Trade Balance Deficit Research Articles

QUARTERLY OUTLOOK ON MONETARY, BANKING, AND PAYMENT SYSTEM IN INDONESIA: QUARTER I, 2017

Globally, the economy continues to recover. The economic growth in AS increases supported by solid consumption and increase on non-residential investment, as well as the economy of Tiongkok, supported by private investment and better export performance. European economy also better off with stronger consumption and export, and the reduction of geopolitical risk post the presidential election in France. The economy in Japan also increases supported by stronger domestic and export demand. This global trend supports the growth in Indonesia that rises to the level of 5,01% (yoy), with the pillars of exportperformance, better global demand and commodity prices, as well as higher government expenditure – particularly on investment – and the household consumption. Spatially, the national growth was mainly from Java and Kalimantan due to their better export performance. Inflation increases slightly particularly related to price regulation implemented in early 2017. Spatially, inflation occurs in most area except Sumatera who recorded deflation. The balance of payment recorded a surplus arisen from financial and capital surplus of 7.9 milliard dolar AS. However, the current account recorded deficit due to the deficit of oil trade balance and primary income. The reserve increases to 121.8 miliar dolar AS, accompanied with stronger Rupiah with lower volatility relative to peer countries. Following the monetary ease on previous Quarter IV, 2016, the monetary transmission is better yet not optimal due to the prudent practice of the bank on allocating credit. The interest rate decreases reflected on daily PUAB O/N reduction by 7 point to 4.23%. The deposit rate also decreases as well as the lending rate with larger decrease. Lookingforward, the growth in 2017 will be higher than 2016 on the range of 5.0 – 5.4%, while inflation will be around the target of 4 + 1%. We need to anticipate the impact of Fed Fund Rate increase, the lower of FED balance, and the trade and fiscal US policy, as well as the geopolitical dynamics across regions particularly in Korean Bay. Bank Indonesia will keep strengthening his policy mix and macroprudential, and his coordination with the government to ensure the inflation control, greater stimulus for growth, and the implementation of structural reform run on the right track, and hence preserve the sustainable economic development.

United States of America's Change in International Trade Policies that Effect ASEAN Community

The purpose of this study is to study the United States of America’s Change in International Trade Policies that Effect ASEAN Community. The study is done by documents studied, in-depth interview with the international traders and specialists from the international trade organizations in the total of 21 people that had given main information. The study results found that the products that had directly effect from the changing of the U.S.’s international trade policies are the products that have GSP rights and the products that have been accused of using child labors or the use of forced labors. However, it has not effected that high due to the products that have balance of trade deficit are the products that American investors used ASEAN countries as the manufacturing bases. Therefore, proactive protection guidelines preparation from the international trade policies changed are to elevate many products quality to the higher level than asking for privileges and if there must be trade agreement, it should be done by trade agreements and investment descriptions between the United States of America and ASEAN community. Thus, ASEAN community must apply for old customer preservation policy and searching for new customers than abiding on old trade markets and to reduce commercial exploitations between one another.

The Impact of Exchange Rate on Market Fundamentals: A Case Study of J-curve Effect in Vietnam

This study examines if there is an equilibrium relationship between gross domestic product (GDP), exchange rate fluctuation and trade balance in long-term and short-term in Vietnam. The results show that the short-term and long-term exchange rate fluctuations impact the trade balance in Vietnam; both ARDL (Autoregressive Distributed Lag) and ECM (Error Correction Model) methodologies implied that exchange rate has a statistically negatively impact on the trade balance. Particularly, Autoregressive distributed lag (ARDL) utilized to test the long -term impact, shows the trade balance deficit becomes worse when the REER (real effective exchange rate) increases. ECM (Error Correction Model) equation based on the long-term cointegration equation and impulse response, reveals that the domestic currency devaluation could not improve the trade balance, indicating that the J-curve effect does not hold on the dong, the currency of Vietnam.

Argentina–Import Measures: How a Porsche is worth Peanuts

AbstractThe dispute Argentina-Measures Affecting the Importation of Goods concerns a series of measures imposed by Argentine authorities on economic operators as a condition for obtaining import licenses. These measures were introduced with the goal of advancing the Argentine government's stated policies of re-industrialization, import substitution, and elimination of trade balance deficits. From a legal point of view, the least interesting feature of the dispute was the substantive compatibility of these measures with Article XI:1 GATT as they clearly constituted import restrictions. Identifying and classifying the measures involved, however, proved more challenging: based on vague policy guidelines, devoid of any legal basis, and consisting largely of wholly discretionary ad hoc action by the authorities, clouded in confidential obscurity, the measures escaped familiar categories and distinctions of WTO law. From an economic perspective, although Argentina's measures appear to have had no impact on its overall imports, they imposed large costs on foreign companies, as well as on Argentine importers and consumers.

