Trade Policies in Southeast Asia in the Wider Asian Perspective

This paper takes stock of trade policies in Southeast Asia after the Asian crisis and in the wake of the current global economic crisis. It compares trade policies in individual Southeast Asian countries; places them in the context of regional and global economic integration; and particularly draws implications for the region from the rise of China and India. The first section looks at recent trade and FDI patterns in Southeast Asia. Then follows an overview of key trade‐policy trends, in the region overall and in individual countries. The next sections examine ASEAN countries in international trade negotiations and agreements: first in the WTO, especially in the Doha Round; then within ASEAN; and finally on cross‐regional FTAs. The paper concludes that ASEAN countries cannot rely on external tracks ‘from above’ for meaningful trade policy reform. Since the Asian crisis there has been a slowdown of reform momentum, and too much reliance on trade negotiations – especially FTAs. Rather, countries in the region have to rely on themselves –‘from below’ as it were. The engine of liberalisation and regulatory reform has to be home‐driven – as it was before the Asian crisis – with governments taking unilateral measures in response to internal and external conditions.     

Developing Countries in the WTO System: Applying Robert Hudec's Analysis to the Doha Round

In his 1987 Developing Countries in the GATT System, Robert Hudec concluded that the identity of developing countries in the GATT system was primarily a matter of their demanding non‐reciprocal and preferential treatment, developed countries responding grudgingly to those demands and that this situation had been unfruitful either to support developing country reforms or to discipline developed country restrictions aimed at developing countries. Hudec was pessimistic about the relationship becoming more productive, but his expression of despair offered a glimmer of hope: ‘There are those who believe that the GATT has become so committed to the current policy that the only way to change it would be to start a new organization’. A new organisation was started, the World Trade Organization, but has the WTO achieved what Hudec hoped a new organisation might? At the 1987–95 Uruguay Round, developing country leaders acted as Hudec had hoped. They used international rules and bindings as leverage to support their own internally‐driven reforms; to overcome generations of accumulated protection, to lock in reforms against the backsliding that had undone previous reforms. Dealing with the Uruguay Round's ‘unbalanced outcome’ and the overlapping ‘implementation problem’ have shaped the Doha Round, but the negotiations have misconceived and mismanaged both issues. Rather than seeking to identify their real economics, the negotiations have gone back to the traditional idea of special and differential treatment. Perhaps the largest cost of this mismanagement is that in many developing countries the unilateral momentum for liberalisation has waned. To the extent that the Doha negotiations have drawn attention away from the domestic issues that were the basis of developing country liberalisation – and enhanced the status of negotiators relative to the leaders who fought at home for reform – they have contributed to that waning.     

Failure of the WTO Ministerial Conference at Cancun: Reasons and Remedies

This paper first discusses four general developments in the world trading system that have made it increasingly difficult in recent years for nations to reach multilateral agreements aimed at further liberalising international trade, namely: (1) the increased technical complexity and disruptive domestic economic effects of the issues being negotiated; (2) the shift in relative bargaining power among the negotiating participants in favour of the developing countries; (3) the proliferation of bilateral and regional free trade agreements in contrast to multilateral agreements, and (4) the increased emphasis on achieving ‘fairness’ rather than reciprocity in trade liberalisation. Differences in negotiating positions of the participants on the major specific negotiating subjects of the Doha Round, such as new rules covering investment, competition policy, government procurement policy, and trade facilitation, agricultural liberalisation, changes in anti‐dumping and countervailing duty rules, the tariff‐cutting rule to increase access to non‐agricultural markets, and further liberalisation in the services sector, are then considered as well as the likelihood of reaching compromises on these matters. Finally, the possibilities of reaching acceptable balances of concessions and gains are considered for such key participants as the Group of 20 developing countries, the European Union, the United States and other industrial countries.     

