Multilateral Trade Negotiations Research Articles

A Study of Global Trade War and Its Impact on Indian Economy

Introduction 1. In an era of globalization, international trade is inevitable. When we walk into a supermarket and find South American bananas, Malaysian rubber products, Brazilian coffee, we simply experience the impact of global trade. Global trade allows all countries around the world to publicise their markets and to supply goods and services that otherwise would not have been open to the domestic economy. As all goods and services are available at relatively cheaper prices in the international market, therefore domestic market becomes more competitive. People have got choices for competitive products. Therefore, the difference in the prices of goods of the foreign economy and domestic economy results in international trade. 2. Why nations trade with each other ? Not a single nation alone can generate all the goods and services for its households in today’s world of limitless desires. There is an unequal distribution of factors of production over the countries of the world. Countries of the world differ from each other in terms of natural resources, technology, entrepreneurial and managerial skills which determine the ability of the country concerned, at the lowest cost of production, to manufacture goods and services. For example, South Korea can manufacture cars or microelectronic products effectively in comparison with any other nation in the world, similarly Malaysia could produce rubber and palm oil more efficiently. The ability to manufacture these products, such as electronics or rubber, is much greater than their ability to consume these goods within the country so that they can sell these goods at comparatively cheaper prices to other countries around the world. Similarly, India and Brazil can import certain products from South Korea and Malaysia at lower prices and can in exchange, import Brazilian coffee or Indian textiles at a lower price. Therefore, generally trade benefits all the countries of the world provided it is free trade. If one country has a belief in free trade and the other beliefs in the opposite, only the previous one will end practicing free trade and suffering in the end. Economists say that trade conflicts safeguard economic interests and are advantageous to the local market, but critics claim that they ultimately hurt local companies, consumers, and the economy in long run. Protectionist policies always harm the concept of globalization. According to the World Commission on the social dimension of globalization (2004). “Globalisation should benefit all the countries and should raise the welfare of all people throughout the world”. Advocates of protectionist view put arguments in favour of restrictions of the trade like the expansion of the home market, keeping money at home, counteracting foreign low wages, defence or national security arguments, protection of infant industry, anti-dumping arguments, and balance of payment arguments. Trade restrictions are of two types; tariff barriers and non-tariff barriers. The tariff barrier is the most common barrier to trade. It is the tax or duties that one country imposes on exported or imported goods. There are various types of tariff barriers in international trade. If the tariff is imposed based on the physical weight of some goods, imported or exported, called a specific tariff. • If a tariff is imposed on the value of some goods, imported or exported is called “Ad Valorem tariff”. • If different rates of the tariff are imposed on different countries called discriminatory tariffs. • If the same rates of a tariff are imposed on different countries, called non-discriminatory tariff’. • If the main purpose of imposing a tariff is to produce revenue, called a revenue tariff. • And the most commonly used tariff is the Protective tariff. if the tariff is imposed mainly to protect domestic industries from foreign competitions are called the protective tariff 4. Followers of the protectionist policy argue that tariff imposition has two impacts; revenue increases after the imposition of tariff and home production increases which is called protective effect but if other countries retaliate in the same manner, the trade war is inevitable. A situation of trade war erupts when one nation or economy strike back against another economy by imposing trade barriers. The application of trade restrictions is not a new concept in international trade. If we study the background of the global trade war, we find that countries frequently used trade restrictions in global trade. The situation was aggravated after the second world war. Most of the countries were intentionally devaluing their currency to increase their export and minimise imports. This was also the reason for the currency war between countries. 5. We can divide the world trade in the pre-Bretton Woods and post Bretton Woods period. An efficient international monetary system is very essential for the smooth functioning and expansion of international trade. From the early 19th century until the first world war, the era was regarded as a period of internationalism. Most of the major industrialised nations of the world started participating in world trade. After the second world war and the hectic slump and currency war that followed it all the countries of the world wished to return to normalcy. Two causes were responsible for this wish: - • Reconstruction of the economies ravaged by the war. • To end the currency war. As far as the second cause is concerned many countries or the trading partners of the world started devaluating its currency to improve the conditions of their BOP. This resulted in a trade war between nations. Therefore, in Bretton Woods, New Hampshire, USA, members of 44 countries met to discuss these problems and to find realistic solutions for them. This conference proposed the establishment of: - • The International Monetary Fund (IMF), to help member countries to meet their BOP deficit problem. • IBRD, to reconstruct and develop economies of member countries. • An International Trade Organisation (ITO), to solve the problem of international trade and proper liberalisation of it. 6. However, the proposal for the International Trade Organisation did not materialise and the General Agreement on Tariff and Trade (GATT) was formed. The GATT was established in 1948 with a big and important objective of “free trade” and “no trade war”. Its main purpose was to remove trade restrictions which sooner or later converts into a trade war. The first seven rounds of GATT were focussed on the removal of trade barriers only. Despite these discussions in several rounds of GATT, it couldn’t provide a useful forum for discussion on international trade issues. 7. The 8th round of GATT is called Uruguay Round which started in 1986. Member countries negotiated in the areas of Tariffs, Non-Tariff Measures, Tropical Production, Natural resource-based products, Agriculture, GATT articles, Safeguards, Multilateral trade negotiation agreement, Subsidies, Disputes Settlement, Trade-Related Intellectual Property Rights (TRIPPS), Trade-Related Investments measures (TRIMS), Functioning of GATT system (FOGS). Despite serious discussion on these issues’ agreement could not be reached and member countries kept on using trade and non-trade barriers on each other. 8. COVID-19 pandemic, which started in March 2020, has adversely affected global trade. As per WTO statistics, a 3% fall in the volume of merchandise (export and import) trade is seen in the first quarter of 2020. Lockdown in many economies of the world aggravated the problem and declines are historically large. Strict social distancing and majors and restrictions on travel and transport adversely affected the service sector of the world economy which is the main contributor to gross domestic product (GDP) of many countries. Therefore, the economic recovery from the COVID situation is highly uncertain. This situation might give a boost to the global trade war which will be the endeavour during the research to be found out and a description of the same has been covered in Chapter 3. The research has tried to reveal how the pandemic has crippled the world economy and aggravating the pre-existing problem of the trade war. The recent trade war between China and the USA is an apt example. Recent Examples of Trade War​​ 9. Since the year 2018 world has been witnessing trade conflict which was earlier currency conflict between the USA and its economic partners mainly the EU and China. But in this conflict US’s all-weather friend Canada and Mexico were also hit. However, retaliation by other countries has been very limited. In March 2018, the United States announced the imposition of additional tariffs under Section 232 on imports of steel (25%) and aluminium (10%) from China to the United States. This might harm the Chinese economy as China is the major contributor of crude and finished steel in the world. 10. In the same month, the US President announced his strategy to endorse restrictions against China over its Intellectual Property Rights (IPR) policies which were severely affecting its stakeholders. In this sanction, the US raised tariffs by 24 to 25% on selected Chinese products which were valued to the tune of approximately $50 billion. By adopting the policy of quid pro quo China on 01 April responded with 25% tariffs on $50 billion in US exports on various American products, like agriculture, pork, and cars. On 3rd April 2018, the US administration released a list of 1,333 goods equivalent to $50 billion in trade, which it said would enforce a 25% tariff. 