Trade Regime Research Articles

A Comparative Analysis of the Trade and Industrial Policies of Ukraine and China in the Context of the Obor Initiative

The world economy is evolving towards multipolar globalization, and China has become a new pole of economic development. Ukraine, like other countries, is looking for ways to cooperate with China in the field of trade and investment. China, for its part, offers a model of cooperation within the framework of the OBOR (One Belt, One Road) initiative. Along with Chinese investment in transport and logistics infrastructure, OBOR aims to conclude FTAs with the countries participating in the initiative; thus, the article focuses on the issues of trade, and Ukraine’s industrial and innovation policy in the context of the OBOR initiative. A comparative analysis of both countries’ trade and industrial policies was conducted to provide a basis for evaluation. The terms of trade between Ukraine and China are not symmetrical due to the difference in the scale of the economy and trade. Additionally, Ukraine’s trade regime is relatively liberal, while the Chinese market is protected by higher tariff and non‑tariff barriers. Furthermore, the current situation in mutual trade is asymmetric. Ukraine exports mainly raw materials to China, while exports from China to Ukraine are dominated by investment and consumer goods.
 The import dependence of the Ukrainian economy, in general, is high without any noticeable signs of decline. In 2014–2018, the share of imports of goods and services in GDP in Ukraine averaged 54% (for comparison, in China, this parameter was 19%). In 2018, 55% of Ukraine’s negative balance in trade in goods was due to trade with China. China seeks to conclude FTAs under the OBOR initiative, but in the current context, the liberalization of trade regimes with China will result in Ukraine growing its raw material exports to China and increasing its dependence on Chinese imports. On the other hand, China’s investment, production, research, and technological opportunities can become an important resource for Ukraine to modernize its economy. Promising areas of Chinese investment include high technology, in particular, aviation, shipbuilding, bioengineering, the development of new materials, and more. Ukraine is interested in China’s experience in implementing a number of state programs in the field of innovation development of Chinese industrial enterprises. The support system for clusters, industrial parks, Free Economic Zones (FEZs), and technology parks can be recommended for introduction into Ukrainian legislation in the sphere of developing an innovation structure in Ukraine.

Financial Sector Development, Trade Openness and Economic Growth Nexus: Evidence from SAARC Countries

To boost economic growth, SAARC countries resorted to trade liberalization policies since mid-1980s, therefore, now it is high time to evaluate the outcomes of this outward-oriented trade regime. Available literature confined the potential gain with the trading country’s status of the financial sector development. This study therefore empirically investigates the complementarity between domestic financial sector and trade openness for its growth effectiveness in the case of SAARC region. The empirical analysis basis upon the panel of six SAARC countries, using panel co-integration technique for the period 1980-2014. The empirical estimates of FMOLS and DOLS indicate that countries holding relatively developed domestic financial sectors enjoy larger gains from trade openness, which finally translates into economic progress. To be exact, the country’s domestic financial sector plays a complementary role between openness and growth in SAARC countries. Results hence suggest that SAARC countries need to lay higher emphasis on the development of the domestic financial sector.

A new delegation design for EU governance: how preference cohesiveness of multiple principals shapes the European Commission\u2019s discretion in trade negotiations

The Lisbon Treaty enhanced the role of the European Parliament in free trade agreements. This article offers a comprehensive theoretical and empirical account of this new delegation design in EU trade governance. Specifically, it addresses the question how the preference cohesiveness of multiple principals—the Council of Ministers as a de jure principal and the Parliament as a de facto principal—shapes the Commission’s discretion in negotiating trade agreements. Exploring these two conjectures through a combination of primary materials and interviews, this contribution posits that those configurations of low degree of cohesiveness within the Council and high cohesiveness within the Parliament or high cohesiveness of the Council and low cohesiveness within the Parliament increase Commission discretion. A configuration of low cohesiveness within and between multiple principals, by contrast, is more likely to lead to paralysis of the negotiation process.

