Penetration of industrial country markets by agricultural products from developing countries

About 55% of food and about 60% of non-food agricultural exports of the developing countries are sold in industrial country markets. Market access is therefore important.While the developing countries have been able to increase the market penetration of their manufactured exports in industrial countries at a remarkable rate of about 8% in the 1970s, market penetration in agricultural commodities has generally been less successful.From 1970 to 1980 the developing countries were able to increase their market penetration in processed agricultural commodities from 3.5 to 3.7%, which amounts to an average annual increase of only 0.6%. In basic agricultural products like sugar, maize, tomatoes and beef they even incurred losses in their market share that corresponded to an increase in the degree of self-sufficiency (and probably of protective trade barriers) of the industrial countries, in particular the EC.     

Trends and patterns of the international tropical hardwood trade

In spite of the rapid expansion of tropical hardwood exports since 1960, there was no change in the structure of the trade. For a more equitable distribution of gains from the trade, tropical developing countries need to move away from log exports into domestic processing of wood. The main obstacles to future expansion of tropical hardwood exports are a lack of necessary complementary inputs in the producing countries and the restrictions to market access in the major importing countries. Rationalization of the production and trade of tropical hardwoods could contribute significantly to world welfare.     

Unrestricted Market Access for Sub-Saharan Africa: How Much Is It Worth and Who Pays?

Initiatives to improve market access for the poorest countrieshave recently been announced by the EU, Japan and the USA. Thispaper assesses the impact of these initiatives and others thatmight be taken for a subset of 37 Sub-Saharan African countries(SSA-37). We find that fully unrestricted access to all theQUAD countries (EU, USA, Canada and Japan) would produce substantialgains for SSA-37, leading to a 14% increase in non-oil exports($2.5 billion) and boosting real incomes in SSA-37 by about1%. Most of these gains would come from preferential accessto the highly protected Japanese and European agricultural markets.The smallness of SSA-37 ensures that the costs of trade diversionfor the QUAD, other developing countries and the world as awhole are negligible.     

PROBLEMS IN EXPANDING JAPAN'S IMPORTS OF MANUFACTURES FROM DEVELOPING ECONOMIES: A SURVEY*

The Japanese economy is now the second largest market economy, with a large trade surplus. And yet, Japan's imports of manufactures have long been very low relative to its GNP, when compared with other industrial countries; its ratio of manufactured imports to GNP was in the range of 2.1–2.7% in the 1980-87 period, as compared with 8.5–10.3% for the industrial countries as a whole or 4.7-7.2% for the United States. The share of developing economies in total imports of manufactures in Japan is about the same as, if not higher than, those for most other industrial countries. If Japan's ratio of manufactured imports to GNP were to rise in the future to approach closer to those of other industrial countries, Japan's imports of manufactures from developing economies could be two to three times what they are today, even if Japan's GNP does not increase at all and the share of developing economies in Japan's manufactured imports does not increase. This paper is an attempt to probe the potential of the Japanese market for imports of manufactures from developing economies in terms of rising ratio of such imports to GNP. The paper explores the reasons why Japan's ratio is exceptionally low, on the basis of existing literature. (a) Japan's ratio of manufactured imports to GNP has remained exceptionally low compared with those for other industrial countries. (b) Japan's ratio of manufactured imports from developing economies to GNP has remained distinctly low despite the recent surge in such imports. (c) If a part of the reason for the low ratio for Japan was a market access problem as often alleged, the problem is not with formal import barriers such as tariffs and formal non-tariff barriers because these barriers in Japan are no higher than in other industrial countries. As for informal import barriers, evidence found indicates that: (i) Administrative guidance and flexibly managed competition policy, which in the past had considerable effects of limiting imports, appear to have declined-in importance, but they still have import-limiting effects in certain areas. (ii) Market access difficulties involving import procedures, product standards, testing and certification requirements, which were enormous in the past, may have also decreased in severity over the last decade, but problems in these areas persist. (iii) There are aspects of the Japanese distribution system and practice that seem to make foreign access to the Japanese market significantly more difficult than the access by Japanese exporters to the markets in other industrial countries. Distribution in Japan suffers from overregulation. (iv) Users of manufactured products in Japan are sensitive to quality, perhaps more so, on the average, than in other industrial countries. Does the recent upsurge in Japan's imports of manufactures suggest that the traditional import behavior of Japan is changing? Japan's manufactured imports measured in yen increased by 18 and 27 percent in 1987 and 1988, respectively, and those coming from developing economies increased even more rapidly. There is also some evidence that price and income elasticities of demand for manufactured imports may have increased recently. These are encouraging, but it remains to be seen whether the trends will continue far enough into the future to bring Japan's import behavior more into line with those of other industrial countries. If they do, implications for the market prospects of manufactured exports from developing economies could be far-reaching. Outstanding questions are: (i) How much of the recent increase in manufactured imports is attributable to the appreciation of the yen (price effect)? How much is attributable to the increase in income or industrial output (income effect)? How much is attributable to removal of formal and informal import barriers effected so far (structural change)? Has consumer taste changed? (ii) Why have Latin American countries not been successful in promoting their exports of manufactures to Japan, when Asian exporters have been so successful? (iii) Up until now, the share of developing economies in Japan's manufactured imports has not been particularly low compared with those for other industrial countries, but is this share likely to fall or rise in the future? (iv) What is the likely impact of recently increased direct investment (DFI) by Japanese manufacturers in developing economies on the imports of their products into Japan?     