11. These Chinese products mainly belong to the category of important sectors like robotics, rail and shipping, information technology, health care, and medicine, and high-technology. China retaliated and published a list of 106 products on which 25% tariffs were imposed and its value was worth $50 billion in trade. Thus, quid pro quo tactics kept ongoing between China and the US. The US plans to tax $50 billion worth of Chinese imports was replied with threats by China to impose tariffs on American products worth $50 billion. China announced to hit back with additional taxes on American chemicals, automobiles, and other products. Interestingly all these 106 American products are produced in those regions of the US where President Trump enjoys great support of his people. Earlier this year both countries signed the first phase of the trade agreement to reduce trade pressures between them, which last year weakened global growth and scaled-down business investment around the world. But due to the blame game over the pandemic, progress has been derailed. 12. Apart from the above, the subsidy has been one of the major causes of dispute amongst countries of the world. According to the WTO agreement on agriculture, developed economies had to reduce their subsidies by 21% in six years and developing countries by 12% in 10 years. Recently restriction on Indian agriculture produce by US, EU, Canada, Brazil, and Japan has been imposed in August 2020. They have questioned that India is not following the WTO peace clause for surpassing the limit on support or, subsidy it can render to its peasants. In the platform of WTO, the ceiling for subsidy is 10% of the value of the produce. India provided the WTO with details that the value of its rice production in 2018 was $43.6 billion and subsidies were worth just $5 billion. Subsidies have therefore remained a major bone of contention between the various countries of the world, but there is one peace arrangement in the WTO that protects the WTO members’ food procurement program for developing countries from taking action in the event of a violation of the subsidy cap. It will also be a litmus test to observe if in circumstances like the ongoing pandemic, WTO members grant food security pre-eminence to emerging economies or whether developed nations are pursuing market entree. Globalisation has reached a few obstructions in recent times, following decades of surges in world trade, worldwide tourism, and global cooperation, as some of the development achieved in the past has been undone by the re-emergence of patriotism and protectionism. The COVID-19 pandemic is predicted to trigger an unprecedented deterioration in global trade after trade growth decelerated dramatically in 2019, owing in huge part to trade conflict between the United States and China. As per the forecasts of the WTO, merchandise business is going to plunge between 12.98% and 31.88% this year, depending on how easily the coronavirus is controlled and trade will return to pre-crisis levels. According to the WTO Director-General, Roberto Azevêdo, the swift and robust rebound is only possible through the focus on free trade. Global markets have to be kept open and predictable, in addition to promoting a more desirable business climate. 13. Though before the onset of the pandemic, the Indian economy was not affected much by the ongoing trade conflict between the USA and China because of the combined effect of the pandemic and trade war India’s GDP shrunk by 23.9% in the first quarter of FY 2020-21. In the first quarter, the worst-hit industry was construction, which contracted by 50 percent. The hotel industry contracted by 47%, production by 39.3%, and mining by 23.3%. Agriculture, which posted a 3.4 percent rise, was the only industry that managed to survive the recession. The economy is believed to have suffered the most during the June quarter as a result of the nationwide lockdown. 14. In January 2019, as the trade war was raging, India also placed anti-dumping duties on more than 99 Chinese goods to protect its domestic markets, such as anti-dumping duties on chemicals, petrochemicals, fabrics, yarn, pharmaceutical equipment, rubber, and steel products. As a follower of protectionist policy Indian government also imposes anti-dumping duty on imports of steel products, an alloy of aluminium. The total value of duty imposed was $13.07 per ton to $ 173.1 per ton, which is a big amount. China, Vietnam, South Korea for five years in June 2020. India needs to take some major steps and reforms to bounce back its economy back on track. 15. Review of Literature… To complete the research number of books, literatures in the forms of articles, journals, independent views of various economists have been reviewed and referred. Books…. ​Various books reviewed and which have contributed in the course of the research include the following: - (a) ​Trade War Are Class War: How Rising Inequality Distorts the Global Economy and Threatens International Peace by Mathew C. Klein and Michael Pettis published by Yale University Press, May 19, 2020. ​The roots of today’s trade wars are traced by Klein and Pettis to decisions taken over the past thirty years by policymakers and business leaders in China, Europe, and the United States. The authors include a coherent narrative in this book that demonstrates how the growing injustice of class wars is a challenge to the global economy and international peace, and what the ways ahead are. (b)​ Has China Won by Kishore Mahbubani published by PublicAffairs, March 2020. ​​The author of this book aims to provide an insight into the trade war between the USA and China. He also claims that China is not as is claimed, an expansionist country. By extending its trade, diplomacy and military might in the region, it secures its national interest. But his view appears to be skewed toward the Chinese target. (c)​ Superpower Showdown: How the Battle between Trump and Xi Threaten a New Cold War by Bob Davis and Lingling Wei published by HarperCollins, June 9, 2020. ​As told by two Wall Street Journal reporters, one based in Washington, D.C., the other in Beijing, who had more access to the decision-makers in the White House and China’s Zhongnanhai leadership compound than anyone else, this is the inside story of the US-China trade war, how ties between these superpowers unravelled, darkening prospects for global peace and prosperity. Over the seven years, they have collaborated on writing for the Wall Street Journal, Davis and Wei have conducted hundreds of interviews with government and business officials in both nations. They explain how we have reached this turning point and look at where we might be going, evaluating U.S.-China ties. (d) ​COVID-19 Challenges for the Indian Economy: Trade and Foreign Policy Effects by EEPCINDIA and AIC, 2020. ​​A study entitled ‘COVID-19: Challenges for the Indian Economy – Trade and Foreign Policy Consequences’ was developed by the ASEAN-India Centre(AIC) Research and Information System for Developing Countries(RIS) in collaboration with the Engineering Export Promotion Council (EEPC), it presents freshly written 40 primary comments on India’s trade and foreign policy challenges raised by this crisis and the way forward by Indian professors, economists, and practitioners. (e ) ​Global Economic Effects of COVID-19 by Congressional Research Service August 2020 by James K. Jackson, Martin A. Weiss, and Rebecca M. Nelson.​ It’s a Congressional Research paper published to analyse the effects of the pandemic on the world economy particularly, the USA. It’s a crystal gazing done by two seasoned economists and gives an excellent perspective of ongoing trade and its likely directions post COVID-19. Research is full of authentic data, facts and Pictures gathered from governmental and non-governmental sources. (f) ​Trade is Not a Four-Letter Word: How Six Everyday Products make the case for Trade, January 2014 by Fred Hochberg published by Simon and Schuster. ​Fred P. Hochberg breaks down colourful and convincing real-world examples through the prism of six traditional American items to reject the common myths and misunderstandings surrounding trade. Mr. Hochberg illustrates the story of America’s most unexpected business partnerships by using six commonly consumed American products; the taco salad, the minivan, the banana, the iPhone, the college degree, and the HBO series Game of Thrones – thus sharing the fundamentals of trade that everybody should know. (g) ​Indian Economy by Dutta and Sundhram published by S. Chand, New Delhi, 66th Revised Edition.