WAEMU Trade and Current Account Balance Deficit Analysis: A Panel VAR Approach

Our study focuses on the analysis of the main determinants which have an effect on trade and current account balance. We empirically investigate the effect of money supply (M2), real exchange rate, income, inflation, investment, and house-hold consumption expenditure on the trade and current account balance of WAEMU for the period 1980-2013. The examination of monetary and absorption approaches to the balance of payments motivate the inclusion of income and money supply (M2). The conventional approach of elasticity motivates usage of exchange rates. We adopt the panel VAR method which additionally includes a simulation of variance decompositions and impulse response functions for transmission of shocks and further deductions. The study found a negative and statistically significant effect of money supply, household consumption expenditure on trade Balance. We found also a significant and positive effect of real exchange rate, income, inflation, and investment on the trade balance. A significant and negative relationship between money supply, investment and current account balance was established. The effect of real exchange rate, income, inflation, and household consumption expenditure on the current account balance was found to be positive and significant as well. The significance of exchange rate effect on the trade balance suggests that the Marshall-Lerner condition hold for WAEMU.

The Impact of Low Oil Prices on the Trade Balance of Balkan Countries and their Energy Security

This chapter examines the impact of low oil prices in the last years on the trade balance of Balkan countries and their energy security.? The development of oil prices in the last years has a potential impact on all economies. Indeed the impact was positive for crude oil importing economies but in the other hand, negative impact on crude oil exporting economies. According to our analysis, the impact was positive on all Balkan economies, regardless the scale of the impact. The positive impact was clear on the trade balance of all Balkan countries, for example in 2015 they registered a significant decrease in their deficit of trade balance comparing to 2011. For the energy security of Balkan should be insured by other alternative energy resources, among them natural gas and renewable energy resources.

Commercial and biophysical deficits in South America, 1990–2013

This article analyses the Physical Trade Balances (PTB) of five South American economies since 1990. Both exports and imports (measured in tonnes) increased but exports were consistently much larger than imports. Such large Physical Trade Deficits (PTD) persisted throughout the 1990s and 2000s. Export prices of primary goods increased but by 2013, export prices had declined and the exports could no longer pay for imports. Countries started to show commercial trade deficits (in money terms). These findings hold for all the South American countries analysed and they show that the optimism generated by the improving terms of trade in South America at the beginning of the 21st century was premature. First, there were PTDs even in the boom years; second, the deterioration in the terms of trade after 2012 was accompanied by a counterproductive deficit in the monetary trade balance. It is counterproductive because, in principle, it leads to greater external debts or to outflows of currency reserves. It can also create pressure to increase physical exports. We argue that deficits in the monetary trade balances tend to be compensated by increasing the deficit in the PTB, which can lead to enhanced environmental pressures and therefore to local protests.

ECONOMICS OF NON-OIL EXPORTS OF SUDAN

The purpose of this paper was to estimate the respective roles of oil and non-oil exports to total Sudan exports during 1970-2009. The specific objective aimed to estimate the respective role of agricultural exports on the agricultural Gross Domestic Product (GDP) and the main factors affecting the exports of selected agricultural commodities. The study ultilized secondary data covering the period 1970-2009. The data analyzed using descriptive analysis and multiple regression analysis. The main finding of study showed that the contribution of agricultural exports to total exports dropped from 100% during 1990-1994 to 8.5% during 2005-2009.The study also indicated that the increased revenues of oil exports caused a positive trade balance in certain years. The main agricultural exports were sesame 32.3% of total agricultural value, sheep 21.8%, cotton 17.7% and gum Arabic 14.8%. As an example, the regression results indicated a negative relationship between the FOB prices and quantities exported in the case of sesame export model. It also showed the existence of a positive relationship between production and exports of sesame. In case of gum Arabic model the results indicated positive relationship between exports of gum Arabic and production, stock, and negative relationship with FOB price, taxes and GAC oligopoly. The study recommended diversification and increasing non-oil exports in order to reduce the impact of the deficit in trade balance and encouraged local processing of agro-based raw materials to enhance the exports and take advantage of value added.

