Trade Measures Research Articles

Nontariff measures and product differentiation: Hormone‐treated beef trade from the United States and Canada to the European Union

AbstractWe investigate how a combination of the sanitary and phytosanitary (SPS) measure and product differentiation affects beef trade and the consequences for the United States (US)–European Union (EU) hormone‐treated beef trade dispute. We develop a partial equilibrium model to represent the global beef markets and product differentiation between non‐hormone‐treated beef, hormone‐treated beef, and other beef. The results show that removing the SPS measure increases EU hormone‐treated beef imports from the US and Canada and decrease beef consumption. In addition, EU hormone‐treated beef consumption and imports can be related to a few key indicators of product differentiation. The framework we develop can estimate EU hormone‐treated beef consumption and imports based on a minimum of parameters relating to product differentiation, thereby providing useful applied economic analysis of a key trade measure.

The Liberal Party, Free Trade and the 1841 Election

AbstractIt is a paradox that the Liberal Party's electoral defeat in 1841 attested to its underlying strength and vitality. This article focuses on the impact on party unity of the free trade measures advocated by the ministry in the months preceding its fall. The Liberal Party's bold electoral platform antagonised its protectionist MPs, a group previously overlooked in the historiography, but fell short of the demands of its radical wing for political reform. While all the ingredients for fragmentation existed, unity prevailed. Protestations of loyalty to the leadership could be heard from the mouths of Liberal MPs of all shades, from stalwart protectionists who coalesced around the ministry on traditional foreign policy grounds through to the most fervent radicals who celebrated its ‘new’ direction. Such findings of cohesion contradict accounts which have hitherto viewed the 1841 electoral defeat as evidence of the party's inchoateness. Indeed, this article shifts the historiographical narrative away from addressing why the Liberals lost to the more pertinent issue of why the losses suffered were not greater. In answering that question, both the sensitivity with which the financial agenda was presented by ministers and the flexibility of different sections of the Liberal Party in interpreting and presenting the free trade measures to the electorate are underlined. Above all, Lord John Russell is rehabilitated as a ‘popular’ leader and his importance in the development of the nascent Liberal Party is unearthed.

Are Retaliatory Trade Measures Justified under the WTO Agreement on Safeguards?

Abstract In March 2018, the USA adopted measures to increase tariffs on a range of imported steel and aluminum products, claiming that the measures are justified for its national security concerns. Several World Trade Organization Members, including the European Union, India, Russia, Turkey, and China, have argued that the US measures are in violation of WTO rules on safeguard measures and adopted retaliatory measures invoking Article 12.5 of the Agreement on Safeguards. The USA argues that its measures do not constitute safeguard measures under WTO rules, and, therefore, the retaliatory measures are not justified under the SA. This article reviews relevant cases and examines whether the US measures are safeguard measures under the SA and whether the retaliatory measures are also justified under the SA. The article also discusses the need for regulatory reform to address the issues with unilateral trade measures and retaliation.

Administrative regulation measures for foreign trade in the European union (on the example of the Republic of Poland) and in the Eurasian economic union (on the example of the Russian Federation)

The European Union is the largest trading partner for the Eurasian Economic Union. The multi-integration of the Eurasian Economic Union with foreign countries practically guarantees a positive result. The issues, related with non-tariff measures regulating foreign trade, have been considered in the article. For the countries of the Eurasian Economic Union and the Russian Federation in particular, in the near future, the main task should be step-by-step standardization and elimination of almost all non-tariff barriers to trade, as these values significantly aggravate the counter-trade in goods and services and hinder further integration. And this concerns, above all, the development towards the European Union.

Financial Development and International Trade inside Asia

This study attempts to document the impact of on trade between selected Asian economies and rest of the Asian region. Financial development is used to represent financial development level which includes four dimensions from two perspectives; institutional and market. An financial development index is calculated by combining institutional and market level financial development indices. Effect of market and institutional dimension is measured separately on trade of Asian economies with rest of the Asia. Different macro-variables are controlled including GDP per capita, total population, Inward FDI flow, Outward FDI flow and real effective exchange rates for modeling. Sample includes data for twenty years ranging from 1997-2016 for 16 large economies of Asia. Panel data modeling technique effects regression is used with two different proxies of dependent variable. Overall financial is found to have positive and significant relationship with trade. Study confirms the robustness of the results to different measures of trade. Results from fixed effects model confirm positive and significant relationship between all components of financial development and trade, and between overall financial development and trade in Asian economies. Singapore, Japan and South Korea represent highest levels of financial development while other countries showed relatively less development financial development level according to measure used in this study. An important policy implication is if a country wants to grow economically by using instrument of trade policy especially exports improvement, then it has to develop its financial system to efficiently fulfill international trade finance needs. Keywords: Financial Development Index, International Trade, Asia DOI : 10.7176/EJBM/11-11-04 Publication date : April 30 th 2019