​This book analyses structure of the Indian Economy, national income, study of human and natural resources in the context of economic development, pattern of foreign trade of India, broad cross-section of the Indian economy. Chapter 6 of this book deals with foreign trade in India and its balance of payment position which is significant for my study. (h) ​International Economics by Francis Cherunilam published by Tata McGraw Hill Publishing Company Limited, New Delhi, Third Edition. The author is a professor at the School of Management Studies at Cochin University of Science and Technology. This book deals with the conflicting national interest, international economic relations, and solutions of conflicting interests. Chapter 3 of this book shows the picture of international trade. Chapter 9th and 10th clear the picture of free trade versus protection and different types of trade barriers. (i) ​International Economics by H.G. Mannur published by Vikas Publishing House Private Limited, Second Revised Edition. ​The author of this book, H.G. Mannur paid his gratitude to the school of social sciences of the university of science in Penang Malaysia, which provided him a great opportunity to learn about the International economics of Malaysia related to the world. This book is dealing with the International economy of Malaysia which is the highest foreign trade-dependent economy. Chapter 1 explains why do nations trade with each other. Chapter 7 of this book deals with obstacles to trade and trade restrictions. (j) ​International Economics by Dominick Salvatore by Wiley, January 1, 2014. ​​Dominick Salvatore, the author of international economics is an American economist. This book presents theories of international economics and its relevance through real-world examples and applications. Articles. ​ Several articles on the subject relating to the global trade, trade conflict and its effects on world have been written by many noted columnists and authors. Apart from that in last 10 months number of organisations and research bodies also carried out the analysis and likely effects of the COVID-19 pandemic on the world trade and ongoing trade conflict. Articles from publications such as ‘The Economics Times’, ‘Business Today’, ‘The Hindu’, ‘National Council of Applied Economic Research’, ‘BBC Economic Research’, ‘Economic Research and Statistics Division (ERSD)’, ‘Investopedia’ and ‘Business Insider’ form a part of the literature review for the research. In addition to the articles and journals by various writers certain data were also taken from the governmental and non-governmental reports like United Nations Conference on Trade and Development(UNCTAD), WTO Press releases and Economic Survey of India. The existing literature provides great insight into the reasons of trade between the countries, trade conflict and its catalyst and how an unforeseen event like the pandemic brings the entire world to a standstill where even largest and strongest have no solution. There are number of literature and research available which brings out many scenarios where the current trade conflict can go. Besides, a large number of research papers have also been written about the likely recovery of the world trade in various different scenarios. Study of some of has definitely given an insightful perspective on the subject. There is, however a void in the research writings on the subject from Indian government’s concerned ministry like Ministry of Finance, Ministry of Trade and Commerce and Ministry of Agriculture. The Economic Survey of India was the only document where authentic data could have been found but that too was almost six to eight months old. The updated analytical facts and data from the ministry’s sites will go a long way in helping a researcher for his work. A critical study of books and articles mentioned above has assisted in the research to address the issues identified. ​16. Statement of Problem.​ The research seeks to investigate: - (a) ​How the current global trade war (GTW) has impacted the nations having a considerable share in world trade? (b) ​How has the Global Trade War (GTW) impacted the Indian economy? (c)​What are the effects of the COVID-19 pandemic on the Global Trade War? (d) ​What are the likely effects of the COVID -19 pandemic on the Indian economy? 17. Statement of Problem.​ The research seeks to investigate: - (a) ​How the current global trade war (GTW) has impacted the nations having a considerable share in world trade? (b) ​How has the Global Trade War (GTW) impacted the Indian economy? (c)​What are the effects of the COVID-19 pandemic on the Global Trade War? (d) ​What are the likely effects of the COVID -19 pandemic on the Indian economy? 18. Objectives of the Study. The specific objectives of the study are as under: - (a) ​To study the reasons and effects of the global trade war on nations having a major share in world trade. (b) ​To study the effects of COVID-19 pandemic and GTW on international trade with specific emphasis on the Indian economy. 19. Hypothesis The research is intended to deliberate and validate the following hypothesis: - (a) ​Global Trade War has severely impacted nations from having a major share in world trade. (b) ​India has not been affected much by the Global Trade War. (c)​COVID-19 pandemic is going to aggravate the Global Trade War. (d) ​Indian economy will be adversely affected by the ongoing pandemic. 20. The relevance of the Study… This study will contribute to academia with an in-depth insight into the existent trend of international trade and trade war. The present study will evaluate the effect of COVID-19 on international trade and its role in aggravating trade war. Besides, this study will also endeavour to furnish both analysis and suggestions towards: - (a) ​Trend of global trade and reasons behind trade war. (b) ​Likely direction of international trade post-COVID-19. (c)​Its impact on the Indian economy and recommendations for future economic policies. 21. Research Methodology Owing to the current and contemporary nature of the topic, research was based on the primary and secondary method of data collection wherein the number of books, open-source articles, internet blogs, periodicals, and research papers were referred and perused. Apart from the same reports and analysis of both governmental and non-governmental agencies, which were available in the open domain, were also accessed during the research. To support the arguments, an online public opinion, based on close-ended questionnaire, was be taken through Google forms. The survey questionnaire was analysed based on responses using Likert Scale. Non-random convenient sampling was used for selection of participants. A total of 114 respondents took part in the survey. 22. Organisation of the Research Research has been completed under five chapters. Headings of the chapters and their broad contents have been covered in succeeding paragraphs. (a) ​Chapter 1: Introduction and Research Methodology. In this chapter background of global trade, particularly after World War II, the role of WTO for free and fair trade amongst member nations along with research methodology have been covered in detail. (b) ​Chapter 2: Background of Global Trade War and Situation up to the onset of the COVID-19 pandemics. In this chapter issues like background of trade war, currency war and current state of global trade amidst ongoing trade conflict between the USA and China has been covered in detail. Apart from the same it has also been brought out in this chapter that which are the countries and which all products and services have been severely affected. All the affected nations are adopting their own policies to deal with the current situation of COVID-19 and ripples of trade dispute. Same have also been brought forward in this chapter. (c)​Chapter 3: Likely Directions of Global Trade War post-COVID-19 pandemics. COVID-19 pandemic has added a new dimension to the way nations were doing trade with each other, particularly in the light of disruption in production, supply chain, unpredicted market, and labour issues. Apart from that, it has severely affected the ongoing global trade war. The revival of the economy is incumbent on medical success in finding the vaccine for the disease. In this chapter likely direction of the trade war has been discussed in details. Apart from the foregoing, long and short term effects of the pandemic on global trade have also been covered in this chapter. (d) ​Chapter 4: Impact of Global Trade War and COVID-19 pandemics on the Indian Economy. The Indian economy was not affected much by the global trade war but since the onset of a pandemic, the combined effect of COVID-19 and trade war has started affecting the Indian economy. Apart from the same in this chapter impact on export and import capability of India during pandemic times have also been covered in detail. Recent development at Galwan valley in Eastern Ladakh which includes the steps taken by India and its likely implications on the trade between India and China has also been covered in this chapter. In the end an analysis of the Online survey with the help of Google form has been covered to check the hypothesis. (e)​ Chapter 5: Way Ahead for the Indian Economy, Recommendations and Conclusion. ​In continuation of the previous chapter, this chapter contains nthe state of global trade in the current times along with certain recommendations which can be followed to have a fair world trade. During COVID-19 pandemic the Indian government has taken large number of fiscal measures to control to the damage and bring the economy back on track and same have been covered in great details in this chapter. Apart from that actions which Indian government should take to minimise the impact of trade dispute between other nations have also been recommended. In last way ahead for the Indian economy has been recommended.

