US Trade Policy in the Trump Administration

President Donald Trump has emphasized three recurring themes regarding trade policy: the importance of trade balances, including bilateral trade balances, currency manipulation to gain unfair advantage in trade, and “disastrous” trade agreements. Asia figures prominently in these concerns. Trump withdrew the United States from the Trans‐Pacific Partnership, is increasing contingent or process protection, demanding the renegotiation under duress of the North American Free Trade Agreement and the Korea‐United States Free Trade Agreement. These policies are modeled quantitatively and results generated for sectoral output and employment at the state and metropolitan area level.     

North America: A case for economic integration

The recent protectionist trend in trade policy in the United States and other OECD countries is making it more difficult for debtor countries, such as Mexico, to meet their external obligations. In contrast, Mexico and most other debtor nations have adopted more liberal trade policies in recent years. The success of the United States-Canada Free Trade Agreement will expand trading opportunities in the North American economies; however, Mexico is expected to encounter difficulties in competing in this market because of the barriers to trade and investment flows that have existed in the past. This paper discusses the potential impact of a North American Free Trade Agreement on the Mexican economy and the prospects for such an agreement in the current political economy.     

NORTH AMERICAN FREE TRADE: OPPORTUNITIES AND PITFALLS

Most studies of the impacts of the North American Free Trade Agreement assume that once the agreement is in place, it will remain in place. Some common theories of trade and of special interest groups' influences upon government policy call these assumptions into question. If ratification of the agreement represents a loss for some import-competing special interest groups, the loss likely will be only of a battle in a war that continues. Attempts to abridge the effects of the agreement may succeed even if the agreement itself is not abridged. U.S. special interest groups rather than their Mexican counterparts will make the majority of these attempts.     

Should AFTA and CER Link?

This article examines the logic of the link between the ASEAN Free Trade Area (AFTA) and the Closer Economic Relations (CER) regional trading arrangements which was mooted by the Thai Prime Minister in 1993. AFTA and CER are the only two regional trading arrangements in the East Asia/West Pacific region and both are advancing to a high degree of regional integration. This article argues that there are undoubted gains to be had from an AFTA-CER link by itself which includes reciprocal trade liberalisation as well as trade facilitation. Both groups of countries would benefit from freer trade between them and both have a lot to learn from the experiences of the other regional trading arrangement. However, this link will be redundant if the Bogor Declaration of the APEC is implemented after the Osaka meeting of APEC Leaders in November 1995. If, instead, multilateral trade liberalisation through the World Trade Organisation and APEC falters, an AFTA-CER link becomes an important possibility.     

TRADE DISPUTES AND SETTLEMENT

We develop a model of trade agreements with renegotiation and imperfectly verifiable information. In equilibrium, trade disputes can occur and can be resolved in a variety of ways: Governments may settle “early” or trigger a court ruling, and in the latter case, they may implement the ruling or reach a post‐ruling settlement. The model yields predictions on how the dispute outcome depends on the contracting environment and how it correlates with the optimal contract form. We find support for a key prediction of our model using data on the outcomes of actual trade disputes in the General Agreement on Tariffs and Trade/World Trade Organization.     

Abenomics and Japan's Trade Policy in a New Era

Trade policy, in particular, the Trans‐Pacific Partnership Agreement (TPP), has been a centerpiece of the Abe administration's economic strategy. The TPP's contributions to Japan's growth strategy include: (i) creating trade and investment opportunities abroad for Japanese companies through ambitious liberalization targets; (ii) advancing domestic reforms – with the largest service and agricultural liberalization commitments to date; and (iii) increasing bargaining leverage in other trade negotiations. But the domestic reform goals of Abenomics in agriculture have come up short due to opposition from domestic lobbies. American trade politics – which culminated in the US withdrawal from the TPP – have upended the goals of trade policy under Abenomics. Japan's best option in this new environment is to deliver on high quality, multi‐party trade agreements: concluding negotiations with Europe; scaling up the ambition of Regional Comprehensive Economic Partnership; and salvaging a TPP 11. The merits of a bilateral free trade agreement with the USA will depend on how the Trump administration operationalizes its America First policy.     

Politics, the WTO and Trade Disputes: Evidence from US Cases

Do political variables play a significant role in trade disputes and does the World Trade Organization (WTO) ameliorate disputation? This paper uses US data to assess the role of the WTO and political variables in trade disputes. The data suggest that political factors are significant in the initiation of trade disputes and in their length of adjudication. The WTO disputes that require the formation of adjudication panels take fewer months to complete than under the General Agreement on Tariffs and Trade system, but overall the WTO appears not to play a significant role in reducing the number of disputes or shortening their duration.     

