Inter-country Trade Research Articles

Inter-country Energy Trade Analysis Based on Ecological Network Analysis

Abstract Energy embodied in the economic activities are making connection between countries more closed under the rapid globalization. The inter-country energy trade reallocates the energy resources and sustains economic development, which is crucial to global energy supply and security. To investigate the structural features of the inter-country energy trade markets, we built the inter-country energy trade network covering 40 representatives based on the input–output table and ecological network analysis (ENA). The indicator of control difference is used to explore the relationship between countries within the global energy supply market. The results show that Canada, Latvia, Malta and Poland are the main exporters, and the Japan, Germany, Korea, Turkey and Mexico are main importers. According to the dependence results, such as Japan has strong dependence on Canada, Korea is highly dependent on the Malta can provide insights for how to improve countries’ security by adjusting the energy trade policies.

'Governed' Trade: Value Chains, Firms and the Heterogeneity of Trade in an Era of Fragmented Production

Over the past several decades, firms have de-verticalized and internationalized increasingly complex manufacturing and service functions, a phenomenon studied across the social sciences. However, the disciplines disagree over whether the fragmentation of production is substantively novel, requiring amendments to trade theory, or is simply a secular deepening of the international division of labor. Some economists view it as “just trade,” driven by well-known actor-less determinants, such as factor endowments, technology, and returns to scale, while more recent firm heterogeneity trade theories consider firm behavior. By contrast, other heterodox social science approaches differ by focusing on the strategic actions of firms and sector-specific governance as independent drivers which “govern” trade and determine the division of value between countries. This paper develops novel measurements by utilizing unique transactional trade data – the raw firm-level trade transactions that comprise standard inter-country trade statistics – on 439 of China’s largest exporters in eighteen sub-sectors of the electronics and light industries, to examine whether trade is heterogeneously governed in ways theorized by the global value chains (GVC) literature. It finds substantial empirical support for GVC-governed trade, and advances both GVC and firm-centric trade theory along several fronts.

‘Governed’ trade: global value chains, firms, and the heterogeneity of trade in an era of fragmented production

ABSTRACTOver the past several decades, firms have de-verticalized and internationalized increasingly complex manufacturing and service functions, a phenomenon studied across the social sciences. However, the disciplines disagree over whether the fragmentation of production is substantively novel, requiring amendments to trade theory, or is simply a secular deepening of the international division of labor. Some economists view it as ‘just trade,’ driven by well-known actor-less determinants, such as factor endowments, technology, and returns to scale, while more recent firm heterogeneity trade theories consider firm behavior. By contrast, other heterodox social science approaches differ by focusing on the strategic actions of firms and sector-specific governance as independent drivers which ‘govern’ trade and determine the division of value between countries. This paper develops novel measurements by utilizing unique transactional trade data – the raw firm-level trade transactions that comprise standard inter-country trade statistics – on 439 of China's largest exporters in 18 subsectors of the electronics and light industries, to examine whether trade is heterogeneously governed in ways theorized by the global value chain (GVC) literature. It finds substantial empirical support for GVC-governed trade, and advances both GVC and firm-centric trade theory along several fronts.

Diffusion of Power and Diplomacy: New Meanings, Problem Solving, and Deadlocks in Multilateral Negotiations

The classic hierarchical distribution of power featuring nation-states is now increasingly supplemented with a diffusion of power with multiple actors. A hierarchical concentration of power is predicated toward bargaining coercion and great powers can impose their solutions on the weak. Diffused power allows for joint problem solving among multiple actors through negotiations but also makes reaching agreement hard because of the relatively greater equality among bargaining units. Reaching agreement in a diffusion of power is also hard because of the new perspectives and meanings that arise through globalized interactions. These new meanings – for example, commerce viewed through the lens of intra-firm rather than inter-country trade – make it hard to fashion solutions based on past understandings centered on territoriality and nation-states.

Trade Integration and Trade Imbalances in the European Union: A Network Perspective

We study the ever more integrated and ever more unbalanced trade relationships between European countries. To better capture the complexity of economic networks, we propose two global measures that assess the trade integration and the trade imbalances of the European countries. These measures are the network (or indirect) counterparts to traditional (or direct) measures such as the trade-to-GDP (Gross Domestic Product) and trade deficit-to-GDP ratios. Our indirect tools account for the European inter-country trade structure and follow (i) a decomposition of the global trade flow into elementary flows that highlight the long-range dependencies between exporting and importing economies and (ii) the commute-time distance for trade integration, which measures the impact of a perturbation in the economy of a country on another country, possibly through intermediate partners by domino effect. Our application addresses the impact of the launch of the Euro. We find that the indirect imbalance measures better identify the countries ultimately bearing deficits and surpluses, by neutralizing the impact of trade transit countries, such as the Netherlands. Among others, we find that ultimate surpluses of Germany are quite concentrated in only three partners. We also show that for some countries, the direct and indirect measures of trade integration diverge, thereby revealing that these countries (e.g. Greece and Portugal) trade to a smaller extent with countries considered as central in the European Union network.

