Increased Trade Flows Research Articles

Tests of goods market integration between China and African BRI countries

AbstractThe Chinese Government has promulgated the “Belt and Road Initiative” (BRI) to increase trade flows and integrate goods markets between China and BRI countries. The validity of purchasing power parity (PPP) implies well‐integrated goods markets, a precondition for further economic convergence, and the next stage of economic integration in factor, service, and financial markets. Our study aims to examine the validity of the PPP and the extent of goods market integration between China and selected BRI countries in Africa. Since the functional form of the cointegrating relationship may not be exact or linear, we adopt the nonparametric rank tests for analysis without prior knowledge and specification of the functional form. We also address the rank problems that occur in multivariate rank tests. Our empirical results provide strong evidence of an unrestricted PPP relationship with reasonably strong evidence of nonlinearity in the data. We also find that some African BRI countries have experienced goods market integration with China during the second‐half period only. This indicates that the introduction of the BRI in 2013 and China's active involvement in African economic development through BRI projects are leading to enhanced goods market integration between China and Africa. The results indicate favorable prospects of closer economic cooperation in the factor, service, and financial markets to build a free trade area or common markets with BRI countries in Africa.

PENGUJIAN PENYAKIT KOMODITAS IKAN AIR TAWAR PADA LALU LINTAS DOMESTIK DI STASIUN KARANTINA IKAN JAMBI

Increased trade flows of international and domestic fishery coomodities in the opportunity to enter and spread Hama penyakit Ikan Karantina (HPIK) caused by pathogenic organism, namely bacteria, parasites, fungi, and viruses. This study aims to identify whether freshwater fish commodities in domestic traffic are infected with parasites, the bacteria Edwardsiella ictaluri, TiLV (Tilapia lake Virus) and the fungus Aphanomyces invadans at the Fish Quarantine Stasion, Quality Control and Safety of Fishery Products Jambi. Fish samples consist of 15 fish samples to be tranported. Based on results of the examinatoin of fish diseases, Parasite Examination there were 4 parasites with 3 types of parasites, namely 2 parasites of Dactylogyrus sp. On the gills of Tilapia and catfish. One (1) parasite Gyrodactylus sp. On fish slime Stripe 3, and 1 parasite Camallanus sp.in the intestines of betta fish; on bacterial examination of the 4 samples of fish examined, Edwardsiella ictaluri bacteria were nof found; on virus examination the result were negative for TiLV (Tilapia lake Virus); on examination of the fungus with the PCR method, negatif result were obtained for the fungus Aphanomyces invadans which is the cause of EUS (Epizootic Ulcerative Syndrome).

Reshaping the structure of the World Trade Network: a pivotal role for China?

In recent years, the global trade landscape has undergone significant changes, particularly in the aftermath of the 2008 financial crisis and more recently as a consequence of Covid-19 pandemic. To understand the structure of international trade and the impact of these changes, this study applies a combination of network analysis and causal inference techniques to the most extensive coverage of available data in terms of time span and spatial extension. The study is conducted in two phases. The first one explores the structure of international trade by providing a comprehensive analysis of the World Trade Network (WTN) from various perspectives, including the identification of key players and clusters of strongly interacting countries. The second phase investigates the impact of the rising role of China on the global structure of the WTN. Overall, the results highlight a structural change in the WTN, evidenced by a variety of network metrics, around China’s rapid growth years. Additionally, the reshaping of the WTN is not only accompanied by a significant increase in trade flows between China and its partners, but also by a corresponding decline in trade among non-China-partner countries. These results suggest that China played a pivotal role in the restructuring of the WTN in the first decades of this century. The findings of this study shed light on the interpretation of the rapidly changing landscape of global trade.

