Reciprocal Trade Agreements Research Articles

Developing a Product-Level Prioritization Method for Bilateral Trade Negotiations

ABSTRACT The SACU and US trade relationship continues to be dominated by AGOA. Given the lingering uncertainty surrounding its renewal post-2025, this article recommends the SACU to be proactive and reengage the US in the negotiation of a reciprocal trade agreement that builds on AGOA and deepens the parties’ trade relationships. However, trade negotiation processes can be challenging. The literature on product-level prioritization specifically designed to inform trade negotiations is also sparse. Hence, this article proposes a product-level prioritization method, suggested for implementation in the preparation phase of the bilateral trade negotiation process. The method can be applied in any bilateral trade negotiation setting.

On Trade Agreements and a Social Reproduction Approach to GVCs: A Reply to Donatella Alessandrini

Abstract The 15 years following the 2008–2009 global financial crisis witnessed increasing questioning in the global North of the distribution of the gains and costs of an open world economy and the multilateral rules-based trade order. Difficulties in (re-)negotiating trade agreements in the World Trade Organization led states to shift even more of their focus to reciprocal and bilateral trade agreements as these internalize benefits among partners by continuing to maintain trade barriers against non-signatories (mostly emerging economies). There is a vigorous debate across academic disciplines whether such agreements help to increase participation in global value chains (GVCs) by signatory nations and the magnitude and incidence of the associated economic, social and environmental impacts – positive or negative. These are questions calling for rigorous empirical research that assesses impacts against appropriate baselines and counterfactuals and investment in data collection, monitoring and evaluation by participating governments. Mischaracterizing both the extent to which trade agreements constrain the ability of states to regulate and reports published by international organizations on GVCs and trade agreements detracts from where the focus arguably should be: providing compelling empirical evidence that GVCs and trade agreements detrimentally affect social reproduction and specific suggestions on how the design of trade agreements should be changed to improve outcomes.

United States’ Trade Policy and Future Outlook : Focus on United States Trade Representative and United States International Trade Commission

본 연구는 먼저 미국의 통상정책에 막대한 영향을 끼친 법으로 알려진 1930년 스무트 홀리 관세법, 1934년 상호무역협정법, 1962년 무역확대법, 1974년 무역법, 1988년 종합무역법에 대해 살펴보고자 하였다. 이를 바탕으로 트럼프･바이든 행정부에서 추진한 주요 보호무역조치를 알아보고 어떠한 특성이 있는지 확인하고자 하였다. 그 결과 미국 우선주의를 표방한 트럼프･바이든 행정부에서 추진한 대표적인 보호무역조치는 반덤핑관세 및 상계관세 부과, 세이프가드 조치, 국가안보를 이유로 1962년 무역확대법 제232조에 근거한 무역규제가 있음을 확인하였다. 또한 트럼프･바이든 행정부가 추진한 보호무역조치의 특성으로 중국뿐만 아니라 미국 동맹국을 비롯하여 다른 국가에도 미국의 무역규제의 압력이 증가되고 있으며 이를 극복할 방안으로 우리는 수출시장 다변화 및 공급망 재편의 필요성이 제기된다.First of all, this study tried to review the Smoot-Hawley Tariff Act of 1930, the Reciprocal Trade Agreements Act of 1934, Trade Expansion Act of 1962, Trade Reform Act of 1934, and Omnibus Trade and Competitiveness Act of 1988. These laws are known to have exerted considerable influence on the establishment of United States trade policy. In addition, this article contained information related to the protectionism measures pursued by the Trump and Biden administrations. The Trump and Biden administrations used the provisions of Section 232 under the Trade Expansion Act, as well as anti-dumping and countervailing duties. Especially, the Trump administration invoked rarely-used rationales for the enforcement of trade barriers by mentioning national security. And this article explained the current situation and characteristic of the Trump and Biden’s trade policy. To conclude, the Trump and Biden administrations has quickly adopted active and defiant approach to using United States trade laws as a protectionist tool.

Impact of Belt and Road Initiative on India-south Asia Regional Trade Integration

Belt and Road Initiative (BRI) is a standout amongst the latest and remarkable regional economic integration strategies of Chinese government. This initiative incorporates South Asia which is a piece of Asian territory. From past researches we came to know that regional trade intensity among south Asian nations is low. The majority of the analysts finished up by computing the general list at beneath 0.5. Notwithstanding various multilateral and reciprocal Free Trade Agreements (FTA) exchange coordination did not increment attractively. India has reciprocal FTAs with every south Asian nation. Also this sub region is among the significant exchange accomplices of India. There are double suppositions of India about Chinese BRI initiative. In this research we found an answer of an inquiry that, regardless of whether BRI has sway on trade coordination among India and south Asian nations. We utilized a blended gravity model equation from Hayakawa et.al (2015) and Weerehewa (2009) inquire about papers to assess the aftereffects of variables.

