Liberalising the Movement of Natural Persons: A Lost Decade?

Liberalisation of international trade in services through the Movement of Natural Persons (Mode 4) remains one of the least negotiated issues of trade policy among the 144 members of the World Trade Organisation. Economists believe that there is a basic convergence of economic interest between the developed and the developing world for liberalising Mode 4. Yet the multilateral trading system has not facilitated greater worker mobility between the labour‐surplus and labour‐scarce countries. Is there any economic logic as to why cross‐border movements of workers have not followed the pattern predicted by international trade theory? Or are there strong socio‐political barriers that have come in the way of liberalising Mode 4? These are some of the questions the paper attempts to answer. The paper shows that the economic arguments against the free movement of natural persons are based on the narrow perspective of the welfare of domestic workers while ignoring the benefit it brings to the economy as a whole. Further, non‐economic arguments miss the point that the movement of workers under Mode 4 of GATS is temporary in nature, and so unlikely to have any lasting social and cultural spillovers. The paper gives specific illustrations from the recent past where temporary import of workers from labour‐surplus countries has enabled both developed and developing countries sustain their economic growth. It concludes by arguing that the environment for renegotiating WTO commitments under this important sector of international trade in services is better than ever before, even though the current world economic slowdown may delay actual negotiations for a while.     

Canada's Anti‐dumping and Safeguard Policies: Overt and Subtle Forms of Discrimination

Like many countries in the international trading system, Canada repeatedly faces political pressure from industries seeking protection from import competition. I examine Canadian policymakers’ response to this pressure within the economic environment created by its participation in discriminatory trade agreements such as the North American Free Trade Agreement (NAFTA). In particular, I exploit new sources of data on Canada's use of potentially WTO‐consistent import‐restricting policies such as anti‐dumping, global safeguards and a China‐specific safeguard. I illustrate subtle ways in which Canadian policymakers may be structuring the application of such policies so as to reinforce the discrimination inherent in Canada's external trade policy because of the preferences granted to the United States and Mexico through NAFTA.     

Trade and Exchange Rate Policies in Formerly Centrally Planned Economies

This paper examines the international economic policies of the eastern European and Soviet Successes States in the early 1990s which provide one of those wide‐open windows of opportunity when powerful vested interests are not lobbying for retention of an existing tariff structure. Moreover, the simultaneous abandonment of central planning by over two dozen countries provided a natural experiment in which a range of differing policies might have been pursued. Policymakers in transition economies have generally ended up pursuing liberal non‐discriminatory trade and foreign exchange policies. There are exceptions and the majority may be wrong, but the presumption is that, perhaps after a learning or trial‐and‐error process, decision makers have found the rules of thumb suggested by economists to be their best guide to international economic policy. This paper notes that integration of transition economies into the global trading system has been surprisingly successful. Almost all the countries in transition from central planning have accepted the WTO rule‐based system in principle, even if there are variations in trade policies and performance, and have generally pursued multilateral non‐discriminatory trade policies. In particular, the potential danger of regionalism proving more attractive than multilateralism has not eventuated. The revealed behaviour of policymakers suggests that trade liberalisation is a good rule of thumb and regional groupings among transition economies have been insignificant. Despite a proliferation of new currencies, varying exchange rate regimes, and differing degrees of currency convertibility, the general pattern has been to accept convertibility for current account transdactions, and in many cases to extend this to a de jure commitment and to allow substantial capital account convertibility. A general policy conclusion in favour of more open and non‐discriminatory trade and exchange policies have passed the test of acceptability by policymakers in over two‐dozen countries in this category.     

Issues for Business Ethics in the Nineties and Beyond

Nine issues of fundamental importance for business ethics are examined with a view to encouraging researchers in the field to direct their attention to them in the 1990s and beyond. The issues are related to organized labour, social dumping, international finance and Third World debt, tobacco promotion, arms trade, wealth concentration and taxation, pollution and resource depletion, international trading blocks, and the Canadian Business Council on National Issues and other business organizations.     

