The importance of EU-15 borders for CEECs agri-food exports: The role of tariffs and non-tariff measures in the pre-accession period

This paper assesses the evolution of the EU-15 market access for the agri-food products, originating from CEECs. A gravity model technique has been used to assess the overall trade resistance (border effect), and to weight its various components such as tariff and non-tariff measures (sanitary and phytosanitary standards, other quality measures) in the pre-accession period (1999–2004). The findings reveal, despite the undertaken integration and trade liberalisation processes, a persisting and significant trade resistance for the CEECs’ agri-food exports to the EU market, even just prior their accession in 2004. Still present difficulties in market access at the time are partially explained by tariff and non-tariff measures, while a large part of border effect remains in the domain of other, presumably non-trade policy related factors (home bias, consumer preferences, etc.). These results indicate that despite the accession process (customs union and adoption of the EU standards), the trade integration of the enlarged EU market was not yet completed in 2004.     

Smallholder market participation: Concepts and evidence from eastern and southern Africa

This paper reviews the evidence on smallholder market participation, with a focus on staple foodgrains (i.e., cereals) in eastern and southern Africa, in an effort to help better identify what interventions are most likely to break smallholders out of the semi-subsistence poverty trap that appears to ensnare much of rural Africa. The conceptual and empirical evidence suggests that interventions aimed at facilitating smallholder organization, at reducing the costs of intermarket commerce, and, perhaps especially, at improving poorer households’ access to improved technologies and productive assets are central to stimulating smallholder market participation and escape from semi-subsistence poverty traps. Macroeconomic and trade policy tools appear less useful in inducing market participation by poor smallholders in the region.     

Cross-national adoption of private food quality standards

Retailer initiated food quality standards are important elements to market food and agricultural products. However, farmers’ certification proceeds at an unequal speed worldwide with some countries representing a large number of certified producers and others representing very few, if any. This study aims at analysing the adoption of two private food standards, BRC Food Technical Standard and GlobalGAP, at an aggregated cross-country level using data of 2007. Negative binomial models are applied to quantify the determinants of standards’ spread at an aggregated level. The results of the econometric analysis reveal some (potential) barriers for farms and firms in developing countries to access this type of organisational innovation. Certificates of both standards seem to be issued more likely in countries with established trade relations with Germany, the Netherlands and the United Kingdom, home countries of the standards. Furthermore, larger countries and countries with better institutional quality host more certified firms. Finally, a country’s level of economic development displays a clear non-monotonic relationship to the number of certified enterprises. Although no evidence for a general exclusion of developing countries can be found, the main implication of this paper is that third-party certification for export purposes seems to reinforce already existing trade relations, potentially hampering new entrants.     

Human Resource Management and International Trade

This article reviews recent developments in international trade theory that relate to issues of human resource management and industrial relations Some trade models with imperfectly competitive goods markets and thir liks to strategic trade and industrial policy and described. These models, results are shown to be sensitive to the incorporation of labor market imperfections. Applications of trade theory to international labor migration and human capital acquisition are also included.     

Do markets and trade help or hurt the global food system adapt to climate change?

Rapidly expanding global trade in the past three decades has lifted millions out of people out of poverty. Trade has also reduced manufacturing wages in high income countries and made entire industries uncompetitive in some communities, giving rise to nationalist politics that seek to stop or reverse further trade expansion in the United States and Europe. Given complex and uncertain political support for trade, how might changes in trade policy affect the global food system’s ability to adapt to climate change? Here we argue that we can best understand food security in a changing climate as a double exposure: the exposure of people and processes to both economic and climate-related shocks and stressors. Trade can help us adapt to climate change, or not. If trade restrictions proliferate, double exposure to both a rapidly changing climate and volatile markets will likely jeopardize the food security of millions. A changing climate will present both opportunities and challenges for the global food system, and adapting to its many impacts will affect food availability, food access, food utilization and food security stability for the poorest people across the world. Global trade can continue to play a central role in assuring that global food system adapts to a changing climate. This potential will only be realized, however, if trade is managed in ways that maximize the benefits of broadened access to new markets while minimizing the risks of increased exposure to international competition and market volatility. For regions like Africa, for example, enhanced transportation networks combined with greater national reserves of cash and enhanced social safety nets could reduce the impact of ‘double exposure’ on food security.     

