Evaluating the outcomes of trade liberalization in Uzbekistan: impacts and paths forward

Most countries have implemented export-oriented development strategies with the objectives of improving their economic stability and improving resource allocation efficiency. Export tax, which has been an integral part of trade policies for centuries, has not been given adequate attention by the World Trade Organization (WTO) or the economic literature. Export taxes on primary commodities serve as indirect subsidies to manufacturing and processing industries by lowering the domestic price of inputs, and also have a positive effect on government revenue. Conversely, export taxes can have a negative impact on the producers of raw materials and externalities for trade partners. The government of Ethiopia applied a 150% export tax on raw hides and skins (RHS) and semi-finished leather products in 2008, and another 150% export tax on crust leather in 2012 in order to encourage the leather manufacturing industry. The aim of this study is to examine the export trends of Ethiopia’s raw hides and skins and finished leather products, and to analyse the effect of export tax on Ethiopia’s leather industry’s export competitiveness. A linear trend analysis model was used to analyse the export trends of raw hides and skins and finished leather products. This study evaluated export volume data from 1997 to 2014 in order to estimate the trend coefficients. The results of the model showed that Ethiopia’s RHS and semi-processed leather products export had declined by -38.06% and significant at 1% significant level; this is due to the heavy export tax imposed by the government to increase the production and export of finished leather products. Meanwhile, finished leather products and footwear have increased by 75.34% and 44.37% respectively, and significant at 1% significant level. The comparative advantage analysis was used to examine the revealed comparative advantage (RCA) of Ethiopia by comparing selected countries. The results indicated that Ethiopia was a RCA of raw hides and skins and semi-processed leather products more than one (RCA > 1) before 2008; after the export tax implementation in 2008, the RCA became decreased, conversely, the RCA of Ethiopia’s finished product more than one for the period 2006 to 2014 and increased more after 2008. South Africa has comparative advantage only on the export of raw hides skins and semi-processed leather product (RCA>1). Nigeria was not stable RCA for both raw hides and skins and finished leather products and in most year revealed comparative advantage greater than one (RCA >1). The RCA indexes of footwear for all three countries were less than one except Ethiopia in (2007, 2008 and 2012). The RCA provides information on advantage to exports, such as product comparisons with other competitive countries. However, the RCA does not show the sources of advantage (growth), therefore the constant market share (CMS) model was used to indicate the source of advantage. The CMS model has been used to evaluate the competitiveness of Ethiopia’s leather products. The export value data of 2007 were used as the base year, whereas data in 2013 were considered as the year after the export tax implementation and increase. The results indicate that the implementation of the export tax has reduced the competitiveness of raw hides and skins and semi-processed leather products, but increased the competitiveness of the finished leather products in the world markets. The overall results showed positive export growth (2.55), which is most likely achieved by an increase in the export competitiveness of the leather industry of 2.25. The positive competitiveness value indicates that Ethiopian finished leather products are competitive with other exporters in selected markets (Italy, China and Hong Kong). Conversely, Ethiopia’s leather products have negative commodity composition effects and market composition effects (-0.132 and -0.262, respectively). The negative commodity composition effect shows that, because of the export tax, the export of Ethiopian raw hides and skins and semi-processed leather products have decreased, while the imports of these products have grown faster in selected markets. The same is true for negative market composition effects; because of the export tax, the demand for raw hides and skins and semifinished products decreased in selected markets.Even though the government imposed the export tax to reduce the export of raw hides and skins and semi-processed leather products to encourage the finished-product manufacturing industry, there is a shortage in the supply of raw materials. This need highly improved the supply of raw hides and skins and the quality of the leather-processing enterprises by constructing a new policy on livestock management and hides and skins collections. In the short run, the export tax may enhance the competitiveness of the leather industry. However, in the long run, it may lead to efficiency losses, lower welfare, and lower growth, because a temporary measure can have long-lasting effects. The Ethiopian government should consider reducing the export tax in the long run to make the industry as competitive as South Africa and other exporting countries.