Next-generation Trade Facilitation for Asian Integration: Cross-border Paperless Trade

Reducing trade costs is essential to achieve Asian integration. Trade costs in the Asian and the Pacific region remain high, in particular, between different Asian subregions. Significant progress has been made in implementation of trade facilitation measures between 2015 and 2017, particularly those included in the World Trade Organization (WTO) Trade Facilitation Agreement (TFA). However, progress in implementing of next-generation digital trade facilitation measures, such as cross-border paperless trade measures, has been more limited. Simulation results suggest that full implementation of such measures could nearly double trade costs reductions expected from WTO TFA implementation. A new regional United Nations (UN) treaty, the Framework Agreement on Facilitation of Cross-Border Paperless Trade in Asia and the Pacific, may accelerate progress in this area. JEL Codes: F13, F15, F17

A Study of the US Unilateral Trade Pressure against China from the Perspective of International Trade Law : Focusing on the WTO Annex 2 Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU)

트럼프 행정부 출범 이후의 미국 통상정책은 중국을 주요 대상으로 한 G2 패권 대립의 양상으로 흘러가고 있다. 이 과정에서 지난 반세기 이상 국제경제질서 유지에 크게 기여해 온 GATT·WTO가 큰타격을 받았는데, 기존 DDA 표류에 더해 다자통상체제 자체의 전례 없는 위기의식에 쌓여있다. 그 중에서도 미국의 대(對)중국 통상압력은 그간 GATT·WTO체제의 핵심이라고 평가되던 분쟁해결제도를철저히 무시하고 있어 그 중대성이 매우 크다. 본 논문에서는 지난 2년간 미국의 대중국 통상압력수단으로 실제 활용했던 관련 조치들에 대해 국제통상법적 관점에서 WTO DSU협정의 조항들을 중심으로그 위법성을 분석한다. 이를 통해 WTO 분쟁해결제도의 한계와 과제를 자성하는 동시에 추후 동 제도와 기구 자체의 존속 및 발전을 위한 유의미한 시사점을 고민해보고자 한다.The U.S. trade policy under the Donald Trump Administration since 2017 is better described as a unilateral measure targeting China in the aim at holding a dominant position in the G2 tension. In the course of the U.S.-China trade war to the present, the GATT and WTO system, representing the international economic order, are severely damaged, and now combined with the DDA stagnation, unprecedentedly serious crisis over the system is being aroused. The U.S. unilateral trade pressure against China is particularly problematic because it intentionally ignores the multilateral WTO Dispute Settlement System (DSS), which used to be considered as the core function of the organization. This paper is to analyze the practical examples of the U.S. trade measures mainly on China for the last two years from the perspective of international trade law, focusing on the WTO Dispute Settlement Understanding. This is believed to provide the opportunities for introspecting the limitations and seeking for the chance of further development of the WTO DSS.

The Practical Countermeasures on Technical Barriers to Trade(TBT) in the WTO System

