International Trade Integration Research Articles

The Future of Trade and Environment: A Roadmap for Reconciling Two Competing Goals

The global market has experienced an unprecedented increase in cross-border trading, culminating in substantial economic growth for numerous nations. However, this extensive process of economic integration has cast a shadow on various associated domains. Trading activities, intricately linked to the environment due to their reliance on natural resources for production, have indisputably left their mark on global environmental conditions. International trade and environmental preservation, as distinct disciplines, operate under separate sets of laws and regulations. Environmental laws encompass multilateral environmental agreements, and regional and national regulations, while trading activities are governed by the multilateral agreements of the World Trade Organization (WTO) and bilateral agreements. The integration of international trade with environmental measures has become a contentious subject. Proponents of trade argue that it facilitates global access to environment-friendly goods and technologies, thereby facilitating the maintenance of high environmental standards. In contrast, environmentalists contend that international trade laws and practices often impede the governmental efforts to implement regulatory measures aimed at pollution prevention and environmental restoration. The WTO has faced criticism for its perceived inaction in addressing environmental concerns ensuing from trade, despite acknowledging environmental protection as an objective in the preamble of the Marrakesh Agreement. The global discourse on environmental protection has intensified, seeking to accord environmental issues the same weight as trade disputes. This article endeavours to delve into the multifaceted interactions between international trade and environmental protection, scrutinizing their regulatory mechanisms while highlighting the underlying grounds for the disputes that arise between these two realms. Agreement on Fisheries subsidies, Committee on Trade and Environment, Environmental Protection, Free Trade, GATT, Multilateral Environmental Agreements, WTO

On the revision of detecting learning-by-exporting: empirical evidence from the small- and medium-sized enterprises in Vietnam

This study aims to identify the role of exports in improving the productivity of small- and medium-sized enterprises (SMEs) in Vietnam. We exploit the firm-level panel dataset from the Vietnam SME Survey between 2009 and 2014. This remarkable period occurred two years after Vietnam’s accession to the World Trade Organization. Hence, for the first time, the learning-by-exporting hypothesis was tested for a case study of SMEs in developing countries in the context of international trade integration, such as Vietnam. By applying the propensity score matching method, our results are as follows. First, we find strong evidence that SMEs in Vietnam could improve their productivity when exporting during the studied period. Second, exports have a significant impact on the productivity of SMEs in non-municipal areas of Vietnam. Based on these findings, policy recommendations are suggested for stimulating the productivity of SMEs in developing countries. In particular, SMEs in non-municipal provinces might need more favorable policies to boost export activities.

Assessment and Analysis of Stock Market Integration Among the Countries of the D8 Group

The D8 group pursues different goals, and one of the most important ones is in the field of economy and economic development of the member countries. The present study thoroughly assesses financial integration and its effective variants. Due to the relatively low physical capital interruption and the more intrinsic consumption fluctuations, developing economies benefit from financial integration. Four criteria have been used to assess the financial integration among the D8 group: foreign assets, foreign debts, volume criteria, and investment criteria. The data is based on Eviews software, and the least-squares method (EGLS) for 2000-2019 has been analyzed. The present study results confirm the effect of financial development and international trade integration on financial integration, and between the two, based on the estimated model coefficients, the impact of international trade integration on financial integration is more significant. Also, among the three criteria of financial development, the development of the banking sector is not a good measure of the financial development in countries and has less of an impact on D8 Group's financial integration.

Changes in Trade Structure of Paper Industry in Korea: Focused on Changes in Intra-Industry Trade

This study examined the changes in intra-industry trade of the Korean paper industry while analyzing the trade structure of the industry from 2000 to 2021. The results are summarized as follows. First, most paper industry products exhibited intra-industry trading, and the portion of intra-industry had grown. The intra-industry trade included recovered, printing, sanitary, kraft, and corrugated papers as well as cardboard. Second, more products, including sanitary, kraft, and corrugated papers as well as cardboard, were included in vertical intra-industry trading. Third, with the exception of sanitary paper, most vertical intra-industry trade showed inferior vertical intra-industry trade. An increasing part of the intra-industry trade in the paper industry showed the intensified integration of international trade. However, reducing inferior vertical intra-industry trade could be a challenge for the future development of the Korean paper industry.

