The Most and the Least Favoured Nations: Norway's Trade Policy in Perspective

This article reviews some recent developments in Norway's trade policy, in the light of the WTO's Trade Policy Review of Norway, 2004. A main focus is on the relationship between MFN trade policy and Norway's numerous preferential trade arrangements. In spite of a growing number of free trade agreements the paper suggests that Norway's trade regime has not become more discriminatory. The reason is that cuts in MFN tariffs as well as improvements in GSP have eroded preference margins in manufacturing faster than the coverage of free trade agreements has expanded. As a result of liberalisation, the trade regime for manufacturing has become less discriminatory, not more. While Norway is on the whole a liberal‐minded supporter of the world trade system, it has twice in recent history reacted with protectionism. Around 1980, a restrictive quota regime for clothing was implemented. This has later been dismantled, contributing to sharply increased imports from developing countries. For agriculture, Norway has currently high protection, and tariff preferences are limited. It is likely that agricultural protection will be gradually reduced due to the WTO, as well as through free trade agreements and improvements in GSP.     

EU Trade Preferences and Export Diversification

Since at least the 1960s, the European Union (EU) has offered various kinds of non‐reciprocal trade preferences for developing countries. Originally, these trade preferences had at least two policy goals: (i) to increase export volumes for developing countries and thereby boost their export earnings and (ii) to facilitate export diversification. While extensive research has confirmed that the first of these goals is typically met, the second goal seems to have been largely forgotten by researchers as well as in policy circles. The aim of this paper was therefore to analyse the impact of the EU's non‐reciprocal trade preferences for developing countries on export diversification. Our estimation results suggest that some trade preference programmes, such as the Generalised Scheme of Preferences (GSP), lead to increasing ranges of export products. By contrast, preferences offered to Mediterranean countries typically have no significant effects, and African, Caribbean and Pacific (ACP) preferences actually have negative effects towards the end of our time period, suggesting that ACP countries may respond to preferences by specialising into fewer goods.     

Facing up to Trump administration mercantilism: The 2018 WTO trade policy review of the United States

As one of the largest trading economies in the WTO system, US trade policy is reviewed regularly by WTO members, informed by a Trade Policy Review (TPR) report. This paper discusses the 2018 TPR of the United States, the 14th such review undertaken since the entry into force of the WTO in 1995. It is the first review of trade policy under the Trump administration. While the TPR documents the significant changes in US trade policy, it does not engage with the mercantilist vision that motivates trade policy under President Trump or the apparent desire to engage in trade wars with its major trading partners. The lack of discussion of the existential threat to the liberal trading system implied by the drastic changes to US trade policy reduces the salience of the TPR and makes it unclear exactly what purpose it serves.     

技术壁垒对国际贸易影响的实证分析——以中日茶叶贸易为例

技术性贸易壁垒是影响两国(地区)间贸易发展的重要因素。以农药残留标准为主要内容的技术性贸易壁垒严重影响了我国农产品的对外贸易,其中尤以我国传统特色出口农产品——茶叶受到的技术性贸易壁垒的影响最为典型。日本是我国茶叶出口的第二大市场,自2001年起,日本不断提高进口茶叶的农药残留标准,构成了技术性贸易壁垒,成为影响中日两国茶叶贸易发展的障碍。文章在简介日本茶叶技术性贸易壁垒与中国茶叶农残限量标准体系、定量分析茶叶在中日两国贸易中地位与作用的基础上,运用引力模型实证分析技术性贸易壁垒对中日茶叶贸易的影响,并探讨了化解日本茶叶技术壁垒的对策建议。     

Summits,Riots and Media Attention: The Political Economy of Information on Trade and Globalisation

Supply of information has increased rapidly through the growth of commercial media and technological innovations. Yet economists still blame anti‐globalists’ demonstrations and public opposition to trade liberalisation on poor information. This paper analyses how the structure of the media industry affects the distribution of information on trade policy and globalisation. We present an empirical analysis of Belgian media reporting on trade policy and globalisation over the 1999–2002 period, supports these hypotheses and finds strong negative bias in media coverage. Moreover, we find that media coverage of trade policy and globalisation is highly concentrated around summit meetings of political leaders. Media attention in the popular press is heavily influenced by riots and demonstrations at summits. The paper points at important implications for public information on trade policy and globalisation and for economists.     