International trade in used cars and problems of economic development

This paper provides a price-theoretic explanation of the well-known phenomenon that automobiles in developing countries depreciate less rapidly and are scrapped at a greater age than they are in industrial countries. This paper then argues that the renewal of barriers to free trade in used cars would lead to substantial welfare gains for developing countries through both capital gains implicit in the arbitrage and positive externalities from car repair industries. Negative externalities from increased car supplies are evaluated and the final part of this paper considers what policies might be needed to develop international trade in used cars on a large scale.     

The integrated programme for commodities

The gains from stabilizing commodity prices are likely to be rather small. The distribution of such gains among producers and consumers is uncertain. Compensatory financing is a cheaper and more effective means of dealing with the problem of fluctuating export earnings. The developing countries have some scope for cartel pricing in the tropical beverages, but hardly in any of the other ten ‘core’ commodities. A common fund is not an economically essential feature of the commodity programme, and will not lead to savings in terms of resources. As a group the ‘core’ commodities do not face serious import barriers in the developed countries. In sum, the integrated commodity programme, if implemented, may produce some, but probably rather limited benefits to the developing countries. Some of these could be at the cost of the developed countries, and it is not clear if the whole scheme is a positive-negative-, or zero-sum game.     

Export subsidies and minimum access guarantees in agricultural trade: a developing country perspective

The paper presents a framework for and results from a quantitative analysis of two proposals to GATT, made as part of an effort at containing or rolling back the spread of non-tariff barriers in agriculture. The first proposes export subsidies, which would be financed by the producers themselves, requiring no government outlay. The second calls for a minimum access for importers. This analysis examines the magnitude of the effects on trade flows, world prices, the impact on the production, consumption, and trade of the OECD countries and on foreign exchange earnings of less developed countries (LDCs), of minimum access as applied to sugar trade — one of the most protected products in OECD countries and one with great potential for LDC exporters. Results are then compared with an analysis of more comprehensive trade liberalization in the sugar market, i.e., complete removal of trade barriers in all OECD countries.     

Accessing Modern Science: Policy and Institutional Options for Agricultural Biotechnology in Developing Countries

The private sector dominates biotechnology research in industrialized countries, but there are major market failures in developing countries in accessing the new tools and technologies. The public sector, national and international, will have to play a major role in filling this gap. This paper provides an overview of options that countries of different sizes and capacities can employ to gain access to the research tools and technologies that they need to address issues of relevance to poor producers and consumers. Particular attention is given to how public–private partnerships and market segmentation are being employed to access proprietary tools and technologies.     