Respatializing Federalism in the Horn’s Borderlands: From Contraband Control to Transnational Governmentality

ABSTRACT Analysts documenting the proliferation of border controls amidst the global War on Terror have highlighted recent extensions of state sovereignty into new geographies. Such shifts are largely driven by Western states’ security concerns as they partner with governments in Africa and other migrant-sending spaces to stem migration. In eastern Ethiopia, however, new dynamics of border securitization have facilitated African politicians’ efforts to extend governance in the opposite direction. This article traces how authorities in Ethiopia’s Somali Regional State (SRS) between 2010 and 2018 instrumentalized the decentralization of border control in attempts to both address the persistence of “contraband” border trade and tax evasion, and solve a longstanding security problem: opposition activities among diaspora Somalis. Theoretically connecting a “borderlands as resources” framework to conceptions of transnational governmentality, this study analyzes how the governance of trade at national and subnational borders may enable efforts to regulate diaspora groups.

Factors affecting gold production in Zimbabwe (1980–2018)

The debate on the ‘resource curse’ or ‘the paradox of plenty’ has been raging for decades, albeit with no consensus. This is due to the diversity of findings from empirical literature supporting either side of the debate. The resource curse itself has been compartmentalised into several variants of the model, depending on the perceived causes and channels through which its effects are transmitted into the economy. Zimbabwe has been classified as a natural resource-abundant country by the World Bank. This paper broadly aims to evaluate the determinants of gold production in Zimbabwe during the period 1980 to 2018. Zimbabwe has an estimated 13 million tons of gold in situ. However, the country has not been able to fully exploit this resource – production has been intermittent and cyclical. Econometric modelling of the determinants of gold production shows that international gold price appears to be negatively related to gold production in Zimbabwe. This counter-intuitive result is explained by the greater impact of domestic economic conditions. Foreign currency retention, political stability, and gross capital formation are all positively related to gold production. It is recommended that Zimbabwe considers liberalizing the gold trading regime and institutes greater political stability and strengthen its institutions to stimulate gold production.

Clustering commodity markets in space and time: Clarifying returns, volatility, and trading regimes through unsupervised machine learning

Unsupervised machine learning can interpret logarithmic returns and conditional volatility in commodity markets. This article applies machine learning in order to visualize and interpret log returns and conditional volatility in commodities trading. We emphasize two classes of unsupervised learning methods: clustering and manifold learning for the reduction of dimensionality. We source daily prices from September 18, 2000 through July 31, 2020, for precious metals, base metals), energy commodities and agricultural commodities. Our results highlight that at the very least, returns-based clusters conform more closely to traditional boundaries between precious metals, base metals, fuels, temperate-climate agricultural commodities, and tropical agricultural commodities. On the other hand, volatility-based clustering succeeds in identifying periods of extreme market distress, such as the global financial crisis of 2008–09 and the Covid-19 pandemic.

Consensus decision-making and democratic discourse in the General Agreement on Tariffs and Trade 1947 and World Trade Organisation

Abstract This paper provides a genealogy of consensus decision-making and democratic discourse in the multilateral trade regime. It argues that the contemporary link between the World Trade Organisation’s consensus procedure and ideas of ‘international democracy’ has its roots in a struggle that took place over the international economic order in the 1960s and 1970s.

Consensus Decision-Making and Democratic Discourse in the General Agreement on Tariffs and Trade 1947 and World Trade Organisation

This paper provides a genealogy of consensus decision-making and democratic discourse in the multilateral trade regime. It argues that the contemporary link between the World Trade Organisation’s consensus procedure and ideas of ‘international democracy’ has its roots in a struggle that took place over the international economic order in the 1960s and 1970s.

Brexit and trade policy: an analysis of the governance of UK trade policy and what it means for health and social justice

BackgroundThere is an extensive body of research demonstrating that trade and globalisation can have wide-ranging implications for health. Robust governance is key to ensuring that health, social justice and sustainability are key considerations within trade policy, and that health risks from trade are effectively mitigated and benefits are maximised. The UK’s departure from the EU provides a rare opportunity to examine a context where trade governance arrangements are being created anew, and to explore the consequences of governance choices and structures for health and social justice. Despite its importance to public health, there has been no systematic analysis of the implications of UK trade policy governance. We therefore conducted an analysis of the governance of the UK’s trade policy from a public health and social justice perspective.ResultsSeveral arrangements required for good governance appear to have been implemented – information provision, public consultation, accountability to Parliament, and strengthening of civil service capacity. However, our detailed analyses of these pillars of governance identified significant weaknesses in each of these areas.ConclusionThe establishment of a new trade policy agenda calls for robust systems of governance. However, our analysis demonstrates that, despite decades of mounting evidence on the health and equity impacts of trade and the importance of strong systems of governance, the UK government has largely ignored this evidence and failed to galvanise the opportunity to include public health and equity considerations and strengthen democratic involvement in trade policy. This underscores the point that the evidence alone will not guarantee that health and justice are prioritised. Rather, we need strong systems of governance everywhere that can help seize the health benefits of international trade and minimise its detrimental impacts. A failure to strengthen governance risks poor policy design and implementation, with unintended and inequitable distribution of harms, and ‘on-paper’ commitments to health, social justice, and democracy unfulfilled in practice. Although the detailed findings relate to the situation in the UK, the issues raised are, we believe, of wider relevance for those with an interest of governing for health in the area of international trade.