The Effects of Global Debt Problems on the ASEAN Economy

The Global Financial Crisis and the subsequent eurozone crisis magnified the large debt accumulated by developed countries, particularly the United States. There have been several stimulus attempts in the form of quantitative easing in both the United States and in Europe. However, the results have not been satisfactory. Limited growth in the developed regions will have an impact on ASEAN due to its dependency on exports. At present, ASEAN inter-country trade is low and is therefore unable to substitute for the loss of exports to developed economies. Thus, a new paradigm has to be created to provide other avenues of growth. The most probable drivers of growth come from two sources: empowering domestic consumers to boost consumption and spending; and intensifying trade with other countries in the region. The former policy should be designed in a manner where a rise in local demand will not trigger a price hike attributable to an increase in the unit cost of production. The latter policy should stimulate trade flows in the region through the provision of additional infrastructure, as the current foundation is insufficient.

E-Commerce in Africa: Challenges and Solutions

Abstract Trade in Africa has the potential to be revolutionized by Information Communication Technologies (ICTs), which have led to the development of e-commerce. These technologies have the capacity to boost intra-country and inter-country trade and subsequently promote economic development in African countries. However, many African States are yet to reap the full benefits of e-commerce, as it has not penetrated the continent to the extent experienced by Western countries. The lack of adequate ICT infrastructure, lack of basic ICT knowledge and threat of cybercrimes has created a significant barrier to the adoption and growth of e-commerce in many African countries. This article analyses the persisting digital divide barriers that have inhibited the penetration of e-commerce in Africa and suggests regulatory solutions to resolving them.

Agricultural Liberalization in the Doha Round

Agriculture is an urgent and vital problem for developing countries, and even more so for the poorest countries that are often dependent on a very small set of commodities, many of which are highly subsidized and protected in the OECD countries. The Uruguay Round brought agriculture into the WTO legal framework, but did not lower the effective level of OECD farm protection after 1995 and granted many exceptions to WTO rules that reinforced agricultural protection. While there are a number of diverging forces that are potential sources of change in the levels and patterns of agricultural protection, the recent farm policies adopted by the U.S. and EU reflect an absence of significant domestic reform and appear to be going in the wrong direction. The analysis of agricultural liberalization reveals very large potential gains for both developed and developing countries that will come especially from own-country liberalization as well as from inter-country trade, significant benefits that may be realized by the poorest developing countries, and limited benefits from existing preferential agricultural arrangements. An ideal program for agricultural liberalization in the Doha Round would involve substantial reductions in the high tariffs that exist in both developed and developing countries using the Swiss formula approach and limiting exceptions and special and differential treatment, elimination of agricultural export subsidies, and making meaningful reductions in domestic supports. The negotiations should not get hung up on issues of food security and the effects of higher prices for low-income consumers, and a special safeguard for agriculture is not recommended. It is imperative that agricultural liberalization should be combined with appropriate domestic policies and actions and international assistance, if needed, to help finance emergency food inventories and aid to disadvantaged groups. Patrick A. Messerlin is Professor of Economics at the Institut d'Etudes Politiques de Paris (Sciences Po) and director of the Groupe d'Economie Mondiale de Sciences Po (GEM) which is an independent research center seeking to improve the performance of French and European public policies in a global world. In 2002-2005, he was co-chairman with Dr Ernesto Zedillo, Former President of Mexico, Director of the Yale Center for the Study on Globalization, of the Task Force on Trade in the UN Millenium Development Goals Project, which produced a Report on Trade for Development released in May 2005. In 2001-2002, he was special advisor to Mike Moore, WTO Director General. He has published a dozen books and a hundred papers on trade theory and policy. His most recent book is Measuring the Costs of Protection in Europe: European Commercial Policy in the 2000s, Institute for International Economics (Washington) 2001.

The Impact of Exchange Rate Risk on Intercountry Trade and Production

Analysing various arrangements of intercountry trade, this paper investigates the impact of exchange rate risk on production and expected trade. It addresses the question how a mean‐preserving spread of the exchange rate distribution effects strategic aspects of different trading arrangements. It is shown that in an uncertain environment the efficiency loss induced by double marginalization can in general not be overcome by negotiation.

Inter-Country Trade Patterns in Europe and the Asia-Pacific: Regional Structure and Extra-Regional Trends

Inter-Country Trade Patterns in Europe and the Asia-Pacific: Regional Structure and Extra-Regional Trends

Economic Factors in the Development of Canadian-American Trade

Canadian market absorbed approximately $20,000,ooo worth of American goods. In 192-9 the values of trans-border shipments reached the peak figures of $5oo,ooo,ooo for the southward flow and almost $900,000,000 for the stream moving northward.' The vast proportions of this intercountry trade and its remarkably persistent growth warrant consideration of the factors which have motivated and directed the development.