Growth Of World Trade Research Articles

India's Trade Relations with China in the Era of Globalization

In this study, an effort has been made to analyze the trade relations between India and China since 1995 using the concepts of trade intensity, revealed comparative advantage, trade reciprocity index, long-term trend analyses and statistical test. Time horizon is taken during 1995 to 2008. Our results show that the liberalization process has led to significant increase in Volume of Indio-China trade resulting in trade growth between the two countries higher than the world trade growth. India's trade growth lagged behind China during 1997-2002, but since 2002, its trade growth rate improved substantially and became even higher than China. India's exports to China increased rapidly since 1995 because of this China became the second largest destination for India's exports. This analysis also shows great potential of trade in manufactures, chemicals and agricultural products. The composition of India's commodity basket shows that India mainly focuses on exports of primary product and imports manufactured goods, which is not beneficial for India in long term. Balance of trade is not favourable for India and there is need to take immediate steps for improving India's exports to China specially by focusing on exports of manufactured goods for which good potential exists.

China's exports in a world of increasing oil prices

PurposeThis paper aims to examine the impact of oil prices on trade's sensitivity to distance. Furthermore, it seeks to investigate if the nature of trade and the type of goods have a mediating role on the oil prices' impact on trade.Design/methodology/approachA set of gravity models are estimated on a unique panel dataset from China Customs Statistics that reports trade by customs regime (processing trade vs non‐processing trade) and by transportation mode (air vs sea) for the years 1988‐2008.FindingsHigher oil prices increase the sensitivity of China's exports to distance. This effect is especially pronounced for processing exports, where goods cross borders multiple times. On the other hand, it is smaller for exports shipped by air. While these results are statistically significant, their economic effects are relatively small. This paper estimates that the quadrupling of oil prices between 2002 and 2008 has increased the elasticity of Chinese exports with respect to distance by a mere 5‐7 per cent.Social implicationsThe surge of oil prices in recent years has led to speculation that rising transportation costs could end the period of dramatic world trade growth – in the words of Rubin, “[…] Your world is going to get a whole lot smaller.” This paper suggests that this concern is overstated.Originality/valueThis is the first paper that estimates the mediating role that the nature of trade and the type of goods play on trade's sensitivity to distance.

China’s Foreign Trade: Perspectives From the Past 150 Years

AbstractThis paper studies the trade of China in the past 150 years, starting from the first opening of China after the Opium War. The main purpose of the paper is to identify what is (and was) China’s ‘normal’ level of foreign trade, and how these levels changed under different trade regimes, from 1840 to the present. We present new evidence on China’s foreign trade during the treaty port era (1842–1948), drawn from disaggregated trade data collected by the Chinese Maritime Customs Service, that yields important findings for current research. First, although the volume of foreign trade remained limited initially, there was a notable expansion in the diversity of products, with many new goods being imported into China. Second, the regional diffusion of foreign goods through China was greatly facilitated by the expansions of the port system. Third, the importance of Hong Kong as an intermediary in China’s trade has undergone long‐term fluctuations suggestive of learning effects. China’s recent wave of liberalization has led by the early 1990s to a trade level comparable to the high of the 1920s. While much of China’s recent growth in world trade is in line with her income growth, there is no doubt that China’s trade openness today, comparable by some measures to Denmark’s, is a stunning reversal relative to the pre‐1978 and also the pre‐1840 period. The paper emphasises the roles that history and institutional change have played in this.

World Overview: Oil Prices and the Fiscal Stance

At the global level, GDP growth accelerated to 1.2 per cent in the final quarter of 2010 according to NIESR estimates — largely driven by a sharp rise in domestic demand in China, which more than offset a slowdown in world trade growth that originated in the US. The economic recovery in the advanced economies remains lacklustre. The sharp rise in the oil price in recent months has exacerbated the effects on output of the protracted downturn in global investment and a tighter fiscal policy stance, at least in Europe. High commodity prices will push inflation in the OECD close to 3 per cent both this year and next. At the global level we expect GDP growth to moderate from an estimated 5.2 per cent in 2010 to just below 4½ per cent per annum in 2011–12, with around half of this slowdown attributable to the effects of the increase in oil prices between October 2010 and April 2011. The key assumptions underlying this forecast are discussed in Appendix A, with our forecasts for key macro variables in 40 major economies detailed in Appendix B.

Is Our World Going to Get a Whole Lot Smaller?

The surge of oil prices in recent years has led to speculation that rising transportation costs could end the period of dramatic world trade growth —in the words of Rubin (2009), “…Your world is going to get a whole lot smaller.” Using data from China’s Customs Statistics, we examine the impact of oil prices on trade’s sensitivity to distance. We find that higher oil prices increase trade’s elasticity to distance, but that the economic effect is small. We also find that the effect is more pronounced for trade within global production networks, and less large for goods shipped by air.