WTO체제의 안정적인 정착과 FTA의 확대로 가시적인 관세장벽은 철폐되거나 점진적으로 낮아지고 있으나, 미국, EU 등 선진국을 비롯한 개발도상국들의 위장되거나 숨겨진 보호무역주의에 따른 비관세장벽(NTB)은 계속 급증하고 있다. 그동안 무역기술장벽(TBT)은 각국의 국내문제로 인식하여 왔으며, GATT/WTO에서는 크게 논의되지 않았으나, 최근에는 비관세장벽으로서의 역할이 증가함에 따라이를 규율하기 위한 논의가 활발하게 진행되고 있다. WTO협정에 포함된 TBT협정은 기술규정, 표준, 적합성평가절차로 구성되어 있으며, 각국의 기술규제에 대하여 일정한 가이드라인을 제공하고 있다. 따라서 본 논문에서는 TBT협정의 특성과 내용을 이론적으로 분석한 후, 국내업계가 외국정부의 무역제한적인 조치에 직면한 경우 TBT협정을 어떻게 활용하여야 하는지를 실무적으로 설명하고, 또한정부와 공조하여 TBT협정을 효과적으로 활용하는 방법을 모색하였다. 결론적으로 TBT에 관한 연구는 우리나라 기업의 수출증대와 해외시장 개척에 크게 일조할 것이며, 국제표준화에 부합하는 국내표준화정책을 추진하도록 함으로써 수출상대국의 기준·인증제도 등 보호무역주의적인 TBT를 극복하는방안이 될 것이다.With the stable settlement of the WTO system and the extension of the FTA, visible tariff barriers have been either abolished or lowered gradually; however, Non-Tariff Barriers(NTB) have been increasing rapidly and continuously according to the disguised or hidden protectionism of developing countries as well as advanced countries including the US and EU. Previously, Technical Barriers to Trade(TBT) were regarded as domestic matters in each country and hardly discussed by the GATT/WTO; however, as their roles of NTB are increasing lately, they are disusing actively to regulate them. TBT Agreement included in WTO agreements consists of technical regulations, standards, and conformity assessments, and a fixed guideline is provided for technical control in different countries. Accordingly, this researcher here has analyzed the characteristics and contents of TBT Agreement theoretically and then explained how domestic industry should utilize TBT Agreement practically when any facing foreign government’s restrictive trade measures and sought ways to use TBT Agreement effectively through cooperation with the government. In conclusion, it is expected that research on TBT will contribute significantly to the increase of exportation of Korean companies as well as the exploitation of overseas markets. It will also allow us to promote domestic standardization policy conforming to international standardization; therefore, we will be able to overcome the protectionist TBT of our partners in exportation such as their criteria and certificate systems.

The benefits of country-specific non-tariff measures in world wine trade

During the last decades, significant changes in trade regulations are modifying the global trade of wine. The number of non-tariff measures (NTMs) implemented in the wine sector is relevant: a large number of country-specific NTMs, set in the occasion of trade agreements, have been adopted. The impact of these policy instruments on trade is not always clear, nor quantified at global scale. We investigate the effects that country-specific NTMs are showing on global imports of wine. In particular, we estimate a gravity model to explain how and to what extent country-specific NTMs influence wine trade, and we disentangle these effects for different segments of the international market of wine.Our results suggest that country-specific NTMs tend to favour imports of wine. Differences emerge across market segments and types of regulations. In particular, the Technical Barriers to Trade favour (friction) bottled (bulk) wine; pre-shipment inspections enhance imports of bottled wine; the Sanitary and Phytosanitary Standards and the export-related measures are the most trade-enhancing NTMs, regardless of the market segment.

Quantity Measurement Cost and Reliability of Cereal Commodity Trade: Evidence from Ethiopia

Measurement reliability is an undervalued aspect of local agricultural marketplace organizations. There are also gaps in identifying the extent of cereal commodity trade measurement costs. Therefore, the aim of this paper is to estimate the magnitude of cereals trade quantity measurement cost caused by instrument error and unreliability in the context of the local marketplace in Ethiopia. In this regard, a survey was conducted in six different districts’ marketplaces (n = 602) of Oromia regional state. In addition to administered structured questionnaires, site mass measurement calibration was employed. The survey data were analysed using an independent samples t-test, one sample t-test and analysis of variance. According to the findings, the actual value measurement means of the quantity of most local units of the farmers were greater than small traders. The independent t-test result indicated that the average values of the quantity of the majority of units of measurement between farmers and small traders were varied significantly. Estimated average measurement cost of the farmers and small trader which occurred due to measuring instruments’ error and unreliability were higher for a sack, bowl and glass units compared with other units of measurement. This study demonstrates that homogeneity in measurement, market regulatory policy and institutions that aid cereals trade have an indispensable role to reduce measurement costs thereby ensure equitable exchange.

Are Retaliatory Trade Measures Justified Under the WTO Agreement on Safeguards?

In March 2018, the United States adopted measures to increase tariffs on a range of imported steel and aluminum products, claiming that the measures are justified for its national security concerns. Several WTO Members, including the European Union, India, Russia, Turkey, and China, have argued that the U.S. measures are in violation of WTO rules on safeguard measures and adopted retaliatory measures invoking Article 12.5 of the Agreement on Safeguards. The United States argues that its measures do not constitute safeguard measures under WTO rules, and, therefore, the retaliatory measures are not justified under the Agreement on Safeguards. This article reviews relevant cases and examines whether the U.S. measures are safeguard measures under the Agreement on Safeguards and whether the retaliatory measures are also justified under the Agreement on Safeguards. The article also discusses the need for regulatory reform to address the issues with unilateral trade measures and retaliation.