IMPACT OF CORONAVIRUS (COVID-19) ON THE GLOBAL ECONOMY

The COVID-19 pandemic and associated lockdowns have hit the global economy and affected the basis of the socio-economic and business models, which have already undergone some complex changes. Industrialized countries are witnessing a steady decline in interest rates and GDP growth rates, possibly due to medium-term demographic and technological changes, a growing demand for savings assets, and increasing divergences between individuals, firms, and regions. In conditions of the demographic transition, pension provision and health care are placing an additional burden on the state budget. These trends are increasingly restricting monetary and fiscal policy to stabilize the economy in the event of adverse shocks. On the technological side, the digitalization of consumption and production requires structural adjustments in various areas in order to remain competitive and create new opportunities for displaced jobs. For a number of years, globalization has been facing serious obstacles associated with growing protectionism and skepticism about the universal benefits due to ever-increasing international trade and financial integration. The article focuses on the interaction of these trends and the shock caused by COVID-19. International economics and economic policy deal mainly with macroeconomic, trade and technological aspects. The article concluded that measures to restore the economy should be comprehensive, not limited to individual areas.

Uruguay y la necesidad de modernizar su estructura institucional para desarrollar su estrategia de inserción comercial internacional. ¿Existe hoy una estructura institucional abocada a la inserción económica-comercial internacional del país?

Uruguay has an institutional structure dedicated to international economic and trade integration, which has been strongly influenced by our presence in Mercosur over the last 30 years. The institutional design of foreign trade policy is one of the pillars on which a country’s international insertion strategy is based. Foreign trade policy cannot be divorced from the institutions and processes that shape it. The contents of a policy are important, but so are the formal aspects that allow those contents to flow. For a country the size of Uruguay, development is closely linked to how it manages to insert itself into other markets. In addition, Uruguay needs to sustain its economic and trade insertion based on agreements whose legal and institutional nature allows it to deploy a proactive and dynamic external trade policy that has a positive impact on competitiveness. As a result of the poor results obtained by the regional trade bloc throughout its history in terms of its external trade agenda and considering a change of government in Uruguay in March 2020, it is perceived that the country is at a turning point that can generate new opportunities. That is why, in this research, we have decided to delve into what institutional architecture we have and what need for modernization and adaptation it requires to be efficient, dynamic, proactive, and able to work in a coordinated manner.

TÜRKİYE'DEKİ CARİ AÇIKLARA NEDEN OLAN FAKTÖRLER: KISA VADELİ SERMAYE GİRİŞLERİ, ENERJİ İTHALATI YA DA ALTIN İTHALATI MI?

This study investigates the effects of gold imports, energy imports and short-term capital inflows on current account deficits using Turkish quarterly data for the period 1996Q1–2021Q1. To this end, first, the current account deficit model is built based on the literature review and estimated using the autoregressive distributed lag (ARDL) model. Then the presence of cointegration among relevant variables is tested by employing bonds testing, and then the error correction model is estimated. The bonds testing results indicate cointegration among current account deficits, gold imports, energy imports, portfolio investment, foreign direct investment, reel effective exchange rate, real gross domestic products, openness, and financial development proxies. The empirical findings of this study reveal that while gold imports play a significant deteriorating role on Turkish current account deficits in the short and in the long term, energy imports and portfolio investment only have a short-term effect. Furthermore, appreciation of Turkish currency seems to increase current account deficits only in the long term; it has no short-term effect. Interestingly, the openness proxy, which is being used as a measure of international trade integration of a country to the world economy, exerts no effect on current account deficits neither in the long-term and nor in the short-term.