Market Integration and Competition in Environmental and Trade Policies

Recent empirics suggest the relevance of transport cost reductions for world trade growth along with eliminations in protectionist trade barriers. To address the welfare effects of trade cost reductions in a context of ‘trade and the environment,’ we develop a two-stage game model where governments choose environmental and trade policies and firms play a Cournot-Nash game. We show that reductions in transport costs lead to lower emission taxes and higher tariffs. And, we find that the degree of pollution damage plays a central role in whether market integration is welfare-improving relative to autarky.

Causes of world trade growth in agricultural and food products, 1951–2000: a demand function approach

The objective of the present study is to analyse the causes of the growth of international agricultural and food trade in volume terms from 1951 to 2000. The results suggest that income growth has been the principal reason for this expansion, while exchange rate stability and the real price of agricultural products played only a minor role. Multilateral trade liberalization and trade costs, given their long-term stability, are not elements that could have stimulated their growth. Finally, the intensive liberalization of trade which took place in various economic regions, especially in Europe, became a key factor in promoting agricultural trade among the countries participating in regional trade agreements. The study results also indicate that the determinants of trade growth for these goods were different to those for other goods and other periods.

Determinants and Barriers to Bilateral Trade: A Study on Developing Economies

World trade has grown rapidly. Several factors are highlighted by literature as a driving force behind the growth of world trade. Reduction in barriers to trade is one of them. A comprehensive empirical investigation is carried to ascertain the trade reducing and increasing effect of barriers to trade which are also known determinants of trade. The modified gravity model developed in this study analyses the effect of GDP, distance,remittances, FDI, transportation cost, exchange rate, inflation, population, import and export on trade flows. The study revealed that the population, import and transportation cost, distance, Tariff imposed by trading partner, FDI and Population of trading country are the determinants and significantly affect exports of developing economies. The study also ascertain that transportation cost, distance, population of trading partner, FDI of both trading countries and remittances of trading partner are the determinants that have major impact on import of developing nations.

Trade & the New Economic Geography of the Middle East

World trade has followed an average annual growth rate of 10.1% that increased global exports to USD 13.9 trillion in 2007 from USD 0.06 trillion in 1949. In the past eight years, exports grew on average 2.7 percentage points faster than real gross domestic product. The pattern of international shifted with the increased participation of newly emerging market economies dominating the growth of world trade, and Chinese exports dominate developed countries imports (especially the US).In this economic note, we trace the changing global trade patterns according to the data from the World Trade Organization and the implications for the region, especially the GCC. The data, (available till 2007) reflects the inflated commodity prices that increased rapidly at the start of 2007. The faster rise in commodity prices in 2008 (including the phenomenal rise of oil prices to cross $145 a barrel) has however not been reflected in the available data. But given the aftermath of the financial turmoil and historical evidence of the fall in commodity prices during downturns, the decline in trade volume and value is likely in both 2008 and 2009 in line with growth projections for the world economy).Detailed analysis of GCC trade data reveals a shift in trading partners with EU and Asia emerging as the major partners with the US share declining. While fossil fuels remain the most important exports from the GCC, there is evidence of trade diversification towards non-oil products. While intra-GCC trade has picked up, there exists potential for sustained intra-regional trade growth, which pales in comparison to regions like Europe (71.2%) or Asia (57.4%). In this context, the GCC should aim to reduce trade barriers (both tariff and non-tariff barriers) impeding regional trade and expedite negotiations with its more important trading partners to facilitate trade. Additionally, the GCC Single Market initiated in 2008 and the expected launch in 2010 of the Gulf Monetary Union and common currency will help GCC to strengthen regional trade and leave a mark on the global trade map.

Determinants of international fragmentation of production in European Union

The growth in world trade during the last decades was largely caused by increasing bilateral exchanges of parts and components as a consequence of international fragmentation of production. Apparently, the international integration of the Newly Industrializing and Eastern European economies prompted firms in ‘high-wage’ countries to exploit factor price differences in order to increase their international competitiveness. However, theory predicts that, beside factor price differences, international fragmentation of production should be driven by a multitude of additional determinants. Against this background, the present paper reveals empirical evidence on parts and components trade as an indicator for international fragmentation of production in the European Union and determines its main explanatory factors. The results of a panel data analysis show that especially industry specific factors as well as communication and transportation infrastructure are likewise important for shifting production to or sourcing components from foreign countries.