TRADE CREATION AND DIVERSION EFFECTS OF THE U.S.-CANADIAN FREE TRADE AGREEMENT

This study empirically estimates and evaluates the economic benefits of the U.S. and Canadian Free Trade Agreement (FTA). Most past studies rely on aggregate data. The analysis here emphasizes the trade effects of removing tariff and nontariff barriers on each commodity group classified by the Standard International Trade Classification. Estimating the amount of trade expansion under FTA for both countries involves using the import demand elasticities from a dynamic demand model. Results show that U.S. imports from Canada are more sensitive to domestic, import, and world prices than are Canadian imports from the United States. U.S. imports from Canada would increase roughly £3.257 billion compared to the £2.432 billion increase for Canadian imports from the United States .     

Trade in International Transport Services: The Role of Competition

The paper is concerned with trade in transport services (not cabotage but rather international shipping, transport, and related logistical services) and the importance of competition and market structure in the sector. It examines implications of liberalization for profits, trade, and national gains from trade. Though past GATS (General Agreement on Trade in Services) maritime negotiations involved the maritime nations, this paper also flags interests of consuming nations (particularly poorer developing countries). Issues raised in the analytical section are illustrated through a computational example, to provide a rough sense of orders of magnitude and the importance of the issues raised for basic gains from improved market access.     

How effective is the Free Trade Agreement in South Asia? An empirical investigation

We investigate the efficacy of preferential trade liberalization in changing the observed trade pattern among the South Asian countries that have entered into the South Asian Free Trade Agreement (SAFTA). Although in its nascent stage, some data are now available to provide an ex-post evaluation of the performance of this bloc. Using these data, we find no empirical evidence of trade creation among SAFTA members, which is not surprising given that tariff concessions in SAFTA are small and are offset by complicated rules of origin procedure. However, a substantial and statistically significant increase in exports from SAFTA members to the rest of the world is found. Several panel strategies are used to check the sensitivity of the results against the assumptions of the estimation strategies. As some key coefficient estimates are found to differ across estimation methods, policymakers in South Asia need to use care in relying on the results from empirical studies, including our own, in formulating their trade policies.     

The GATT/WTO has promoted trade,but only in capital-intensive commodities!

This article uses gravity models to explore the impact of the General Agreement on Tariffs and Trade (GATT)/World Trade Organization (WHO) on bilateral trade in a sample of 46 countries over the period 1965 to 1997. Our data enable us to disaggregate trade by broad commodity aggregates. The results for total trade are similar to those reported by Rose (2004). However, the disaggregated estimates reveal that the GATT/WTO has had a positive and statistically significant impact on trade in capital-intensive commodities, but no statistically significant impact on trade in other commodities. The article demonstrates that simple modifications of Rose's approach lead to results that are much more ‘common sense’ than his (JEL F10, F15).     

AGRICULTURAL AND NAMA REFORM UNDER DOHA: IMPLICATIONS FOR ASIA-PACIFIC ECONOMIES

Abstract.  This paper provides estimates of the potential gains to the Asia Pacific region from completely freeing merchandise trade globally and from partial liberalizations that might emerge from the Doha Round. Particular attention is given to agriculture, where the majority of the gains would arise. The results suggest that moving to free global merchandise trade would boost real incomes in the Western Pacific proportionately more than in other regions. The Doha partial liberalization scenarios considered would move the world only a small way towards complete free trade, but inreasingly so the more developing countries themselves are willing to open up.     

Which International Institutions Promote International Trade?

This paper estimates the effect on international trade of three multilateral organizations intended to increase trade: (1) the World Trade Organization (WTO) and its predecessor the General Agreement on Tariffs and Trade (GATT); (2) the International Monetary Fund (IMF); and (3) the Organisation for Economic Co‐operation and Development (OECD) and its predecessor the Organisation for European Economic Co‐operation (OEEC). I use a standard “gravity” model of bilateral merchandise trade and a large panel dataset covering over 50 years and 175 countries. My results indicate that OECD membership has had a consistently large positive effect on trade, while accession to the GATT/WTO also increases trade.     

试析《中美洲自由贸易协定》多角化影响

历经9年的艰苦谈判之后,美国与中美洲五国及多米尼加签署了《中美洲自由贸易协定》(CAFTA-DR).该协定的签署对于中美洲国家而言意义重大,借助该协定的实施,中美洲国家的贸易与直接投资将会得到大幅度的增长,地区经济将会快速发展.同时,CAFTA-DR的签订,改变了中美洲原先的次区域一体化优先路线,对中美洲未来的区域一体化进程将会产生深远的影响.     