Carbon,Trade Policy and Carbon Free Trade Areas

This paper discusses both the potential contribution that trade policy initiatives can make towards the achievement of significant global carbon emissions reduction and the potential impacts of proposals now circulating for carbon reduction motivated geographical trade arrangements, including carbon‐free trade areas. We first suggest that trade policy is likely to be a relatively minor consideration in climate change containment. The dominant influence on carbon emissions globally for the next several decades will be growth more than trade and its composition, and in turn, the size of trade seemingly matters more than its composition given differences in emission intensity between tradables and non‐tradables. We then note that differences in emissions intensity across countries are larger than across products or sectors and so issues of country discrimination in trade policy (and violations of MFN) arise. We next discuss both unilateral and regional carbon motivated trade policy arrangements, including three potential variants of carbon emission reduction based free trade area arrangements. One is regional trade agreements with varying types of trade preferences towards low carbon‐intensive products, low carbon new technologies and inputs to low carbon processes. A second is the use of joint border measures against third parties to counteract anti‐competitive effects from groups of countries taking on deeper emission reduction commitments. A third is third‐country trade barriers along with free trade or other regional trade agreements as penalty mechanisms to pressure other countries to join emission‐reducing environmental agreements. We differentiate among the objectives, forms and possible impacts of each variant. We also speculate as to how the world trading system may evolve in the next few decades as trade policy potentially becomes increasingly dominated by environmental concerns. We suggest that the future evolution of the trading system will likely be with environmentally motivated arrangements acting as an overlay on prevailing trade and financial arrangements in the WTO and IMF, and eventually movement to linked global trade and environmental policy bargaining.     

Bilateral ‘WTO‐Plus’ Free Trade Agreements: The WTO Trade Policy Review of Singapore 2004

The World Trade Organisation's 2004 Trade Policy Review of Singapore (WTO‐TPR Singapore 2004) depicts the small and outward‐oriented economy as one of the most open countries to international trade and investment. The review highlights the benefits of the outward‐oriented strategy that has enabled the Singapore economy to weather recent external shocks such as the Asian financial crisis to the SARS and to the recent unfavourable conditions in the Middle East. In particular, the report commended Singapore's efforts on its liberalisation of the services sector and its economic benefits to consumers and global trade. However, the WTO‐TPR Singapore 2004 highlights several key areas of concerns: (a) the commitment to multilateral agreements with the rising number of bilateral free trade agreements signed by Singapore and (b) the lack of growth of total factor productivity, a key indicator for long‐run efficiency of the economy. The paper addresses the above key concerns raised in the WTO's TPR of Singapore in terms of its commitment to global trade in terms of WTO‐plus bilateral FTAs, which intends to support a multilateral trading system, and its overall industrial strategies to raise its competitiveness.     

Macro Determinants of FDI Inflows to Japan: An Analysis of Source Country Characteristics

This paper examines the source country determinants of FDI into Japan. The paper highlights certain methodological and theoretical weaknesses in the previous literature and offers some explanations for hitherto ambiguous results. Specifically, the paper highlights the importance of panel data analysis, and the identification of fixed effects in the analysis rather than simply pooling the data. Indeed, we argue that many of the results reported elsewhere are a feature of this mis‐specification. To this end, pooled, fixed effects and random effects estimates are compared. The results suggest that FDI into Japan is inversely related to trade flows, such that trade and FDI are substitutes. Moreover, the results also suggest that FDI increases with home country political and economic stability. The paper also shows that previously reported results, regarding the importance of exchange rates, relative borrowing costs and labour costs in explaining FDI flows, are sensitive to the econometric specification and estimation approach. The paper also discusses the importance of these results within a policy context. In recent years Japan has sought to attract FDI, though many firms still complain of barriers to inward investment penetration in Japan. The results show that cultural and geographic distance are only of marginal importance in explaining FDI, and that the results are consistent with the market‐seeking explanation of FDI. As such, the attitude to risk in the source country is strongly related to the size of FDI flows to Japan.     

The Political Economy of Strategic Trade Policy and the Brazil–Canada Export Subsidies Saga

In this paper we study the on‐going trade dispute between Canada and Brazil on export subsidies in the aircraft industry and the reasons for its escalation. This is a peculiar case of strategic trade policy insofar as the good, i.e. regional jets, is heavily dependent on sub‐systems that are imported in the two countries. The hypothesis that the dispute solely derives from the search for rents and externalities is therefore incomplete. Without downplaying the role of interest politics, we argue that in both countries ideas about the goals of trade policy have an important place in explaining why this dispute drags on. For Canada, the belief in a rules‐based trading regime has led it to strongly oppose violations, while insecurity about its competitiveness has led to a variety of government schemes to support firms in advanced sectors like aerospace. For Brazil, its place as a leader of the developing world acted as a rallying point for government and firms alike. The research also argues that the WTO process has actually made a resolution of the dispute more difficult by making it too costly for firms and countries to comply with the costs of losing.     

