The signaling power of trade protection

This paper proposes an empirical analysis to provide new insight into the trade diversion effects of antidumping (AD) policy. Trade diversion is the shift in trade from named countries in an AD investigation to non-named countries. Previous studies have concluded that AD action causes a considerable drop in exports from named countries, however the extent to which trade is diverted to non-named countries is still an open debate. This paper examines to see whether AD action on named countries can have signaling effects on non-named countries. To examine the trade effects on non-named countries, a time series data at an 8-digit product level is constructed for all cases initiated between 1997 and 2003 in the European Union. The paper provides evidence that antidumping policy has signaling effects on non-named imports.     

Differences in the determinants and targeting of antidumping: China and India compared

Despite both being developing countries, China and India have markedly contrasting patterns in their use and targeting of antidumping (AD) measures. We explore the factors driving AD use by these two countries, considering in turn macroeconomic, strategic and other determinants. We find more regular or systematic features of AD use by China, while India displays a less systematic pattern of AD use. Economic growth, AD club effect and free trade agreement participation are shown to constrain AD use by China. Compared to India, AD use by China is also more sensitive across industries. Furthermore, China targets developed countries more than developing countries, while India is less discriminating with respect to the country type it targets.     

Fiscal policy and private consumption in industrial and developing countries

This paper empirically studies the effects of fiscal policy shocks on private consumption. Further, it investigates if the initial financing needs of the government or previous fiscal deficits affect that relationship. We use yearly data between 1970 and 2000 for 40 countries, of which 19 are industrialized and 21 are developing countries. In general, the estimation results seem to indicate that government consumption shocks have Keynesian effects for both industrial and developing countries. In the case of tax shocks, the evidence is mixed. Furthermore, there is no evidence that favors the hypothesis of expansionary fiscal consolidations.     

India’s Green Revolution: Economic Gains and Political Costs

Research and development (R&;D) promotion policies are critical for economic development in the sense that they contribute to technical progress. Although it is true that policy space is restricted under the World Trade Organization (WTO) system, there are still some R&;D promotion policy measures made available to developing countries. It is thus necessary for developing countries to utilize such available measures. In addition to explaining the R&;D promotion measures available under the current WTO regulations, I provide suggestions for modifying the Uruguay Round Subsidies Code with respect to the R&;D promotion policies of developing countries from the viewpoint of “distributional fairness” in international trade relations.     

The Trade Effects of Indian Antidumping Actions

Antidumping (AD) has emerged as the most widespread policy impediment to trade in the last 25 years. One of the surprise proliferators of AD in the lesser developed world has been India, which has filed an outstanding number of 285 cases between 1992 and 2002. In this paper, I study empirically the effect of Indian AD cases on trade flows from other countries. I also look at the effect of AD cases on trade diversion from countries subject to or “named” in AD investigations to non‐subject or “non‐named” countries and conclude that Indian AD policy is effective. I use a unique dataset combining AD data from the World Trade Organization with trade data from Comtrade. The empirical model is estimated via the Arellano–Bond procedure.     

Do state trading exporters distort trade?

In this paper, we analyse the trade-distorting effects of state trading enterprises (STEs) which exist in some exporting countries. Because of these potential effects, several countries have raised the issue of state enterprises in the Doha Round negotiations in the WTO. The belief is that STEs in certain developed countries have trade effects which are equivalent to an export subsidy. STEs also exist in developing countries, though since the aim of government policy may differ from the developed country case, the trade distortion may be equivalent to an export tax. We present a theoretical model that is sufficiently general to allow us to consider the case of exporting STEs in developed and developing economies. The model is calibrated with data on two examples of STEs, one typical of an STE in a developed country, the other typical of an STE in a developing economy. In each case, we allow for differences in the nature of the STE's pay-off function. The overall conclusion is that STEs do distort trade and the trade distortion effect is potentially significant.     

Heterogeneous trade agreements,WTO membership and international trade: an analysis using matching econometrics

This article explores the heterogeneous effects of trade agreements (TAs) and World Trade Organization (WTO) membership on the volume of international trade. We extend Baier and Bergstrand’s (2009a) application of matching econometrics by distinguishing between different types of TAs and WTO participation and account for the endogenous nature of trade policy. For a panel data set covering 1960–2005 and 187 countries, we find that the treatment effect on international trade systematically varies with the type of TA and WTO membership.     

The Effects of Consumer Bliss on Welfare Economics

Some developed countries have sought to counteract what they see as unfair competition faced by their domestic industries arising from the employment of child labor in the production of consumer goods in developing countries by including a "social clause" in the World Trade Organization (WTO) charter. Many people and civil society organizations in developed countries are also genuinely concerned with child labor employment purely on humanitarian grounds. In this paper we have argued that a more appropriate approach to tackle the child labor problem would be to facilitate acceleration of growth in developing countries through greater, not less, integration of these countries into the world trading system. We have also argued that directing development assistance for improving institutions and social infrastructure would be more effective than trade sanctions.     

