Main Trading Partners Research Articles

The Factors Affecting Egypt’s Exports: Evidence from the Gravity Model Analysis

This paper investigates the factors that affect Egypt’s bilateral export flows to its main trading partners. Based on the panel data, the gravity model approach has been used to estimate Egypt’s exports through annual data covering the period 2000 to 2013 for 42 main trading partners. The gravity model in its fixed effects panel data explained 84 percent of the fluctuations in Egypt’s exports. The results show that Egypt’s GDP, importer’s GDP, importer’s population, regional trade agreements (RTA) and the border between Egypt and its trading partner are the main factors affecting Egypt’s exports to its main trading partners. All these factors affect Egypt’s exports positively. Transportation costs (distance variable) are found to have negative but insignificant effect on Egypt’s exports. All these results can help the government and policy makers to undertake appropriate measures to improve the performance of the Egyptian foreign trade sector.

Cross-Border Production Chains and Business Cycle Co-Movement between Central and Eastern European Countries and Euro Area Member States

In this paper, we highlight the role of global value chains in the synchronization of economic activity between countries in Central and Eastern Europe (CEE) and the euro area. We start off by demonstrating that the degree of synchronization of the business cycles of CEE countries and their main trade partners from the euro area has increased in recent years. We next show that the cyclical fluctuations of GDP in CEE countries are strongly influenced by pro-cyclical movements of changes in inventories. We then present evidence of the importance of cross border production chains for the economies of CEE countries. We build on these findings to show that the propagation of changes in demand for imports along global supply chains — linked to technological requirements and inventory stock adjustments — contributes to the synchronization of economic activity across Europe. We also show evidence that CEE exporters have started to set up their own value chains in the CEE region.

Determinants and Potential of Foreign Trade in Ethiopia: A Gravity Model Analysis

In this study, attempts are made to provide a theoretical justification for using the gravity model in analyzing the bilateral trade flows. The augmented gravity model was adopted to analyse Ethiopia's trade with its main trading partners using the panel data estimation technique. Estimations of the gravity model for export, import and total trade (sum of exports and imports) are carried on. The estimated results show that Ethiopia's export, import and total trade are positively determined by the size of the economies, per capita GDP differential and openness of the trading countries' economies. Specifically, the major determinants of Ethiopia’s exports are: size of the economies(GDP's of Ethiopia and that of partner), partner countries’ openness of economies, economic similarity and per capita GDP differential of the countries. All these factors affected Ethiopia's export positively except similarity indicator. The exchange rate, on the other hand, has no effect on Ethiopia's export trade. Ethiopia's imports are also determined by GDP's (of Ethiopia and the partner country), per capita income differentials and openness of the countries involved in trade. Transportation cost is found to be a significant factor in influencing Ethiopia's trade negatively. On the other hand, Ethiopia's export and import trade are not found to be influenced to by common border . The country specific effects show that Ethiopia could do better by trading more with Comesa member countries and newly emerging economies of Asia such as Hong Kong, Singapore and Yemen as well as European countries like Turkey and Russia.

Current Account Deficit and Global Competitiveness in Turkey

Normal 0 21 false false false TR X-NONE X-NONE MicrosoftInternetExplorer4 Current account deficit has been at the core of policy discussions in recent years in Turkey. The current account deficit in Turkey has exceeded the risky level. Policy makers worry that the enlarging current account deficit will further jeopardize Turkey’s economic future, making it more vulnerable to external economic fluctuation. The greatest portion of the current account deficit in Turkey results from increased trade deficit, and the main parts of imports in Turkey focus on some specific countries. A comparison between Turkey and its trade partners in terms of global competitiveness will provide a deep insight to reduce the deficit as well as the current account deficit. For this reason, this study aims to compare the level of global competitiveness of Turkey and its main trade partners. /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Normal Tablo"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-qformat:yes; mso-style-parent:""; mso-padding-alt:0cm 5.4pt 0cm 5.4pt; mso-para-margin:0cm; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:11.0pt; font-family:"Calibri","sans-serif"; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-fareast-font-family:"Times New Roman"; mso-fareast-theme-font:minor-fareast; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin; mso-bidi-font-family:"Times New Roman"; mso-bidi-theme-font:minor-bidi;}

Testing for Marshall-Lerner Condition: Bilateral Trades between Malaysia and Trading Partners

In this paper, empirical approaches are applied to test the validity of Marshall-Lerner condition, i.e. if devaluation in real exchange rate helps to improve the trade balance of domestic country. The analyses are focused on five pairs of bilateral trades between Malaysia and its main trading partners of China, EU, Japan, Singapore and U.S. respectively. Applying the Least Square and Fully Modified Least Square approaches, our results fail to show the validity of Marshall-Lerner condition in all five pairs of bilateral trades. However, our results show that higher income level of trading partners may lead to improvement in the trade balance of domestic country.  period of 1980-2012. We fail to prove the validity of Marshall-Lerner condition in all five pairs of bilateral trades. Our results reveal that higher income of foreign trade partner may improve the trade balance of domestic country.