Trade Balance： Numbers Can be Deceiving

I. Introduction Trade disputes have become more prevalent and acute in recent years. Almost all disputes have centered on trade balance and/or market access of certain merchandise or services. It is commonly believed by the public, media and politicians that trade surplus resembles mercantilism and trade deficit represents vulnerability. This is a major reason why Sino– US trade deficit and dispute settlements in the WTO relating to China have been stealingTrade Balance: Numbers Can be …     

在两级市场准入体系下实现我国技术的梯度跃迁——基于技术性贸易壁垒理性化的思考

在全球技术性贸易壁垒理性化过程中产生的两级市场准入体系使发达国家和发展中国家在全球技术梯度的相对位置具有相当的“稳定性”,而发展中国家采取的学习战略又进一步削弱了其技术性后发优势,毫无疑问,技术创新战略就成为后发国家的必然选择。由于渐进性创新往往会导致技术的依附性乃至经济的依附性,所以,突破性创新才是实现技术梯度跃迁的根本。     

China’s fare share? The growth of Chinese exports in world trade

The growth of Chinese exports in market share over the past two decades is a singular event in the history of world trade. Using data from 1995–2010, we document this growth in a variety of ways. We show that the expanded trade is pervasive. Virtually every country in the world has seen China claim a larger share of its import market. Then, we use Constant Market Share analysis to determine which country or countries have lost market share as China’s trade has grown. Contrary to much discussion in the popular press, we find strong evidence that other developing countries have not seen export shares fall as a result of China’s gains. Rather, our results suggest that China’s share growth has come largely at the expense of exporters based in developed countries, especially Japan and the United States.     

中外贸易摩擦的新动向及应对战略

随着中国在世界贸易中地位的提高,贸易摩擦问题日益凸显。其新动向主要表现为：摩擦手段从传统贸易壁垒转向新贸易壁垒,摩擦对象从发达国家向发展中国家蔓延,贸易摩擦争端的内容迅速扩大、涵盖众多产品,贸易摩擦领域从微观层面向制度层面延伸。应对中外贸易摩擦的新动向,不仅要客观地看待贸易保护主义,更要重视贸易摩擦的政治解决途径,同时注重提高国内企业市场竞争能力,不断完善市场经济制度。     

ECONOMIC INTERDEPENDENCE AND INTERNATIONAL INTERACTIONS : THE IMPACT OF MARKET POWER ON DYADIC CONFLICT AND COOPERATION

This article presents a theoretical approach to analysing how a country with market power could affect international relations. The liberal view and trade‐conflict model claim that if countries seek to protect their trade gains, trade will reduce conflict between pairs of countries, designated “actors” and “targets”. The main purpose of this paper is to examine the effect of market power on the gains from trade. Once the distribution of trade gains is changed between countries, the conflict and cooperation relationships between countries will also alter. We apply the trade‐conflict model to derive two propositions as follows: (1) the more monopoly power over exports a monopolistic target has, the greater the amount of actor‐to‐target conflict; (2) the more monopsony power over imports a monopolistic target has, the greater the amount of actor‐to‐target conflict. To summarise, these hypotheses will predict that a country with market power reaps the gains from trade and will exhibit less conflict and more cooperation, whilst the country that is exploited will exhibit more conflict and less cooperation.     

Testing the limits of privatization: Argentine railroads

Just how far can privatization be pushed, and with what consequences? Based on a study of Argentine railroads, this paper concludes that even large, unprofitable firms in developing countries faced with market failures can be privatized, but the gains from doing so depend on how badly the state enterprise was performing to begin with, and the potential for introducing competition in the market and for the market. The broader lesson is that when both market failures and government failures are present, a public-private solution is preferable to a purely private or a purely public solution. Privatization is not a panacea but potentially a palliative, when it comes to reducing subsidies or coping with regulatory failures.     

ANTI-DUMPING AND MARKET ACCESS: A NOTE

For the duration of the currently stalled round of trade negotiations (the Doha Development Round) attention focused on the plight of developing countries under the current trade rules. One of the aspects under discussion is market access, and in particular the (ab)use of anti‐dumping measures to limit market access so that the progress made towards trade liberalisation is eroded. A popular assertion is that developed countries use anti‐dumping measures to protect their own industries against competition from developing countries. Part I of this short research note briefly takes stock of developments in this regard since the inception of the World Trade Organisation (WTO) in 1995. How has the use of anti‐dumping (AD) measures evolved? Who are the most active initiators of AD investigations and who are the victims? What is the spread between initiations of AD investigations and the actual imposition of AD measures? In Part II we consider selected AD issues, such as the determination of dumping margins and injury, administrative discretion, and the longevity of AD decrees.     

