An assessment of the Europe agreements’ effects on bilateral trade, GDP, and welfare

The so-called Europe Agreements had been enacted in the 1990s to initiate the integration of goods markets between the 15 EU incumbent economies as of 1995 and 10 potential entrants located in Central and Eastern Europe. This paper evaluates the trade, GDP, and welfare effects of these agreements by means of structural analysis of a bilateral trade flow model. The results support three conclusions. First, the agreements exerted significant positive effects on goods trade between the EU15 incumbents and the CEEC and, at the same time, they induced trade redirection from other countries. Second, EU15 GDP responded by an increase of much less than 1% while that in the 10 CEEC increased by several percent in response to the agreements. Third, the effects on welfare were moderate in the EU15 but amounted to more double-digit percentage changes in the involved CEEC.     

The trade impact of European Union agricultural preferences

We assess the impact on agricultural trade of European Union (EU) trade policies, using a gravity model based on disaggregated trade flows from 161 developing countries (DCs) to 15 EU member countries. We use a sample selection framework to account for potential selection bias of positive trade flows and provide an explicit measure for relative preference margins. From a policy perspective, our results debunk some of the most widespread criticisms of preferential policies: EU preferences matter and have a positive impact on DCs agricultural exports at both the extensive and intensive margins, although with significant differences across sectors.     

欧盟玩具业环境规制对我国玩具出口的绿色壁垒效应-基于我国四类玩具出口欧盟十国的面板数据分析:1990-2006

本文采用引力模型,对我国玩偶、玩具动物、玩具乐器、其他玩具等四类玩具1990年至2006年向欧盟十国的年度出口值进行面板数据分析,合并考察欧盟玩具业有关传统玩具的一揽子环境规制措施对我国玩具出口是否产生壁垒效应。本文拓展测度环境规制严度变量的赋值法,按规制措施对玩具出口影响的强弱对环境规制严度变量赋予不同的增加幅度,在时间序列数据中对先后实施多项不同种类的环境规制措施如何进行计量分析的问题取得突破。结果显示:欧盟玩具业有关传统玩具的一揽子环境规制措施对我国四类玩具的出口已构成绿色贸易壁垒。这一结果为欧盟环境规制构成绿色壁垒的论断提供了经验分析的证据。     

Heckscher-Ohlin Theory or the Modern Trade Theory: How the Overall Trade Characterizes at the Global Level?

This paper has two objectives: to locate the global trade pattern and to compute the export potential of world economies. Considering the maximum number of countries and maintaining a good representative sample of the overall international trade, an empirical examination is conducted by utilizing the trade complementary index and the per-capita income variable in the standard gravity model. The main aim is to determine which of the two theoretical frameworks―either the Heckscher-Ohlin theory, which is based on factor endowments or the Modern Trade theory of Krugman-Helpman and Linder, based on the intra-industry trade―is explaining the overall global trade flows. The estimated results support the factor endowments trade theory. In other words, the observed trade patterns conform to the Heckscher-Ohlin theory of trade over intra-industry Modern trade theories. The inference drawn is based on the significantly positive coefficient of the trade complementarity index and the absolute differenced PCI variable. Furthermore, as far as export potential is concerned, there exists a vast scope for the export potential across economies. These countries can exploit the existing export potential through trade cooperation and integration at the regional and the bilateral level.

     

Do environment regulations matter for EU-MENA trade?

This study examines the impact of environmental regulations stringency on agricultural trade between European Union (EU) and Middle East and North Africa (MENA countries). Using a gravity model and applying the zero-inflated Poisson (ZIP) model, we estimate the impact of environmental regulations stringency on bilateral agricultural exports between 28 EU and 20 MENA countries during the period 2001–2014. The results have showed that environmental regulations do matter for agricultural trade between both regions because in the presence of excessive zero trade observations, they act as significant fixed export costs that affect the probability of trade. More stringent environmental regulations stimulate innovative efforts in cost-saving green technologies, which increase productivity and positively affect agricultural exports. The results have favoured the revisionist Porter hypothesis (PH), according to which environmental regulations may stimulate innovative efforts, which mitigate the negative effects of higher fixed abatement costs and enhance trade competitiveness.     

Similarity in trade structures,integration and catching‐up1

In this paper, we look at the role of export composition in the growth process, considering how increased similarity in trade structure among countries can induce catching‐up in income levels in a group of countries in transition. We analyze the sectoral export patterns of the Central and Eastern European countries (CEECs) by comparing them to those of the current members of the European Union (EU), focusing on countries’ specialization as suppliers for the EU market, and we assess whether similar export patterns foster the catching‐up process of the CEECs. Our main result is that similarity in export composition has a positive, significant and non‐linear impact on catching‐up, and seems to be driven by the growth of the main export market and delocalization of production more than by other factors.     