The comparative advantages and the patterns export of vietnam agricultural product at integration context

The paper aims to identify agricultural produce with comparative advantages in addition to the structure of Vietnam's agricultural exports in the context of international trade integration in the period from 2000 to 2018. By using the Worldbank data (the SITC- revision 3), the indicators of the product structure analysis HHI and the revealed comparative advantage RCA indicated that given rapid commercial integration of Vietnam from 2000 to 2018, Vietnam only focused on limited key agricultural produce and neglect those with huge export potentials, though the structure of the export industry has been more diversity while that of export markets barely show changes. This implies that Vietnam is only focusing on certain markets and has not made good use of the trade agreements it has entered into to exploit the remaining markets. Through the research results, the authors believe that Vietnam has great room and opportunity in taking advantage of trade agreements, especially the EVFTA agreement (effective from August 1, 2020) to improve Vietnam's export capacity. Finally, through the research results and related references, the authors give 6 recommendations to the government and enterprises operating in the field of agricultural produce to maximize the export capacity of agricultural produce in particular and the export capacity of Vietnam in general.

Analysis of international trade integration of Eurasian countries: gravity model approach

The recent changes in world politics and economy, along with the breakup of the Iron Curtain, directly influenced the foreign trade structure of the Eurasian countries. The foreign trade relations, controlled by the central planning during the Union of Soviet Socialist Republics (USSR) era, began to be formed according to free-market conditions. In this paper, empirical gravity models, covering data of 86 countries for the 1994–2018 period, are used to determine factors affecting the international integration process of the Eurasian countries. For these purposes, we estimated the classical and augmented gravity models to scrutinize the effects of border, infrastructure, trade policies, and institutions, along with the main factors. Based on the estimation results, we concluded that the Eurasian countries during the analysis period were 35% less integrated with the world trade system than the predicted potential level.

DIVERSIFICATION OF TRADE-INTEGRATION RELATIONS OF UKRAINE

Introduction. In the open economy, the diversification of international trade and integration relations is one of the dominant factors in reducing the uncertainty of the external environment. The process of Ukraine's integration into the world economy intensified after the country's independence and was accompanied by numerous turbulences in the internal and external environment. The strategic task for Ukraine now is to develop and implement a balanced foreign economic strategy to create a competitive economy and justify measures to reduce its sensitivity to these adverse conditions by improving the mechanisms of foreign economic activity. The purpose of the article is a comprehensive assessment of the diversification of domestic trade-integration relations, taking into account the turbulence of the international economic space. Results. The main indicators of diversification of international trade and economic relations of Ukraine are analyzed, on the basis of which its key factors having a specific context and geographical character are singled out. The main problematic issues of development of domestic foreign trade in terms of external and internal factors are identified. The structure and dynamics of spatial and commodity diversification of trade and integration relations of Ukraine are considered. The main directions of increasing the export diversity of commodity flows are systematized and the tasks of expanding trade and economic ties and deepening the country's integration into the world economy are outlined. Conclusions. The degree of diversification of Ukraine's trade and integration relations is quite high and it is determined by the concentration of its efforts on creating favorable conditions for trade in EU markets. At the same time, there are numerous positive trends in the development of diversified trade and integration relations of Ukraine, which indicate the formation of a basis for further stimulation of exports of innovative and knowledge-intensive products and, consequently, greater competitiveness in world markets. Key words: diversification, world economy, international trade, international trade integration relations.

DOMINANTS OF INTERNATIONAL TRADE INTEGRATION DEVELOPMENT

Introduction. The dynamic development of trade and integration processes, their expansion and deepening necessitate the identification of key dominants of this process and the factors that influenced their formation and development. The purpose of the study is to determine the modern dominants of the development of international trade integration and to identify the factors of their formation. Results. The article identifies and substantiates the key dominants of international trade integration, namely: transgeographic spatial localization, which is manifested in the emergence of international trade integration at the interregional and sometimes intercontinental level; trade liberalization, which takes place at both the global and regional levels and is manifested in the reduction of tariffs, removal of non-tariff barriers and the growth of the total number of regional trade agreements; multilevel trade integration - modern integration processes cover not only countries, subregions and regions, but also corporations, small and medium enterprises through their inclusion in global value chains; multilevel implementation of trade integration processes requires the formation of a multilevel regulatory system. The dynamics of the share of exports of interregional and intercontinental trade and integration associations in world exports of goods and services is analyzed. The determining factors of the dominants of international trade integration are singled out and classified. It is determined that economic factors, to a greater extent, affect trade liberalization and multilevel integration processes. Conclusions. Integration processes are an integral part of modern global economic development. They are developing quite dynamically at all levels. Among the modern dominants, it is necessary to single out transgeographic spatial localization, trade liberalization, multilevel trade integration, formation of a multilevel system of regulation. However, it should be added that in a turbulent economic environment, which can generate or transform modern factors, there is a transformation of the dominants of international trade integration. Keywords: international trade integration, trade liberalization, multilevel international trade integration, regional trade agreements, integration associations.