Old Wine in a New Bottle? Green Industrial Policy and the Use of Safeguards in the Solar Sector

Enhancing manufacturing competitiveness in the solar photovoltaics (PV) sector has been a political priority for numerous countries, with green industrial policies often used to effectuate such priorities. In 2018, safeguards were utilized by the United States as a new form of green industrial policies in the solar PV sector, which was quickly followed by India. Safeguards are distinctly different from other widely employed green industrial policies, and their use threatens the multilateral trading system and impedes much-needed efforts to mitigate climate change. This article seeks to advance the literature on the interaction between green industrial policies and the World Trade Organization (WTO) by exploring the legal considerations and policy implications of employing safeguards in the PV Sector. This article discusses why the WTO would likely find that both the US and Indian measures violate the General Agreement on Tariffs and Trade and the Agreement on Safeguards (AS), but perhaps more importantly reveals several deficiencies associated with the WTO rules and institutional difficulties which may curtail the reduction of trade barriers. This article suggests the negotiation of a plurilateral agreement to eliminate the use of safeguards in the solar PV sector and foster a positive synergy between the trade and climate regimes. WTO, Safeguards, Green Industrial Policy, Solar PV, Trade Protectionism, Climate Change

An Economic Study on Koyambedu Market at Chennai - Some Issues

Agriculture is the backbone of the Indian economy. Nearly 70 percent of the population depends on agriculture for their daily livelihood directly or indirectly. In that, 20 per cent of the villagers now depend solely upon agricultural income for their livelihood directly. The agricultural produce sector has been one of the most important components of the Indian economy. Considerable progress has to be achieved in scaling new heights in the production of food grains, commercial crops like cotton, sugarcane, tea, fruits, vegetables and milk. The increasing trend of agricultural production has brought new challenges in terms of finding market for the marketed surplus. There is also a need to respond to the challenges and opportunities, that the global markets offer in the liberalized trade regime. The following are the specific objectives of the study. 1. To study the functioning of the agricultural marketing in general. 2. To know the different varieties of the vegetables produced and sold.

How Do Third Parties Affect Compliance in the Trade Regime?

A core insight of the literature on dispute settlement at the World Trade Organization (WTO) is that third party countries help enforce the organization’s multilateral objectives, including the fundamental principle of nondiscrimination. Little is known, however, about when countries comply with WTO rulings and whether these bystander states play a role. We introduce new data on compliance, measured as whether losing countries make tangible domestic reforms to bring policy in line with WTO rulings. We show that compliance is significantly less likely in disputes with more third parties. Using a variety of estimation techniques, including controlling for nonrandom selection into legal rulings, we demonstrate a robust correlation between third party participation and noncompliance. Our findings highlight a risk of stringent enforcement and suggest that compliance problems threaten to undercut the operation of the multilateral trade regime.

COVID-19 and Policy Impacts on the Bangladesh Rice Market and Food Security

This research employs a partial equilibrium model to estimate the short- and long-run effects of COVID-19 and rice policies on Bangladesh’s rice market and food security. We also analyze the impact of relevant policies in terms of their effectiveness in mitigating stresses stemming from a hypothetical pandemic with a COVID-19-like impact. The results indicate that the effect of COVID-19 on Bangladeshi food security during FY 2019/20 was mixed, as the indicators of food availability improved by 5%, and decreased by 17% for food stability, relative to what they would have been otherwise. Policy simulation results indicate that a higher import tariff improves self-sufficiency status, but undermines rice availability and accessibility by bending the market toward a restrictive trade regime. Results also indicate that unlike stock enhancement policy, closing the existing yield gap improves rice availability, accessibility, and moderates the depressing effect of a future event with repercussions similar to COVID-19, although the yield policy appears more speculative and could be too costly. The insights generated contribute to the understanding of policies that aim to achieve sustainable development goals related to aggregate food security, and build resilience against future shocks akin to COVID-19.