Analyzing the role of Imports in Economic Growth of Pakistan; Evidence from ARDL Bound Testing Approach

Imports were considered to be expenditure of an economy's budget in post liberalization era but soon world economies has realized the importance and value of imports in accomplishing requirements of growing economic development. Thus protectionist's policies were sidelined in the interest of economy and promote acknowledgement of technical and resource diffusion from developed economies. Pakistan is a developing country and with many problems it also experiencing deficit in balance of trade since independence. That is why this study attempted to endeavor the role of imports and its determinants in economic growth in Pakistan applying ARDL Bound testing approach. The study found optimistic and noteworthy effect of imports and its determinants in economic growth of Pakistan supportive of world income and other trade policy variables too.

Análisis de la industria de la madera aserrada en México

Con la apertura comercial, los productos forestales mexicanos han enfrentado dificultades para acceder a los mercados internacionales y mantener su participación en el mercado interno, disminuido las exportaciones y aumentado las importaciones, lo que se ha visto reflejado finalmente en un aumento del déficit de la balanza comercial. La industria del aserrío, la más importante tanto por el volumen que procesa como por el número de plantas industriales que existen, ha sido la más afectada. En los últimos seis años la importación de madera aserrada ha aumentado significativamente. Esto implica una mayor dependencia comercial de este producto, habiéndose cubierto gran parte del consumo nacional aparente de madera aserrada con importaciones provenientes de Chile, Estados Unidos, Brasil y Canadá. Para revertir esta tendencia, es urgente implantar una serie de políticas públicas en el mediano y corto plazo, que tiendan a fortalecer esta industria. De no hacerlo se preven efectos negativos, como una mayor presión sobre el bosque natural, el cierre parcial o total de aserraderos, aumento del desempleo y la pérdida de una importante fuente de ingresos para los propietarios del recurso forestal.

AN ECONOMIC ANALISYS FOR PRICING POLICY AND POLICY OF FORIGEN TRADE OF AGRICULTURAL SECTOR IN IRAQ DURING 2003-2013

There is no doubt that Agricultural Policy is the main responsible for the degrading in Agricultural sector in Iraq during the period 2003-2013, and that was very clear from magnitude of indicators because of little sharing of each of agricultural product in GDP because it was (9.38%) in average during the study period and the annual changing of it was negative (-5.82%), and there is increasing in deficit of trade balance in Agriculture during the study period about (4185.73) million US$, and the percentage of agricultural exports from total exports was (0.14%) in average only. The foreign trade policy in Agricultural products also cannot determine map of Revealed Comparative Advantage (RCA) of Agricultural products and crops. The study showed that there is continuous deficit in agricultural price policy because the agricultural producer is still receive prices for strategically crops less than world prices and that was showed by Net Nominal Protection Coefficients (NNPC) and although of the improvement than before 2003 but it is not paralleled with importance of Agricultural sector.

China's outbound tourism – Stages, policies and choices

China's outbound tourism has developed rapidly in recent years. This development has been accompanied by a continuous and expanding deficit in the tourism balance of trade, triggering debate among government officials and academia about whether China's outbound tourism development has outgrown general economic development. Understanding China's growth in outbound tourism and its impact has therefore become more than an academic issue; it also affects the future orientation of China's tourism policy. This paper provides a detailed analysis of the tourists, spatial flow, market size, and expenditure. Despite the above concerns, it is suggested that China's outbound tourism is still in a preliminary stage of development and furthermore complies fully with national policies. Therefore, orderly guidance and discretionary market policies are proposed to further facilitate the growth of the outbound tourism market in China.

AN ECONOMIC AND QUANTITATIVE STUDY FOR THE GEOGRAPHIC AND ALLOCATION IMPACT ON FARMLAND INFRINGEMENT IN EGYPT DURING THE PERIOD 2005-2010