FREE TRADE, NATIONALISM, AND THE COMMON MAN: THE FREE TRADE AGREEMENT BETWEEN CANADA AND THE UNITED STATES

This paper discusses the forces that have been at play in the debate over the recently concluded Canada-U.S. Free Trade Agreement. Most economists agree that free trade is desirable and that both parties likely will gain from specialization and exchange. But many objections to this agreement have been raised, some of which are very different from those that economists usually consider. A review of the agreement and many of the arguments raised against it reinforces the basic credo that freer exchange between consenting parties leads to improved economic well-being.     

服务贸易自由化与中国应对策略的探析

服务贸易自由化是在服务贸易重要性显现以及全球经济一体化背景下提出的。随着国际服务贸易发展程度的深化,全球经济一体化进程的加快,以及《服务贸易总协定》的签订,服务贸易自由化可谓是大势所趋。这必将对世界各国服务贸易的发展和政府经济政策的制定产生众多深远的影响。服务贸易自由化既具有积极的经济效应,又具有一定的负面效应。作为既是发展中国家也是WTO成员方的中国,服务贸易自由化对我们来说是机遇也是挑战。我们必须要在这一趋势下认清中国服务贸易发展的现状,抓住机遇,并勇于迎接挑战,制定符合中国实际的应对策略,提高中国服务贸易的竞争力。     

NORTH AMERICAN FREE TRADE AGREEMENT BILATERAL TRADE EFFECTS

This study evaluates the effects of the North American Free Trade Agreement (NAFTA) on bilateral trade between the United States and Canada and between the United States and Mexico. Trade flow estimates are from a vector autoregression (VAR) model. The VAR methodology allows modeling bilateral trade in a flexible manner that incorporates both the interaction between different variables and the dynamics of trade, output, prices, and the exchange rate. After testing the outside sample forecasting ability of the models, the study produces dynamic forecasts of bilateral trade. It then compares forecasts incorporating the effects of the NAFTA with baseline forecasts. The results suggest expanded trade for all three countries and an improvement in the U.S. trade position with both Canada and Mexico.     

THE WTO AND ANTIDUMPING IN DEVELOPING COUNTRIES

Since the 1995 inception of the World Trade Organization (WTO), developing countries have become some of the most frequent users of the WTO-sanctioned antidumping (AD) trade policy instrument. This paper exploits newly available data to examine sector-level use of nine of the major "new user" developing countries, matching data on production in 28 different three-digit ISIC industries to data on AD investigations, outcomes, and imports at the six-digit Harmonized System product level. We present economically significant evidence consistent with theory that developing-country industries that seek and receive AD import protection are responding to macroeconomic shocks, exhibit characteristics consistent with endogenous trade policy formation, and face some changing market conditions consistent with requirements of the WTO Antidumping Agreement. However, the evidence also suggests substantial heterogeneity in determinants of AD use across developing countries, which highlights the flexibility of this policy as a protectionist tool responsive to many different types of political-economic shocks.     

Are free trade agreements good for the environment? A panel data analysis

This study empirically examines the relationship between free trade agreements (FTAs) and greenhouse gas (GHG) emissions. For this purpose, we use three different FTAs: the Southern Common Market, the North American Free Trade Agreement, and the Australia–United States Free Trade Agreement. These FTAs are between developing, both developing and developed, and only developed countries, respectively. Panel unit root, panel cointegration, and fully modified ordinary least squares estimations are employed to examine the long‐run relationship between GHG emissions and trade liberalization. The results indicate that the environmental effects of FTAs depend on the different agreement types. When FTAs are between only developed or developing countries, overall there is no environmental damage, and these types of FTAs can be beneficial for the environmental quality in the long run. However, when developing and developed countries are in a trade agreement, overall environmental quality decreases due to increased GHG emissions.     

北美自由贸易区经济周期协动性的实证研究

自《北关自由贸易协议》签订并实施以来,美国、加拿大、墨西哥三国间的经贸联系日益密切。三国间经贸投资联系的加强必然会作用于三国宏观经济波动的传导,并改变北美自由贸易区内美、加、墨三国经济周期协同的特点。本文首先探讨了《北美自由贸易协议》对美国、加拿大、墨西哥三国间贸易与投资的积极效应,然后对三国在北美自由贸易区成立前后的经济周期协动性变化的特征事实进行了分析,最后考察并检验了《北美自由贸易协议》对三国间经济周期协动性的影响。