Modeling of the impact of the financial crisis and China's accession to WTO on China's exports to Germany

We focus on discussing the impact of China's accession to WTO and the financial crisis on China's exports to Germany, particularly in agricultural products, based on some most recent proposals. Firstly, structural breaks caused by those events are detected. Then the Box–Cox model and a new tree-form Constant Market Share (CMS) model are fitted to discover the long-term impact of those events on the trade relationship between China and Germany and the growth causes of China's exports to Germany. We found that China's accession to WTO had a negative short-term impact on China's exports and its market share in agricultural products, but a positive short-term impact on its market share in industrial products and a positive long-term impact on its exports and market share in both classes. The tree-form CMS model shows the growth of China's exports to Germany due to competitiveness after this event was much higher than before. The financial crisis exhibited a negative short-term impact on China's exports to Germany, but a positive short-term impact on China's market share and the trade relationship between both countries in industrial products. China's market share in agricultural products was not affected by the financial crisis.     

The impact of China’s WTO accession on trade and economic relations across the Taiwan Strait

This paper evaluates the impact of China’s World Trade Organisation (WTO) accession on trade and economic relations across the Taiwan Strait and its implications for the rest of the world by a recursive dynamic, 17‐region, 25‐sector computable general equilibrium (CGE) model according to actual market access commitments that China and Taiwan have made to date. The simulation results show that both China and Taiwan will substantially benefit from their WTO memberships, and their economic interdependence and their dependence within the rest of the world will further deepen. The rest of the world may also benefit because of the expansion of world trade and improvement of their international terms of trade, but some developing countries with an endowment structure similar to China, like those in South America and Southeast Asia, may experience keener competition in labour‐intensive exports and lower prices for their products. JEL classification: F1, F02, C68, P52.     

Is trade in electrical and electronic products sensitive to IPR protection? Evidence from China’s exports

This article attempts to provide the first empirical evidence on the effect of intellectual property rights (IPRs) on China’s export of electrical and electronic products. It adopts a gravity model for unbalanced panel data of China’s 146 important trading partners over the period of 2002–2012. To eliminate the effects of FDI in determining the linkage between IPR and exports, the panel excludes the destination countries and territories that invest in China. The results reveal that the level of IPR protection in destination countries has a positive impact on China’s flow of exports. Further analysis on data disaggregated by IPR score demonstrates that a higher level of IPR protection in destination countries and territories is positively linked with China’s exports of these items in each of the IPR protection clusters and indicates a strong market power effect by the interplay between R&D expenditure and IPR in the destinations. Finally, both market power and market expansion effects are found to be prevalent in the destinations, as implied by the coefficient of IPR protection disaggregated by income level of China’s export destinations. The results generally resemble those in the literature that describe the linkage between IPR protection and trade flows.     

Do trade flows respond to nudges? Evidence from the WTO’s Trade Policy Review Mechanism

Relatively little is known about the economic effects of WTO members’ communications outside of official negotiations and dispute proceedings. This paper considers whether interactions between members through the Trade Policy Review Mechanism, the WTO’s prime transparency institution, lead to subsequent changes in bilateral trade flows. Trade policy concern submissions are more likely to lead to positive trade responses when (i) the receiving country is less concerned about terms‐of‐trade losses, (ii) the submitter is more willing to engage in WTO disputes with the reviewed member to challenge controversial trade policies, and (iii) the submitting country challenges trade policies in the nonchemical manufacturing sector. Nudges through the TPR process are not successful in raising agricultural trade.     

The Environmental Conundrum of Rare Earth Elements

Clean technologies, such as solar panels and wind turbines, help to curb global emissions, but they require dirty inputs for their production—i.e., mining rare earth elements (REEs) pollutes local environments. REEs are also the object of rent-shifting strategic trade policies, as highlighted by a recent WTO ruling against China’s quotas and tariffs on exports of REEs. We construct a three-country trade model with an environmental damage function, in order to examine the effects of three policies with different implications for the equilibrium quantities of dirty inputs and clean technologies: a downstream subsidy, an upstream export tariff, and an upstream pollution tax. We relate the welfare implications of the policies to the parameters of the damage function and to the number of downstream competitors. The effects of a unilateral policy switch from an export tariff to a domestic pollution tax, as suggested by China’s reaction to the WTO challenge, are also examined.     

中国农产品对外贸易对农业经济增长的贡献--基于1981-2003年数据的实证分析

改革开放以来中国农业经济和农产品对外贸易增长迅速。对二者的相关数据采用出口扩展型总量生产函数模型进行实证分析,结论表明,1982-2003年间中国农产品对外贸易总体对农业经济增长的贡献份额平均为8.19%。虽然平均计算的贡献份额较低,但加入WTO后的最近几年,农产品外贸对农业经济增长的贡献越来越大。由上述结论可解读出若干政策含义。     

Sanitary and phytosanitary measures in Chinese agricultural exports: the role of trade intermediaries

We study the effect of sanitary and phytosanitary (SPS) measures on Chinese agricultural exports and the role of trade intermediaries in this process following China’s accession to the World Trade Organization. While both agricultural exports and SPS regulations have grown, the use of trade intermediaries has declined sharply. We develop a model of heterogeneous producer-level decisions about choice of export mode that is consistent with this trend. In our econometric analysis, we analyse the effects of SPS measures and trade intermediaries on Chinese fruit and vegetable exports using transaction-level customs data. In contrast to much of the literature, we find some evidence of positive relationships among SPS measures, trade intermediaries and exports.     