Computable General Equilibrium (CGE) models are now routinely utilized for the evaluation of trade policy reforms, yet they are typically quite highly aggregated, which limits their usefulness to trade negotiators who are often interested in impacts at the tariff line. On the other hand, Partial Equilibrium (PE) models, which are typically used for analysis at disaggregate levels, deprive the researcher of the benefits of an economy-wide analysis, which is required to examine the overall impact of broad-based trade policy reforms. Therefore, a PE-GE, nested modeling framework has the prospect of offering an ideal tool for trade policy analysis. In this paper, we develop a PE model that captures international trade, domestic consumption and output, using Constant Elasticity of Transformation (CET) and Constant Elasticity of Substitution (CES) structures, market clearing conditions and price linkages, nested within the standard GTAP Model. In particular, we extend the welfare decomposition of Huff and Hertel (2001) to this PE-GE model in order to contrast the sources of welfare gain in PE and GE analyses. To illustrate the usefulness of this model, we examine the contentious issue of tariff liberalization in the Indian auto sector, using PE, GE and PE-GE models. Both the PE and PE-GE models show that the imports of Motorcycles and Automobiles change drastically with both unilateral and bilateral tariff liberalization by India, but the PE model does a poor job predicting the overall size and price level in the industry, post-liberalization. On the other hand, the GE model overestimates substitution between regional suppliers due to “false competition” and underestimates the welfare gain, due to the problem of tariff averaging in the aggregated model. These findings are shown to be robust to wide variation in model parameters. We conclude that the linked model is superior to both the GE and PE counterparts.

The potential impact of a liberalization of global trade on developing nations is a controversial subject. The liberaliza-tion of global agricultural trade, in particular, has been the focus of the debate for many years now and is part of the current WTO negotiations. Trade policies are believed to have influenced a country’s comparative advantage. Comparative advantage as a concept for evaluating the patterns of trade, is widely accepted and often used in theoretical and policy discussions. Livestock and livestock products, in the global trade, account for about one sixth, by value, of all agricultural trade. Iran is the one of main producers of hen egg in the world (FAO, 2004). Higher-than-global cost prices are the main disadvantage of the Iranian hen egg industry. The industry comprises of 700 million broiler day-old chicks, 10 million broiler breeders and 50 million layer day-old chicks. Hen egg is one of the Livestock products which are part of the non-oil export in Iran and its export consistently faces with fluctuation during last years. This paper looks at the performance of hen egg export and examines the comparative advantages indices like: revealed comparative advantage (RCA), revealed symmetric comparative advantage (RSCA) and (revealed competitive advantage(RC) for Iran and world main producers over the period 1990-2005. The source of data from 1990-2005 are supplied by F.A.O (2006). The changes in Iran’s export structure were compared with main producers ones. The results of the research showed, the trade and production policies and economic behavior of producers and exporters have been in such a way that they could not show a appropriate and timely response of world, also the re-vealed instabilities in the trends of RCA, RSCA and RC indices during the study period led to the conclusion that there is no well defined strategy and plan for utilization of low price production factors, effectiveness human power, knowledge of bargaining power and target markets. The objective of this paper is to try to identify: 1) The export comparative advantage of Iranian hen egg; 2) Its changing during the time; 3) The comparative advantage of Iranian hen egg in competition with other countries which are famous in trade and production of hen egg.

The demand for Indonesian essential oils in the global market has trended quite well in the past decade. However, there has been no significant effort to increase the competitiveness of Indonesian essential oils in the global market. Seeing the increasing demand for Indonesian essential oils and the competition between the fierce producing countries, it shows that Indonesian essential oils have the potential to be developed, especially by looking at Indonesia's position which is in the 6th order as the world's essential oil exporter in the last ten years (2011-2020). The purpose of this study is to determine the competitive position of Indonesia's essential oil exports in the international market using a comparative advantage approach and competitive advantage with the five main export destination countries of Indonesian essential oils (United States, India, France, China, and Singapore) using the Revealed Comparative Advantage (RCA) analysis method, based on comparative advantage analysis, Indonesia's essential oil position commodities are said to be strongly competitive because Indonesia's essential oil commodities have a comparative advantage or RCA>1 value in all major export destination countries that are the object of research, with the highest competitiveness between Indonesia and France. This happens because of the trend of export value that decreases from year to year and the market is less dynamic. Indonesian essential oil commodities can be declared quite strongly competitive but development is still needed so that Indonesian essential oil commodity products are increasingly in demand in export destination countries so that export market share increases consistently from year to year and Indonesian essential oil commodities are increasingly competitive.