The Complementary Role of the WTO in the Enhancement of the Base Erosion and Profit Shifting Project

The current rules on international tax do not function properly due to the gaps which allow for tax manipulation. Whereas most tax agreements largely contribute to the prevention of double taxation, they do not effectively approach double non-taxation matters arising from tax competition based on the agreements’ bilateral nature. In order to tackle this issue, the Base Erosion and Profit Shifting project was introduced. Developed under the Organization for Economic Co-Operation and Development framework, the Base Erosion and Profit Shifting project deals with tax avoidance practices that use mismatches and gaps in tax rules. Nevertheless, the success of this new soft law initiative requires a forum that can promote and enforce its recommendations. The structural nature of the Organisation for Economic Co-operation and Development has led to the consideration of the World Trade Organization to be this forum by many. However, the World Trade Organization covered agreements are drafted in a way that includes some of the tax competition matters but not others, including traditional tax havens. This paper aims to bridge the gaps in the area of the international tax regime. By examining the international trade and international tax regimes, it is shown that there is space for variations in the World Trade Organization broadly drafted agreements for such matters to find a resolution. It is argued that the World Trade Organization can play a complementary role in the enforcement of the new international tax rules.

Assessing Livestock Sector Development of India in the Era of Global Trade Distortions

In the WTO regime, surging imports have not only affected farm incomes but also employment in many developing countries. Consequent upon cheap imports and absence of adequate protection measures, safeguarding income and livelihood of poor farmers have emerged issues that need to be addressed by policy makers. As rightly pointed out, the developing world have suddenly become the children of a lesser god and they are the neo-poor. Further, though producer milk prices in India stand significantly lower than US and Western Europe, dairy product prices are relatively higher than international market prices owing to domestic processing inefficiencies in India. An earlier study assessed the impact of GATT on dairy products and projected the world dairy product prices to rise by about 2.3 per cent in real terms by the year 2002. The study categorically emphasized on the fact that domestic product prices would remain higher than world market prices despite expected surge in world market prices. This necessitates improvement in production and processing efficiency of livestock sector in India to make it competitive with imports. India is already price competitive in the world market and when subsidies from competitive producers like USA and EU countries are removed, the situation will make India more price competitive. In case India is not able to capture the world market in the event of removal of subsidies from the modern bloc countries, the other competitors like Australia and New Zealand would capture this market and enter in a big way to flood markets with their dairy products, making us loosing our competitiveness and a great opportunity in the new trade regime.

How do carbon trading platform participation and government subsidy motivate blue carbon trading of marine ranching? A study based on evolutionary equilibrium strategy method

Amidst the efforts to develop a low-carbon economy, blue carbon sequestration provides new approaches and opportunities for economic growth. Not only will blue carbon sequestration trading increase the value added for marine ranching firms, but it will also be conducive to conserving the ocean ecology and safeguarding sustainable marine development. From the supply chain perspective, this paper develops an evolutionary game model with three players: the marine ranching firm, the carbon trading platform, and the government. The model is then employed to examine the impacts of the carbon trading price, the government subsidy, and consumers’ willingness to pay for blue carbon on the participants’ choice of strategy in a blue carbon trading regime. The MATLABR2016b application is employed to perform numerical simulations and analyses. The following conclusions can be drawn from the research findings: The strategies chosen by the marine ranching firm, the carbon trading platform, and the government affect each other. Both the marine ranching firm and the carbon trading platform are affected by the choices of the other two players, while the government’s choice of strategy is only affected by the platform’s strategy. Reductions in carbon emitted by the marine ranching’s aquaculture activity, increases in the blue carbon trading price, improvements in consumers’ willingness to pay for blue carbon, and deceases in transaction costs to the marine ranching firm and the trading platform all motivate the marine ranching firm and the platform to choose a cooperative strategy. Government subsidies can encourage the marine ranching firm to improve its carbon sequestration capacity and incentivize the platform to cooperate. However, when the subsidy to the platform is too high, the system does not have an evolutionarily stable strategy. If the marine ranching firm reasonably uses the government subsidy to sequester carbon and improve the environmental friendliness of its products, the government’s willingness to subsidize will increase. Our findings will contribute to the theory on managing marine ranching blue carbon sequestration. This paper can provide evidence to improve the utilization of blue carbon sequestration, the development of the blue carbon sequestration trading market, and the design of the government subsidy mechanism.