FREE TRADE OR PROTECTIONISM? TRADE BARRIERS AND TRADE POLICY OF THE EU

For years, a number of researchers have questioned whether there is an implicit impulse for protectionism hidden behind the tariff and non-tariff liberalization clauses put forward in all new EU agreements, as well as in the Union's participation in various formats of multilateral trade negotiations. On the other hand, the introduction of protectionist measures implemented by many countries around the world is increasingly being observed. In order to summarize and clarify these trends in the development and restructuring of the global trade system and the EU's place in it, the article first summarizes some insights from economic theory and empirical research on free trade and protectionism, then it examines the pre-pandemic trade barriers vis-à-vis the EU, and finally it assesses the “new framework” of bilateral and multilateral preferential trade agreements in the EU trade policy.

전자적 전송물 무관세 모라토리움의 미래와 통상법적 쟁점에 대한 연구

The future of WTO duty-free moratorium on electronic transmissions (moratorium), which has been temporarily in effect for more than 20 years, is uncertain. There is a possibility that the moratorium might be officially repealed on March 31, 2024, as decided during the 12th WTO Ministerial Conference. The termination of the moratorium could have a significant impact on Korea, a prominent exporter of online content. This study provides a detailed examination of the legal issues surrounding duty-free provisions in Korea's agreements. Additionally, it suggests both multilateral trade negotiation strategies for Korea to advocate for the permanent status of the moratorium and bilateral strategies to maintain the duty-free status of cross-border electronic transmissions in anticipation of the potential repeal. The contribution of this study lies in its identification of specific legal issues related to duty-free provisions and the development of effective negotiation strategies for each issue in preparation for the 13th Ministerial Conference.

Rights redux: the return of human rights at the WTO

The conventional wisdom is that human rights have long been off the negotiating agenda at the World Trade Organization (WTO). The failed attempt by Northern states to include a ‘social clause’ in WTO rules during the late 1990s and early 2000s is often cited as having foreclosed bringing human rights to bear in multilateral trade negotiations. This article challenges this traditional view, demonstrating that states are mobilizing human rights at the WTO to shape current global trade rulemaking. Moreover, in sharp contrast to the prevailing assumption that developed countries are the primary champions of human rights in the trade regime and developing countries the opponents, I show that developing countries have in fact become key protagonists in marshalling human rights at the WTO. To illustrate these claims, I examine how developing countries mobilize human rights norms, principles and discourse to shape global trade rulemaking in two of the most contentious issues in recent WTO negotiations: The use of public food stockholding for food security purposes and a TRIPS waiver to ensure access to COVID-19 vaccines.

Hope Springs Eternal: Plurilaterals, the WTO and APEC*

The rules‐based international trading system is under the greatest pressure since its inception in 1948 when the General Agreement on Tariffs and Trade (GATT) came into force. The rules of the GATT's successor, the World Trade Organization (WTO), are being flouted, and the Appellate Body of the dispute‐settlement system is no longer functioning. Superpower rivalry is likely to prevent new multilateral trade negotiations leading to substantive agreements. In these circumstances, like‐minded countries should begin negotiating plurilateral agreements at the WTO and within APEC.

Non‐tariff measures: What's tariffs got to do with it?

AbstractAfter successive rounds of tariff reductions by GATT/WTO members, non‐tariff measures (NTMs) have increasingly become the focal point of multilateral trade negotiations. It remains an open question whether the liberalization in tariff rates has subsequently been weakened or even erased by increases in NTMs. Using a product‐level global panel of WTO members over the period 1996–2019, this paper systematically examines the empirical link between various tariff measures and the imposition of NTMs. I find that bound or applied tariff reductions do not correlate much on their own with NTM incidence. The relevant trade policy margin for detecting a tariff–NTM nexus is instead tariff overhangs, the difference between WTO members' bound and applied tariff rates. Countries impose more NTMs when their sectoral applied tariffs are close to their respective bound rates, indicating that small tariff overhangs signal limited legal trade policy flexibility.

How China lost its wolf pack: the fracturing of the emerging-power alliance at the WTO

Abstract There has been considerable debate about the capacity of emerging powers, such as the BRICS (Brazil, India, China, South Africa), to act as a unified and coherent force in global economic governance. In the case of the World Trade Organization (WTO), strategic cooperation and alliance-building among the emerging powers—specifically Brazil, India and China (BIC)—were essential to counterbalancing the US and other traditional powers and enabling the rising powers to defend their interests. However, as this article shows, the BIC alliance at the WTO has collapsed. The core issue that historically united the emerging powers and provided the foundation for their alliance was ‘special and differential treatment’ (SDT) for developing countries. Yet both Brazil and India have now defected from the alliance, abandoning China. Brazil was the first to defect, switching sides and realigning itself with the US; the change in its alliance calculations reflected shifting economic priorities and a fundamental reorientation of its foreign policy strategy away from its earlier Third Worldism. India then defected when its alliance with China, once an important source of strength in WTO negotiations, instead became a liability. As a result, having lost its key allies at the WTO, China is increasingly isolated in multilateral trade negotiations.