Nigeria’s comparative advantage for the African Continental Free Trade Area (AfCFTA), has been investigated by this work. The specific objectives of this study are calculating the Revealed Comparative Advantage (RCA) and the Revealed Symmetric Comparative Advantage (RSCA) of Nigeria, and computing and comparing the Revealed Comparative Advantage (RCA) and the Revealed Symmetric Comparative Advantage (RSCA) of Nigeria, Ghana and South Africa. Time series data of Nigeria’s, Ghana’s and South Africa’s export products namely raw materials, intermediate goods, consumer goods and capital goods were obtained from the World Integrated Trade Solution (WITS). The RCA and RSCA of raw materials, intermediate goods, consumer goods and capital goods were computed using the Balassa index, and it was found that Nigeria has comparative advantage in the export of raw materials but has comparative disadvantage in the export of intermediate goods, consumer goods and capital goods. Compared to Ghana and South Africa, Nigeria can profitably export raw materials to AfCFTA trade partners because, though Ghana and South Africa also have comparative advantage in the export of raw materials, theirs is lesser than Nigeria’s. Unlike Nigeria, Ghana and South Africa have relative advantage in intermediate goods export trade. In the export of consumer goods, Nigeria, Ghana and South Africa all have comparative disadvantage, but the position of South Africa is better than that of Nigeria and Ghana. Similarly, Nigeria, Ghana and South Africa have comparative disadvantage in the export of capital goods, however, the position of South Africa is better than those of Nigeria and Ghana. Based on the findings, this study recommends that Nigeria should continue to strengthen its raw materials exports and at the same time, pursue policies and programmes that would improve the comparative advantage positions of its intermediate goods, consumer goods and capital goods export trade. In the area of trade negotiations, the findings of this study has been recommended to the Nigerian Office for Trade Negotiations (NOTN) for adoption in its preparations of guidelines on the rules of origin for stakeholders’ negotiations under AfCFTA Key words: Revealed Comparative Advantage, Revealed Symmetric Comparative Advantage, Goods, Free Trade Area, Nigeria. JEL Classification Codes: F10, F11, F12, F14.

Research background: Globalisation and economic integration are the reasons for which the competitiveness of economic entities is analysed more and more often in the context of their relations with the international market. One of the ways to assess the competitiveness of the Polish food sector is an analysis of comparative (relative) advantages in the export of this sector’s products.
 Purpose of the article: The objective of this paper is to assess comparative advantages in Polish export of food products to the European Union against a background of selected groups of non-food products.
 Methods: The study used the B. Balassa’s revealed comparative advantage (RCA) index. The study is preceded by a brief review of foreign trade results. The source of data was the WITS-Comtrade commercial database. The analysis was carried out at the level of the HS sections (in commodity terms). The research period covered the years 2003–2015.
 Findings & Value added: In the years 2003–2015, export of food increased nearly six times and its import — more than 4.5 times. The major partners of Poland as regards trade in food were the EU countries. The food sector was one of few sectors of the economy with the positive trade balance. Polish export to the EU was characterised by a diversified level of comparative advantages. From among 20 HS sections, in 2015 Poland had comparative advantages in export to the EU countries for products from 10 sections (2 food and 8 non-food). Those products accounted for 11% and 70% of Polish export to the EU, respectively. The development of Polish foreign trade in food products during the Polish membership in the EU as well as fairly high comparative advantages in the export of these products to the EU indicate the competitiveness and significant importance of the Polish food sector for the national economy.

