How Different Are Safeguards from Antidumping? Evidence from US Trade Policies Toward Steel

Use of temporary trade barriers (TTBs) has proliferated across countries, industries, and even policy instruments. We construct a panel of bilateral, product-level US steel imports that are matched to a unique data set on trade policy exclusions that are associated with the 2002 US steel safeguard in order to compare the trade impacts that result from application of various TTB policies over 1989–2003. We find that the trade effects of an applied safeguard—which is statutorily expected to follow the principle of nondiscriminatory treatment—can nevertheless compare closely to the application of the explicitly discriminatory antidumping policy. Our results on trade policy substitutability complement other recent research on these increasingly important forms of import protection.     

Regional trade,government policy and food security: Recent evidence from Zambia

Given heavy dependence on rainfed maize production, countries in East and Southern Africa must routinely cope with pronounced production and consumption volatility in their primary food staple. Typical policy responses include increased food aid flows, government commercial imports and stock releases, and tight controls on private sector trade. This paper examines recent evidence from Zambia, using a simple economic model to assess the likely impact of maize production shocks on the domestic maize price and on staple food consumption under alternative policy regimes. In addition to an array of public policy instruments, the analysis evaluates the impact of two key private sector responses in moderating food consumption volatility – private cross-border maize trade and consumer substitution of an alternate food staple (cassava) for maize. The analysis suggests that, given a favorable policy environment, private imports and increased cassava consumption together could fill roughly two-thirds of the maize consumption shortfall facing vulnerable households during drought years.     

An economic analysis of the impacts of trade liberalization on Asian dairy market

This paper develops an economic analysis of the impacts of further trade liberalization scenarios on Asian dairy markets, using a world dairy model incorporating both vertical and spatial characteristics of the world dairy sector. Japan and Korea’ producers will suffer much bigger losses from trade liberalization than other countries in the region; Japan and Korea’s producers get much more protection from trade distortions than from domestic subsidy. India is a potential competitive exporter if Asia is liberalized. China and India are potential competitive exporters under global free trade. South East Asia and other South Asian countries remain importers under free trade. Greater trade liberalization around the world increases exports for potential exporters and/or ease importing pressure for potential importers. The increasing order of competitiveness of Asian dairy economies sectors is found to be Japan, Korea, South East Asia, other South Asia, China and India. China and India consumers would lose from world trade liberalization, but the other countries’ consumer surplus will increase.     

Consumer preferences and the international harmonization of organic standards

Harmonization of technical standards is often advocated as a means to remove technical barriers that reduce the welfare gains available from international trade. Organic standards are not currently harmonized internationally. If domestic organic standards reflect consumer tastes, and consumers have strong preferences for those standards, then harmonization to a common standard may reduce the benefits consumers receive from organic products. Through a consumer survey, conjoint analysis was used to explore the preferences of consumers in the US, the UK and Canada for organic food. The results suggest that consumers in the three countries do not have a strong attachment to the current national organic standards and that international harmonization may be a legitimate food policy goal.     

Effects of data localization on digital trade: An agent-based modeling approach

Post the Snowden and Cambridge Analytica episodes, concerns have been raised by governments and regulators on protecting consumer data collected and transmitted by various digital firms. Driven by concerns of privacy, national security, surveillance, and cyber terrorism, governments around the world have been erecting barriers in cyberspace through data localization. The extent of data localization varies from free flow of data, to stringent restrictions requiring all data to be stored only within the territorial jurisdiction of the country. Though there are certain legitimate concerns regarding protection of personal data, scholars and liberal economists have long proclaimed that any restrictions on the Internet and associated digital trade will have serious economic consequences. Data localization affects digital trade between consumers and producers of digital services to varying degrees. In this paper, we use agent based modeling to study the properties and behaviours of consumers and producers under varying data localization regimes. An augmented gravity model of trade with iceberg coefficient is incorporated to reflect distance-related costs between producers and consumers. Varying data localization compliance costs are included to reflect the effect of non-tariff barriers of data restrictions. Our extensive simulations indicate that there is often clustering of consumers around local firms in highly restrictive data localization regimes, thus enabling local firms to effectively compete against global multinationals. However, results also indicate that while free cross-border data flow enables intense competition amongst producers, data localization restrictions often limit consumer choice due to its effect on price and quality of services.     

Benefit cost analysis of an import access request

Invasive species outbreaks are often unintended side effects of trade. In this paper partial equilibrium trade models and stochastic bioeconomic impact simulation models are combined to present a benefit cost analysis template to assess market access requests. The template is used to assess the likely regional economic welfare implications of a decision by Australian biosecurity regulators to allow the Chilean table grape industry access to the national table grape market. We show that consumption benefits expected to accrue to Western Australia are exceeded by increases in likely invasive species damage resulting from grape imports, implying that insufficient consumer gains are grounds to deny market access.     

Food sovereignty and agricultural trade policy commitments: How much leeway do West African nations have?