Makroökonomie und Populismus

Is the rise in populism driven by economic issues, e.g. inequality and stagnating incomes, or by social issues, e.g. illiberal views on gender, race and migration? This paper argues that it is impossible to distinguish between the two factors, as social issues have a profound impact on economic issues. Populists make use of this tight link and exploit the inability of mainstream policymakers to address the negative economic impact that open borders for goods, capital and labour have on a large number of people within their countries. The result is the return of economic nationalism, as it seems to provide policymakers with an opportunity to dismantle the policy constraints set by a globalised economy.     

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.     

产业内贸易与垂直专业化贸易比较及启示

二战以后,产业内贸易成为国际贸易主流,与此同时,在经济全球化背景下垂直专业化贸易也迅速发展起来.从理论上分析,这两种贸易形式产生、发展的基础和动因既有相同点又有区别.两种贸易形式存在密切关系,二者均以跨国公司为主体,并且垂直专业化构成产业内贸易的另一重要起因.文章对两种贸易形式的发展趋势、理论基础、相互关系进行了分析、比较,并在此基础上提出我国参与国际分工与贸易的相关启示.     

论反垄断法与贸易政策的互动关系

反垄断法与贸易政策是国际市场活动中被广泛运用的两个有效工具。如何发挥这两个工具的积极作用,实现国际市场的自由、公平竞争,提高全球消费者福利,是国际社会迫切需要解决的议题之一。通过对贸易政策和反垄断法在维护市场公平竞争秩序方面的各自实现途径的讨论,证明了他们是一种互动和互补关系。在全球化经济环境下,国际性贸易政策虽然得到了不断的完善。但是,国际反垄断法的发展却面临着重大的困难。因此,为真正实现国际贸易的公平自由竞争秩序,制订和完善国内反垄断法并推动反垄断法的国际化,具有相当的紧迫性。     

The future impact of Trans‐Pacific Partnership’s rule‐making achievements: The case study of e‐commerce

While policymakers and scholars often emphasise the significance of the rule‐making aspect when they discuss the benefits of negotiating free trade agreements (FTAs), we know little about the ways in which rules are actually made. We need impartial assessment of the status of rule‐making to draw any concrete policy implications. Moreover, “how international economic rules develop” in terms of enforceability has been a neglected but important research question for students of international economics and laws. International economic rules evolve through a series of FTAs that are signed by a different set of countries. By using the case study of e‐commerce chapters, this paper will specifically examine: (1) how earlier FTAs paved the way to the Trans‐Pacific Partnership (TPP) e‐commerce negotiations; (2) whether rule‐making achievements of TPP are substantial compared against earlier FTAs; and (3) whether rule‐making achievements of TPP, if any, are likely to have some impact on post‐TPP FTAs.     

Opening and linking up: firms,GVCs, and productivity in Latin America

This work explores the relationship between exports, global value chains (GVCs)’ participation and position, and firms’ productivity. To this aim, we combine the most recent World Bank Enterprise Survey in Latin American and Caribbean (LAC) countries with the Organisation for Economic Co-operation and Development and World Trade Organization trade in value-added data. To explore the above relationship, we adopt an extended version of the standard Cobb-Douglas output function including indicators of export performance and GVCs. We control for heterogeneity among firms (by country, region, and industry), sample selection, firms’ characteristics, and reverse causality. Our empirical outcomes confirm the presence of a positive relationship between participation in international activities and firm performance. They also show that both participation in GVCs and position within GVCs matter. These findings have strong policy implications and may help policymakers in choosing the best policy options to enhance the link between GVCs’ integration and firms’ productivity.     

Trade Liberalisation and Economic Performance: Theory and Evidence for Developing Countries