Correlation Analysis of Stock Markets in the Belt and Road Regions

As a regional cooperation framework, the Belt and Road Initiative (BRI) aims to spur economic development by investing in infrastructure and improving connectivity between the countries in Asia, Europe, and Africa located along the Silk Road Economic Belt and the 21st Century Maritime Silk Road. Many studies have documented that BRI-related investment projects reduce trade costs, increase trade and investment flows, bring benefits to trading parties, and improve connectivity between countries along the Belt and Road. Financial integration is a critical aspect of intangible connectivity that is fundamental to and benefits from increased trade and investment flows between countries. This study examines the pairwise correlations between 39 stock markets in the Belt and Road regions from 2008 to 2018, focusing on the correlations between China and the other markets. We find that the correlation between two markets in the same region is greater than those in different regions. China has a higher correlation with markets in Southeast Asia and North and Central Asia than in other regions. The correlations fluctuate over time, but their relative rankings among market pairs remain stable. In the first half of 2015, there was an unusually low correlation between China and all other markets, most likely due to China’s stock market bubble. Our systematic examination of stock market correlations in the Belt and Road regions sheds new light on the temporal and cross-sectional dynamics in these understudied financial markets. The findings suggest significant potential for financial integration in the Belt and Road regions.

Экономические процессы в Грузии в условиях новых международных реалий

Georgia has been demonstrating double-digit GDP growth rates for the second year in a row. If in 2021 this growth was associated with a post-pandemic recovery, in 2022 a special contribution to the development of the Georgian economy was made by income from growing tourism and increased remittances from Russia many times over. The new international political reality that has developed in the world since the beginning of the Russian-Ukrainian conflict has also had an impact on the increase in trade flows now going through Georgia. Under the influence of rapid economic growth, the government has developed four main directions of Georgia’s development for the future – the transformation of the country into a transport, energy, technological and financial hub.

Моделирование внешнеторговых потоков высокотехнологичной продукции макрорегиона в условиях роста торговых барьеров

Current geopolitical situation requires improving a methodology for researching, planning and managing foreign economic activity of Russian regions. Imposed sanctions changed the development of Russian foreign trade, contributing to the transformation of foreign economic activity. The study aims to model high-tech trade flows of the Ural macroregion, considering trade barriers, as well as to determine new international trade boundaries and emerging high-tech trade flows. The Ural Federal District was selected for study due to its unique experience in the development of international trade and economic relations, especially in terms of Russian high-tech exports and imports. The gravity model of Anderson and van Wincoop was used to assess changes in trade with friendly and unfriendly countries. As the values of trade barriers and the structure of trade flows in the medium term were assumed stable, the traditional gravity model of Anderson and van Wincoop was modified to predict the redistribution of trade flows between Russia and friendly and unfriendly countries in conditions of increasing trade barriers with the latter. The modified gravity model was applied to predict changes in trade flows for different groups of high-tech products. A growth of trade barriers will cause an increase in trade flows between Russia and friendly countries and a decrease in trade with unfriendly countries. For any elasticity, as trade barriers increase, exports to unfriendly countries decline more than imports from them, and exports to friendly countries grow more slowly than imports. The resulting models and findings can be used by federal and regional authorities to improve spatial, scientific and technological development policies of Russia, as well as to adjust foreign economic strategies in regions of the Urals Federal District.

Тенденції, проблеми та перспективи розвитку світової торгівлі в умовах сучасних викликів