Farmland infringement for the purpose of construction has become a serious problem in Egypt that negatively affects the average per capita of arable land and soil fertility in Egypt. On the other hand, this situation negatively affects Egypt's self-sufficiency rates of agricultural commodities, agricultural income, and employment in rural areas. However, farmland infringement is completely forbidden by the Egyptian agricultural legislation. In this regard, the current research aims at evaluating the impact of the Geographic and placement impact on Farmland infringement in Egypt during the period (2005-2010). This study recommend the importance of reduce farmland infringement in different Geographic places, to increase the Egyptian agricultural production, raise Egypt's self-sufficiency rates of agricultural commodities, and reduce the deficit in agricultural trade balance, and reduce the problem of unemployment in rural areas. Moreover, the current study used descriptive and statistical analysis to achieve its goals. The main results of this research showed that the total area of ​​agricultural land that had been infringed during the period (2005-2010) reached about 4031 feddans during the period (1993 –1995), increased during the period before revolution (1996 2010-) to 28788 feddans and increased more after revolution during the period 2011- 2014 to ( 38046) feddans. By calculated the total yearly average of farmland infringement in Egypt, the result show that it was about 30.8 feddans during the period (1993 –1995), increased during the period before revolution (1996 2010-) to 43.3 feddans and reduced after revolution as a total to 34.8 feddans as a result of reducing the rate of farmland infringement in the civilization governorate by intensive security power. On the other hand the farmland infringement in all other this rate had increased in all geographic placements in Egypt. Where the yearly rate of farmland infringement in Delta of Egypt, Meddle Egypt and upper. Egypt reach about (43.1, 49.5, 41.2) feddans respectively before revolution, increased after revolution to (712.1, 405.8, 354.5) feddans respectively. It is clear that the delta Egypt has the highest yearly rate of farmland infringement, so it is important to control this rate in future. Besides, the results showed that the most important reasons behind farmland infringement by construction in Egypt are the dummy variable representing the Geographic and placement for the governorates’ and time. The economic model shows the increase of yearly average of total farmland infringement by about 74.4 feddans and the result was significant at the level of significance 1%. Moreover the yearly average of farmland infringement for Delta of Egypt, Meddle Egypt and upper Egypt by about (287.9, 101.7, 95.4( respectively. On the other hand, by using the dummy variable of piecewise to describe the situation after and before revolution in the different geographic and placement of governorates the results show the increase of the farmland infringement after revolution in delta of Egypt from 1136.4 to 2704.3 feddans and the results was accepted significantly at the level of 1%. The results show also the increase of the farmland infringement after revolution in middle of Egypt from 206.7 to 492 feddans and the results was accepted significantly at the level of 1%. Furthermore the results show the increase of the farmland infringement after revolution in Upper Egypt from 254.2 to 605.1 feddans and the results was accepted significantly at the level of 1%. However, the results showed that the farmland infringement after revolution in Egyptian civilization governorates decreased as a results of strong security from -34.5 to -82 feddans and the results was accepted significantly at the level of 1%. Finally, the research recommends strengthening the importance of protected the Egyptian agricultural land specially in the highest geographic and placement governorates especially in delta of Egypt, middle and upper of Egypt by achieving the balance of investment between all these geographic and placement governorates and establishment the necessary desert villages to meet the needs of Rural households.

Argentina Import Measures: How a Porsche is Worth Peanuts

The dispute Argentina-Measures Affecting the Importation of Goods concerns a series of measures imposed by Argentine authorities on economic operators as a condition for obtaining import licenses. These measures were introduced with the goal of advancing the Argentine government’s stated policies of re-industrialization, import substitution, and elimination of trade balance deficits. From a legal point of view, the least interesting feature of the dispute was the substantive compatibility of these measures with Article XI:1 GATT as they clearly constituted import restrictions. Identifying and classifying the measures involved, however, proved more challenging: based on vague policy guidelines, devoid of any legal basis, and consisting largely of wholly discretionary ad hoc action by the authorities, clouded in confidential obscurity, the measures escaped familiar categories and distinctions of WTO law. From an economic perspective, although Argentina’s measures appear to have had no impact on its overall imports, they imposed large costs on foreign companies, as well as on Argentine importers and consumers.

How Does the Flow of Remittances Affect the Trade Balance of the Middle East and North Africa?

Middle Eastern and North African (MENA) economies have had the highest degree of dependency on received remittances worldwide over the last three decades. The region has also had the highest non-oil external trade balance deficit among developing countries. We examine the role of remittances in the trade balance of 11 labor-abundant MENA countries. Our panel regression analysis shows that the inflow of remittances has had an increasing effect on trade deficits by triggering import-led consumption expenditures. The results are robust after controlling for other drivers of trade deficit and fixed effects.