Trade policy under the GATT/WTO: empirical evidence of the equal treatment rule

Abstract. A fundamental difference between multilateral trade agreements like the GATT and WTO and a preferential agreement is the multilateral agreements’ inclusion of a most‐favoured‐nation principle. Though MFN requires that members implement policies that provide equal treatment to all GATT/WTO countries, how far do members actually follow the MFN principle when so required? We empirically investigate a sample of GATT/WTO trade disputes and the effect of successful dispute settlement negotiations on the disputed product trade of third country exporters to the defendant country. We document evidence of trade liberalization consistent with defendant countries successfully applying the equal treatment rule. JEL classification F13     

贸易自由化是如何影响我国出口产品质量的？*--基于贸易政策不确定性下降的视角

传统理论认为贸易自由化会促进出口产品的质量升级,但我国加入W TO后的情况却并非如此。文章基于贸易政策不确定性的视角,利用我国加入W TO前后美国对我国产品进行关税调整这一自然实验,通过倍差法分析了贸易自由化对我国出口产品质量的影响。研究表明：（1）在贸易自由化的过程中,贸易政策不确定性的下降会拉低我国的出口产品质量,且这一结论在改变质量测度方法、控制成本效应以及使用不同的产品属性、贸易对象和样本的情况下依然稳健;（2）贸易政策不确定性主要是通过广延边际上的质量调整降低了我国出口产品的总体质量,即在贸易政策不确定性下降幅度越大的产品中,有越多的生产低质量产品的企业进入出口市场;（3）在集约边际上,存续企业并未针对贸易政策不确定性的下降做出及时的产品质量调整,从而无法改变我国的产品质量在短期内下降的趋势。文章为我国如何在推行贸易自由化的同时实现出口产品质量升级提供了启示。     

How Important is APEC to China?

APEC is an important forum for China to show its commitment to economic openness. Concerted trade liberalisation in the APEC region reduces the adverse terms of trade effect of China's own trade liberalisation. These help maintain the momentum of reform by reducing domestic resistance. APEC is not a stepping stone to WTO membership, but it gives China an opportunity to rally international support for its early entry into the WTO. However, APEC cannot substitute for WTO membership. This is not only because the WTO framework provides greater security for market access for Chinese exports as well as potentially larger gains to the Chinese economy, but also because it imposes legal bindings on China's trade policy once it becomes a member. In facilitating China's trade liberalisation, APEC and the WTO seems to be mutually re-enforcing. APEC prepares China for the WTO and the WTO accession pushes China to go along with the APEC process. Both APEC and WTO accession push forward domestic reform.     

The impact of cultural exceptions: audiovisual services trade and trade policy

Audiovisual services such as music and movies in digital formats have gained substantial importance over the last decade, while remaining one of the sectors with the lowest number of commitments by WTO members. Based on a novel data set, this article analyses the role of trade restrictions on audiovisual services in a gravity model. We find that countries with WTO commitments trade more audiovisual services, while both exports and imports are lower for countries which impose policies to curb inflows of foreign cultural services.     

贸易自由化与增加值贸易*——WTO对中国出口的真实影响

国际贸易的中间品贸易的兴起,使传统关境贸易统计无法准确衡量全球价值链下一国的实际贸易利得。本文基于增加值贸易视角重新评估加入WTO对于中国出口的真实影响,以及关境统计下WTO贸易促进作用与真实状况的偏离。基于引力模型的实证结果表明：（1）总体上,中国加入WTO显著促进其增加值出口,但关境统计明显高估了WTO贸易促进作用。（2）分行业看,WTO对中国增加值出口的贸易促进作用存在显著的行业差异：加入WTO显著地促进了中国非制造业工业、制造业和服务业增加值出口,却抑制了中国农林牧渔业的增加值出口。（3）进一步研究发现,关境统计数据对于WTO贸易促进作用的高估问题仅存在于制造业,对于农林牧渔业等其他三个行业反而存在低估问题。     

Cuba,Trade Dependency and the GATT/WTO System

Cuba sought economic independence from the U.S. and its reliance on sugar exports after its 1959 revolution, but subsequently developed new dependency relationships. In the meantime, Cuba remained inside the General Agreement on Tariffs and Trade (GATT), despite conducting most of its trade outside it. This paper explores the political economy of Cuba’s participation in the GATT and later the World Trade Organization (WTO). Documents show that Cuba sought to use its participation to gain new markets and influence in the developing world. While Cuba has gained little economically from its participation, in recent years it has diversified its exports and trade partners, and its trade interests now align more closely with WTO rules. Economic reforms will be necessary in order for Cuba to benefit.     