The proposed article aims to present a comprehensive overview of the problems and prospects of world trade, aimed at understanding the challenges it faces and substantiating the possibilities for its further development in the modern world. It is determined that the EU, China and the USA are the world’s largest exporters of goods. The dynamics of exports and imports of goods and services, the trade balance between the United States and the European Union, foreign trade by sectors of the economy are studied. The milestones of trade policy between the USA and the EU are outlined. The factors of recovery of the world economy after the COVID-19 pandemic are considered. It is substantiated that the full-scale war in Ukraine, the rupture of trade relations between the United States and China and the consequences of Brexit played a significant role in the formation of the main trends in bilateral trade on a global scale. A forecast of the development of world trade is carried out, emphasis is placed on the factors that will have both a positive and a negative impact on its dynamics. In particular, among the factors that will have a positive impact on the development of world trade, the following are allocated: growth in demand for certain types of services; trade and industrial policy reflecting the so-called «green transition» to an environmentally sustainable global economy. This will help increase trade flows of goods and services related to the production of energy-efficient goods and renewable energy sources. On the other hand, against the backdrop of the negative impact of geopolitical factors, including geopolitical tensions in the world and the war in Ukraine, industrial production is expected to slow down, with many economies maintaining relatively high interest rates as a result of ongoing inflationary pressures. The growing level of debt burden of the world’s economies, combined with high interest rates, will continue to have a negative impact on the macroeconomic conditions of many countries, which will lead to an increase in the cost of borrowing, and the policy of internal orientation in large economies may lead to increased restrictive measures in international trade, which will restrain the growth of its volumes.

Regional integration and non‐tariff barriers to Intra‐Sub‐Saharan Africa trade

AbstractThe paper assesses the ex‐post trade effect of sub‐regional trade agreements (RTAs), financial integration and other non‐tariff barriers on intra‐regional trade involving 43 Sub‐Saharan Africa (SSA) countries. The objective is to find out if RTAs within SSA had increased trade flows to inform current efforts of establishing a successful continental free trade area in SSA. Estimating a gravity model augmented with measures of trade agreements and financial integration, the paper made use of bilateral trade flows and key gravity covariates from CEPII database over the period 1960–2015. After controlling for the endogeneity of the trade agreement dummy, multilateral price resistance and zero‐valued trade flows, we find RTAs within SSA and especially among Economic Community of West African States and Southern Africa Development Community members to have had a positive and significant impact on bilateral trade. Financially integrated trading partners also traded more, while we also found distance, landlockedness, common currency and colonial link to have an impact on trade costs and bilateral trade flows within SSA. The results indicate the need to focus on policies to expand and integrate regional markets in SSA by removing impediments to trade and improving on trade facilitation measures to significantly improve trade performance under the newly established African Continental Free Trade Area.

Effect of European Integration on the Competitiveness of the Agricultural Sector in New Member States (EU-13) on the Internal EU Market

The 2004, 2007, and 2013 enlargement of the EU opened up free trade opportunities, increasing trade flows and demand for products of agriculture. On the one hand, the integration processes have intensified competition between countries, and on the other hand, they have created new opportunities for them. The aim of the study was to evaluate the effect of European integration on the competitiveness of the agricultural sector in countries that acceded to the EU in or after 2004. The assessment of the competitiveness of the agricultural sector was made using the following indicators: land and labour productivity in agriculture, importance of the agricultural sector in the economy of the EU countries, agricultural trade balance, importance of agricultural export in total export of the EU countries, trade coverage ratio, Grubel–Lloyd intra-industry specialization indicator, and Balassa comparative advantage indicator. The analysis was carried out from 2004 to 2020 with the Eurostat statistical database. The outcome of surveys implies that a gap still exists between the old and the new member states of the European Union (EU) in the efficient utilisation of their production factors, despite an increased dynamics of growth in labour productivity compared with the old member states, the so-called EU-15. The overall competitive position of all EU-13 countries in agricultural trade on the common EU market has improved; however, individual analysis reveals disparities between respective member states. In 2020, net exporters with comparative advantage were Hungary, Bulgaria, Lithuania, and Croatia, and net importers with comparative disadvantage included Poland, Czechia, Slovakia, Estonia, and Malta. Latvia and Romania improved their competitive position in agricultural trade.