Developing Countries at Doha: A Political Economy Analysis

This paper offers a political economy analysis of the Doha Ministerial Conference with special reference to developing countries. One of my key objectives is to understand the politics underlying the negotiations with a view to assessing the influence developing countries exerted on the outcome and the success they achieved in relation to the Uruguay Round Agreement, which is widely perceived as favouring mainly if not exclusively the developed countries. The main conclusions of the paper may be summarised as follows. First, with trade liberalisation as its central focus, the Doha negotiating agenda is to be welcomed from the viewpoint of developing countries. Second, the opposition by developing countries to the inclusion of at least some of the Singapore issues at Doha is defensible. Among other things, the countries lack the necessary negotiating and implementation capacity. Third, while the UR Agreement benefited both developing and developed countries, on balance, it benefited the latter more. The Doha outcome offers a better balance when taken by itself but does not go so far as to significantly correct the imbalance in the UR Agreement. Fourth, despite this better balance, the Doha negotiations offer little evidence of a shift in the relative bargaining powers of developing and developed countries. Nor can the superficially development friendly language of the Doha Declaration be viewed as signalling the softening of the tough negotiating stance developed countries took during the UR Round. Fifth, much of the negotiating power continues to reside with developed countries. Relatively equal levels of incomes gives greater coherence to interests of developed countries on issues that divide along North–South lines. Moreover, the presence of three large players – the USA, EU and Japan – allows them to exploit their bargaining power more effectively. Finally, to negotiate more effectively in the future, developing countries must improve their research capacity, think strategically and forge coalitions with other influential WTO members – whether developed or developing.     

The Latest Enlargement of the EU and ‘Buy National’ Rules

This paper presents a variety of indicators which reflect the extent of protection of individual manufacturing industries in ten countries of Central and Eastern Europe by the ‘Buy National’ rules in public procurement. Eight countries joined the EU in 2004 and the two remaining countries will become full members in 2007. Combining these data with information on the current international competitiveness of each individual industry, the paper identifies those industries that are likely to be particularly sensitive to the abolition of ‘Buy National’ rules due to their recent accession to the European Union. Two series of indicators are proposed to measure the impact of ‘Buy National’ policies. The first series outlines the behaviour of the public sector vis‐à‐vis domestic production and imports. The second series of indicators sketches the industrial structure of the sectors which, following the above analysis, seem to be protected by preferential public procurement. The interaction of both series of indicators can provide information about the extent of protection in terms of public procurement on a sectoral level and about its impact on domestic production.     

Mini‐symposium on the WTO Non‐agricultural Market Access (NAMA) Negotiations

NAMA liberalisation alone will not be sufficient to achieve the development goals of the Doha Round. The structure of developing countries’ economies and weaknesses in their infrastructure and institutions mean that adjustment to liberalisation is often costly and export responses slow. To make NAMA work, developing countries will need technical and financial support to raise their ability to adapt to greater openness and globalisation pressures and to increase their export capabilities. Although developing countries should decide how to raise their ability to adjust and to increase exports, bilateral donors and multilateral agencies will need to fund NAMA support programmes. The WTO, however, is not the appropriate or competent international agency to provide or disburse such funding. It can provide technical advice and offers a negotiating vehicle for industrial countries to signal that the development aims of the Doha Round are recognised in substantive terms. If industrial countries support developing countries’ NAMA‐related adjustment costs in addition to offering NAMA tariff cuts, the chances of a successful Doha agreement and genuine pro‐development outcomes will be boosted significantly.     

Globalisation,Women's Economic Rights and Forced Labour

Globalisation critics are concerned that increased trade openness and foreign direct investment exacerbate existing economic disadvantages of women and foster conditions for forced labour. Defenders of globalisation argue instead that as countries become more open and competition intensifies, discrimination against any group, including women, becomes more difficult to sustain and is therefore likely to recede. The same is argued with respect to forced labour. This article puts these competing claims to an empirical test. We find that countries that are more open to trade provide better economic rights to women and have a lower incidence of forced labour. This effect holds in a global sample as well as in a developing country sub‐sample and holds also when potential feedback effects are controlled via instrumental variable regression. The extent of an economy's ‘penetration’ by foreign direct investment by and large has no statistically significant impact. Globalisation might weaken the general bargaining position of labour such that outcome‐related labour standards might suffer. However, being more open toward trade is likely to promote rather than hinder the realisation of two labour rights considered as core or fundamental by the International Labour Organisation, namely the elimination of economic discrimination and of forced labour.     