Je t'aime, moi non plus: Bilateral opinions and international trade

This paper studies the relationship between bilateral trade patterns and opinions. It uses the Eurobarometer public opinion surveys published by the European Commission, which provide data on the share of the population in each EU15 member country in favour of each CEEC joining the EU. Our results first suggest that bilateral opinions have a statistically robust and relatively large effect on imports, even when standard and new covariates capturing proximity between countries are controlled for. We interpret this effect as reflecting a positive impact of “bilateral affinity” on trade patterns. We also show that it is possible to go some way towards explaining the variance in bilateral opinions among our sample. Last we provide some preliminary attempt to determine causality between bilateral opinions and imports.     

What Determines Sectoral Trade in the Enlarged EU?

In this paper, we estimate a sectoral gravity model for trade within a heterogeneous trade bloc, the enlarged EU, comprised of a high‐income group (wealthiest EU), a middle‐income group (Greece, Portugal and Spain), and a low‐income group (new Central and Eastern European member countries). The estimation was conducted on sectors with different degrees of scale economies and skill‐intensities in the presence of transport costs. The results offer support for the call to incorporate trade theories based on both endowments and scale economies. In addition, whilst integrating poorer countries is beneficial for all of the participants in the bloc, there is still a role for a redistribution policy, such as the EU's Regional Policy, which should comprise a mix of policies, focusing on both income and education/skills, together with infrastructure development.     

Quotas on Clothing Imports: Impact and Determinants of EU Trade Policy

We assess the impact of the phasing‐out of quotas on European clothing imports within the framework of the phase‐out of the Multi‐Fiber Agreement and the accession of the CEEC. We use 1996 data on trade barriers for 20 categories of clothing products and 22 exporters. The estimation of a standard gravity equation concludes that tariffs have a large and negative impact as expected but seldom corroborated in the literature. The negative impact of non‐tariff barriers also appears clearly after controlling for an endogeneity bias by the instrumental variables method. The phasing‐out of quotas should increase EU imports by 20%.     

Income inequality,unemployment, and suicide: a panel data analysis of 15 European countries

One of the reasons behind the re-negotiation of the Lomé Convention, resulting in the Cotonou Agreement, was the alleged inability of the trade provisions of Lomé to increase the African, Caribbean and Pacific (ACP) countries' market share of the European Union (EU) market. The Cotonou Agreement may lead to the more advanced ACPs being granted future market access to the EU under a generalized system of preferences (GSP), in conformity with World Trade Organization (WTO) rules. To this end, this paper makes a comparative analysis of the effects of the EU's Lomé Convention and GSP on exports of developing countries using a gravity type of model. The results indicate positive and statistically significant export effects of the both the Lomé Convention and the GSP. The export effects are greater in case of the Lomé Convention throughout the study period running from 1973 to 1992. In addition, the paper illustrates the EU country distribution of the export effects and shows that Belgium and The Netherlands are the EU countries that most have increased their imports from the developing countries under both the Lomé Convention and the GSP.     

Which commercial partners are important for the most recently admitted EU countries?

This paper describes the degree of trade integration inside the European Union (EU) after the fifth enlargement in 2004. To achieve this goal, we build a database of information on trade flows between the new EU countries (EU‐10) and 180 commercial partners in six different sectors from 1999 to 2011. Using the standard gravity model and estimating a difference‐in‐differences specification, we analyze how joining the EU affected the intensity and direction of the EU‐10's trade flows. Our results show that though trade exchanges between the EU‐10 and EU‐15 intensified after 2004, the impact of integration was much more significant to the EU‐10 group.     

CEEC growth projections: Certainly necessary and necessarily uncertain*

In this paper we discuss the necessity for an indirect approach to assess the growth and convergence prospects of ten Central and Eastern European countries (CEEC10). Ongoing structural changes in these countries and the recent European Union membership of eight countries in the sample have to be taken into account in growth projections. Our indirect approach consists of basing growth projections for the CEEC10 on growth equations estimated for the incumbent EU member states. The study improves upon current practice in two ways. First, growth equations are estimated for the EU14 and not on a large heterogeneous panel that includes many countries unrelated to the CEEC10. Second, by means of a variety of equations and scenarios we assess the uncertainty inherent in such projections. We present growth‐rate and convergence time distributions. The mean convergence times are in line with previous findings. The growth‐rate and convergence time distributions are bi‐modal, reflecting the possibility of two distinct growth paths, depending upon economic policy choices.     

Virtual proximity and audiovisual services trade

Audiovisual services such as music and movies in digital formats have gained substantial importance over the last decade. This paper analyses audiovisual services in a gravity model framework. In particular, we explore the role of virtual proximity – a new proxy for cultural proximity based on bilateral hyperlinks and bilateral website visits between countries – and find that ‘virtually-proximate’ countries trade significantly larger amounts of audiovisual services. Our results show that virtual proximity also has a larger impact on trade in audiovisual services than on total services trade. Moreover, in line with Hanson and Xiang (2011), our analysis indicates that in the audiovisual services sector, global fixed export costs dominate bilateral fixed export costs for most countries in our sample.     