The Impact of International Currency and Financial Integration on the Countries Economic Development: European Experience

In the article, the author makes an attempt to identify economic effects for the countries participating in the currency union based on a detailed analysis of the studies of foreign economists. The world experience in the formation of currency unions is diverse, there are more than 100 integration associations in the world, which are characterized by their heterogeneity and uniqueness. However, of all regional unions, only the European Union has achieved a high level of integration, and the euro has become a full-fledged regional currency. Thus, most of the studies within the framework of this topic are devoted to the experience of the development of the eurozone. Most empirical studies reveal positive effects from the introduction of a single currency in the form of increased trade flows and incomes, reduced inflation and exchange rate volatility. On the other hand, other studies argue that a monetary union does not have a positive impact on the level of development of the national economy, but rather increases macroeconomic volatility in the participating countries. As a result of the study, the author's interpretation of the benefits and costs of the country's entry into international monetary and financial integration relations is given. It is concluded that the effects of the intensification of economic integration are different for each period of time and for a particular regional association. The validity of the conclusions was carried out on the basis of general scientific methods: monographic survey, analytical and systematic approaches, comparative and historical-logical analyzes, methods of induction and deduction. Key words: monetary union, economic integration, single currency. &nbsp

CHINESE BELT AND ROAD INITIATIVE IN THE COUNTRIES OF THE GULF COOPERATION COUNCIL

China's relations with the Gulf Cooperation Council (GCC) countries have expanded significantly in recent years, especially in the areas of geopolitics, economics, trade, finance, banking, infrastructure, energy and security. China is deepening its economic cooperation with the GCC monarchies through the China-Arab Cooperation Forum (CASCF) and the China-GCC Framework Agreement. A mechanism that can strengthen trade relations is the FTA between China and the GCC. The Chinese New Silk Road Initiative (NSRI) was accepted by all GCC countries that became members or perspective members of the Chinese-led Asian Infrastructure Investment Bank (AIIB). The NSRI project called "Industrial Park - Connecting ports, Two-Wheel and Two-Wing Approach" would provide the basis for consolidating China-built industrial parks in key cities of the GCC with regional ports to create business clusters, increase trade flows, and connect supply chains across the region. The future of relations between China and the GCC oil-producing countries will be based on strong, less fluid building blocks, which has facilitated alignment of the NSRI with the national development concepts of the GCC countries. All, are designed to diversify their economies from a single-resource rentier model to a post-oil model, with the necessary transition to manage their dependence on foreign labor, public sector employment and heavily subsidized utilities.

The effect of non-tariff barriers reduction on trade of Kazakhstan

This article examines the impact of non-tariff barriers (NTBs) reduction on Kazakhstan’s trade due to the creation of the Eurasian Customs Union (ECU) in 2010. The assessment of the effect of NTBs reduction was carried out using a dynamic gravity model and econometric PMG method. The synchronization of the system of phytosanitary norms and the approval of a unified system of customs regulation have reduced the cost of trade. These innovations have reduced NTBs between ECU countries, which should increase trade flows between countries.According to the model’s estimates, the reduction in NTBs increased Kazakhstan’s imports from the ECU countries by 33% but did not have a significant impact on exports to these countries. That is, on average, Kazakhstani producers benefited less from joining the ECU than producers in other CU countries. These results confirm the findings of reports of international organizations that because of the creation of the ECU, non-tariff barriers between countries have significantly decreased. Unfortunately, Kazakh producers have not been able to take full advantage of the benefits of joining the ECU, and although NTBs between countries have decreased, total exports to ECU countries have not increased. At the same time, the reduction of barriers between countries allowed entrepreneurs from other countries to increase their exports to Kazakhstan (Kazakhstan’s imports) by 33 percent.

Infrastructure and Trade: An Empirical Study Based on China and Selected Asian Economies

We empirically determine the role of different forms of infrastructure on a country’s trade. We use an augmented gravity model that incorporates infrastructure in the estimation of merchandise trade flows. We take panel data, including China and 21 selected Asian economies, from 1999 to 2018. We find that the panel ordinary least squares (OLS) and poisson pseudo maximum likelihood (PPML) model estimations prove to be significant. Proxies for Transport Infrastructure including roads, railways, and sea transport, and Proxies for information and communication technology (ICT) infrastructure consisting of mobile, electricity, and internet connections show a strong and positive impact on trade while air transport and landline phone connection have an unexpected negative effect on trade. The positive estimates for quality of infrastructure signify that high standards of Transport and ICT infrastructures lead to increased trade flows of the exporting and importing countries. Results also show that cultural similarity leads to increased trade flows between China and its trading partners in Asia.