Market structure and U.S. trade flows

Using samples of input-output table detailed industries, we test the impact of various elements of market structure on U.S. trade flows, at the industry level, holding factor proportions constant. Industry demand characteristics and the extent of scale economies have significant impacts on trade flows. Labor intensity at the industry level has the effects on trade flows which are predicted by the factor proportions theory. Capital intensity increases both import and export flows; this result, together with certain others, suggests the importance of trade among industrialized countries in producer goods.     

Farm resources,transaction costs and forward integration in agriculture: Evidence from French wine producers

This research aims to understand why French wine producers venture into direct sale to customers instead of selling bulk wine to wine companies. The empirical tests on the French Farm Census confirm the value of both Resource-Based Perspective and Transaction Cost Economics in understanding organizational choices in agriculture and food markets. Because asset specificity in wine trade is low on average, large wine producers have an advantage over smaller ones and so are more likely to venture into direct sale of generic wines. By contrast smaller wine producers are more likely to rely on the bulk wine market, which is less risky for them. In addition our model helps us to understand the effect of the State-sponsored certification of grape and wine quality, the Protected Designation of Origin system. All other things being equal, producers with vineyards of high reputation (PDO) are also more likely to bottle and sell their wines; we guess this is because they wish to capture the value of the PDO reputation, the collective brand name capital owned by the farmers. Finally, saving on transaction cost is only one side of the coin: the most educated wine producers can profitably reinvest their knowledge and capabilities into new activities. These choices have important consequence on the French Wine Supply Chain governance.     

Trade and invasive species risk mitigation: Reconciling WTO compliance with maximising the gains from trade

This paper analyses the issue of balancing the gains from trade with the risk of pest and disease transference. Two decision frameworks for determining whether or not to permit trade in a potentially invasive species-carrying good are presented. The first considers only the potential production losses resulting from an invasive species entering through a trade pathway, as is prescribed by WTO compliance. The second is a unilateral welfare-maximising approach which considers the consumer gains from trade, the loss of domestic producers’ market share and expected damage from the invasive species. It is shown that these alternative decision frameworks can be reconciled such that they produce the same outcome regarding whether or not trade is to be permitted. The key parameters which influence these decisions are also highlighted.     

A diagrammatical template for business market demand estimation

This article describes a template that can help guide managers through a minefield of complex product interactions and demand drivers on the way to producing a realistic demand estimation. It is based on many years of consulting and conducting postmortems to find out what went wrong when demand forecasts have gone awry.A menu of troublesome variables that make up a rogue's gallery of the worst offending causes of estimation error are presented. The premise being, if we are aware of the potential trouble spots in demand estimation, we are likely to avoid some of the more serious problems that plague market projections.A diagrammatical template is presented that shows these troublesome variables and where they enter into the demand evaluation process. Next, the template components are introduced to show how the various product interactions and drivers that affect demand estimation are used and how they impact market projections. Throughout, a list of dos and don'ts are provided along with a sufficient number of real-life disaster stories to reinforce the issues.     

Investing to access an adverse selection market

I analyse a market with asymmetric information and interdependent values. Accessing the market is costly and stochastic, e.g. requires lobbying, licences or R&D. For a range of parameter values, interventions that raise production or entry costs for all seller types increase trade, investment and payoff for all types. This effect is driven by a novel feedback loop between the market composition and the investment in access.     

The impact of biofuel growth on agriculture: Why is the range of estimates so wide?