Russia and WTO: interaction and security issues

Globalization as a process of expanding the interaction and mutual influence of countries and peoples, intensifying connections, and relationships between communities, manifests itself in the integration of international trade and investment activities. The influential international organization, the WTO, plays a very significant role in facilitating the freer movement of goods and services, capital and labor, which contributes to the weakening of protectionist tendencies. This makes it necessary to study the problem of interaction and security for the WTO member countries. The purpose of the study is to identify the advantages, possible risks, and scenarios for the Russian economy development in the context of Russia’s presence in the WTO. The methodological basis for the study of the interaction and security issues during Russia’s accession to the WTO was a set of general scientific and specific scientific methods – logical, concrete-historical, comparative, analysis method. The specificity of the research subject determined the use of conceptual and systematic approaches. Research result: the WTO problem zones have been identified, the elimination of which will ensure more effective regulation of foreign trade relations in the world market; competitive advantages, risks and expected consequences related to Russia’s obligations upon accession to the WTO in the sphere of economy, finance, taxation and customs relations are identified and analyzed; the sphere of integration relations in the post-Soviet space; the sphere of ensuring the country’s defense capability; the sphere of access and use of natural resources; scenarios of situation development for Russia in connection with the accession to the WTO are considered – catastrophic, optimistic and realistic; it is found that monitoring and rapid response to the current situation in the Russian economy will determine a more effective economic trajectory

Зовнішньоторговельна інтеграція України в умовах поглиблення міждержавних конфліктів

Зовнішньоторговельна інтеграція України в умовах поглиблення міждержавних конфліктів

DO EXCHANGE RATE CHANGES HAVE SYMMETRIC OR ASYMMETRIC EFFECTS ON INTERNATIONAL TRADE INTEGRATION?

This paper investigates whether exchange rate changes have symmetric or asymmetric effects on international trade integration, using quarterly time series data from 1980: Q1 till 2018: Q2. The recent innovation in cointegration techniques allows us to estimate nonlinear effects. We apply both linear autoregressive distributed lags (ARDL) and nonlinear ARDL models. The empirical results indicate that asymmetric relationship exists between exchange rate (REER) and international trade integration (ITI) in the short-run as well as in the long-run, meaning that real effective exchange rate has negative and statistically significant effects on international trade integration. Robustness checks indicate no role of various crisis including GFC on the relationship between ITI and REER, however, regime change has significantly negative impact in short-run and positive in long-run on ITI. The results are important because when we separate currency appreciation from the depreciation, it has the significant and different effects on international trade integration.

The Strategic Vision behind Vietnam's International Trade Integration

This paper evaluates the positioning of Vietnam in international trade. It addresses the key question of how Vietnam uses its participation in international trade agreements as a tool to ensure and advance national interest and security through increased economic power. The paper first examines how Vietnam participates in the international integration of the ASEAN Economic Community (AEC), and then looks at the importance for Vietnam to be outward-looking; that is, to participate in trade agreements outside the South-East Asian region. Finally, I examine how reforms required under international trade agreements push Vietnam into domestic economic reforms. My conclusion is that the political elite of Vietnam has identified trade, export-oriented growth and international economic integration as international policy preferences and has used international trade integration as a strategic instrument to maximise these national priorities within the regional and international trade system. Therefore, Vietnam has a very strategic view on international trade integration and uses it as an instrument to ensure its national interest and security through increased economic power. Through careful selection of trade agreements, Vietnam aims to position itself in a strategically advantageous position vis-à-vis other economies of the AEC, to ensure continued economic growth through preferential access to key markets and to push through some of the more difficult and sensitive domestic economic reforms, using its commitments under external trade agreements as a lock-in mechanism.