The last five decades have witnessed a profound evolution of economic policy in developing countries, particularly in the case of trade strategies. Both internal, as well as external, factors have prompted the need for more outward‐oriented (or liberalised) trade policy regimes. The creation of the General Agreement on Tariffs and Trade (GATT) in 1947 and the World Trade Organisation (WTO) in 1995 have been important driving forces for free trade. Since then, the major quantitative barriers to trade, i.e. tariffs and non‐tariff barriers (quotas, licences and technical specifications, among other restrictions), have substantially been reduced or dismantled. Also, the progress towards more liberalised trade regimes, mainly in developing countries, has been manifested in the trade and development literature. Major studies suggest that the performance of more outward‐oriented economies is superior to that of those countries pursuing more inward‐looking trade practices (Greenaway and Nam, 1988; Dollar, 1992; Sachs and Warner, 1995; and Rodríguez and Rodrik, 2000). Recent developments in the international trade literature focus on the potential dynamic effects of trade liberalisation, i.e. simplification of tariff structures and elimination of non‐tariff barriers, in reducing the incentives to rent seeking and in accelerating the flow of technical knowledge from the world market. Moreover, there have been important advances regarding the study of trade liberalisation and its impact on exports, imports and the balance of payments, largely neglected in the literature, often driven by supply‐side considerations.     

Migration and servicification: Do immigrant employees spur firm exports of services?

Services play an increasingly important role in production, employment and international trade but are subject to substantially higher trade costs relative to manufactured goods. Knowledge of how these trade costs can be mitigated is important for facilitating trade of services. In this paper, we analyse the role of immigrant employees as facilitators of firm exports of services, a role that remains largely unexamined. We bridge the gap in existing research by drawing on new data for nearly 30,000 Swedish firms during the period 1998–2007 within a heterogeneous firm framework. The results have important policy implications. As the multilateral approach to facilitating trade is challenged and more countries are imposing measures to restrict the cross‐country mobility of people, policymakers may need to find new ways to promote exports of services. Our results indicate that immigrant employees spur firms' export of services activities: hiring one additional foreign‐born worker can increase services exports by approximately 2.5 per cent, on average, with a stronger effect found for skilled and newly arrived immigrants. Therefore, policymakers could leverage the findings of this study to implement initiatives that utilise high‐skilled immigrants to promote services exports.     

Borders Redrawn: Measuring the Statistical Creation of International Trade

In this note, we quantify how much of the increase in the volume of international trade that took place since 1945 is attributed to the reclassification of within‐country trade to international trade owing to changes in national boundaries. We do so by imposing the territorial delimitations corresponding to 1946 to the current trade flow data, thus quantifying the volume of international trade that would not have been labelled international given national boundaries right after the end of World War II. Our results show that the effect of ‘boundary redrawing’ corresponds roughly to 1 per cent of the total volume of international trade. If colonial trade had been statistically considered to be within‐country (within‐empire) trade instead of international trade, the independence of colonies would have raised this effect to approximately 3 per cent of total trade.     

Corporate Social Responsibility and Psychosocial Risk Management in Europe

Corporate social responsibility (CSR) is a comprehensive concept that aims at the promotion of responsible business practices closely linked to the strategy of enterprises. Although there is no single accepted definition of CSR, it remains an inspiring, challenging and strategic development that is becoming an increasingly important priority for companies of all sizes and types, particularly in Europe. Promotion of well-being at work is an essential component of CSR; however, the link between CSR, working conditions and work organisation is still found to be unfamiliar to stakeholders. As CSR is strategic and is regarded by many companies and corporate leaders as an important development, it offers opportunities for psychosocial risk management, an area that is currently among the top priorities in working environment and well-being at work debates. However, the link between CSR and psychosocial risk management has not been addressed clearly before. This paper aims to explore the potential role of CSR in promoting well-being at work through the development of a framework for the management of psychosocial risks. As part of the research, key stakeholders [including the World Health Organization (WHO), the International Labour Organization (ILO), the European Agency for Safety and Health at Work (EU-OSHA), the European Commission (EC), employers’ associations, trade unions and other policy experts] across Europe participated in a survey, interviews and focus groups to assess and clarify the link between CSR and psychosocial risk management. On the basis of the findings, a CSR-inspired approach to the management of psychosocial issues at work is proposed. Such an approach can be a useful tool in contexts where, up until now, expertise and tradition in dealing with psychosocial issues have been lacking.     