A ESTRATÉGIA ESPACIAL DE INTERNACIONALIZAÇÃO DE EMPRESAS BRASILEIRAS DO SETOR FRIGORÍFICO: OS CASOS DA JBS E DA MINERVA

A internacionalização de empresas brasileiras é um fenômeno recente e que chama atenção pelo aceleradoprocesso de abertura de unidades de produção no exterior. Ao averiguar barreiras comerciais que afetam asexportações brasileiras de carne bovina, constatou-se que as medidas restritivas existentes no comérciointernacional de carne impulsionaram a dispersão geográfica de empresas brasileiras para fora do territórionacional, com o intuito de aumentarem as suas participações no mercado mundial. A partir do estudo de casodas multinacionais JBS e Minerva, verificou-se que a abertura de filiais em territórios estrangeiros é umaestratégia espacial adotada pelas empresas, uma vez que a localização das unidades de produção visa acessarmercados-alvo internos e externos. Ao dispor de uma ampla plataforma de produção e comercialização,estrategicamente posicionada, as multinacionais brasileiras da carne estabeleceram uma integração diretacom os principais mercados globais e alavancaram suas receitas operacionais.Palavras-chave: Internacionalização. Barreiras comerciais. Estratégia espacial.

Indonesian Export Efficiency : A Stochastic Frontier Gravity Model Approach

Export performance is an important aspect to encourage economic growth and economic prosperity. Export performance can be analysed using export efficiency variable. Export efficiency can be defined as ratio of the actual to potential exports. Knowing the export efficiency and factors affecting it could help policy maker to minimize and mitigate the affects of existing restrictive measures of trade. This study was conducted to analys the efficiency of Indonesia's merchandise exports and the affecting factors using stochastic frontier gravity model. Result of this study shown that Indonesian merchandise export flows with 62 trading partners is significantly positively affected by Gross Domestic Product (GDP) and population, then significantly negatively affected by bilateral distance. The study also found that the average export efficiency of Indonesia to 62 trading partner countries up to 51.35 percent in 2012 and 49.69 percent in 2016. The highest value of export efficiency was in Singapore and the lowest was in Portugal. Result of technical inefficiency model reveals that export inefficiency increased by business freedom, investment freedom, and landlocked dummy, and then export inefficiency decreased by labor freedom, financial freedom, contig dummy and FTA dummy.

Spillovers from Us Monetary Policy: Evidence from a Time Varying Parameter Global Vector Auto-Regressive Model

SummaryThe paper develops a global vector auto-regressive model with time varying parameters and stochastic volatility to analyse whether international spillovers of US monetary policy have changed over time. The model proposed enables us to assess whether coefficients evolve gradually over time or are better characterized by infrequent, but large, breaks. Our findings point towards pronounced changes in the international transmission of US monetary policy throughout the sample period, especially so for the reaction of international output, equity prices and exchange rates against the US dollar. In general, the strength of spillovers has weakened in the aftermath of the global financial crisis. Using simple panel regressions, we link the variation in international responses to measures of trade and financial globalization. We find that a broad trade base and a high degree of financial integration with the world economy tend to cushion risks stemming from a foreign shock such as US tightening of monetary policy, whereas a reduction in trade barriers and/or a liberalization of the capital account increase these risks.

Fiscal Space for Trade: How Could the International Trade Community Help?

This paper examines the issue of fiscal space for trade, proxied by countries’ public expenditure for the trade sector. It provides empirical evidence that improvement in countries’ overall fiscal space results in higher public expenditure for trade. Furthermore, by promoting multilateral trade liberalization, the international trade community (including the World Trade Organization, WTO) could help enhance countries’ overall fiscal space, which would in turn translate into greater fiscal space for trade. Thus, rising restrictive trade measures in the world would likely undermine the promotion of multilateral trade liberalization and affect countries’ capacity to fund the development of their trade sector.

Measuring intraregional trade

ABSTRACTThis article develops a novel measure of intraregional trade. The new measure is easy to implement and robust to different gravity models. I use the new measure to study the economic integration of the major trade blocs and discuss how the measure can be extended to analyse the roles of trade policies and institutions in regional integration.