TRADE INTEGRATION AND INTERNATIONAL FINANCIAL INTEGRATION: EVIDENCE FROM ASIA

This paper investigates the relationship between international trade integration and international financial integration in Asia using a dataset covering the period from 2001 to 2015. Using a simultaneous equations system, this paper sheds further light into international trade integration and international financial integration processes of Asian countries. We account for the bidirectional causality between these two variables by employing a system of simultaneous equations. Utilizing the two-stage least squares estimator, we find a positive and significant bidirectional relationship between international trade integration and international financial integration. This result has strong policy implication relating to the liberalization process in these Asian countries.

How Does the Health Sector Benefit from Trade Openness? Evidence from Sub‐Saharan Africa

AbstractThe linkages between international trade and economic performance has received significant attention from policymakers and researchers. There is consensus in the literature that improved trade openness corresponds to improved economic growth. In this study, we argue that trade openness has a significant impact on population health outcomes and financing. The study employed a balanced panel data for 42 sub‐Saharan African (SSA) countries over the period 1995–2013. Population health status was measured by total life expectancy at birth, infant mortality rate and under‐five mortality rate. Three main estimation models were used: (1) fixed effect (FE); (2) random effect (RE); and (3) the generalized method of moments (GMM) in estimating the relationships. The results showed that trade openness has a positive and significant effect on life expectancy, a negative and significant effect on the infant mortality rate and a negative impact of trade openness on the under‐five mortality rate. A positive effect of trade openness on health financing was also realized. The findings of the study support international trade integration and emphasize the need for countries to be conscious of gains from trade within sub‐sectors of the economy.

Financial Development, International Trade, and Stock Market Integration: Evidence in Six Southeastern Asia Countries

Measuring the integration degree of the national stock market is popular in the general globalization trend. This paper applies the measurement method of Chaiporn et al. (2016) to consider the Vietnamese stock market, and five other typical Asian economies in the period from 2000 to 2015. The authors’ method has its foundation in the research of Wälti (2011), An and Zhang (2013) and Dasgupta (2010). The paper adopted the fixed effect and random effect models to measure the impacts of financial development, financial integration and international trade integration to national stock market integration. The research findings revealed the positive affect of financial integration and development on the national stock market’s integration with the global stock market in Vietnam and five other countries. In addition the research found international trade integration does not affect the integrating securities market, possibly because the bilateral trade is too small to impact the bilateral stock market’s integration.

Trade, Skill Premium and Endogenous Firm Organization

In this paper, I propose a new theory to address a critical question in international trade: 'What factors explain the worldwide increase in skill premiums following international trade integration'? I show how trade cost reductions induce firms to choose a higher degree of labor specialization and evolve into more skill-intensive ones. I further demonstrate how these internal horizontal organizational changes directly affect aggregate skill intensity and the skill premium in a general equilibrium setting. Lastly, I calibrate this model to the US data ans show that a 20% rise in trade costs can reduce the skill premium by 6%.

Scenarios of Business Development in the Agricultural Machinery Market Under Conditions of International Trade Integration

The purpose of the article is to identify and analyze scenarios of business development in the agricultural machinery market under conditions of international trade integration using the case of present-day Russia and to determine the need for state support for domestic production. As a methodological provision, we use the scenario analysis method adapted by the authors for the determination and analysis of possible scenarios of business development in the agricultural machinery market under conditions of international trade integration. From the research results, the authors conclude that the Russian agricultural machinery market develops dynamically under the influence of multiple favorable factors and positive tendencies, which include a population’s income growth, increases in crop areas of farm crops, and state agricultural machinery modernization programs, among other. In view of recent events in the currency market, Russian manufacturers of agricultural machinery are presented with better opportunities to export their products. The performed analysis of features of the Russian agricultural machinery market under conditions of international trade integration shows that increased demand and market prices are probable and that this could lead to enterprise income growth. From our scenario analysis of business development in the agricultural machinery market under conditions of international trade integration, we identify the absence of an urgent need for state interference in market processes in the Russian market for agricultural machinery in the next five years.