The 2008 food crisis has challenged the political legitimacy and economic efficiency of the liberalization of international agricultural trade. An alternative vision defended by the food sovereignty movement is that long-term food security cannot rely on dependency on food imports, but must be built on the development of domestic production with enough barrier protection to shelter it from world price fluctuations and unfair trading.The purpose of this paper is to look into whether the West African nations can achieve food sovereignty given their various trade commitments and other external constraints. The particularity of our approach is to combine a historical economic analysis with a political approach to food sovereignty and trade commitments.Our results suggest that external brakes on the development of food sovereignty policies are marginal, as the countries still have unused room for manoeuvre to protect their smallholder agriculture under the terms of draft World Trade Organization agreements and Economic Partnership Agreements and under the international financial institutions’ recommendations. Rather the international environment seems to be instrumented by West African states that do not manage to secure a national political consensus to drive structural reforms deemed vital and further the food security of the urban populations over the marginalized rural populations. Recently, the regional integration process has made headway with a common agricultural support and protection policy project that could herald an internal political balance more conducive to food-producing agriculture.     

Consumer satisfaction with food products

An important problem facing public policy makers is how best to measure market performance. Economists have traditionally used criteria such as the existence of monopoly forces, entry barriers, and externalities in production and consumption. Increasingly, however, policy makers are viewing the measurement of consumer satisfaction as an important additional approach to the assessment of market performance, even though consumer attitudes may lack some of the precision and objectivity of the economist's measures.¹ Responding to the growth of the consumer movement, policy makers are assigning a relatively high priority to the development of programmes designed to protect the consumer interest. Effective consumer protection programmes depend on the availability of information which can provide a basis for comparing levels of consumer satisfaction across a range of products and services, for identifying problem areas, and for effectively allocating limited consumer protection resources. Given the number of alternative foods on the market and the central role of food consumption in everday life, effective resource allocation is of special importance to policy makers concerned with food and agriculture.     

Consequences of further opening of the Korean dairy market

This paper develops a simulation of Korean dairy policy that is tailored to the data, institutions, and policies in South Korea. It compares potential effects of changes in trade and domestic policy to baseline projections to 2015. Beverage milk continues to be supplied from domestic sources, implying imports compete in the manufacture of tradable products. We model manufactured dairy product supply, demand, and trade on a milk fat and non-fat-solid component basis reflecting product fungibility over the 10-year horizon used for our trade policy analysis. We find that if the domestic price support is removed with no change in trade policy, the market price of raw milk falls by about 2% and raw milk production declines by 4.5%. Under substantial tariff cuts of 30–40% with no effective change in domestic dairy policy, Korean fat and non-fat-solid prices fall by 7% and 11%, fat and non-fat-solid imports rise by 9% and 7% and Korea raw milk production falls by about 2% relative to the baseline. Prices of Korean farmer-owned dairy inputs, labor, and capital fall by about 1%.     

Symbiotic production: The case of telecommunication pricing

In this paper we analyze a generalization of vertical monopolies in which monopoly suppliers trade essential inputs with one another. The most obvious applications of the model, which we call symbiotic production, are to postal and telecommunications services. We show how producers can use per-unit tariffs to achieve cooperative outcomes without colluding directly over consumer prices. We then show the firms have an incentive to collude in the setting of tariffs but that suchcollusion will lower consumer prices. This assumes that the suppliers are otherwise unfettered. In contrast, if the constituent monopolies are regulated, we show that collusion enables the firms to completely undo the restraints of regulation. The model has important policy implications for the international telecommunications market.     

The character of demand in mature organic food markets: Great Britain and Denmark compared

We investigate the organic food market in two selected European countries, Great Britain and Denmark, identifying main differences and similarities. We focus particularly on consumer perceptions and priorities, labelling schemes, and sales channels as a basis for assessing market stability and prospects for future growth. We employ a unique set of household panel data that includes information on stated values and concerns as well as registered purchasing behaviour. Most organic food on both markets is produced and processed by large-scale industrialised units and distributed through mainstream sales channels, consumer confidence being sustained at present by organic labelling schemes that appear to function well. However, a parallel market, based on the supply of goods through various direct sales channels to heavy users, prevails. We find that organic food purchase decisions are primarily motivated by ‘private good’ attributes such as freshness, taste and health benefits, attributes that may be perceived as being compatible with modern production and sales structure. Mature markets for organic foods nevertheless appear to be vulnerable to consumer dissatisfaction, particularly among heavy users of organic food products.     