The rapid expansion of biofuel production has generated considerable interest within the body of empirical economic literature that has sought to understand the impact of biofuel growth on the global food economy. While the consensus within the literature is that biofuel emergence is likely to have some effect on future world agricultural market, there is a considerable range in the estimated size of the impact. Despite the importance of this topic to policy makers, there has been no study that has tried to reconcile the differences among various outlook studies. This paper undertakes an in-depth review of some key outlook studies which quantify the impacts of biofuels on agricultural commodities, and which are based on either general-equilibrium (GE) or partial-equilibrium (PE) modeling approaches. We attempt to reconcile the systematic differences in the estimated impacts of biofuel production growth on the prospective prices and production of three major feedstock commodities, maize, sugar cane, and oilseeds across these studies. Despite the fact that all models predict positive impacts on prices and production, there are large differences among the studies. Our findings point to a number of key assumptions and structural differences that seem to jointly drive the variations we observe, across these studies. The differences among the PE models are mainly due to differences in the design of scenarios, the presence or absence of biofuel trade, and the structural way in which agricultural and energy market linkages are modeled. The differences among the GE models are likely to be driven by model assumptions on agricultural land supply, the inclusion of the byproducts, and assumptions on crude oil prices and the elasticity of substitution between petroleum and biofuels.     

The collective voice of unions and workplace training in Italy: New insights from mixed methods

Using a three-phase approach that combines quantitative (pooled OLS, fixed effects and IV) with qualitative (semi-structured interviews) analyses, we find that in Italy, workplace unions are more likely to enhance training when they sign a firm-level agreement and when they can get access to external funds for financing. We also identify three channels: what we call a ‘maturation effect’, double-track communication and watch-dog function. We argue that these results are consistent with the idea that the impact of workplace unions on training depends on the empowerment of its collective voice within an institutional framework that does not fit either of the standard models provided by collective and liberal market economies.     

The impact of trade liberalization in telecommunications services: The case of APEC countries

This paper examines the impact of liberalizing the telecommunications services sector on investment and output in the Asia-Pacific Economic Cooperation (APEC) countries by estimating a system of four structural equations that takes into account the causal relationship between national income and telecommunications infrastructure. The degree of openness to trade in telecommunications is represented by a carefully constructed index that reflects a country’s trade and investment policy in terms of market access, national treatment and regulatory principles. One interesting finding from the empirical analysis is that the effects of trade liberalization depend on the risk rating of a country. In countries with relatively high risk ratings liberalization reduces investment in telecommunications.     

Trade policies and variability in international grain markets

Increased instability in international market prices has created new problems for trade participants, particularly developing countries. However, it seems that importing country policies are primarily responsible for market variability. In most cases, a trade-reliant strategy appears more effective than an alternative policy of self-sufficiency. As long as countries continue to subsidize domestic consumption, international market controls appear likely to remain as key components of grain policy in importing countries.     

Fertilizer market liberalization and private retail trade in Kenya

This paper examined the factors influencing the entry and sales decision of private traders in fertilizer retail trade in a liberalized market using survey data from Kenya. A two-stage econometric model is used to examine traders’ entry and sales decision. The results provide insights into factors that are associated with private retail traders’ entry and sales decisions in an era of liberalized fertilizer markets. It shows substantial entry into fertilizer retail trade following market liberalization. Relatively limited investments in trading assets and equipment are predicted to hold back firm expansion. Implications drawn from the study provide insights into likely research and policy interventions.     

Agricultural market integration in the OECD: A gravity-border effect approach

This paper uses the border effect estimate from a gravity model to assess the level of agricultural market trade integration among 22 OECD countries for the 1994–2003 period. Empirical analysis confirms that the use of a gravity equation derived from theory, in the estimation of border effect, matters. A representative estimate of the border effect shows that crossing a national border within the OECD induces an average trade-reduction effect of a factor 13. This average value masks differences that are quite substantial in market integration, with value for intra-EU trade being higher while that for trade between the Central and Eastern European Countries (CEECs) is lower. The data show a process of strong integration in all the country-trade combinations involving CEECs. However, quite surprisingly, the intra-CEEC and OECD-CEEC integration processes are almost twice as strong as those in the EU-CEEC combination. Finally, the equivalent tariffs implied by the estimated border effects are not implausible compared to the actual range of direct protection measures.     