From NAFTA to USMCA: Two’s Company, Three’s a Crowd

The renegotiation of NAFTA was surrounded by a dramatic atmosphere, just as Canadian Minister of Foreign Affairs Chrystia Freeland predicted. The negotiations took place against a backdrop of unilateral trade measures, President Trump’s mercantilist approach to trade policy, and the United States’ specified preference for bilateral trade deals. This article argues that, for the most part, economic, political and cultural relations in the NAFTA countries are bilateral in nature, but with important trilateral production chains in specific sectors, most notably in the automotive sector. Beyond these trilateral sectors, the relationship between Canada and Mexico plays a relatively minor role. However, replacing NAFTA with bilateral agreements would have placed Canada and Mexico at a disadvantage, relative to the United States, in terms of attracting foreign direct investment. Nevertheless, Canadian and Mexican interests do not always coincide, nor do their negotiating positions. For example, Mexico was willing to give up Chapter 19 dispute settlement for trade remedies, whereas Canada insisted on keeping it in place. In end, USMCA Chapter 10 preserves this dispute settlement mechanism for all three parties. Canada was willing to give up NAFTA Chapter 11 on foreign investment disputes, whereas Mexico accepted a modified version. The result is a trilateral agreement with significant bilateral elements, as well as global elements that will serve as a possible model in future megaregional and multilateral negotiations.

Forgotten Statutes: Trade Law's Domestic (Re)turn

Since the first half of the twentieth century, the U.S. Congress has increasingly delegated its authority over tariffs to the U.S. president. Some of these statutes permit private actors to petition for tariff relief. Some also permit the president to initiate an investigation and subsequently to take trade-related or other action when certain criteria are met. Since the 1990s, however, a robust multilateral trading system has required the United States and others to resolve disputes over trade measures in Geneva, rather than through unilateral policy steps under these tariff authorities. In a stark departure from this movement away from unilateral action, the Trump Administration has returned to relying heavily on domestic statutes to impose tariffs on goods imported from U.S. trading partners and on those from one country in particular: China.

Colombia – Measures Relating to the Importation of Textiles, Apparel and Footwear (DS461)

In this paper, we examine the recent WTO dispute “Colombia – Measures Relating to the Importation of Textiles, Apparel and Footwear (DS461).” The dispute centers on the appropriate use of trade measures to target trade-related money laundering, the WTO consistency of such measures, and an ancillary question of appropriate time for remedies to be applied. The economics of the measures employed do not directly target the ostensible justification for the measures, while Colombia failed to convince the panel and Appellate Body of key points related to the necessity of the measures taken. There has been success targeting trade-related money laundering following from cooperation of customs authorities and financial regulators to more directly target the agents involved. There may be a role for the WTO, in the form of steps taken to encourage such cooperation (as in DS453). The basic lesson is that blunt, second best, blunt, and likely misdirected policies are not easily justified at the WTO, though more direct measures may be.

Trade for the Environment: Transboundary Hazardous Waste Movements after the Basel Convention

International institutions are important regulators of the trade-environment relationship. Many of them deploy trade measures for environmental purposes, with mixed results. The Basel Convention is a typical case where designated strong trade restrictions have failed to curb movements of hazardous waste or protect vulnerable countries from waste dumping. The existing literature emphasizes North-South conflict under the Basel Convention as the main reason for these shortcomings. This paper returns to the fundamental question as to why countries engage in the trade of hazardous wastes. It relaxes the Basel assumption that hazardous wastes are invariably negative externalities, and argues that global economic integration has commodified these wastes. Countries are increasingly diverging on their views and treatment of hazardous materials. This study draws from the under-utilized Basel Convention Database and other sources to piece together a holistic picture of the global hazardous waste movements. It identifies three types of countries with distinct trade-orientations: industrialized countries, which trade the largest amounts of hazardous wastes and with considerable specialization; newly industrializing countries, which are becoming influential players in hazardous waste generation and management; and least- developed countries, which are least open to waste trade yet least protected from waste dumping. This analysis shows that, as globalization deepens, the management of hazardous wastes may actually require extensive transboundary movements of hazardous materials between countries of capability and interest. Contrary to its current trade minimization approach based on a crude North-South dichotomy, the Basel Convention may benefit from an approach that motivates capable countries to treat more wastes and builds capacity for intended waste importers.