RUSSIA-EU CUSTOMS COOPERATION LEGAL BASE IN THE CONTEXT OF RUSSIA WTO ACCESSION

As a result of long-term accession process Russia became WTO member, which stipulates adequate analyze of relevant consequences both for Russia and its bilateral relations with trade partners. Taking into consideration the fact, that EU is Russia’s main trade partner and significant role of customs issues in ensuring smooth trade flows across the border, author provides legal assessment of Russia WTO accession influence on Russia-EU customs cooperation legal base. Author comes to the conclusion that due to trade, but not customs nature WTO addresses customs to prevent it from being obstacle to trade. Besides, during accession process Russia in general provided correspondence of its legislation to WTO norms. For example, Russia-EU customs cooperation is based on WTO norms from the date of Partnership and Cooperation Agreement entering into force, in which included references on General Agreement on Tariff and Trade. These facts minimize Russia WTO accession influence on the process of Russia-EU customs cooperation legal base construction. At the same time author proves Russia-EU customs cooperation instrument fruitfulness in elimination of risks arising from Russia WTO accession. Such instruments will support effective customs administration without unreasonable interference in trade flows, including within WTO. At the same time it will be important factor for economic, national security as well as for increase of investment attractiveness of Russia.

Reflections on new currency solutions

The Washington agreement of last December achieved an important result in one respect: through an adequate realignment of major currencies it corrected the overvaluation of the dollar, thus setting in motion a process of reabsorption of the fundamental disequilibrium between the U.S. and its main trading partners, to be completed in two years or so. Therefore, it has fully succeeded in solving the immediate problems brought to the surface by the May-August exchange crisis. However, no advance has been made, beyond the identification of the main issues, in solving the structural crisis which has plagued the international monetary system since the beginning of the sixties. The present article examines the adjustment, confidence and liquidity problems of the international monetary reform, the second activation of SDRs and intra-EEC monetary relations.

Pass-through in dollarized countries: should Ecuador abandon the US dollar?

In this article, we examine the convenience of dollarization for Ecuador today. As Ecuador is strongly integrated financially and commercially with the United States, the exchange rate pass-through should be zero. However, we sustain that rising rates of imports from trade partners other than the United States and subsequent real effective exchange rate depreciations are causing the pass-through to move away from zero. Here, in the framework of the Vector Error Correction Model, we analyse the impulse response function and variance decomposition of the inflation variable. We show that the developing economy of Ecuador is importing inflation from its main trading partners, most of them emerging countries with appreciated currencies. We argue that if Ecuador recovered both its monetary and exchange rate instruments, it would be able to fight against inflation. We believe such an analysis could be extended to other countries with pegged exchange rate regimes.

Overview of the International Financial Instruments Issued in Spain

The Spanish economy continues to contract as it undergoes a difficult process of correcting pre-crisis imbalances. The challenge of this adjustment has been exacerbated by weak economic conditions in many of Spain’s main trading partners and by continued financial market fragmentation within the euro area. Spain is undertaking a major program of financial sector reform with support from the European Stability Mechanism (ESM). On June 25, 2012, Spain requested financial assistance from the European Financial Stability Facility (EFSF) to support the ongoing restructuring and recapitalization of its financial sector. The Eurogroup approved this support for Spain. This paper deals with the present economic condition in Spain and the dynamic changes in the financial market present in Spain with reference to its financial instruments.

Estimating long-run equilibrium real exchange rates: short-lived shocks with long-lived impacts on Pakistan

The purpose of this study is to investigate the factors that affect real exchange rate volatility for Pakistan through the co-integration and error correction model over a 30-year time period, i.e. between 1980 and 2010. The study employed the autoregressive conditional heteroskedasticity (ARCH), generalized autoregressive conditional heteroskedasticity (GARCH) and Vector Error Correction model (VECM) to estimate the changes in the volatility of real exchange rate series, while an error correction model was used to determine the short-run dynamics of the system. The study is limited to a few variables i.e., productivity differential (i.e., real GDP per capita relative to main trading partner); terms of trade; trade openness and government expenditures in order to manage robust data. The result indicates that real effective exchange rate (REER) has been volatile around its equilibrium level; while, the speed of adjustment is relatively slow. VECM results confirm long run convergence of real exchange rate towards its equilibrium level. Results from ARCH and GARCH estimation shows that real shocks volatility persists, so that shocks die out rather slowly, and lasting misalignment seems to have occurred.Electronic supplementary materialThe online version of this article (doi:10.1186/2193-1801-2-292) contains supplementary material, which is available to authorized users.