Kosovo – EU trade relations: a dynamic panel poisson approach

To inform policymaking following trade liberalization between Kosovo and the EU within the framework of the Stabilisation and Association Agreement (SAA), we specify a gravity model to investigate Kosovo’s trade in goods with 28 EU countries over the period 2005–2013. We reconcile competing methodological requirements by using a dynamic Poisson approach to estimation. Together, persistent trade patterns and an unfavourable combination of demand and supply elasticities suggest that trade liberalization in isolation is not sufficient to promote exports but may need to be incorporated within a wider policy and institutional framework. In addition, our findings suggest that trade costs should be a particular focus for policy: distance has a big negative influence on Kosovo’s exports to EU countries; while diaspora communities promote Kosovo’s exports to EU markets, most likely because they offset trade costs.     

Logistics performance and export competitiveness: European experience

Logistics performance has become a decisive factor in export competitiveness. At the same time, and as a result of the continuous enlargement processes it has undergone, the European Union (EU) is a very interesting case to study how the reforms that enhance logistics performance have affected exports. Therefore, this paper aims to analyse the importance of logistics performance in regard to EU exports over the period 2005–2010 in an attempt to identify possible advances on behalf of Member States. Several gravity equations are estimated using the Logistics Performance Index (LPI) and its components as characteristic proxy variables of trade facilitation. In order to avoid the possible heterogeneity caused by sample bias, the two-stage model proposed by Heckman is used. The estimations of the gravity models using the two-stage Heckman model for all 26 EU countries have led us to conclude that logistics was more important for exporting nations than importing nations in both 2005 and 2010, reinforcing the interest in the exporter side of the paper. In reference to the components of the LPI, Competence and Tracking has acquired greater importance in recent years, in keeping with the weak domestic demand in European countries and the search for new international markets.     

Greece’s Potential Trade Flows: A Gravity Model Approach

This paper attempts to access whether Greece’s low openness is a reflection of its low trade integration primarily as a result of the country’s relatively poor goods export performance. The analysis estimates potential trade flows for Greece through a gravity model using a panel of cross-country data, which cover bilateral trade flows concerning the EU member states. These flows are then derived by applying the estimated parameters to the Greek economy. The results show that actual Greek exports fall short of potential ones, while the opposite is true with respect to imports. This becomes more profound when the extent of intra-industry trade is included in the analysis. The findings for the Greek exports differ considerably from the corresponding ones for Portugal, a country with similar characteristics, manifesting the limited convergence of Greece’s trade patterns towards the EU average as well as its unique geographical location relatively to the other EU countries.

Trade integration and the EU economic membership criteria

The purpose of this paper is to consider whether the European Union (EU)'s economic membership criteria for the Central and Eastern European countries (CEECs) and Cyprus (the Candidate Countries) are fulfilled. To this end, I examine the actual and potential levels of trade between the Candidate Countries and the EU countries using the gravity model. The results show a high degree of trade integration between all Candidate Countries and the EU, indicating that the Candidate Countries would not face any serious difficulties in coping with the competitive pressure and market forces within the Union in the medium term. The European Commission, however, suggested the contrary for some of the Candidate Countries in its opinions of 1997.     

Press freedom,market information,and international trade

We consider a framework in which freedom of the media can alleviate barriers to trade, while in the absence of trustworthy market information, firms optimally withhold part of their export activity and opt for testing-the-waters strategies. We employ data on export flows among a large group of Western and Latin American countries combined with the Freedom House measure of press freedom to examine the main theoretical implication. In a standard set-up of gravity equations, we find evidence that the effects are partially conditional on the political institutions of the importing country: press freedom is strongly associated with trade with autocracies.     

An analysis of EU wine trade: A gravity model approach

In this research study, a gravity model approach was used in order to analyze the main factors affecting the trade flows of wine in the EU. The empirical model was applied using data for the first twelve EU countries for the period 1989–97. It has been clearly shown in the empirical literature that gravity models can be successfully applied to a single commodity market. The present study utilized pooled cross-sectional and time series data in a one-way fixed effects model that accounted for country-pair heterogeneity. The results revealed that wine trade was positively influenced by an increase in GDP per capita, since greater income promotes trade. The remoteness of one country from another influenced exports positively and imports negatively, and the quantities traded did not prove to be very sensitive to wine prices. The depreciation of EU currencies and the high production of wine in the EU increased exports and reduced imports, while EU integration enhanced trade among members.     

World Bank trade loans and export performance of recipient countries

Since 1980 several developing countries have received World Bank structural loans, aimed at opening their economy to international trade. By estimating a gravity equation on a panel of 180 countries, observed from 1962 to 2010, we investigate whether the Bank’s programs have affected the export performance of beneficiaries in the subsequent years. According to our results, trade loans have been ineffective in the shorter run while, in the longer, they appear to have hindered the export performance of recipient countries. The Bank’s new trade policy approach, however, seems to have some potential for inverting the negative influence that we have detected.