国际贸易与内生经济增长——基于 DGE 理论分析与实证检验

本文基于开放条件下的内生经济增长理论,构建居民、贸易与非贸易企业三部门的动态一般均衡理论分析框架,演绎了出口贸易、消费品与中间产品进口贸易以及加工贸易对经济增长的效应及其内生作用机理,并采用动态面板数据模型GMM估计方法予以实证检验。研究发现,消费品进口贸易对经济增长具有相同单位的边际制约效应;出口贸易通过直接与间接拉动效应以及收入效应促进经济增长,中间产品进口贸易与加工贸易通过直接与间接推动效应以及收入效应促进经济增长;另外,出口贸易与加工贸易促进经济增长还存在“乘数”现象。本文的发现对于我国经济发展“新常态”背景下的贸易政策改革与创新具有启示意义。     

Standards, trade and competition in the emerging global information infrastructure environment

Decentralized construction of the Global Information Infrastructure (GII) is substituting market-driven, ‘de facto’ standards and voluntary agreements on standards for technical compatibility, in place of the engineering decisions once made by public (and quasi-public) telecommunications network operators. Due to strategic economic behaviours on the part of private businesses and national governments, the goal of a fully interoperable GII remains elusive. The Internet does not offer an entirely credible alternative model, as the standards that have facilitated its explosive growth also are contributing to serious congestion problems, and the solutions proposed point to the Internet's re-integration into the public switched telecommunications network. Technical standards will shape the GII's implications for international trade and competition, and thus raise important, but inadequately recognized issues for regulation, competition and trade policy.     

Changes in trade and domestic distortions affecting China’s agriculture

This paper assesses the implications of China’s trade and domestic policies for incentives to producers in China. It uses a price comparison methodology (nominal rates of assistance—at the border and the farmgate), with adjustments for exchange rate distortions in the first part of the sample period (1981–1994). On average, distortions to agricultural incentives have been reduced. In the early 1980s, on average, China’s domestic prices were far below international prices. There were substantial variations, however, between imported (which were being protected) and exported goods. During the 1980s and 1990s the gap between domestic and international prices for both imports and exports narrowed initially mainly due to the elimination of domestic policy distortions. Between the mid-1990s and 2004, trade liberalization policy furthered narrowed the gap between world and China farmgate prices. By the mid-2000s, China’s agriculture was operating with only small price distortions.     

Reducing transatlantic barriers on U.S.-EU agri-food trade: What are the possible gains?

In recent years, the EU and the U.S. have engaged in discussions to lower trade and investment barriers and strengthen transatlantic integration. For food and agricultural trade, non-tariff measures (NTMs) such as sanitary and phytosanitary measures (SPS) stand out as significant barriers. This study combines sector-level econometric modeling with an agriculture-focused computable generable equilibrium (CGE) model to simulate various transatlantic liberalization scenarios on U.S.-EU agri-food trade. The simulations quantify the effect from tariff removal and addressing NTMs. The magnitude of the gains depend upon the level of tariff liberalization, the depth of integration, and possible consumer demand changes.     

Competition Policy and Trade Barriers: Empirical Evidence from China

This paper examines the impact of competition policy on inter-regional trade barriers among provinces in China. Using data from 28 Chinese provinces for the period 1994–2013, we show that the implementation of competition policy—as measured by a number of indices that we construct—can effectively reduce inter-regional trade barriers. We provide results that are based on both fixed effects and instrumental variables estimators to support the causal nature of the established link. The effect is found to be more salient for provinces with a less corrupt political environment. The results are also shown to be robust across alternative specifications, alternative measures of competition policy, and inter-regional trade barriers.

     

Broadband infrastructure and export growth

With the digital transformation of the economy and society, high-speed Internet is becoming an important supporting infrastructure for international trade activities. This study treats the pilot policy of the Broadband China strategy as a quasi-natural experiment and investigates the ways in which broadband infrastructure development affects export trade in Chinese cities. Empirical results show that export trade in the pilot cities increases by 6.82%–18.8% on average as a result of the Broadband China policy intervention. Our study shows that this policy can effectively promote the use of Internet facilities, and broadband infrastructure can significantly promote the growth of a city's export trade. Broadband infrastructure influences export trade through the direct channel of improving information efficiency, which in turn lowers logistics costs, promotes trade efficiency, and reduces barriers to trade. There is no significant regional heterogeneity and urban characteristics heterogeneity in the export trade effect. Although broadband infrastructure can affect exports through the indirect channels of industrial structure and technological innovation, the direct effect accounts for much of the total effect.     

Economics at the FTC: Pharmaceutical Patent Dispute Settlements and Behavioral Economics

Economics at the Federal Trade Commission (FTC) supports both the competition and consumer protection missions of the agency. In this year’s essay we discuss two issues, one from each of the agency’s missions. First, we focus on intellectual property issues in pharmaceuticals. Specifically, we discuss the principal rationale for antitrust concerns about certain patent dispute settlements in the ethical drug industry. Then, we discuss consumer economics, our recent behavioral economics conference, and how behavioral economics influences our thinking about consumer policy.     

An explanation of intra-industry trade in identical commodities

A model of international trade under conditions of spatial price discrimination is developed in order to demonstrate that intra-industry trade is identical commodities can occur between two countries over a wide range of market structures. The geographic extent of intra-industry trade is shown to be inversely related to the degree of competition affecting imports in each country in the sale of the homogeneous commodity. Furthermore, the degree of intra-industry trade is directly related to the incidence of spatial price discrimination in favor of distant customers.