Carbon policy and the structure of global trade

Alternative perspectives on the structure of international trade have important implications for the evaluation of climate policy. In this paper, we assess climate policy in the context of three important alternative trade formulations. First is a Heckscher‐Ohlin model based on trade in homogeneous products, which establishes the traditional neoclassical view on comparative advantage. Second is an Armington model based on regionally differentiated goods, which is a popular specification for numerical simulations of trade policy. Third is a Melitz model based on monopolistic competition and firm heterogeneity. This heterogeneous‐firms framework is adopted in many contemporary theoretic and empirical investigations in international trade. As we show in this paper, the three alternative trade formulations have important implications for the assessment of climate policy with respect to competitive effects for energy‐intensive production (and hence carbon leakage) as well as the transmission of policy burdens across countries.     

Missed Opportunities: The WTO Trade Policy Review for the East African Community

The East African Community (EAC), comprising Kenya, Tanzania and Uganda, came into force on 7 July 2000 with a Common External Tariff (CET) established in January 2005. This Trade Policy Review (TPR) of the EAC is timely as all three countries had implemented significant trade liberalisation since the late 1980s while the CET represented an asymmetric change – Kenya and Tanzania essentially reduced tariffs whereas Uganda increased tariffs. The TPR provides considerable information on the CET and on trade and related policies in each of the member countries. However, the EAC and the TPR missed a number of opportunities: the EAC included no coordinated export promotion or investment provisions, while the TPR says little on the potential for intra‐regional trade, and nor does it address the position of the EAC in the economic partnership agreements (EPAs) being negotiated with the EU. This review concentrates on these omissions to explore the implications of the EAC for developments in trade policy in the region.     

Liberalisation and Regional Market Integration: Turkish and Australian Automotive Sector Experience Compared

With similar production strategies and shared policy objectives forming a common background in both countries, plans to liberalise automotive production and trade emerged in Turkey and Australia after 1980. The subsequent outcomes of these attempts to abandon protection were to diverge, however, and the future viability of these two formerly heavily protected markets has now come to depend increasingly upon access to regional trade blocs. Examination of the path followed by these two economies as they adjust to the consequences of automotive liberalisation clarifies not only comparative economic performance in key areas of industry and trade, it also highlights the influence of differing levels of multi‐state economic integration, as these processes create, or fail to create, new opportunities for manufacturing economies operating in their individual regional geographic settings.     

Aggressive Legalism: The Rules of the WTO and Japan’s Emerging Trade Strategy

Over the course of the last decade there has been a significant change in Japan’s trade strategy, one that has remained seriously unappreciated for both its contents and its policy implications. The heart of this unfolding strategy is the active use of the legal rules in the treaties and agreements overseen by the WTO to counter what the Japanese government deems to be the unreasonable acts, requests, and practices of its major trade partners. To wit, the Japanese government is deliberately using both the procedural and substantive rules of the WTO to matter to the results and outcomes of major trade disputes involving Japan. And in a relatively short time, it has shown how these rules can be made to serve as both ‘shield’ and ‘sword’ in high‐profile trade disputes. This is the strategy that Japan has embraced as the principal means of dealing with its major trade partners, and it reveals much about both a new Japan and the power of international law.     

The US Generalised System of Preferences in Principle and Practice

In principle, the US generalised system of preferences (GSP) offers uniform market access to exports from eligible developing countries for a broad set of GSP‐eligible products. In practice, realised GSP tariff exemptions demonstrate marked variation across countries, industries and years. In this paper, we identify the sources of discretionary and non‐discretionary GSP exclusions and quantify the extent to which competitive needs limitations (CNLs), waivers and additional annual product, country and country‐product exclusions drive a wedge between the ‘generalised’ principle of GSP and its implementation in practice.     