服务贸易领域的原产地规则在区域经济一体化进程中的应用

乌拉圭回合谈判后,多边贸易体制的调整范围由货物贸易扩大到服务贸易。WTO规则允许各成员根据最惠国原则对不同成员的服务和服务提供者给予差别待遇。《服务贸易总协定》(简称为GATS)第5条对"经济一体化协定"的规定也允许对隶属于区域成员国的服务或服务提供者给予区域性更优惠待遇。服务贸易领域因此也日益关注起对原产地规则的研究。我国自2004年1月1日实施《内地与香港关于建立更紧密经贸关系的安排》(简称为CEPA)起,"香港公司"可以在内地享受市场准入和政策优惠的待遇。但是很多所谓的"香港公司"是由欧美等其他国家的服务提供者在具体进行业务操作,而优惠的实际获得者是这些"搭便车"的外国公司。本文通过对服务原产地规则国际协调和规范的阐释,对我国CEPA的发展现状进行分析并提出几点完善性建议。     

Curbing Agricultural Exceptionalism: The EU's Response to External Challenge

From 1948 to 1994, the agricultural sector was afforded special treatment in the GATT. We analyse the extent to which this agricultural exceptionalism was curbed as a result of the GATT Uruguay Round Agreement on Agriculture, discuss why it was curbed and finally explore the implication of this for EU policy making. We argue that, in particular, two major changes in GATT institutions brought about restrictions on agricultural exceptionalism. First, the Uruguay Round was a ‘single undertaking’ in which progress on other dossiers was contingent upon an outcome on agriculture. The EU had keenly supported this new decision rule in the GATT. Within the EU this led to the MacSharry reforms of the Common Agricultural Policy (CAP) in 1992, paving the way for a trade agreement on agriculture within the GATT. Second, under the new quasi‐judicial dispute settlement procedure, countries are expected to bring their policies into conformity with WTO rules or face retaliatory trade sanctions. This has brought about a greater willingness on the part of the EU to submit its farm policy to WTO disciplines.     

EVOLUTION IN IMPERFECT COMMITMENT BARGAINING—STRATEGIC VERSUS IGNORANT TYPES

To commit in bargaining is crucial: in the ultimatum game with its one‐sided commitment power the ‘proposer’ (almost) receives the whole pie while the ‘responder’ is left with (almost) nothing. When bargaining parties commit simultaneously the symmetric Nash (Econometrica, 1950, vol. 18, pp. 155–162) bargaining solution predicts equal shares. Continuously connecting these two games yields a one‐parameter family of games ( Fischer et al. , Experimental Economics, 2006, vol. 9, pp. 17–33) for which we distinguish two behavioral dispositions, namely (1) neglecting commitment power and (2) reacting to it strategically. Their pay‐off implications define the evolutionary set‐up for which we derive the evolutionarily stable behavioral disposition. Our analysis sheds light on the hypothesis that in experiments participants neglect strategic aspects such as commitment power.     

Investigating the gap between citizens' sustainability attitudes and food purchasing behaviour: empirical evidence from Brazilian pork consumers

Consumers worldwide are increasingly concerned with sustainable production and consumption. Recently, a comprehensive study ranked 17 countries in regard to their environmentally friendly behaviour among consumers. Brazil was one of the top countries in the list. Yet, several studies highlight significant differences between consumers' intentions to consume ethically, and their actual purchase behaviour: the so‐called ‘Attitude‐Behaviour Gap’. In developing countries, few studies have been conducted on this issue. The objective of this study is therefore to investigate the gap between citizens' sustainability‐related attitudes and food purchasing behaviour using empirical data from Brazil. To this end, Brazilian citizens' attitudes towards pig production systems were mapped through conjoint analysis and their coexistence with relevant pork product‐related purchasing behaviour of consumers was investigated through cluster analysis. The conjoint experiment was carried out with empirical data collected from 475 respondents surveyed in the South and Center‐West regions of Brazil. The results of the conjoint analysis were used for a subsequent cluster analysis in order to identify clusters of Brazilian citizens with diversified attitudes towards pig production systems, using socio‐demographics, attitudes towards sustainability‐related themes that are expected to influence the way they evaluate pig production systems, and consumption frequency of various pork products as clusters' background information. Three clusters were identified as ‘indifferent’, ‘environmental conscious’ and ‘sustainability‐oriented’ citizens. Although attitudes towards environment and nature had indeed an influence on citizens' specific attitudes towards pig farming at the cluster level, the relationship between ‘citizenship’ and consumption behaviour was found to be weak. This finding is similar to previous research conducted with European consumers: what people (in their role of citizens) think about pig production systems does not appear to significantly influence their pork consumption choices. Improvements in the integrated management of this chain would better meet consumers' sustainability‐related expectations towards pig production systems.     