Russia and Iran in Conditions of Economic Sanctions: Anti-Sanction Policy and Resistance Economy

Economic sanctions always have destructive impact on economic structures of states, especially such developing countries as Iran and Russia. These countries used anti-sanction economic approach in order to oppose western sanctions. Strategy of anti-sanction economy is a tool of counteracting adverse impact of sanctions on national economy as a sanction target. The authors investigate the influence of strategy of anti-sanction economy on national economy of Iran and Russia, which are facing economic sanctions introduced by western countries. Research findings demonstrate that strategy of anti-sanction economy is a key priority of both Iran and Russia. This strategy helps these countries improve the local business climate, support small and medium enterprises and raise efficiency of local production units. Principle recommendations of our research for Iran and Russia imply that apart from using strategy of anti-sanction economy these countries should do their best to lower their dependence on the US dollar (strategy of dollarization), improve bilateral economic cooperation and eliminate trade barriers to increase trade flows.

Ex-post assessment of heterogenous effects of trade agreements: the case of Turkey

Purpose -Free trade agreements (FTA) are prominent features of international trade. The proliferation of FTAs over the past 20 years is one of the most prominent aspects of the global economy. Turkey has also signed many FTAs in this period on the basis of obligations stemming from customs union with European Union. FTAs aim to increase trade flows and welfare through liberalizing trade and achieving a deeper integration between partners. In this respect, FTAs are getting more and more important as international trade is a crucial tool to boost the economic development. Indeed, getting the utmost benefit from FTAs is very important for Turkey and other developing countries. Regarding the increasing importance of FTAs, the ex-post effects of FTAs on Turkey’s trade are examined in this paper. Methodology -In the light of recent techniques, structural gravity model is used in this study. Trade data used consists of aggregate trade flows among pairs of 90 countries from 1988-2016, 29 years in total. As the estimation technique, Ppml_panel_sg command is used. This is an estimation command for Poisson pseudo-maximum-likelihood (PPML) regression for panel gravity models with time varying importer and exporter fixed effects and time invariant pair fixed effects. Findings-The results indicate the econometric evidence of the impact of FTAs on Turkey’s trade. When all FTAs are considered at macro level, the results suggest that, FTAs had a statistically significant positive effect on exports and imports of Turkey. However, at micro level, there is substantial variation and heterogeneity in the agreement specific effects and trade direction specific effects within the agreement. Conclusion-This paper provides the first evidence that the impact of FTAs are heterogenous and not all the FTAs affected the trade of Turkey in the same positive way. Even within the same agreement, the effects vary considerably depending on the direction of trade.

Trade flow of manufacturing sector and foreign direct investment in ASEAN economic integration: the gravity model of trade

This study aims to determine the effects of ASEAN economic integration on the manufacturing sector's trade flow and foreign direct investment. This study using panel data regression. The results show that ASEAN economic integration affects trade in the manufacturing sector and foreign direct investment (FDI) in ASEAN member countries. The tariff elimination policy increased trade flows in the manufacturing sector and foreign direct investment. The variable of GDP has a positive and significant effect on the manufacturing sector's trade flows and foreign direct investment. Exchange rate variables have a negative and significant effect on trade flows in the manufacturing sector and foreign direct investment. Meanwhile, the distance variable negatively affects trade in the manufacturing sector, but it does not affect foreign direct investment.