New Vectors of WTO Law Development and Certain Issues of Application of the Subsidy Instrument

The multilateral system of trade regulation is the most complex institution of international law. Over the past three decades, the members of the General Agreement on Tariffs and Trade have managed to form not only the format of negotiations — the World Trade Organization, but also the rules and regulations for doing business in the world market, including the rules for granting subsidies. However, the further development of the organization is undergoing a crisis. The equilibrium application of international trade rules is now impossible due to the current situation: some developing countries, which at the time of joining the WTO recorded a large number of exemptions and transition periods, have grown economically and can now compete on an equal footing with developed countries. On the other hand, it is impossible to talk about any violations, since these exemptions were “agreed”. The problem is exacerbated by the fact that the WTO, although it uses the concepts of “developing, developed and least developed countries”, does not have its own classification of countries according to economic development and cannot respond to changes in their development. The questions posed by the last round of multilateral trade negotiations (the Doha round) have already begun to affect such areas of regulation in which the equalization of the norms and rules of trade between developing countries and developed countries affects not only the economic but also the social sphere. In addition, a deeper level of typification of trade regulation rules affects the mechanisms of interaction that go beyond the activities of such an international organization as the WTO and are inherent in integration associations. Nevertheless, active WTO members have put forward initiatives to change the rules for issuing subsidies, aimed at tightening them and even deeper unification of national jurisdictions with standard international approaches to regulating state support.

Free trade agreements partnership and value chain linkages: Evidence from China

AbstractAs multilateral trade negotiations have lapsed into stalemate, regional economic integration arrangements like free trade agreements (FTAs) are gaining growing prominence. We propose a theory on how a developing country's GVC linkages with partners are affected by partners’ position on the GVCs and the characteristics of the FTAs, and use a large matched data of China's trading partners to validate our hypothesis. We find that there are stronger value chain linkages between China and higher‐income economies, and the degree of mutual value chain dependence rises in line with the partner's development level. The GVC promoting effect of FTA partnership is more pronounced for China's value chain linkages with its higher‐income partners. The results survive various robustness checks and are likely to be informative for other developing countries.

Consensus and Diversity in the World Trade Organization: A Queer Perspective

When the World Trade Organization (WTO) was established in 1995, it was seen as representative of a new era in international law, which claimed to be more functional and cooperative than the Cold War years. Fast forward to 2022, most commentators proclaim that the WTO is in “crisis.” For over two decades, its membership has struggled to reach decisions and, in 2019, the WTO was “dejudicialized” by the United States blocking consensus on appointments to the Appellate Body. In seeking to understand what went wrong, some commentators have focused on the operation of the WTO's consensus procedure and, in particular, the way it can afford states a veto power. In this essay, I take a different approach by considering how the discursive effects of consensus decision making have played into some of the problems facing the WTO today. Inspired by Gibson-Graham's work on “queering the economy,” I do so by unmooring queer theory from its base of gender and sexuality and applying queer insights to a discourse analysis of statements made in relation to the Uruguay Round of multilateral trade negotiations, which lasted from 1986 until 1993 and culminated in the agreement to establish the WTO. I show how the use of consensus decision making served to cultivate an intolerance of economic difference by giving rise to discourses of worldwide sameness and agreement. Finally, I consider what a queerer approach to trade-related decision making might look like.

A Panel Study of Factor Accumulation and Export Quality

Cross-sectional data show Global North countries export higher quality products at a point in time. Product-level panel data can address if countries improve their export quality over time. The literature has addressed this practically relevant panel question only in small samples over the short term. We addressed it for a large sample, over the long run, focusing on the hitherto overlooked endogeneity between export quality and factor accumulation and the role of export composition. We utilized a two-tiered panel: the panel of countries and the panel of products each country trades. We found some evidence that middle-income countries often upgrade export quality within the same product, but that high- and low-income countries do this less often. Our results appear to support product cycle theory: some countries climb the value ladder, others are competed off from the ladder’s top, and new countries enter markets. Technology appears to be a potential basis for consolidating trade competitiveness over time, as skill accumulation becomes more widespread across countries and loses significance as an explanatory variable. Our results provide some explanation of why Global North countries might resist sharing technology. This research is timely with deadlocked multilateral trade negotiations and looming trade wars. It attempts to contribute to an evidence-based guide to trade policy.

The Boundary of Supranational Rules: Revisiting Policy Space Conflicts in Global Trade Politics

While global value chains (GVCs) necessitate effective global economic governance in providing a stable, rule-oriented international economic order for the cross-border flow of factors, it is witnessed that there’s an inevitable decline of multilateralism in the WTO in the contemporary era of deep globalization. This empirical puzzle has stimulated various theoretical explorations, including research on the multilateral trade negotiation model, North–South structural conflicts, and the absence of great power responsibility. The increasing friction between great powers around trade policy has illustrated that policy space conflicts constitute the central challenge of global trade governance. Policy space as a concept illustrates the scope and conditionality of domestic policy instruments when framed by supranational rules. By revisiting existing research, this article clarifies the nature of policy space and categorizes its conflict modes as regulatory diffusion, regulatory differentiation, regulatory competition, and regulatory conflict. The practice of global economic governance shows that deep globalization requires the convergence of diverse domestic regulations that reduce policy space; while maintaining competitive advantage of sovereign states in the global production system requires the preservation of certain flexibilities, especially in areas like interventionism, sequential reforms, or capacity building. This inherent tension causes policy space conflicts to evolve in kind with the escalation of competition among great powers in the global division of labour. Since 2017, the WTO reform agenda, US–EU–Japan trilateral coordination, and intense Trumpian trade wars have all proved that regulatory conflict has offered the dominant model. This shift has led to the decline of multilateralism and the weakening of the multilateral trading system. policy space, multilateralism, global value chains, regulatory competition, global trade politics, convergence and de-convergence, WTO reform

Factors Shaping Exports of Cultural Goods from Pakistan

In the era of economic globalization, cultural goods trade has assumed a vital role in overall bilateral trade. It has become an emerging and transformative force behind socio-cultural-economic development and an important source of inclusive growth. Once virtually unlocked, trade in cultural goods is now fast growing with world-wide market openings. Trade liberalisation in cultural goods thus needs to be treated as a priority policy issue in multilateral and regional trade negotiations. Despite large potential of exports in cultural goods, Pakistan has been unsuccessful in realizing it. This is mainly because of lack of due attention given to it by the policymakers. In this regard, this paper makes a beginning to investigate the determinants of cultural goods exports from Pakistan for the period 2003-2012 with its 157 trading partner countries. The Gravity model is used to identify factors that determine exports of cultural goods. Six major categories of cultural goods are used for the purpose of estimation. Results indicate that size of Pakistan and its trading partner countries’ markets as well as distance among them are important determinants of exports in cultural goods. Specifically, cultural goods exports are strongly and positively influenced by the growth of the GDP in Pakistan, while the trading partner countries’ GDP growth negatively influence cultural goods’ exports. Distance, representing transaction costs and trade barriers, negatively affect exports of cultural goods; while colonial ties, common language, common border and land area of the trading partners positively influence the export of cultural goods. Exports of cultural goods to landlocked countries are lower than other trading partner countries.