The G20 at the Cancun Ministerial: Developing Countries and Their Evolving Coalitions in the WTO

In large measure, the voice that developing countries were able to exercise in Cancun was a result of their effective coalition formation. In this paper we present a brief overview of the various coalitions that played an important role at Cancun. The greater part of this paper focuses on one among these various coalitions: the G20 on agriculture. The G20 presents an especially fascinating case of a coalition that combined a great diversity of members and apparently incompatible interests. All theoretical reasoning and historical precedent predicted that the group would collapse in the endgame. And yet the group survived. We investigate the sources of the unity of this group and trace them to a process of learning that allowed the group to acquire certain structural features and develop strategies that helped to cement it further. While our central dependent variable is the cohesion of the G20, we also address the derivative question of the costs and benefits of maintaining such coalitions. The Cancun coalitions give us an excellent case of coalitions that managed to retain their cohesion, but also ended up with a situation of no agreement rather than a fulfilment of even some of their demands. We examine some of the causes behind the impasse in the negotiation process and suggest ways in which future outcomes could be improved.     

Why the WTO is Deadlocked: And What Can Be Done About It

The GATT was hugely successful, yet its successor organisation is to date failing. This paper argues that the expansion in both scope and membership make it radically more difficult for a purely bargain‐based organisation to succeed. Three factors limit the scope for deals that would be recognised as mutually beneficial. Many developing countries are accustomed to transfers rather than bargains; the poorest countries have no basis for bargaining; and even where mutual advantage is possible it requires cross‐sectoral deals which are only feasible with new rules that are unattractive to many WTO members. The paper proposes solutions to these new problems. It proposes an explicit component of ‘transfer’ in the form of non‐reciprocated liberalisation. It proposes a plurilateral solution to the tension between rules and sovereignty. It links these through a ‘grand bargain’ that offers transfers in return for plurilateralism. For the marginalised countries it proposes time‐bound preferences in OECD markets along the lines of AGOA. Finally, to recreate for the larger developing countries similar incentives for liberalisation to those previously achieved for developed countries, it proposes a limited MFN, through which they could restrict their liberalisations to include only other developing countries.     

Has Globalisation Affected Collective Bargaining? An Empirical Test, 1980–2009

We investigate whether globalisation has affected the nature of collective bargaining in OECD and emerging countries. The main innovations over the existing empirical literature are (i) the consideration of three distinct aspects of collective bargaining (union density, decentralised bargaining and the extent of government intervention), (ii) the reliance on a sample with a larger cross‐sectional and time dimension (44 countries from 1980 to 2009), and (iii) the application of a more appropriate empirical methodology (dynamic panel data models). We find that globalisation, on average, depresses unionisation but neither affects the degree of decentralisation nor government intervention in collective bargaining. We also uncover significant heterogeneity effects, both across countries and over time.     

Class alliances and conflict: An explanation of political transitions in 19th‐century Europe

I develop a model analyzing common interests and conflict among four classes—capitalists, workers, landlords, and peasants in 19th‐century Europe—and show that strong class position, based on a high degree of organization and solidarity, may actually be detrimental to the economic and political advantage of that class. This occurs when a strong class is excluded from a major class coalition via coalition formation processes. The reason is that the weak class, if they enjoy bargaining power over even weaker classes within a coalition, may not want to form a coalition with the strong class. I apply the main results to coalition formation and political transitions in 19th‐century European society.     

On the Adequacy of Monetary Arrangements in Sub‐Saharan Africa

We examine the economic rationale for monetary union(s) in Sub‐Saharan Africa through the use of cluster analysis on a sample of 17 countries. The variables used stem from the theory of optimum currency areas and from the fear‐of‐floating literature. It is found that the existing CFA franc zone cannot be viewed as an optimum currency area: CEMAC and UEMOA countries do not belong to the same clusters, and a ‘core’ of the UEMOA can be defined on economic grounds. The results support the inclusion of the Gambia, Ghana and Sierra Leone in an extended UEMOA arrangement, or the creation of a separate monetary union with the ‘core’ of the UEMOA and the Gambia, rather than the creation of a monetary union around Nigeria. Finally, the creation of the West African Monetary Zone (WAMZ) around Nigeria is not supported by the data.     