Trade and Environment Governance at the World Trade Organization Committee on Trade and Environment

The expansion of the world economy post World War II, and the realization that occurred in the 1960s that certain natural resources were exhaustible,1 raised concerns about the potentially high environmental costs of economic progress hailed by the Bretton Woods system. With the rapid industrialization and a sharp increase in trade flows, environmental concerns gave impetus to movements and the formation of lobby groups that pressured governments to take active measures to protect the environment. Governments around the world started passing laws, which could be seen as direct or indirect trade restrictions, to control environmental pollution and to preserve exhaustible natural resources. It was becoming common knowledge that international trade could amplify both the positive and the negative effects that economic activity can have on social and environmental development. It was against this backdrop that the UN Secretary-General requested the General Agreement on Tariffs and Trade (‘GATT’) participation in...

The Trade Effect of the EU’s Preference Margins and Non-Tariff Barriers

Nowadays, trade negotiations afford both liberalism- and protectionism-oriented policies. Indeed, in recent decades, the developed countries have been actively engaged in negotiating many preferential agreements to integrate developing countries (DCs) into world trade and encourage their economic growth, but many of these schemes contrast with the complex rules, often imposed on international markets, that still are an obstacle for exporters. Their presence and related costs reduce the importance of preferential trade agreements (PTAs) in increasing trade flows. This article attempts to assess the impact of preferential trade policies on trade flows controlling for different non-tariff barriers (NTBs), using a structural gravity model. The analysis uses disaggregated data, registered in the year 2017, on EU imports (defined at level HS-6 digit) from a large number of exporters (187 developed and developing countries) and also includes the intra-EU trade. Our results show robust and positive estimates for the impact of preferences on bilateral trade flows, however, higher non-tariff barriers are likely to play a role in reducing both the extensive margins of trade, and so tariff preferences alone are not sufficient to access international markets. The impact of NTBs on the intensive margin of trade is ambiguous; some measures may act as catalysts and therefore increase trade, and others may act as an additional cost of trade and thus hinder trade.

Evidence on PPP with China along the belt and road using the three-regime TAR cointegration tests

The Chinese Government has proposed the ‘Belt and Road Initiative’ (BRI) in order to increase trade flows and economic prosperity among the Belt and Road (BR) member countries. The BRI may call for enlargement of economic cooperation as manifested by forming an economic or monetary union in the long term. It is therefore essential to choose a subset of member countries that fulfils the criteria for joining the potential economic or monetary union. The validity of purchasing power parity (PPP) implies well-integrated goods markets and is a pre-condition for further economic convergence. While the presence of transaction costs causes nonlinearities in the adjustment mechanism, our empirical study applies a three-regime threshold autoregressive (TAR) cointegration method for analysis. Our results support the existence of a PPP relationship with China for 12 sampled Asian member countries. Chinese policymakers can prioritize these BR countries for closer economic cooperation. Also, this TAR cointegration method can estimate the unobservable proportional transaction costs from the thresholds. The results reveal BR countries with large thresholds as targets to curtail transaction costs of trading in order to enhance the efficiency in international goods arbitrage and the degree of trade integration along the BR routes.

The African Continental Free Trade Area

Political momentum towards Africa-wide free trade has been intensifying. In March 2018, over 40 countries signed the African Continental Free Trade Area (AfCFTA) agreement. Once fully implemented, the AfCFTA is expected to cover all 55 African countries, with a combined GDP of about US$2.2 trillion. This SDN takes stock of recent trade developments in Sub-Saharan Africa and assesses the potential benefits and costs of the AfCFTA, as well as challenges to its successful implementation. In addition to increased trade flows both in existing and new products, the AfCFTA has the potential to generate substantial economic benefits for African countries. These benefits include higher income arising from increased efficiency and productivity from improved resource allocation, higher cross-border investment flows, and technology transfers. Besides lowering import tariffs, to ensure these benefits, African countries will need reduce other trade barriers by making more efficient their customs procedures, reducing their wide infrastructure gaps, and improving their business climates. At the same time, policy measures should be taken to mitigate the differential impact of trade liberalization on certain groups as resources are reallocated in the economy and activities migrate to locations with comparatively lower costs.