Consumer Welfare of Country-of-Origin Labelling and Traceability Policies

Traceability regulations are a way to protect consumers by forcing firms to identify and track products step-by-step through all stages of production, processing, and distribution. Traceability is often used in conjunction with country-of-origin labelling where products explicitly identify where production takes place. However, such country-of-origin regulations can conflict with WTO provisions. This paper analyzes the impact on consumer welfare of traceability and country-of-origin in an international trading regime to assess whether such regulations actually improve consumer welfare. The paper constructs a theoretical model that highlights the potential market failure that arises from traceability. The paper then introduces a simple international trade regime to identify impacts on consumer surplus. The paper compares outcomes with, and without, traceability and country-of-origin regulations. Given the inherent free-rider problem, the paper shows that, as long as costs associated with traceability are low enough, mandatory regulations are welfare improving. Free trade, in the absence of foreign traceability, can lower consumer welfare so provides a rationale for country-of-origin rules. However, mandatory country-of-origin rules need not be welfare enhancing. We show that country-of-origin rules are similar to import barriers and so are third-best solutions. The better solution is international adoption and recognition of traceability rules which would make country-of-origin rules moot.

Have Three Decades of Livestock Development of India Been Exposed to Threats in WTO Regime?

Despite constraints like rearing of livestock under sub optimal conditions due to low economic status of livestock owners, India has now become the largest producer of milk in the world. The development of Indian dairy sector is an unprecedented success story as it is based on millions of small producers. Government of India is making concerted efforts to raise the per capita availability of milk through increase in productivity of milch animals. In order to achieve this ambitious goal, assistance is being provided to the State Governments for controlling animal diseases, scientific management and upgradation of genetic resources, increasing availability of nutritious feeds and fodder, improving microbiological quality of milk, etc. The microbiological quality of milk is poor owing to inadequate knowledge of clean milk production and lack of post milking chilling facilities at the village level. In the present milieu, when production of dairy products to match international standards has become necessary to compete in international market of milk and milk products, steps need to be initiated to improve quality of Indian milk products with a view to boost export trade of these products in free trade regime and earn valuable foreign exchange as well as provide clean and quality milk to domestic population for their better health. Though India does not want to leave any stone unturned insofar as her presence in international trade of milk and milk products is concerned, the liberalisation of markets within the WTO framework, especially due to the export subsidies indulged in by OECD countries, now seen to be threatening the Indian dairy sector.

No More Strategical Neutrality on Technological Neutrality: Technological Neutrality as a Bridge Between the Analogue Trading Regime and Digital Trade

AbstractThe World Trade Organization (WTO), a unique multilateral trading regime, has failed to establish its relevance to the digital nature of trade. This article revisits the ‘principle of technological neutrality’ to make the cross-border supply of services by electronic means subject to the current rules-based trading regime. I argue that the principle of technological neutrality could help resolve a number of thorny legal issues: confirming the applicability of the General Agreement on Trade in Services (GATS) rules to the delivery of services by electronic means; providing a guideline to determine the likeness of services in the era of digital trade; and backing up an evolutionary approach to interpreting the GATS schedules of commitments. However, the WTO adjudicatory bodies have been reluctant to rely on the principle of technological neutrality, which is referred to as strategic neutrality in this article. This article urges the WTO adjudicatory bodies to abandon their strategically neutral position on technological neutrality immediately. It also explores ways to incorporate the principle of technological neutrality into the world trading system at the bilateral, plurilateral, and multilateral levels.

On the economic thought of trade practices and policies in Kenya

This study explains trade regimes in Kenya from a History of Economic Thought (HET) perspective using secondary materials (books, papers, and original manuscripts). We found that the pre-colonial era (before 1895) had a mixture of Classical doctrines and Mercantilism, whereby long-distance and barter trade between communities were practiced. Nonetheless, certain communities restricted trade. Classical economic thought was practiced in the colonial period (1895-1962), whereby agricultural produce was exported and less expensive consumables were imported. The post-colonial period started with a Mercantilism approach (Importsubstitution), but successive regimes have promoted Classical doctrines of trade by reducing import and export barriers and creating trade-promotion institutions. Trade in services, which is topical in international trade, has also been promoted in this regime.