in manufacturing industries with exports from other developing countries as instruments for export exposure. We find that the increase in trade exposure to China in the world economy has caused extensive job gains in manufacturing industries in developing countries that were exporters. On average, our estimations show that this trade exposure created approximately 1.5 million additional jobs from 1992 to 2018, which made an important contribution to manufacturing industries in developing countries. Our empirical analysis also shows that trade had stabilizing effects on employment in the countries in our sample generally.     

Impacts of the Doha Round on Brazilian,Chinese and Indian agribusiness

The central themes to be addressed during the Doha Round of the world trade negotiations are the reduction of the agricultural production and export subsidies and improved market access for agricultural and non-agricultural goods. The G-20 group wields enough power to press negotiations at the Doha Round toward lower agricultural trade barriers and production and export subsidies. The objective of this study is to determine the impacts of the Doha Round on the economies of Brazil, China, and India. The Global Trade Analysis Project's (GTAP) general equilibrium model and database (version 7) are used. The Doha Round scenarios simulated in this paper consider the WTO agricultural production and export subsidy reduction requirement, and the application of the Harbinson approach, and Swiss formula to reduce import tariffs. Brazil and China present the highest GDP growth rate varying from 0.4 % to 1.4%. India shows a negative GDP growth rate in all scenarios, except in that which replicates the Uruguay Round. The welfare gains are positive, but small, for Brazil, China and India. The GDP loss observed in the economies of the EU25 and the US may make it difficult to reach a trade agreement at the Doha Round.