全球贸易竞争对美国反垄断政策的影响

反垄断政策是美国政府最重要的经济政策之一。在贸易全球化时代,有观点认为,反垄断政策不利于美国企业在国际市场上的竞争,甚至认为应当将反垄断政策置于贸易政策之下。但美国政府接受了经济学家迈克尔·波特的理论,坚持激烈的国内市场竞争有助于美国企业国际竞争力形成的观点,反对将反垄断政策作为贸易政策的工具,并在政策取向上一方面对反垄断政策进行调整,使反垄断政策有助于推动企业创新;另一方面积极推动反垄断领域中的国际合作,为美国企业创造更加平等的竞争环境。     

Trade, competition and antidumping—Breaking the impasse!?

Recent reviews of the WTO, while cautioning against broadening its scope, nevertheless agree that antidumping concerns would need to be addressed “somehow”. Obviously, promoting international market access and “fair” competition is difficult in the presence of divergent rules for dealing with private market power and non-border restraints to trade. This is especially true once these differences are taken to justify preferences for highly discretionary trade policy measures in dealing with dumping concerns. Antidumping and the prerequisite competition issues will therefore have to be put onto the agenda of the new round of trade negotiations.     

Demystify Protectionism: The WTO Trade Policy Review of Japan

This paper reviews the eighth Trade Policy Review (TPR) for Japan. It begins with an appreciation of its fair and well‐balanced work in updating knowledge on the progress of policy reform in Japan. The TPR confirms the recovery of the Japanese economy with some notable improvements in its policy environment, the example of which is competition policy. On the other hand, there still remain notable trade impediments, particularly in agriculture. Some agricultural products are still heavily protected by complicated border measures. This paper provides some supplementary information, namely that the domestic production of most of the heavily protected products, with the exception of rice, are highly concentrated geographically, suggesting the politico‐economic background. The rise of regionalism is mentioned as another topical issue in Japan though the characteristics and significance of free trade agreement networking by Japan are not fully discussed by the TPR. The TPR praises Japan's effort in providing the generalised system of preferences (GSP), but this paper offers a somewhat sceptical view of the role of GSP as a useful tool for developing countries. Overall, the TPR for Japan is assessed as a good starting point for dealing with the remaining issues on international commercial policies in Japan.     

Patent protection and foreign direct investment

The importance of development and use of products embodying intellectual property rights has increased dramatically. The growing share of knowledge‐intensive products in worldwide trade, together with the increase in international technological competition, has magnified the importance of patents and other forms of intellectual property. The objective of this study is to examine the effect of patent protection on inward foreign direct investment (FDI). It also examines the relative importance of other variables such as market size, trade orientation, unemployment rates, and so on. The findings are supportive of the fact that the level of patent protection is a strong determinant of investment flows. A proper understanding of this relationship will help firms and governments devise appropriate intellectual property policy to encourage the growth and expansion of FDI. © 2006 Wiley Periodicals, Inc.     

How will EMU affect cohesion?

The new policy environment of EMU affects economic, political and social cohesion in different ways: the policy mix and menu will be reconfigured; it will provide for more macroeconomic stability in cohesion countries; economic competition will intensify and change patterns of specialisation; and comparison of living standards will become easier, which puts pressure on policymakers to reduce inequalities. This article assesses the significance of these effects and their likely consequences in the short, medium and long run. Then the salient cohesion issues as regards eastern enlargement are discussed. Finally, policy conclusions are drawn, mindful of the considerable uncertainties that warrant further research. joint editor of the Journal of Common Market Studies. He has just moved to the European Institute of the London School of Economics and Political Science, UK. He is also Visiting Associate Professor at the University of Aveiro     

The Social Clause in Trade Treaties: Implications for International Firms

Various advocacy groups and primarily domestic-focused firms in developed countries have been pushing governments to include a "social clause" in trade treaties with less developed countries. Such a clause is designed to link trading access to markets in developed countries with improvements in working conditions in poor nations. The implications of such a clause for internationally-focused firms and how managers can effectively deal with human rights issues in their foreign operations are examined. Various constituencies in this debate are identified and an integrated response system on the part of firms is presented. It is suggested that the best policy for firms to adopt would be to acknowledge the relevance of the social clause in today's global economy and work closely with the various advocacy groups to ensure continuing public support while avoiding overly restrictive clauses in international trading agreements.