RTAs' Proliferation and Trade‐diversion Effects: Evidence of the ‘Spaghetti Bowl’ Phenomenon

This paper investigates the trade‐diversion effects of regional trade agreements (RTAs), so‐called spaghetti bowl phenomenon (SBP), in multilateral trade. The SBP is due to the proliferation of RTAs. Thus, I investigate the relationship between the number of RTAs concluded by a country and the additional trade value attributed to a RTA. Using bilateral trade data in a sample of 119 countries, from 1995 to 2012, my main finding reveals a negative trade effect between them, confirming the existence of SBP in multilateral trade. However, results could not conclude the evidence of a negative effect of overlapping RTAs, involving the existence of SBP, within North–North, North–South or South–South trade. But, the additional trade value attributed to a RTA concluded with EU countries or US seems to confirm significantly a trade‐diversion effect because of the number of RTAs signed by these countries.     

Trade policy with several goods and ‘market linkages’

In this paper we demonstrate a substantial role for trade policy in a competitive model, finding that: (a) an export subsidy may benefit the exporting country; (b) a ‘voluntary’ export restraint may benefit the importing country; and (c) a countervailing duty may benefit the importing country even if it has no effect on the foreign price of that good. These results are in sharp contrast to the conventional wisdom from two-good or partial equilibrium models, and are derived in a framework of several goods. The pattern of substitution and complementarity across goods - or ‘market linkages’ - determines the role for trade policy.     

An Interim Assessment of the US Trade Policy of ‘Competitive Liberalization’

Since 2001, the Administration of George W. Bush has pursued a trade policy known as Competitive Liberalization. This policy envisages a series of mutually‐reinforcing and sequential steps to open markets abroad to US companies, to strengthen market‐oriented laws and regulations overseas, and to place the United States at the centre of the world trading system. Foreign and security policy considerations have influenced US trade policy making, perhaps more so than in the 1990s. To date the principal outcome of this policy has been the negotiation by the United States of numerous free trade agreements, mainly with developing countries, individually or in sub‐regional groupings. In addition to characterising this policy in detail, the principal purpose of this paper is to assess the logic underlying this approach to trade policy making and whether Competitive Liberalization has begun to fulfil the promise spelled out for it at the beginning of this decade.     

Globalization and the ‘confidence game’

We show that governments in developing countries have an incentive to play the “confidence game” — wherein the need to win the confidence of the international capital market ‘can actually prevent a country from following otherwise sensible policies and force it to follow policies that it would normally consider perverse’. This incentive arises because of a combination of a ‘conformity bias’ and ‘good news bias’ in governmental decision making in an open economy, which results in inefficient outcomes which increases rather than decreases the threat of devaluation. While institutions that encourage greater transparency and the public revelation of information, may often mitigate this inefficiency, on some occasions increased transparency may even exacerbate the inefficiency.     

Horizontal and Vertical Intra‐industry Trade: An Empirical Test of the ‘Homogeneity Hypothesis’

In this paper, we study if and how country‐specific factors affect intra‐industry trade (IIT) when heterogeneity among sectors is allowed for. The paper is novel in that it is the first that addresses an issue raised by Greenaway et al. (Oxford Bulletin of Economics and Statistics, 1999, 61, 365). Specifically, employing data on a sample of OECD countries over a 10‐year period (1997–1998), we build on and take forward a methodology pioneered by Balassa and Bauwens (Economic Journal, 1987, 97, 923) to study the determinants of horizontal and vertical IIT using a multi‐industry approach. In doing this, we seek to avoid the more extreme measurement problems by allowing for heterogeneity among sectors when country‐specific factors are analysed and among countries when industry‐specific factors are considered. The results are compared to those obtained using the traditional method that does not consider intersectoral heterogeneity. We find that the two models yield statistically different results. Moreover, the tests regarding the choice of model – that is, econometric tests designed to compare one model with another when different sets of explanatory variables are used – confirm the relevance of intersectoral heterogeneity in affecting IIT. To the best of our knowledge, a similar analysis has not yet appeared in the empirical literature on IIT.     

Some Lessons From ‘Developing’ Countries' Trade Policy Reviews in the GATT Framework: An Enforcement Perspective

It is one thing to draw up regulations for international trade, and yet another to apply them; but it is also a completely different thing to explain them fairly in a report for the contracting parties….¹     

An evolving historical paradigm: from ‘home economics' to ‘family and consumer sciences’1

With the professional name change in the United States of ‘home economics' to ‘family and consumer sciences’, the purpose of this paper is to facilitate communicating an understanding of our profession to our students. This paper focuses on an historical perspective depicting a progression of conceptualizations about the profession. Four developmental models are presented to provide a system of organization that will help students develop their professional identity. This paper is a reflection of an individual journey to gain a personal-professional identity. The sharing of this pilgrimage and the visual models that have been developed to enhance its communication have become a valuable resource and meaningful part of an undergraduate core class that provides students with the initiative to begin their own professional clarifications.