Ekspor Karet Indonesia ke-15 Negara Tujuan Utama Setelah Pemberlakuan Kebijakan ACFTA

The objective of this study is to examine factors affecting Indonesia’s rubber export performance to Indonesia’s 15 main trading partners after the implementation of ACFTA. This research employs Bergstrand Gravity Model (1985) using 105 observation for 15 countries from 2004 to 2010. Then, the gravity model is estimated by applying random effects (RE) model. The results show that, first, GDP per capita of Indonesia’s main trading partners have significantly positive impact on export. Surprisingly, distance has significantly positive effect on Indonesia’s rubber export. Further, Indonesia’s rubber major export destinations are the member of ACFTA, i.e. China and Singapore. Last, some of the non member countries are still potential to be Indonesia’s rubber market. Therefore, the Government of Indonesia should increase trading with them.

The water footprint of tourism in Spain

This study complements the water footprint (WF) estimations for Spain, incorporating insights of the process analysis and input–output (IO) analysis. We evaluate the virtual (both blue and green consumed) water trade of agricultural and industrial products, but also of services, especially through tourism, for a country in which more than 10% of the gross domestic product (GDP) derives from this activity. We use domestic and import disaggregated tables in the agro-alimentary activities, based mainly on national agrarian, industrial, services and trade statistics. In order to obtain import coefficients, water data and IO tables of the main trade partners are used to reproduce the technology of these economies. Results show that 16% of the Spanish exports are due to foreign tourism, thus the water footprint of foreign tourism in Spain is 3.7 km3. Finally, we compare reductions in total tourism expenditure and the domestic and global water footprint of tourism using four scenarios.

Macedonia's Exports and the Gravity Model

This paper examines the export performance of the Republic of Macedonia to its main trading partners; hence we focus on the major importing countries which are most present in the Macedonian trade balance. The data used in this article are analyzed with gravity model, which has good characteristics and very stable performance. Further, the data sample is formed on the Balkan countries i.e. Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Greece, Romania, Slovenia, Turkey and Serbia and Montenegro. The results show that the domestic country GDP is positively correlated with the exports from the source country to target countries and that Balkan countries have positive propensities to import from Macedonia, however it was found that populations of source country and target country are negatively correlated with exports from the source country to target countries. Additionally, the business cycles had no positive effect on Macedonian export to the target countries.

Russia’s WTO accession and trade in services: an examination into Russia–EU relationships

A Spain-based team of economists specialized in the study of services presents the results of their research on the evolution of Russian international transactions in services in the light of its imminent accession to the WTO. The study analyzes the evolution of three out of four modes of international transactions in services with Russia’s main trading partner, the European Union. Focusing on exports and imports and on foreign direct investment, the authors aim to assess if there was any process of substitution over the period 2005–2010. Business services emerge as one of the most dynamic group in terms of international transactions.

Russia between China and the European Union: Friends or Foes?

Abstract For a long time Russia has regarded the European Union and China as its main economic and trade partners, giving preference to the EU. A sudden change occurred in October 2008, when as a response to the EU’s sharp criticism of the Kremlin over the Georgian-Russian military conflict, Russia decided to re-orient its foreign economic and trade policy from the EU to China and partially also to India. At the same time Russian-Chinese military and energy cooperation started to grow. Russia sold China oil and gas at low price and supplied it with advanced weaponry, which has increased China’s aggression toward its neighbours. Russia also started to politically and militarily support China’s activities in Syria and Iran, which, in turn, worsened Russia’s relations with several EU Member States, including Germany, France and Italy, with whom Russia was planning to cooperate in the developing of the Nord Stream gas pipeline project. However, Russian President Vladimir Putin still declares a great continuing friendship and solidarity with China and is hoping to see the worsening of China’s conflict with the US, which, Putin claims, could avert China’s direct conflict with Russia. Several leading Russian military and political experts describe this hope as unrealistic. At the same time, the volume of EU-Russian mutual trade was almost 395 billion US dollars in 2011, which exceeds in volume the Chinese-Russian trade volume by more than four times. It shows that Russia’s trade reset from the EU to China has been negligible. Also, it is bad news for Russia and China that Iran today stifles cooperation with Georgia and Chinese separatist Uyghurs, and Syrian Bashar al-Assad’s regime is developing cooperation with al Qaeda, and does not explain Russia’s and China’s current similar foreign policy toward Iran and Syria.