Transportation uncertainty and international trade

This paper uses a numerical framework to demonstrate that uncertainty in the arrival time of foreign goods can substantially reduce the demand for foreign goods. It further reveals that the impacts of falling transport costs and shipment time on international trade growth could be discounted, if uncertainty arises in the arrival time of the imported goods. This in turn suggests that reduced uncertainty, which is possibly the results of transportation improvements, might have contributed to the growth experienced in world trade growth over the past several decades. Thus, neglecting the roles of improvements in international transportation arrangements and reduced uncertainty will lead to underestimating the contribution of transportation improvements to trade growth.

Bringing Predictability and Security to Developing Countries Tariff Preferences

While most economists criticise the GSP for a number of (good) reasons, all preference donors and receivers profess their commitment to what they consider as a tool for developing countries ‘to secure a share in the growth of world trade’. The political support given by both receivers and donors to preferences as an economic development tool means that they will remain part of the landscape of international trade regulation for the foreseeable future.Under the WTO Enabling Clause, such preferences are allowed if they are generalized, non-reciprocal and non-discriminatory. However, tariff preferences are also often withdrawn on dubious grounds and without due process. This reduces much of their potential value, because traders and investors lack the predictability and security necessary to make long term business decisions based on the market access opportunities that these preferences provide. Indeed, the lack of predictability and security of unilateral tariff preference schemes has been one of the reasons that some developing countries have concluded regional trade agreements (RTAs) under Article XXIV GATT, despite the sometimes heavy price of reciprocity.In this paper we offer an alternative. Based on a legal examination of tariff preference schemes and their limitations (coverage, graduation, safeguards, and conditionality), we make three practical proposals to provide better security and predictability for both preference beneficiaries and donors:1. a binding of GSP schemes under Article II GATT (negotiated under Article XXVIII GATT)2. as an alternative, a dispute settlement regime specifically targeted at unbound preferences, and3. legally secure rules on limitations to GSP programs, including transparent and objective graduation criteria, which may be bound or unbound.Contrary to what is often assumed, this paper demonstrates that it is perfectly possible to bind tariff preferences and graduation criteria under existing WTO rules. All it takes is sufficient political will.Presented at the SIEL 2010 Conference in Barcelona.

A Research on Competition and Cooperation Between Shanghai Port and Ningbo-Zhoushan Port

With the course of the integration of global economy accelerating, and the speedy growth of world trade, important nodes of global logistics and ports acquire more and more important status in the global economy. Ports with the development of Chinese economy and especially with the rapid growth of the foreign trade have made a great progress. This research mainly focuses on the study of the competition and cooperation between neighboring ports. Several models were developed in the research to analyze the relationship between Shanghai port and Ningbo-Zhoushan port. The research results show that the two ports enter into competition with each other. Ports are faced with competition not only from domestic ports but also from their counterparts in other countries. Therefore, Shanghai port and Ningbo-Zhoushan port should avoid competition and join hands in developing the resource reasonably in Zhoushan and achieving a regional scale economy, so that the entire ports in the region of the Yangtze River Delta can have a better competitive power.

Meat standards and grading

This paper addresses the principles relating to meat standards and grading of beef and advances the concept that potential exists to achieve significant desirable change from adopting more consumer focused systems within accurate value-based payment frameworks. The paper uses the definitions that classification is a set of descriptive terms describing features of the carcass that are useful to those involved in the trading of carcasses, whereas grading is the placing of different values on carcasses for pricing purposes, depending on the market and requirements of traders. A third definition is consumer grading, which refers to grading systems that seek to define or predict consumer satisfaction with a cooked meal. The development of carcass classification and grading schemes evolved from a necessity to describe the carcass using standard terms to facilitate trading. The growth in world trade of meat and meat products and the transition from trading carcasses to marketing individual meal portions raises the need for an international language that can service contemporary needs. This has in part been addressed by the United Nations promoting standard languages on carcasses, cuts, trim levels and cutting lines. Currently no standards exist for describing consumer satisfaction. Recent Meat Standards Australia (MSA) research in Australia, Korea, Ireland, USA, Japan and South Africa showed that consumers across diverse cultures and nationalities have a remarkably similar view of beef eating quality, which could be used to underpin an international language on palatability. Consumer research on the willingness to pay for eating quality shows that consumers will pay higher prices for better eating quality grades and generally this was not affected by demographic or meat preference traits of the consumer. In Australia the MSA eating quality grading system has generated substantial premiums to retailers, wholesalers and to the producer. Future grading schemes which measure both carcass yield and eating quality have the potential to underpin the development and implementation of transparent value-based payment systems which will encourage improved production efficiency throughout the supply chain.