México y la autosuficiencia alimentaria (sexenio 2006 -2012)

México se enfrenta en la actualidad a tendencias globales en que los países ricos exportan productos básicos hacia los países en desarrollo, las cuales han afectado a los medianos y pequeños productores generando una crisis productiva agrícola. Por ese motivo, es importante estudiar el comportamiento del mercado de alimentos (exportaciones e importaciones), pues el modelo de desarrollo mexicano vigente no consigue que la seguridad alimentaria sea una política nacional que garantice la provisión de alimentos para toda la población. Específicamente, este artículo analiza la situación alimentaria durante el sexenio 2006-2012, tomando tres alimentos básicos para los mexicanos: maíz, fríjol, trigo; y otros, estratégicos como el azúcar, sorgo y soya. Estudia su comportamiento desde el punto de vista de superficie sembrada y cosechada, así como exportaciones e importaciones; los resultados indican que los tres alimentos presentan altas tasas de crecimiento en importaciones con afectación a la superficie sembrada y cosechada nacional provocando que la balanza agropecuaria sea deficitaria. La conclusión es que será necesario un cambio en la dinámica productiva donde los productores locales tomen un papel estratégico en la producción de alimentos, con nuevas alternativas productivas sostenibles.

China's Trade with Central and Eastern European EU Members: an Analysis of Eurostat Data, 2004-2014

China is rapidly becoming one of the most significant trading partners of EU countries. This is as much the case for the 11 Central and Eastern European countries (CEE11) which entered the EU in 2004, 2007 and 2013 as for the older members. This paper sets out to examine data obtained from the Eurostat database concerning trade between the CEE11 and China between 2004 and 2014 in an attempt to clarify two main questions. Firstly, are there any differences between individual CEE countries’ trade with China during the last decade? Secondly, have the Visegrad(V4)countries (Poland, the Czech Republic, Hungary and Slovakia) obtained any advantages over each other or over the other CEE11 countries? The Eurostat data, while limited in some aspects, suggest that all the eleven nations, despite variations, are struggling with trade balance deficits and therefore need to cooperate rather than compete concerning trade with China.

Devaluation as a Policy Instrument for Caricom Countries

Caribbean Community (Caricom) governments are being urged to devalue their currencies in order to correct their balance of trade deficits and stimulate the industrial sector. This advice rests on the assumptions that the sum of the elasticities of demand and supply in Caricom countries is greater than one, that free trade prevails, and that the pass-through effects following the devaluation are complete. However, useful as the theory of devaluation may be for the industrial countries where it was developed, it is not necessarily an effective policy instrument within the context of most less developed countries because, in addition to other things, it ignores their colonial social and economic structures. I hypothesize that the colonial social and economic structures, which have persisted into the period of their political independence, help to render devaluation an ineffective policy instrument for Caricom countries.

Trade in value added in the West Pacific: an input-output analysis

The evolution of trade between the four regions in the West Pacific in both gross and value added terms is analyzed using international input-output tables. It is found that value added exports of computers and electronic equipment of the Asian economies are very limited in comparison with their gross exports, and that the largest shares of value added exports were accounted for by the services sectors in every region, particularly so in Japan and the US. Surpluses and deficits in bilateral trade balance in value added terms are generally lower than those in gross terms, and that Japan’s manufacturing sector played a central role in the production chains in the West Pacific, and the US contributed to the region by providing services in value added terms. The inter-temporal factor decomposition of trade shows that deepening input-output linkages between the four regions played an important role in promoting trade in value added in the West Pacific. This process was partly interrupted by the economic turmoil during the 1995-2000 period, but intensified toward 2005. The service sectors seem to have played an increasingly important role in enhancing trade in value added in the West Pacific.

Early Warning System of Currency Crisis Based on Exchange Market Pressure: The Case of Vietnam

The paper aims at identifying leading indicators and a suitable EWS model of a currency crisis in Vietnam based on a combination of parametric and non-parametric approach with the EMP index for period 1996-July 2012. The paper found that model in which dependent variable - CC is defined based on the EMP and other event, and all explanatory variables are expressed in its absolute values with window length of 2 months is outperformed for predicting a currency crisis in Vietnam. Empirical results suggested that probability of predicting a true currency crisis was 80.7 percent; probability of predicting a crisis-hit period with signal was 94 percent. In addition, empirical evidence concluded that real overvaluation, international reserves in import’s weeks, and domestic credit growth rate are leading indicators of a currency crisis in Vietnam. The other indicators such as deficits in trade balance, industrial production value, money supply growth rate could be a good indicator but are all insignificant.