Trump & Trade: The Crisis in the Multilateral Trading System

President Trump is widely seen as instigating a dramatic reversal of 70 years of US trade policy and abdicating the American hegemon’s traditional leadership role in the multilateral trading system. Trump has threatened to withdraw the US from the WTO, abandoned trade multilateralism for aggressive unilateral actions that are in blatant violation of WTO rules, and jeopardized the WTO’s dispute settlement mechanism by blocking appointments to its Appellate Body. Trump’s policies are commonly attributed to the surge of populist anti-trade sentiment under his presidency. As this article shows, however, both the crisis in the multilateral trading system and the American hegemon’s turn away from the WTO – including abandoning multilateral trade negotiations and blocking Appellate Body appointments – originated prior to Trump. This shift in the US orientation towards the multilateral trading system cannot, therefore, solely be attributed to the rise of populism under Trump. It is also a reaction to the decline of the US’s institutional power – its power over the core institution and rules governing trade. Amid the rise of China and other emerging powers, the US’s ability to dominate global trade governance and write the rules of global trade sharply diminished, leading to an erosion of American support for the multilateral trading system it once led. While realism has fallen out of favour in IPE, understanding recent dynamics in the trading system requires revisiting its core insights.

Korea's Choice for Asia

The article discusses the Republic of Korea’s role in multiple already working and being negotiated free trade agreements from the viewpoints of the influence of Korea’s domestic affairs on the role and of the political and economic change among its partners in the free trade agreements. It finds that Korea’s position on the free trade agreements remained stable despite the shift to the domination of right-wing parties in Korea’s domestic politics in 2008 and back to domination of left-wing parties in 2017. Both left- and right-wing parties in Korea supported the free trade agreements, despite their rationale was different: in 2000s left-wing parties perceived the free trade agreements to curb negative consequences of the 1990s Asia’s financial crisis, while in 2010s right-wing parties perceived them as a response to the failure of multilateral trade negotiations within the World Trade Organization. It also finds that Korea’s partners in the free trade agreements sometimes seek to re-negotiate the already existing free trade agreements in response to domestic political and economic changes in those countries. In most cases, Korea and its partners managed to find common grounds at re-negotiations and thus to conclude renewed bilateral and multilateral free trade agreements. At the same time, Korea, China, and Japan have so far failed to conclude a trilateral free trade agreement, thus leaving the ASEAN in the position of the exemplary group of countries in the core of the network of Asia’s free trade agreements.

Patent Games in the Global South: Pharmaceutical Patent Law-Making in Brazil, India and Nigeria

Unlike the products or processes protected, pharmaceutical patents are neither derived from biological nor physical sciences. Patents, like other intellectual property rights (IPRs), are constructed through negotiations between state and interested non-state actors and conditioned by a confluence of legal, historical, political, social, and economic factors. Although patent laws are designed and introduced at the national levels, international agreements alongside bilateral and regional agreements shape the contours of national patent laws. The World Trade Organization (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) occupies the centre of the international patent architecture. TRIPS, presented as Annex 1C of the Agreement Establishing the WTO, was one of the central outcomes of the challenging and controversial Uruguay Round of Multilateral Trade Negotiations (1986–93). Section 5, Articles 27–34 of TRIPS, establishes legally binding minimum patent standards for all WTO members. Although Articles 7 and 8 of TRIPS provides for WTO members to implement these minimum patent standards in ways that promote the socio-economic welfare, public health, and public interest, there are variations in national IPR laws.

Trump & Trade: The Crisis in the Multilateral Trading System

ABSTRACT President Trump is widely seen as reversing 70 years of US trade policy and abdicating the American hegemon’s traditional leadership role in the multilateral trading system. Trump has threatened to withdraw the US from the WTO, abandoned trade multilateralism for aggressive unilateralism, and jeopardised the WTO’s dispute settlement mechanism by blocking appointments to its Appellate Body. As this article shows, however, both the crisis in the multilateral trading system and the American hegemon’s turn away from the WTO – including abandoning multilateral trade negotiations and blocking Appellate Body appointments – originated prior to Trump. This shift in the US orientation towards the multilateral trading system cannot, therefore, solely be attributed to the rise of populism under Trump. It is also a reaction to the decline of the US’s institutional power – its power over the core institution and rules governing trade. Amid the rise of China and other emerging powers, the US’s ability to dominate global trade governance and write the rules of global trade sharply diminished, leading to an erosion of American support for the multilateral trading system it once led. While realism has fallen out of favour in IPE, understanding recent dynamics in the trading system requires revisiting its core insights.

Is Trade Negotiation under the WTO a Victim of Half-Hearted Strategies and Inconsistencies

Since 1947 when the general agreement on tariff and Trade (GATT), a process initiated simple rules to govern the liberalisation of trade. The GATT from 1947 to 1994 has had eight rounds of negotiation, bringing mainly the commercial trade among the developed countries. More the five decades of liberalisation in tariffs under the GATT primarily focused on trade between the developed countries for the manufacturing sectors, excluding critical sectors like agricultural and textiles and clothing. By the late 1980s, the developed countries felt the need for a stronger multilateral organisation to monitor trade and resolve trade disputes (Anderson). The multilateral trade negotiations underwent a complete transformation under the Uruguay Round (1986–94) for the first time in the global commercial history, the developing and least developed countries brought under the commercial agreement platform. A series of challenges have emerged since the U.R. one of the fundamental aspects is the developmental differences between the membership. This study is one attempt to bring forward the nature of SPS-based MRL standards across major ten countries, accounting for nearly 40% of global trade. Although the whole study is based in it impart on agricultural products of India’s export interest. What are the permissible limits legally specified by the SPS Agreement of WTO and what have the countries been introducing as measures that may depart from a harmonised measure under the Codex. The gap in the WTO transparency provisions has allowed members notify under ‘regular’ or ‘emergency’ SPS notifications; however, these need to be treated separately as the impact on developing country exports are significant. The striking feature of all trade negotiations is that the ‘governments’ negotiated each one of such agreements, but it is operated by ‘firms’ – the most micro-element of the economy. The smooth conduct of trade agreements, be it between two countries (RTAs) or multilaterally at the WTO, is a reflection of how good, update and useful is the information flow between the actors in the economy. Therefore, the more formal the economy, the better chance for a trade deal to be successful and beneficial for all agents in the economy. Thus, the more formal an economy, there is a chance that such trade agreements may reflect the need of the actors. Stakeholder consultations are bridging this connection between the lowest agent of the economy and the negotiators. Therefore, a successful trade deal would depend upon how successfully the stakeholder consultations held within the country between the agents.