Research background: Globalisation and economic integration are the reasons for which the competitiveness of economic entities is analysed more and more often in the context of their relations with the international market. One of the ways to assess the competitiveness of the Polish food sector is an analysis of comparative (relative) advantages in the export of this sector?s products.
 Purpose of the article: The objective of this paper is to assess comparative advantages in Polish export of food products to the European Union against a background of selected groups of non-food products.
 Methods: The study used the B. Balassa?s revealed comparative advantage (RCA) index. The study is preceded by a brief review of foreign trade results. The source of data was the WITS-Comtrade commercial database. The analysis was carried out at the level of the HS sections (in commodity terms). The research period covered the years 2003?2015.
 Findings & Value added: In the years 2003?2015, export of food increased nearly six times and its import ? more than 4.5 times. The major partners of Poland as regards trade in food were the EU countries. The food sector was one of few sectors of the economy with the positive trade balance. Polish export to the EU was characterised by a diversified level of comparative advantages. From among 20 HS sections, in 2015 Poland had comparative advantages in export to the EU countries for products from 10 sections (2 food and 8 non-food). Those products accounted for 11% and 70% of Polish export to the EU, respectively. The development of Polish foreign trade in food products during the Polish membership in the EU as well as fairly high comparative advantages in the export of these products to the EU indicate the competitiveness and significant importance of the Polish food sector for the national economy.

Green tea is an export commodity produced by Indonesia. This commodity is produced from tea plantations in Indonesia. Currently, the value and volume of green tea exports are still lower than those of black tea. Therefore, it is necessary to study the comparative advantage and potential export for green tea in the international market. The novelty in this research is combining the comparative advantages and export potential of green tea which has not been researched previously. This study aims to analyze the comparative advantage and potential export of Indonesian green tea in the international market. The data used is Indonesian green tea export from 2006 to 2023. The data sources are UN Comtrade and the Central Statistics Agency. This study used the revealed comparative advantage (RCA) method, the trade specialization index, export product dynamic (EPD) method and X model. The results obtained indicate that the comparative advantage of green tea in the international market is relatively weak, as evidenced by the RCA value of less than 1. The trade specialization index is positive. A positive trade index indicates that Indonesia is classified as a green tea exporter. The weakening of Indonesia's comparative advantage in green tea has not impacted its position in the international market. The position of green tea in international trade based on export product dynamics is still in the rising star position, which means that Indonesian green tea is still in a profitable position. Based on the X model, Indonesian green tea still has the potential to be developed in the international market. Keywords: comparative advantage; export product dynamic; green tea; trade specialization index

The objective of this research is to analyze competitiveness of Indonesia pulp and paper products, particularly chemical wood pulp, newsprint, printing-writing paper and other paper-paperboard products in international market in the period 2002-2011. The Revealed Comparative Advantage (RCA) and the Trade Specialization Index (TSI) were then calculated to determine comparative and competitive advantages, respectively. In addition, the Constant Market Share (CMS) technique was also used to identify factors that affect competitiveness of those products. The results show printing-writing paper and chemical wood pulp had an extremely strong comparative advantage (RCA index > 2,50), newsprint a moderate to strong comparative advantage (0,89 < RCA index ≤ 1,70), and other paper-paperboard a weak comparative advantage (0,63 < indeks RCA ≤ 0,92). Further, TSI indicated newsprint (0,84 ≤ TSI ≤ 0,99) and printing-writing paper (0,84 ≤ TSI ≤ 0,93) were in a maturation stage, chemical wood pulp in an export expansion stage (0,39 ≤ TSI ≤ 0,58) and other paper-paperboard in an import substitution stage (-0,14 ≤ TSI ≤ 0,16). In order of importance, world market growth, competitiveness, and product composition were the influential factors that affect Indonesia’s pulp and paper products competitiveness. Keywords: pulp and paper, competitiveness, revealed comparative advantage, trade specialization index, constant market share