Fertilizer trade under market liberalization: preliminary evidence from Kenya

This paper reports results of a study aimed at identifying broad demand-side and supply-side influences on trade in inorganic fertilizers in Kenya, where, following decades of government control, the fertilizer market has been fully liberalized. Multiple regression analysis using data from a country-wide survey of fertilizer traders indicates that significant demand-side factors include agroecological conditions and maize market prices in the regions in which fertilizer traders operate. On the supply side, the number of years in fertilizer trading and access to credit are important. Implications for policy and research are drawn.     

The impact of international intra-firm trade on domestic concentration ratios

This paper examines the impact of intra-firm foreign trade on domestic concentration ratios and the interchangeability of trade-adjusted concentration ratios in structure-performance studies. Due to data limitations, previous efforts to adjust domestic concentration ratios have not incorporated the possibility that the largest domestic producers could also be importing the product into the domestic market. Foreign trade adjustments, both intra-firm trade by the leading firms and foreign trade in general, had a relatively small effect upon concentration in the majority of industries; however, approximately 20 industries were identified where foreign, trade is a potentially important competitive factor. Concerning the interchangeability of the estimated concent cation ratios, the results suggested that the measures were interchangeable in linear models, but were not interchangeable in log-linear models.     

The case for a more binding WTO agreement on regulatory principles in telecommunication markets

On February 5, 1998, the WTO agreement on basic telecommunications services entered into force. Although the WTO agreement is a step into the right direction its impact might be rather modest. This is because apart from the many exemptions, which are likely to undermine market access and national treatment commitments, the regulatory provisions laid down in the WTO agreement are neither specific nor comprehensive enough to ensure open market access. Because there is in most cases a lack of clear definition as to the terms and conditions of regulatory provisions, there is a great danger that governments might nullify the commitments by abusing the regulatory requirements.     

Good intentions,poor outcomes: Telecommunications reform in South Africa

As the first decade of democratic rule draws to a close in South Africa, this paper reviews the telecommunications reform process in terms of the performance of the sector against the twin national policy objectives of affordable access to communications services and accelerated development to meet the needs of a modern economy. It critiques the implementation of international reform models which have in practice tended to emphasise privatisation at the expense of other reform mechanisms—including competition and, in particular, regulatory measures. It argues that this has impacted negatively on affordable access and has inhibited market innovation.This paper identifies the root of the problem as the market structure. Designed around the vertically integrated incumbent operator, it induces inherently anti-competitive impertives that demands a resource-intensive regulatory response. The regulator has often not had the statutory powers, and seldom the capacity, to circumscribe the behaviour of the incumbent so that it does not impact negatively on new entrants. Without effective regulation, the assumed benefits of liberalisation—including more affordable access through improved management of the incumbent and more efficient allocation of resources in the market through competition—do not materialise.The paper argues that developing country telecommunications markets demand more from a regulator than simply meeting the threshold requirements of transparency and predictability via so-called international “best practice” models. Such a limited approach will not be sufficient to meet the challenges facing most developing countries. The highly imperfect nature of developing country markets, and the enormous income disparities and inequities that exist, require strategic regulation. This is necessary to enable innovative service provision, especially to under-serviced areas, and to facilitate fair competitive markets that promote the viability of the new entrants needed to build the information infrastructure—the infrastructure necessary for a country's participation in the global network economy.Simply removing all market-entry restrictions, however, is likely to place an even more onerous burden on already-struggling regulators and is unlikely to contribute to universal access and other developmental goals. A new policy approach involving the fundamental restructuring of the market is needed to remove the anti-competitive incentives that exist in the vertically integrated market structure that generally accompanies privatisation in developing countries. While a more horizontally structured market will not remove the incumbent advantage entirely, it is likely to reduce the need for constant adjustment of anti-competitive behaviour on the part of the incumbent, freeing up regulatory resources for more strategic regulation towards achieving national developmental objectives.