Intra-industry trade: a methodology to test the automobile industry in South Africa

This paper provides a study of the theory and empirical evidence of intra-industry trade (IIT) and relates it specifically to South Africa’s automobile industry. The automobile industry in South Africa is a key sector within the national economy and has experienced increased trade and foreign investment in recent years, and thus represents an important case study of IIT. In view of this, the paper proposes a methodology that may be used in future to assess the pattern and determinants of IIT between South Africa and its main trading partners in the automobile industry.

Controlling the Company: The Structures of Fante-British Relations on the Gold Coast, 1750–1821

In 1750, Parliament created the Company of Merchants Trading to Africa to facilitate Britain's African trade by maintaining a series of beneficial coastal structures and relations. Along the Gold Coast, the company officers found that traditional and new indigenous structures dictated their relationship with their main trading partners the Fante. Palavers, taking fetish, the status of messengers, pawnship and redemption, and the flying of flags defined the nature of coastal relations and ensured that both sides obtained from the other what they desired. They did this by integrating the company into coastal affairs and in doing so made the company into a tenant-patron. By defining the company in this manner, and by using these structures to acquire goods and services from the company, which coastally was known as eating, the Fante effectively controlled the company to their advantage.

A Battle for the Skies: Applying the European Emissions Trading System to International Aviation

The European Union (EU) has long been in a diplomatic row with its main trading partners. The row concerns the EU’s decision to include foreign aircraft emissions within its Emissions Trading System (ETS). Several States have objected to the inclusion as a violation of their sovereignty. The importance of the quarrel can hardly be overestimated: it is the first real clash concerning unilateral measures to combat climate change. By including foreign aircraft emissions within the ETS, the EU has taken unilateral action to prevent international environmental harm. The EU’s action has given rise to some fundamental questions concerning legislative jurisdiction. Moreover, as the impact of climate change becomes more severe, climate change may serve as a pretext for all kinds of protectionist policies. The current quarrel is therefore also one of principle. This article analyses the jurisdictional basis for extending the ETS to extraterritorial flights and the reactions of third States. In doing so, the article reveals fundamental limits in international rules concerning the allocation of competencies between States, especially in relation to the protection of the environment. The article considers these shortcomings in the context of the present case and suggests a new approach to the traditional principles of sovereignty and legislative jurisdiction.

The Inflation Impact of Selected European Union Members on Polish Inflation

The article aims at determining the inflation influence between Poland and selected EU member states. Although for some time the general inflation level in those countries was definitely controllable, the problem seems to be returning. That is why in this article, using the model of Vector AutoRegression (VAR) and Granger causality test, we are attempting to determine inflation influences on Poland. The study confirmed the impact of the selected countries on Polish inflation, expressed the general HICP index. However, in the case of Germany, the method has not proved the existence of such interactions. For this reason, it is made an attempt to clarify the reasons for non-compliance findings with data showing Germany as a Polish main trading partner for more than two decades. The authors try to show that lack of influence can be seen in the excessive generality of the main HICP index and predict that the chosen method confirm the effect of foreign trade indices in the HICP.

Opportunities for Doing Business with Countries Neighbouring V4 – The Case of Ukraine

Objective: The main objective is to present the business environment of Ukraine in terms of the possible association with the EU or joining the Customs Union, with expectations for V4 countries, regarding trade relations, potential business opportunities and barriers. Research Design & Methods: The paper is discussing the opinions of researchers, current trade indicators, information from managed interviews, completed with some statistical data. Using qualitative methods of analysis, synthesis, comparison and deduction the knowledge is summarized and limitations concluded. Findings: As the main finding we can conclude the fact that the value of mutual trade between V4 and Ukraine shall continue to grow, withlimitation due to the EU common trade policy and trade barriers. Implications & Recommendations: By signing the Association Agreement in November 2013, the EU was to become the main trade partner for Ukraine. Not signing it resulted in protests and political instability, with difficulties in predictions of mutual (trade) relations. Nevertheless, preserving close trade links with Russia as well as deepening those with the EU is equally essential for Ukraine. Contribution & Value Added: The paper presents rather a unique topic of the cooperation of businesses within the Eastern Partnership of the European Union. The emerging markets of the Eastern European Countries (EECs) offer a lot of opportunities from European businesses, especially these from Central Europe.