Trade Impacts of China's World Trade Organization Accession

This study examines China's World Trade Organization (WTO) accession commitments and assesses their implications for China and the world using a model reflecting the importance of duty-free intermediate inputs in China's exports. The WTO agreement built on earlier reforms that introduced competition into the trade regime, eliminated nontariff barriers and exchange rate overvaluation, and reduced tariffs. The reforms associated with accession were conservatively estimated to increase global real incomes by $74 billion per year, with $29 billion accruing to China and the remainder primarily to those countries trading directly with China. Some lower-income developing countries faced greater competition from China in third markets.     

Global trade flows and economic policy uncertainty

ABSTRACT

This article investigates the impacts of economic policy uncertainty (EPU) on global trade flows in gauging international trade developments. We employ a global vector autoregressive (GVAR) trade model, augmented with value-added bilateral trade linkages, that allows for quantifying the effects of economy-specific uncertainty shocks on exports and imports of individual economies. We find substantial spatial propagation in the temporal dynamics of international transmission of shocks amidst the manifestations of cross-border global value chains (GVCs) with China’s accession into the WTO. We provide evidence for the significance of EPU of China and the United States, particularly the latter, in influencing global trade flows. Our results show that while the US impacts can largely be attributed to its indirect trade linkages with other economies, the impacts of China can be relegated more to its direct GVC linkages. The findings have implications on trade protectionist inclinations of the current-term US government and the ongoing efforts of China’s policymakers in steering macroeconomic rebalancing for sustainable growth.     

Does China’s trade defy cultural barriers?

Using annual data for China and 88 trading partners that span the period 1995–2011, we estimate whether cross-societal cultural differences influence China’s external trade flows. Our results, obtained from the estimation of a series of multi-level mixed effect random intercepts and coefficients models, indicate that China’s aggregate exports and imports are largely unaffected by the cultural distance between China and its trading partners. Examination of disaggregate trade measures and consideration of the underlying dimensions of our composite cultural distance variable produces a largely similar result. Taken collectively, our results suggest that China’s trade is less affected by cultural distance than has been reported for other countries in similar studies.     

Institutions,Institutionalism: 1776–1974

Since developing countries were relatively free from the trade regulations relating to export promotion policies until 1994, the northeast Asian dynamic economies could pursue export promotion policies aggressively during the period of rapid economic growth. Under the current World Trade Organization (WTO) system, there are restrictions or even prohibitions on the developing countries' use of export promotion policies. One may doubt the fairness of the current WTO system, which regulates the use of export promotion policies regardless of different economic development levels. The current paper suggests various ways of allowing developing countries to develop their production capacities and exports of manufactured products. It also provides suggestions on modifying the current WTO regulations in favor of the export promotion policies of developing countries. Such special treatment of developing countries could be justified from the viewpoint of distributional fairness applied to international trade relations.     

经济全球化下的农产品对外贸易政策及其调整

经济全球化形成当今世界经济发展的主流,中国加入WTO,必将加快其融入经济全球化的步伐,因而农产品对外贸易政策体系的建立及其调整是21世纪我国农业经济和贸易经济发展的战略选择。     

Beyond Dutch disease

How does the deterioration of rule of law in Russia in recent years affect its ability to move away from an export pattern dominated by natural resources? We investigate this question using three datasets for Russia's bilateral trade relations for goods, services and investment at disaggregated level with its partner countries over the world. Our empirical analysis shows that the deterioration of the rule of law in Russia since 2003 has affected the long‐run trade performance of Russia in sophisticated and technology‐intensive manufactured goods, as well as its inward investments with advanced economies. It is precisely this type of trade that Russia should nurture to diversify away from hydrocarbons export dependence. Our statistical analysis also shows that Russia remains to a large extent an outlier within the multilateral trading system. It exports disproportionately less to partner countries which are or had become members of the WTO over our period of analysis. Russia's trade appears to have been negatively affected by the accession of these countries to the WTO. Russia itself finally acceded to the WTO in July 2012 amidst signs of a modest improvement of its rule‐of‐law indicators.     

CHINA, GMOS AND WORLD TRADE IN AGRICULTURAL AND TEXTILE PRODUCTS

Abstract.  China's rapid industrialization and recent accession to the WTO makes it difficult for the country to maintain self-sufficiency in agricultural products. Genetic modification technology could ease the situation, but is not without controversy. This paper focuses on the implication of GMO controversy for China. It explores the potential economic effects of China's not adopting versus adopting GMOs when some of its trading partners adopt that technology. The effects are shown to depend to a considerable extent on the trade policy stance taken in high-income countries that are opposed to GMOs, and/or on the liberalization of China's trade in textiles and apparel.