Do tariffs matter for the extensive margin of international trade? An empirical analysis

With disaggregate tariff data we study the impact of changing tariffs on the range of goods countries export to the United States. Our probits with country and good effects show tariffs tend to have a statistically significant but small impact: at best 5% of the increasing extensive margin for 1989–1999 and 12% for 1996–2006 is explained by tariff reductions. This suggests the extensive margin has not amplified the impact of tariffs on trade flows to such an extent that the relatively moderate tariff reductions since WW II can explain the strong growth of world trade.

Market Shares in the Post-Uruguay Round Era: A Closer Look Using Shift-Share Analysis

Analysis aims to break down total change of economic indicators into various components to identify underlying sources of growth or decline. A key feature is that the unit of analysis (e.g. a city, a region or a country) exists within a broader frame of reference that strongly influences it (e.g. a national productive system or the world economy). It is based on the principle that total change can be disaggregated into contributing factors and any change that can not be accounted for by these factors can be interpreted as the contribution to that total change. This method has been subject to many refinements. Because the objectives of this paper are both didactic and analytic, traditional Analysis is applied to international trade. It uses the constant market share assumption by decomposing the growth of exports into four separate components: a global component (GLOBO) indicating changes due to overall growth of world trade, a geographical component (GEO) indicating changes due to the country's distribution of trading partners, a product composition component (COMPO) indicating growth due to the mix of products exported, and a residual term (the local contribution) indicating changes in competitiveness, or performance (PERFO). The first 3 components, GLOBO, COMPO and GEO all relate to the change in should trade change proportionally. The fourth and residual component, PERFO, refers to that part of the change in trade that from expected proportional changes, hence the term Shift-Share Analysis. This paper will analyse a change or in shares in trade (particularly exports) of different economies. By focusing on selected time periods and using the PERFO indicator, the method will show what industries shift away from the expected change in trade, which economies have experienced such shifts in their industries, and to which regions.

National Borders Matter... Where One Draws the Lines Too

The fact that crossing a political border dramatically reduces trade flows has been widely documented in the literature. The increasing number of borders has surprisingly attracted much less attention. The number of independent countries has indeed risen from 72 in 1948 to 192 today. This paper estimates the effect of political disintegration since World War II on the measured growth in world trade. We first show that trade statistics should be considered carefully when assessing globalization over time, since the definition of trade partners varies over time. We document a sizeable resulting accounting artefact, which accounts for 17% of the growth in world trade since 1948. Second, we estimate that political disintegration alone since World War II has raised measured international trade flows by 9% but decreased actual trade flows (including inter-regional trade) by 4%.

Growth engines of the south? South Africa, Brazil and Turkey in comparison

South Africa, Brazil and Turkey (SABT) are among those countries that not only to continue to converge towards the per-capita income levels of highly developed nations but also to be the best candidates next to China and India of serving as the locomotives of world GDP and trade growth after the depression. Therefore, it appears interesting to inquire into the macroeconomic governance structures of SABT in order to assess their capabilities for enhancing growth and employment. This will be done on the basis of a Post-Keynesian policy model of market constellations comprising of institutionally embedded macro-economic policy regimes.

Caratteristiche e mutamenti del commercio agro-alimentare: un confronto fra Italia ed India

- This paper examines the product specialisation of Italian trade over the period 2000-2006 to identify the roots of Italy's sluggish trade performance with respect to India. In particular, the analysis focuses on the role of product specialisation in relation to world trade growth and competition from emerging countries. We used trade indicators to describe and asses the state of trade flows and trade patterns of a particular country like India and also to monitor these flows over time and across countries. Till the early 1990s, India was a closed economy: average tariffs exceeded 200 percent, quantitative restrictions on imports were extensive, and there were stringent restrictions on foreign investment. The country began to cautiously reform in the 1990s, liberalizing only under conditions of extreme necessity. Since that time, trade reforms have produced remarkable results. The economy is now among the fastest growing in the world. This leads some to see India as a ‘rapid globalizer' while others still see it as a ‘highly protectionist' economy. India however retains its right to protect when need arises. Agricultural tariffs average between 30-40 percent, anti-dumping measures have been liberally used to protect trade. India is now aggressively pushing for a more liberal global trade regime, especially in services.JEL Code: Q17Key words: emerging countries, trade indicators; competitive pressures

Petroleum refining industry in China

The oil refining industry in China has faced rapid growth in oil imports of increasingly sour grades of crude with which to satisfy growing domestic demand for a slate of lighter and cleaner finished products sold at subsidized prices. At the same time, the world petroleum refining industry has been moving from one that serves primarily local and regional markets to one that serves global markets for finished products, as world refining capacity utilization has increased. Globally, refined product markets are likely to experience continued globalization until refining investments significantly expand capacity in key demand regions. We survey the oil refining industry in China in the context of the world market for heterogeneous crude oils and growing world trade in refined petroleum products.