Tanzania is the most promising current and the destination market for the world trade due to its copious resources and strategic location. It is well known in the region as the trade hub as it provides the influential and suitable trade solutions and investments. The aspiration of this paper is to analyse the Revealed Comparative Advantage (RCA) for the topmost export sectors and commodities in Tanzania from 2009 to 2012 by inspecting and evaluating its potency and competence in the world market compared to exports from other countries. Balassa’s index of Comparative advantage (RCA) was utilized to demonstrate the competitive sectors and commodities comparative advantage together with export data from UN com-trade and International Trade Centre (ITC). The outcomes show that Tanzania has significantly strong comparative advantages in sectors of traditional cash crops such as coffee, tea and spices and commodities found in mineral resources as the leading export sector and commodities for the period of four years with RCA greater than one. However, many sectors demonstrated lower RCA compared to individual commodities and the export products have been waning every year, the situation that needs the government to initiate the immediate measures to overcome such problem.

Import tariffs are typically defined at a very detailed level, which is then used in trade negotiations. The WTO Framework Agreement of July 2004 proposes the use of a “tiered” formula where tariff lines classified in higher ‘bands’ are subject to proportionally higher cuts. Exceptions to the general rule, like sensitive products, are also defined at the tariff line level. Despite the relevance of tariff structure on trade liberalization, computable partial or general equilibrium models usually represent more aggregated products. In this respect, the literature suggests that market models can be combined with detailed tariff modules. We propose a new methodology to more accurately aggregate tariffs from the tariff line level to the one required by computable equilibrium models. The Tariff Reduction Impact Model for Agriculture (TRIMAG) uses the highest possible level of disaggregation (8 digits) and allows implementing tariff cuts and deriving the domestic price drops foreseen by alternative trade policy scenarios. Aggregated tariffs are derived by considering the substitutability effects in consumption between the tariff lines corresponding to the same aggregate product. We incorporate the tariff aggregates of TRIMAG resulting from a WTO agreement into the Common Agricultural Policy Regionalized Impact (CAPRI) partial equilibrium model. Differences between the standard tariff aggregation of CAPRI and the newly implemented methodology are illustrated. Results show that, when tariff cuts are applied at the 8 digit level, whether the substitution in consumption between tariff lines will result in a lower or higher aggregate tariff cut than the one that should directly be applied to the aggregate product is an empirical question. The selection of a limited number of sensitive tariff lines, if their share in the consumption bundle is high, might significantly raise the tariff for the corresponding aggregated product.

Aims: The study aims to analyze the dynamics of export and import growth, variability, and the competitiveness of Indian agricultural commodities. It also examines the comparative advantage and revealed competitiveness of Indian farm exports in the global market. Study Design: A descriptive and analytical study based on secondary time-series data (2013–2022), to assess India’s agricultural trade performance. Place and Duration of Study: The study used data from the ITC Trade Map and Agricultural Statistics at a Glance (Government of India) for the period 2013 to 2022. Methodology: Analytical tools applied include the Compound Annual Growth Rate (CAGR) to measure export and import growth, the Cuddy–Della Valle Instability Index (CDVI) to assess variability, and trade indices such as Revealed Comparative Advantage (RCA), Revealed Symmetric Comparative Advantage (RSCA), and Revealed Competitive Advantage (RC) to evaluate specialization and competitiveness. Results: India's total agricultural exports grew steadily, with a Compound Annual Growth Rate (CAGR) of 6.08%, while imports increased by 9.57%, resulting in a consistent trade surplus. The Cuddy–Della Valle Instability Index indicated moderate variability in exports (25.59%) and in imports (27.4%). Among commodities, sugar (19.37%), rice (10.07%), and marine products (6.58%) recorded the highest export growth, while oilseeds and coffee showed declining trends. The Revealed Comparative Advantage (RCA) analysis indicated that rice (RCA 16.8–19.8), spices (13.0–18.3), tea (4.8–5.8), and copra (up to 11.1) had substantial comparative advantages, whereas wheat (0.07–1.7) and maize (0.23–1.01) exhibited weak or declining competitiveness. The Revealed Symmetric Comparative Advantage (RSCA) values for rice (0.90), spices (0.88), and tea (0.11) confirmed India's strong export specialization in these commodities. Overall, India maintained a favorable agricultural trade balance and global export presence, particularly in traditional crop sectors. Conclusion: The findings indicate a steady improvement in India’s agricultural exports, though competitiveness is weakening for certain cereals and horticultural crops. Policy measures to promote export diversification, value addition, and stable trade infrastructure can enhance India’s long-term agricultural trade performance.