Market Access Asymmetry in Food Trade

Using a bilateral trade equation derived from a monopolistic competition model, we investigate market access reciprocity in food trade among the United States, Canada, the European Union and Japan. We explore country- and industry-specific market access asymmetry through a border effect approach. Our findings reveal marked asymmetries in reciprocal border effects, both across countries and industries. Trade policy measures, particularly non-tariff barriers (NTBs), the degree of product differentiation and a ‘home bias’ in preferences, are important factors in explaining levels in border effects. Asymmetries in border effects are mainly explained by trade policies. JEL no.  F13, F14, Q17     

Explaining liberalization commitments in financial services trade

The paper examines the determinants of market access commitments in international financial services trade in the General Agreement on Trade in Services (GATS). Based on a theoretical model, it empirically investigates the role of domestic political economy forces, international bargaining considerations, and the state of complementary policy. The empirical results confirm the relevance of the model in explaining banking and (to a somewhat lesser degree) securities services liberalization commitments. The findings imply that those who seek greater access to developing country markets for financial services must do more to counter protectionism at home in areas of export interest for developing countries. JEL no. D78, F13, G20     

A comprehensive economic partnership between India and Japan: Impact,prospects and challenges

This paper examines the benefits and challenges of the 2011 Comprehensive Economic Partnership Agreement (CEPA) between India and Japan, specifically the ways to maximize gains from their complementary economies, trade and FDI relations. It also measures the partnership's economy-wide impact empirically, and its role in regional and global integration. An analysis of the trade intensity indices shows that the bilateral trade flow is small considering the other country's importance in world trade, suggesting the existence of great potential for improving trade relations. The computable general equilibrium (CGE) analysis of the economy wide impact of the CEPA suggests that tariff reductions will create a marginal increase in output growth for both India and Japan as compared to the business as usual scenario. In terms of the effect on exports, India's exports to Japan would increase more than those of Japan to India while positive net welfare gains are expected for both countries as a result of trade liberalization. This is in contrast to the study by Ahmed (2010), which finds welfare gains only for Japan, not for India. Furthermore, one of the striking results of the paper is that Japan will not reduce its heavy reliance on the Chinese market, though India will. In general, India, compared to Japan, will gain more, if CEPA materializes by 2020. Japan too will have welfare gains in spite of opening up the agriculture sector with 100% tariff reduction by 2020. Both countries need to accelerate structural reforms to remove the border barriers in addition to reducing tariffs, in order to reap maximum benefit of their economic partnership.     

Stock Market Development and Economic Growth: The Case of Selected African Countries

Abstract: This paper studies the effect of stock market development on economic growth in 14 African countries in a dynamic panel data modelling setting. Results largely show a positive relationship between stock market development and economic growth. Further analyses, based on the level of economic development and stock market capitalization, are also conducted. The results reveal that the positive influence of stock market development on economic growth is significant for countries classified as upper middle income economies. On the basis of market capitalization groupings, stock market developments play a significant role in growth only for moderately capitalized markets. The general trend in results shows that low income African countries and less developed stock markets need to grow more and develop their markets to elicit economic gains from stock markets.     

Efficiency, competition, and the development of life insurance in France (1870-1939): Or: should we trust pension funds?

French life insurance remained underdeveloped in comparison with other countries of similar financial development during the period between 1870 and 1939. We show that technical peculiarities of the contracts used and their interaction with macroeconomic fluctuations explain the wide fluctuations we observe in insurance operations. Nevertheless, these fluctuations are not sufficient to explain the industry’s long-term stagnation. Low returns paid to clients, resulting from very conservative investment strategies, were the main reason for that stagnation, since only those interested by the life-cycle related aspects of insurance contracts continued to put money in these institutions, while most savers invested directly in the market or through State-owned financial institutions. The main reason for such an investment (and then low-growth) strategy is the existence of a set of conservative regulations and a stable oligopoly in the industry from the 1880s onwards. We suggest that established insurance companies were able to impose regulations and barriers to entry blocking the access of competitors to their market, so maintaining a hold on a small but very profitable market.