我国高新技术电子信息产品产业内贸易实证分析

近年来,我国高新技术电子信息产品出口贸易迅速发展,在对外贸易中的地位越来越突出,但所面临的国际市场竞争也日益激烈,提高高新技术电子信息产品的国际竞争力已经成为我国是否成为贸易强国的标志之一。本文通过运用产业内贸易指数、贸易竞争力指数等指标,对我国高新技术电子信息产品的竞争力进行实证分析,提出了若干政策建议。     

Trade Policy Reforms and the Structure of Protection in Vietnam

This paper examines the current state of the trade policy regime in Vietnam against the backdrop of market‐oriented policy reforms undertaken over the past one‐and‐a‐half decades. The core of the paper is an in‐depth analysis of the structure of protection, focusing on both incentives for import‐competing production and the bias in the incentive structure against export production compared to import‐competing production. It is found that, despite notable reform efforts, the structure of protection in Vietnam is still out of line with that of the major trading nations in the region, in terms of the level and the inter‐industry dispersion of nominal and effective protection rates. There is a clear anti‐export bias in the incentive structure, even though the degree of the bias has considerably declined over the years. There is no evidence to justify the existing protection structure on grounds of infant industry protection or employment generation.     

Export Competitiveness of Developing Countries and US Trade Policy

This paper examines the impact of the revocation of tariff exemptions on exports of developing countries using data from cases of the Competitive Needs Limits (CNL), a feature of the US Generalized System of Preferences (GSP). Competitive Needs Limits are arguably imposed on ‘super competitive’ GSP beneficiaries who no longer need the preferential treatment, and aim to reserve the GSP benefits for other GSP eligible countries. The findings suggest that being excluded from the GSP as a result of a CNL induces a large and significant drop in US imports from affected countries, both in value and as a share of total US imports, and much of their market share is captured by non‐GSP countries, contrary to the policy objectives of CNLs.     

中日韩3国农产品在美国市场的竞争关系分析

运用产品相似度指数和显示性竞争优势指数,对中日韩3国农产品在美国市场的总体竞争关系、竞争强度和竞争力进行了测算。得出的结论是:中日韩3国农产品在美国市场存在较为明显的竞争关系,某些农产品的竞争强度有上升趋势,但竞争力相差还是较为明显。研究结论可为日后中国农产品贸易的发展提供借鉴。     

ASEAN and China: Export Rivals or Partners in Regional Growth?

Rivalry in trade between China and its regional neighbours in ASEAN has become a major preoccupation for many regional policy‐makers. For these reasons, strengthening the basis of empirical evidence on regional trade relations is especially important, and this paper does so in two ways. Using very detailed historical trade data, we combine econometric and trade flow analysis to elucidate patterns of export competition and underlying comparative advantage for ASEAN and China. Our findings indicate that the potential exists for both export rivalry and more extensive trade complementarity, but so do many challenges for policy makers who seek to mitigate adjustment costs and facilitate long term efficiency. Our econometric results indicate that, in the short run at least, ASEAN and China are experiencing intensified export competition in prominent third markets such as Japan and the US. More extensive trade flow analysis reveals, however, that in the long run globalisation can accommodate export growth by all the economies of East Asia, if aggregate growth can be sustained to facilitate the structural adjustments necessary for an optimal regional division of labour.     

Multilateral,Regional and Bilateral Trade‐Policy Options for the United States and Japan

We have used the Michigan Model of World Production and Trade to simulate the economic effects on the United States, Japan, and other major trading countries/regions of the Doha Round of WTO multilateral trade negotiations and a variety of regional/bilateral free trade agreements (FTAs) involving the United States and Japan. We estimate that an assumed reduction of post‐Uruguay Round tariffs and other barriers on agricultural and industrial products and services by 33 per cent in the Doha Round would increase world welfare by $686.4 billion, with gains of $164.0 billion for the United States, $132.6 billion for Japan, and significant gains for all other industrialised and developing countries/regions. If there were global free trade with all post‐Uruguay Round trade barriers completely removed, world welfare would increase by $2.1 trillion, with gains of $497.0 billion (5.5 per cent of GNP) for the United States and $401.9 billion (6.2 per cent of GNP) for Japan. Regional agreements such as an APEC FTA, an ASEAN Plus 3 FTA, and a Western Hemisphere FTA would increase global and member country welfare but much less so than the Doha multilateral trade round would. Separate bilateral FTAs involving Japan with Singapore, Mexico, Chile and Korea, and the United States with Chile, Singapore and Korea would have positive, though generally small, welfare effects on the partner countries, but potentially disruptive sectoral employment shifts in some countries. There would be trade diversion and detrimental welfare effects on some non‐member countries for both the regional and bilateral FTAs analysed. The welfare gains from multilateral trade liberalisation are therefore considerably greater than the gains from preferential trading arrangements and more uniformly positive for all countries.