PurposeThe purpose of this paper is to analyze the competitiveness of selected services: business, financial, transport and travel services in developing countries in relation to that of the rest of the world based on three indices of revealed comparative advantage.Design/methodology/approachThe study uses revealed comparative advantage (RCA) indices to measure developing countries' comparative advantages in selected services for the period 1998‐2003.FindingsStrong comparative advantages exist for many developing countries in transport, and travel services. There is substantial room for improvement in financial and business services. Trade liberalization and lack of adequate preparation appears to have resulted in a weakening of their comparative advantages over the years. However, their revealed comparative advantages remain, by and large, stable and do not show a fundamental shift in the structure of their comparative advantages.Originality/valueThere are no studies examining developing countries' comparative advantages in services. The findings and policy recommendations can be used by developing countries to improve the competitiveness of their service sectors.

CGE models are utilized for the evaluation of trade policy reforms, yet they are typically highly aggregated, limiting their usefulness to trade negotiators interested in impacts at the tariff line. Partial Equilibrium (PE) models used for disaggregate analysis lack the benefits of an economy-wide analysis required to examine the overall impact of trade policy reforms. This suggests the need for a PE-GE, nested modeling framework to support trade policy analysis. In this paper, we develop a PE model that captures international trade, domestic consumption and output, using CET and CES structures, market clearing conditions and price linkages, nested within the standard GTAP Model. In addition, we extend the welfare decomposition of Huff and Hertel (2001) to this PE-GE model to contrast the sources of welfare gain among models. To illustrate the value-added of this model, we examine the impact of multi-lateral tariff liberalization on the Indian economy, with special focus on the auto sector, using PE, GE and PE-GE models. The PE model does not predict the change in overall size and price level for the industry well, while the GE model underestimates the aggregate welfare gain due to tariff averaging. It also fails to account for the change in industry composition resulting from trade reform. These findings are robust to wide variation in model parameters. We conclude that the linked model is superior to both the GE and PE counterparts.

PurposeThis study aims to analyze the export competitiveness of Bangladesh's apparel industry by identifying the specific product categories that help sustain its export comparative advantage.Design/methodology/approachCompound annual growth rate (CAGR) and market share (MS) are calculated between 2011 and 2020 at the two- and four-digit level apparel product categories within the harmonized system (HS) to analyze the industry’s growth and export dominance. Trade competitiveness (TC) at the four-digit level, revealed comparative advantage (RCA) and normalized revealed comparative advantage (NRCA) at the two-, four- and six-digit-level apparel product categories are computed for the same 10-year period to investigate the industry’s export competitiveness. Major export destinations of the top 5 exporting product categories are identified to understand the factors facilitating the industry’s growth. A non-parametric Spearman rank correlation analysis evaluated the association between the RCA and NRCA indices.FindingsAmong the 34 product categories at the four-digit level, 29 consistently demonstrated an export comparative advantage, as did 34 out of 217 six-digit level sub-categories. In contrast, 12 sub-categories at the six-digit level consistently exhibited a comparative disadvantage in Bangladesh's export competitiveness. Furthermore, the TC measure identified 28 categories at the four-digit level with a robust comparative advantage. 30 categories displayed a positive CAGR, and Bangladesh asserted significant market dominance over 26 product categories at the four-digit level.Research limitations/implicationsThis study's implications are significant for various stakeholders in Bangladesh and other apparel-exporting industries, encompassing government entities, industry officials, policymakers, investors, researchers and students. Nevertheless, limitations arise from the study's reliance on RCA and NRCA as competitiveness indicators, particularly its adoption of a macro-level approach for measurement without exploring a micro-level perspective. This constitutes a notable constraint in the study's analytical framework.Originality/valueThis study contributed novelty and enrichment to the existing academic literature by identifying distinct apparel product categories that contribute to the industry's growth.