Institutions,Institutionalism: 1776–1974

Since developing countries were relatively free from the trade regulations relating to export promotion policies until 1994, the northeast Asian dynamic economies could pursue export promotion policies aggressively during the period of rapid economic growth. Under the current World Trade Organization (WTO) system, there are restrictions or even prohibitions on the developing countries' use of export promotion policies. One may doubt the fairness of the current WTO system, which regulates the use of export promotion policies regardless of different economic development levels. The current paper suggests various ways of allowing developing countries to develop their production capacities and exports of manufactured products. It also provides suggestions on modifying the current WTO regulations in favor of the export promotion policies of developing countries. Such special treatment of developing countries could be justified from the viewpoint of distributional fairness applied to international trade relations.     

Reconciling the WTO Effects on Trade at the Extensive and Intensive Margins

Empirical studies examining the impact of World Trade Organization (WTO) membership have produced disparate results. These studies, however, have focused on total aggregate trade flows. In this paper, we utilize disaggregated product level data to examine the impact of WTO membership on the product level extensive and intensive margin of imports. Utilizing the Poisson Pseudo-Maximum Likelihood (PPML) estimation that allows for heteroskedasticity in trade data and accounting for several estimation issues, we do not find a positive impact on either margins between WTO member country-pairs. Once we examine asymmetries in trade flows across countries based on their level of development, we find that developing WTO members experience an increase in the extensive margin from industrial member countries. Additionally, the industrial WTO members also experience an increase in the extensive margin from developing WTO members. Results suggest that WTO facilitates the North–South trade relationship, which has been largely absent in trade literature.     

Trade Liberalization and Wage Inequality: Evidence from India

We evaluate empirically the impact of the dramatic 1991 trade liberalization in India on the industry wage structure. The empirical strategy uses variation in industry wage premiums and trade policy across industries and over time. In contrast to most earlier studies on developing countries, we find a strong, negative, and robust relationship between changes in trade policy and changes in industry wage premiums over time. The results are consistent with liberalization‐induced productivity increases at the firm level, which get passed on to industry wages. We also find that trade liberalization has led to decreased wage inequality between skilled and unskilled workers in India. This is consistent with the magnitude of tariff reductions being relatively larger in sectors with a higher proportion of unskilled workers.     

Fiscal Reliance on Tariff Revenues: In Search of a Political Economy Explanation?

One "stylized fact" about trade policy is that trade taxes as a proportion of total tax revenue are inversely related to a country's economic development, as in countries with poor administrative capabilities trade taxes represent the easiest way for governments to raise revenue (Administrative Capabilities Hypothesis). In this paper we develop an alternative explanation based on political economy considerations: using data from 64 developing countries from 1982 until 1997 we find that the Administrative Capabilities Hypothesis must be complemented with a political economy explanation in order to be able to provide a better account of the relevant empirical evidence.     

反倾销措施的贸易救济效果评估

本文利用1997—2004年中国反倾销案例8位数税则号的涉案产品数据,考察了反倾销措施引起的指控对象国和非指控对象国的贸易模式的变化,在此基础上提出了反倾销行为贸易救济效果的证据。检验结果表明,中国反倾销措施对指控对象国的进口有明显的“贸易限制效应”;不仅征税案例,即使是无损害结案的反倾销指控仍然对指控对象国的进口贸易有重要影响,即反倾销具有“调查效应”;但是涉案产品可能在指控对象国和非指控对象国之间转移,这种“贸易转移效应”部分削弱了反倾销措施的保护效果;总体上看,反倾销仍然起到了救济本国产业的作用,因为无论是指控对象国还是非对象国的进口价格都会上升,从而控制了中国涉案产品的进口总量。     

Trade policy under the GATT/WTO: empirical evidence of the equal treatment rule

Abstract. A fundamental difference between multilateral trade agreements like the GATT and WTO and a preferential agreement is the multilateral agreements’ inclusion of a most‐favoured‐nation principle. Though MFN requires that members implement policies that provide equal treatment to all GATT/WTO countries, how far do members actually follow the MFN principle when so required? We empirically investigate a sample of GATT/WTO trade disputes and the effect of successful dispute settlement negotiations on the disputed product trade of third country exporters to the defendant country. We document evidence of trade liberalization consistent with defendant countries successfully applying the equal treatment rule. JEL classification F13     