Fairness in International Trade Negotiations: Developing Countries in the GATT and WTO

Does fairness matter in the hard bargaining and horse‐trading that is associated with trade negotiations? This paper presents a positivist analysis of the particular concepts of fairness that developing countries have appealed to in their trade negotiations within the auspices of the GATT and WTO, how these notions have evolved, and the impact that they have had on negotiated outcomes. Treating the concept of fairness as my central dependent variable, I argue that the notion of fairness can only be understood in terms of the institutional context it is embedded in, which includes institutional structure as well as the participatory processes that underlie it. I advance three hypotheses on the relationship between institutional context: the fairness discourse, and the influence and manoeuvre that member countries can have in shaping that discourse. Focusing on the role of fairness in the negotiation positions of developing countries, I explain its substance and evolution through learning and adaptation by these countries within the very particular institutions of the GATT and the WTO, and the coalitions they form a part of and interact within.     

Redistribution in a Neo‐Kaleckian Two‐country Model

We investigate the interaction between demand‐driven growth and income distribution in open economies, by combining expenditure‐switching and demand spillover effects in a neo‐Kaleckian two country model. First, we specify elasticities of wage share and real exchange rate to the money wage relative to labor productivity, in order to precisely describe the distributive pass‐through from money wages to the labor share and the real exchange rate. Second, we analyze the demand effects of an increase in the money wage for given labor productivity (a redistribution towards labor) in both Home and Foreign country, as well as globally. We derive closed form results for two identical countries. These results indicate that redistribution towards labor at Home: (i) always increases growth globally if Home is wage‐led, but can lead to lower growth at Home relative to Foreign; and (ii) will always imply lower growth at Home relative to Foreign if Home is profit‐led, but can still be growth‐enhancing at Home. Thus, to the extent that countries are concerned with their relative economic performance, a fallacy of composition can emerge. Numerical simulations suggest that these fallacies could indeed occur. As a consequence, ‘returns to coordination’ over international labor policies might be substantial.     

Halving Poverty by Doubling Aid: Is There Reason for Optimism?

This paper criticises the World Bank as overly optimistic with respect to its ability to fine-tune development aid and to focus it on countries with ‘good’ policies rather than on countries with ‘poor’ policies in order to raise its effectiveness. It is shown that recipient regions showed very different patterns of aid inflows and economic growth in the past and that aid flows yielded the highest correlation to growth when their magnitudes shrank. It is furthermore argued that categorising countries by quality of domestic policies is not only questionable at a given point of time especially in countries with failing governmental institutions and open borders as in many African countries. It suffers also from incentive problems so that countries receiving more aid can become victims of changes in their domestic policies which are more permissive and etatist to the disadvantage of private agents. The paper instead pleads for a shift to aid policies decoupled from country-specifics and more oriented to fundamental ‘beyond border’ problems of the well-being of the poor. An international endowment fund under supranational law should finance research and implementation of research findings related to common international goods as it was suggested by Sachs concerning aids and tropical disease research.     

The effect of the Uruguay round on the intensive and extensive margins of trade

Do tariffs inhibit trade flows by limiting the entry of exporters (‘firm extensive margin’) or by restricting the average volume exported by each firm (‘firm intensive margin’)? Using a gravity equation approach, we analyze how the decrease in tariffs promoted during the 90s by the Uruguay Round multilateral trade agreement affected the trade margins of French firms for 57 sectors and 147 countries from 1993 to 2002. Our main contribution is to estimate the elasticity of trade on both margins, controlling for the unobserved heterogeneity of trade flows thanks to a three-dimensional panel and to time-varying tariffs as a measure of variable trade costs. Our results show that the number of firms exporting in a given sector to a given destination is related to the level of tariffs. But they also show that the decrease in tariffs induced by the implementation of the Uruguay Round did not lead more firms to export and that it only induced incumbent exporters to increase their shipments. We control for two problems that may affect our basic specification: tariff changes may be endogenous and zero flows are not included. Our results are confirmed — even when the extensive margin is significant, its magnitude is very small.