Writing Multilateral Trade Rules in the League of Nations

AbstractThis article analyses the mechanics and the political stakes of multilateral trade negotiations in the League of Nations, in the context of the transition from empires to nation states. It examines one attempt to transfer bilateral treaty norms to a multilateral framework, the Draft Convention on the Treatment of Foreigners. This highly contested treaty addressed a policy question that was at the heart of both national sovereignty and international order – the legal treatment of foreign nationals. The attempt to regulate this question on a multilateral basis provoked intense debate about the authority of the League to mediate the relationship between international commerce and national governments.

일방적 통상정책의 국제적 확산과 무역구조의 변화에 관한 연구 (A Study on Unilateral Trade Policy and International Trade Structure)

Korean Abstract: 이 보고서는 일방적 통상정책의 국제적 확산과 무역구조의 변화에 관한 분석을 다룬다. 보고서의 주요 내용은 다음과 같다. 제2장은 세계무역에서 나타나는 일방적 통상정책의 동향을 점검하고, 일방적 통상정책이 유발하는 경제/무역 불확실성 정도를 살펴보며, 일방적 통상정책이 국제적으로 확산되고 있다는 직간접적인 증거를 제시한다. 일방적 통상정책은 기존의 보호무역주의와 달리 조치 수단이 다양할 뿐만 아니라 상대국에 일방적으로 조치를 취하기에 국제통상 환경에 매우 큰 불확실성을 야기한다. 미국의 경우 2015년 ｢특혜무역연장법(TPEA: Trade Preference Extension Act of 2015)｣을 시행한 후부터 보다 적극적으로 반덤핑 상계관세조치를 활용하고 있으며, 이전보다 높은 반덤핑관세ㆍ상계관세를 부과하는 사례가 늘고 있다. 미국은 그동안 ｢1930년 관세법｣의 이용 가능한 불리한 정보(AFA: Adverse Facts Available) 및 특정시장상황(PMS: Particular Market Situation)의 적용을 엄격하게 제한해왔었으나, 2015년 TPEA에 AFA를 활용할 수 있도록 조사당국에 재량권을 부여하는 규정이 강화되고 PMS의 적용 근거 규정이 포함됨에 따라 덤핑 판정이 증가하고 있다. 일방적 통상정책은 국제적으로 확산되고 있는 추세이다. 반덤핑조치, 위생검역조치 및 무역기술장벽 등 비관세조치가 지속적으로 증가하고 있다. 일방적 통상정책의 확대에 따라 불확실성이 증가하며, 특히 최근 2~3년 세계 불확실성 지수의 평균값은 1990년대보다 약 4~5배 높은 것으로 나타난다. 제3장은 무역구조의 변화와 글로벌 가치사슬(GVC: Global Value Chain)의 재편 요인을 살펴보고, 주요 수입시장의 국별ㆍ산업별 점유율 변화 현황을 점검한 후, 일방적 통상정책에 따른 무역전환 효과를 식별한다. 자유무역협정의 확대, GVC 확산 등에 따라 세계 교역은 빠른 증가세를 보였으나 글로벌 금융위기 이후 둔화되는 양상이다. 1995~2008년 세계 교역의 성장률은 연평균 9%이지만, 금융위기 이후부터는 연평균 약 4%대에 머문다. 이런 추세는 선진국과 개도국 모두에서 나타난다. 중간재도 2002~07년 연평균 19% 성장했으나, 2010~19년 동안에는 연평균 2% 성장에 그친다. GVC 변화 요인으로 소비시장으로 떠오른 개도국, 선진국과 개도국 간의 기술격차 감소, 디지털 기술 발전에 따른 개도국의 인건비 경쟁력 하락 등을 꼽을 수 있다. 2절은 2015~19년 북미(미국과 캐나다), 중국, 아세안과 인도, 유럽, 중남미를 중심으로 국가별ㆍ산업별 수입시장 비중 변화를 살펴본다. 첫째, 미중 통상분쟁의 여파로 미중 수입시장의 변화가 뚜렷하다. 북미 수입시장의 경우 전 산업에서 중국의 비중이 감소하지만, 광업을 제외한 전 산업에서 아세안과 인도의 비중은 증가한다. 다만 전기전자 산업 등 제조업 전반에서는 중국이 여전히 높은 비중을 차지한다. 둘째, 중국 수입시장의 전 산업에서 북미 지역의 비중이 감소한다. 특히 농림수산, 수송기기 산업에서 각각 약 12%, 10% 감소하고, 철강비철금속 산업 역시 5% 이상 하락한다. 3절은 2절 결과를 바탕으로 미중 통상분쟁에 따른 무역전환 효과를 실증분석한다. 선행연구의 대부분이 미국 관세부과에 따른 중국 수입 감소 효과를 분석하지만, 이 보고서는 감소한 수입이 다른 국가로 전환되었는지의 여부에 초점을 맞춘다. 무역전환 효과가 크다면, 미국 전체의 무역수지 개선 효과는 미미할 뿐만 아니라 자국산업 보호 및 일자리 창출 효과 역시 크지 않을 것으로 판단된다. 실증분석 결과, 미국 수입시장에서 무역전환 효과가 통계적으로 유의하게 발생했으며, 특히 중간재 품목에서 유의한 영향이 나타난다. 제4장은 이론모델 구축과 데이터 활용을 통해 일방적 통상정책에 따른 향후 무역구조의 변화를 분석한다. 일방적 통상정책의 파급 효과를 추적하기 위해 GVC 구조를 반영한 무역모델을 설계하고 ADB-MRIO 2019년 데이터를 연계한다. 일방적 통상정책에 따른 무역 불확실성 지수를 대리변수로 삼아 관세상당치 값을 추정하여 무역비용의 변화에 대한 외생충격값으로 활용한다. 일방적 통상정책의 국제적 확산에 따른 무역비용의 상승이 세계, 권역별, 국가간 무역구조에 어떻게 영향을 미치는지 살펴보며, 그 결과를 최종재, 중간재, 부가가치 수출, GVC 지표 변화로 제시한다. 미국발 충격에 따라 무역비용이 증가하면 세계 총생산에서 총수출과 중간재 수출이 차지하는 비중이 감소한다. 감소의 대부분은 북미 3국(미국, 멕시코, 캐나다) 총수출과 중간재 수출의 변화로 설명된다. 세계 수출액에서 부가가치 수출이 차지하는 ‘비중’은 오히려 증가하는데, 이 결과 역시 한중일, 유럽권 등 북미 3국을 제외한 권역의 부가가치 수출 비중이 감소할 때 북미 3국의 부가가치 수출 비중은 늘어나는 데서 기인한다. 미국발 충격에 따라 세계 중간재 수입처가 북미 3국을 제외한 권역에서 북미 3국으로 전환되는 것이다. GVC 지표도 북미 3국을 중심으로 변화하며, 특히 미국의 GVC 참여도가 증가한다. 일방적 통상정책에 따른 글로벌 충격은 미국발 충격보다 강하고 무역구조에 미치는 영향도 다르다. 일부 권역이 아닌 모든 권역에서 최종재와 중간재 수출 비중이 감소하고, 대부분의 국가와 권역의 부가가치 수출 비중도 낮아진다. 그 결과 세계 GVC 평균 참여도가 하락한다. 일방적 통상정책의 국제적 확산이 과거 GVC가 확장되던 시기의 추세에 역행하는 힘으로 작용하는 것이다. 일방적 통상정책이 국제적으로 확산할수록 GVC 재편이 심화하고 기존의 총수출, 중간재 수출, 부가가치 수출 구조에 부정적인 영향을 미칠 것이다. 제5장은 앞 장의 분석을 기초로 정책과제를 포함한 시사점을 제시한다. 코로나19 장기화에 따라 세계경제가 단기간에 회복되기는 어려울 것으로 전망된다. 미중 통상분쟁 심화와 함께 일방적 통상정책의 국제적 확산에 따른 통상환경의 불확실성 심화는 GVC 재편을 포함한 무역구조의 변화에 많은 영향을 미칠 것으로 판단된다. 우리 정부와 기업이 주목해야 할 부분으로 다음의 여섯 가지 정책과제를 제시한다. ① 글로벌 가치사슬 재편에 대한 대응 강화 ② 수출의 부가가치 창출 능력 제고 ③ 자유무역협정의 지속적 추진과 개선 노력 ④ 다자협상 논의의 적극 참여와 중견 통상국가와의 공조 강화 ⑤ 글로벌 통상환경 모니터링 강화 ⑥ 기업 차원에서의 경쟁력 제고 노력을 제언한다.English Abstract: This study analyzes the widespread diffusion of unilateral trade policies and change in trade structures. Chapter 2 examines the trend in unilateral trade policies, the economic and trade uncertainty they generate, and the direct and indirect evidences of their diffusion. Unilateral trade policies are diverse in measures and unilaterally imposed on partner countries, hence increasing uncertainty in the international trade environment. In the case of the United States, after the Trade Preference Extension Act of 2015 came into force, anti-dumping and countervailing duties were actively used and higher rates were growingly imposed. Unilateral trade policies are spreading internationally. Non-tariff measures including anti-dumping, countervailing measures, SPS and TBT measures are increasing. Moreover, both developing and developed countries are adopting trade-disruptive measures and these are rapidly increasing. Uncertainty grows with the diffusion of unilateral trade policies, in particular the average value of the World Uncertainty Index almost increased to four-fivefold compared to 1990. Chapter 3 discusses changes in trade structures and factors reshaping the global value chains (GVCs). It also examines changes in import market shares by countries and industries, and it estimates the trade diversion effect due to unilateral