How do US credit supply shocks propagate internationally? A GVAR approach

We study how US credit supply shocks are transmitted to other economies. We use the recently developed GVAR approach to model financial variables jointly with macroeconomic variables in 33 countries for the period 1983–2009. We experiment with inter-country links based on bilateral trade, portfolio investment, foreign direct investment and banking exposures. Capturing both bilateral trade and financial exposures in a GVAR fits the data better than using trade weights only. We use sign restrictions on the short-run impulse responses in the US model to identify the credit supply shocks. We find that negative credit supply shocks have strong negative effects on US and foreign GDP. Credit and equity markets in several countries respond clearly to the shocks. Exchange rate responses are consistent with a “flight to quality” to the US dollar. The credit supply shocks explain about a fifth of one-year-ahead output forecast error variance in the US and about a tenth in the euro area and the UK, but considerably less elsewhere.     

Institutional quality and the effectiveness of aid for trade

Trade policy barriers and high transaction costs hinder developing countries from taking the full advantages of the global trading system. In order to help developing countries overcome the problem, the World Trade Organization (WTO) launched the Aid for Trade (AFT) initiatives in its Ministerial Conference held in Hong Kong in 2005. We examine the effects of AFT inflows on bilateral trade costs facing 133 developing countries while accounting for differences in their location on the contours of various measures of institutional quality. Our results from the estimation of a mixed effects (random-intercept and random-coefficient) model indicate that institutional quality significantly affects the extent to which AFT reduces bilateral trade costs. An important policy implication of our findings is that an economically robust and sustainable reduction in bilateral trade costs facing developing countries requires the presence of both promulgated and effectively functioning institutions such as regulatory power and the rule of law.     

The Economics of Trade Disputes, the GATT's Article XXIII, and the WTO's Dispute Settlement Understanding

Economic theory has yet to provide a convincing argument that can explain why the threat of retaliation under the GATT/WTO dispute settlement procedures is not sufficient to prevent countries from violating the agreement. We consider the question of why countries violate the agreed–upon rules in the face of explicit provisions which allow them to legally adjust their trade policy. Using the GATT/WTO institutional structure and the guiding principle of reciprocity, we provide a theory suggesting when countries will choose to implement protection in violation of GATT/WTO rules, as opposed to under the relevant safeguards provisions, when trade policy adjustments are necessary between "negotiating rounds."     

TRADE,STRUCTURAL REFORM,AND INSTITUTIONS IN SUB‐SAHARAN AFRICA

Sub‐Saharan African countries have traditionally lagged the rest of the developing world in terms of overall trade relative to gross domestic product. But, there is growing interest among these countries to initiate trade policies and improve quality of institutions as a way to promote trade and boost foreign direct investment. This article extends the gravity model of trade to include proxies for trade reform policy and institutional quality among the 15 countries of the Economic Community of West African States (ECOWAS) for data spanning 1984–2006. Alternative methods of estimation based on ordinary least squares, Heckman two‐step procedure, and Poisson pseudo‐maximum likelihood produce predictions that are consistent with the standard gravity model. They further highlight the evidence of restrictive trade policies and weak institutions that contribute to the failure of ECOWAS countries to boost bilateral trade. (JEL F13, F15, O19, O55)     

Global trade flows and economic policy uncertainty

ABSTRACT

This article investigates the impacts of economic policy uncertainty (EPU) on global trade flows in gauging international trade developments. We employ a global vector autoregressive (GVAR) trade model, augmented with value-added bilateral trade linkages, that allows for quantifying the effects of economy-specific uncertainty shocks on exports and imports of individual economies. We find substantial spatial propagation in the temporal dynamics of international transmission of shocks amidst the manifestations of cross-border global value chains (GVCs) with China’s accession into the WTO. We provide evidence for the significance of EPU of China and the United States, particularly the latter, in influencing global trade flows. Our results show that while the US impacts can largely be attributed to its indirect trade linkages with other economies, the impacts of China can be relegated more to its direct GVC linkages. The findings have implications on trade protectionist inclinations of the current-term US government and the ongoing efforts of China’s policymakers in steering macroeconomic rebalancing for sustainable growth.     

入世后我国农业竞争力浅析

农业竞争力是入世后最受人关注的问题之一,文章从加入WTO组织我国所签订的一系列关于农业贸易和出口的协定做了分析,并以此为基础分析我国入世后的农业生产情况和出口贸易情况,从农产品质量、农产品投资、农业产业化三个角度分析了农业竞争的劣势和与国外的差距,并提出了提升我国农业竞争力的措施建议：加快农业产业化步伐;调整农业结构;重视农业高新技术的发展与科技的普及,科教兴农;积极发展具有比较优势的产业;建立农业生产的质量标准体系;完善交通运输、仓储业;提高农民素质;加强农业服务体系建设、改善农业基本生产条件以及农业生态环境。