trade policies. International trade increased rapidly with the rise of free trade agreements and the expansion of GVCs and so on, but has slowed downs after the global financial crisis. Between 1995 and 2007, the trade growth rate was on average 9% per year; after the financial crisis, it slowed to around 4% per year. This trend can also be found among developed and developing countries. Intermediate goods also grew by 19% on average per year from 2002 to 2007, and this growth rate decreased to 2% on average per year from 2010 to 2019. GVCs are being reorganized as developing countries become consumer markets, the technology gap between developed and developing countries diminishes and the development of digital technology decreases developing countries’ labor cost competitiveness. Section 2 of the chapter investigates changes in import market shares by industry for North America (United States and Canada), China, ASEAN and India, Europe and Central and South America between 2015 and 2019. First, the change in import market shares for the United States and China clearly reflects trade disputes between the two. China’s market share in the North American import market decreased across all sectors, whereas ASEAN and India’s share increased across all sectors excluding mining. However, China still accounts for a large portion of North America’s market in manufacturing sectors including electronics. Second, North America’s share in China’s import market decreased across all sectors. In particular, its share decreased around 12% in the agriculture, forestry and fisheries sector, around 10% in the vehicles sector and around 5% in the steel, nonferrous metals sector. Section 3 takes into account the results of the previous sector and analyzes the trade diversion effect due to the US-China trade conflict. Most of the literature focuses on the decrease in imports from China due to the United States’ imposition of tariff measures. This study pays attention to import diversions from China to other countries. If the trade diversion effect is big, it is hard to expect improvement in United States’ trade balance, and the effect of protecting domestic industries and creating jobs would be weak. According to our analysis, the trade diversion effect in the United States’ import market is statistically significant, especially for intermediate goods. Chapter 4 investigates the changes in trade structure due to unilateral trade policies by constructing a theoretical model. GVC structure is incorporated in the trade model to trace the ripple effect of unilateral trade policies. The Trade Uncertainty Index is used as a proxy for unilateral trade policies and its tariff equivalent is estimated. This is then used as an exogenous shock for the change in trade cost. How the rise in trade costs due to the proliferation of unilateral trade policies affects the trade structure of the world, regions and that between countries is examined. The change in consumption goods, intermediate goods, value-added export, GVC indices is then presented. If trade cost rises due to shocks from the United States, the share of total exports and intermediate exports out of the world’s total production both decrease. Most of the decrease can be attributed to the change in total and intermediate exports of the three North American countries (United States, Mexico, Canada). Meanwhile, the share of value-added exports out of total exports increases. This is due to the increase of North American countries’ share of value-added exports unlike that of other countries such as Korea, China and Japan, European countries and so on. GVC indices also changed for those three countries with the United States’ GVC participation rate showing particular increase. The global shock due to unilateral trade policies is stronger than shocks from the United States and has different ramifications. All regions experience a decrease in their share of consumption goods and intermediate goods’ exports and the majority of countries and regions see a drop in value-added exports’ share. In conclusion, GVC participation rate of the world declines. This means that the proliferation of unilateral trade policies works against the decades-long trend of GVC expansion, and it intensifies the rearrangement of the GVCs, negatively affecting total, intermediate and value-added export structures. The last chapter presents policy implications based on the analyses from former chapters. As the Covid-19 pandemic drags on, the global economy will not easily recover in a short period of time. It is estimated that the intensification of uncertainties in the trade environment due to trade conflicts between China and the United States, and the proliferation of unilateral trade measures will have important effects on the change in trade structures, including the reorganization of the GVCs. Followings are some suggestions the Korean government and firms could consider: (1) strengthen the nation’s ability to respond to GVC rearrangements, (2) improve capacity to generate value-added in exports, (3) continue efforts to negotiate free trade agreements and improve their contents, (4) participate actively in multilateral trade negotiations and strengthen collaboration with middle trade powers, (5) strengthen monitoring of the global trading system, and (6) continue efforts to improve competitiveness at the firm level.