Korea’s Strategy on Trade Agreements with Developing Countries in Africa and the Pacific Regions

As the US-China trade conflict intensifies, high dependence on US and China has been pointed out as a potential risk to the Korean economy. This calls for trade policies including diversification of trading partners and the establishment of a new model for trade agreements suitable to such diversified partners. Meanwhile, the necessity for such policies grows as protectionism spreads globally and trade order changes after the Covid-19 pandemic. Africa and the Pacific (AP) regions, the main areas of interest in this report, have been excluded from Korea’s FTA network despite their high growth potential and strategic significance. Most countries in the AP regions are geographically distant from Korea and mostly underdeveloped, so we have approached the region only in terms of development cooperation. Currently, trade agreements and systems for trade and investment with AP countries are insufficient, and the size of economic cooperation with these countries remains small. However, Africa has high market potential, owing to various factors such as its high population growth, middle-class growth, and transition to digital economy, while the Pacific island countries have abundant fisheries and marine resources, and wield voting power in international organizations. In this regard, it is necessary to build the foundation for cooperation with AP countries in the mid-to-long term. Against this backdrop, this study seeks mid- to long-term strategies to promote trade cooperation with AP countries. First we consider introducing and expanding nonreciprocal arrangements for developing countries in the AP regions, as currently provided to United Nations-defined least developed countries. Then we consider introducing a reciprocal trade agreement, for example, an FTA. As a result, we found that it is necessary to introduce an FTA model suitable for developing countries in the AP regions instead of introducing further nonreciprocal agreements. Based on the results of the study, this paper proposes strategic directions for trade cooperation with the AP regions, and furthermore, provides policy suggestions that should be included in the agreement with those countries.

對개발도상국 특혜무역협정 확대 및 활용 방안: 아프리카와 대양주 지역을 중심으로(Korea's Strategy on Trade Agreements with Developing Countries in Africa and the Pacific Regions)

對개발도상국 특혜무역협정 확대 및 활용 방안: 아프리카와 대양주 지역을 중심으로(Korea's Strategy on Trade Agreements with Developing Countries in Africa and the Pacific Regions)

American Commerce, American Empire: Late 19th‐Century Merchant Organizations and Trade Policy

AbstractThe American debate over free trade and protectionism has taken many forms, but it is particularly instructive when it occurs within a single sector of the economy, pitting allied economic interests against each other. That occurred in the shipping industry in the 19th century when shippers and shipbuilders fought each other over trade‐related questions: subsidies for shipbuilding and reciprocal trade agreements with foreign nations. Shipbuilders wanted protection and subsidies; shippers wanted the freedom to make use of cheaper foreign vessels for trade and to develop trade agreements. We show how these opposing forces stymied each other and prevented the shipping industry from taking an active, unified role in national politics. These particular intra‐industry debates reveal broader divisions within the business community over the relationship between business and government under modern commercial capitalism.

The trade creation effects of Africa’s reciprocal vis-à-vis non-reciprocal trade agreements

The advancement of growth through the promotion of exports by granting developing countries preferential terms to rich markets is considered central in global trade policy negotiations. This paper investigates the impact of reciprocal versus non-reciprocal trade agreements on Africa’s trade. The study uses a gravity model with a 5-year-interval comprehensive dataset of 148 countries for the period 1970–2010. The results reveal that African reciprocal trade agreements perform better than non-reciprocal agreements in promoting exports and imports.

Reciprocal vs nonreciprocal trade agreements: Which have been best to promote exports?

The Doha Development Agenda recognizes the central role that international trade can play in the promotion of economic development. In fact, the increase of exports from developing countries to developed nations' markets has been considered a key element for developing countries to realize the potential benefits of globalization. Over the last decades, developed countries have provided preferential access to their markets to developing countries through nonreciprocal trade agreements. Moreover, developing countries have also participated in reciprocal trade agreements. This paper re-examines comparatively the effect of both kinds of trade agreements on exports from developing countries but also from the developed world. In line with other studies, our results across specifications are unstable. However, the results of our preferred specification give additional support to the argument raised by critics of nonreciprocal preference regimes who consider that developing countries should abandon their reliance on one-way trade preferences in favor of reciprocal agreements.

Clashing Over Commerce: A History of U.S. Trade Policy by Douglas A. Irwin

Reviewed by: Clashing Over Commerce: A History of U.S. Trade Policy by Douglas A. Irwin William Bolt (bio) Clashing Over Commerce: A History of U.S. Trade Policy. By Douglas A. Irwin. (Chicago: University of Chicago Press, 2017. Pp. x, 860. $35.00 cloth; $27.50 paper; $27.50 ebook) [End Page 650] In Clashing over Commerce: A History of U.S. Trade Policy, Douglas A. Irwin offers the first comprehensive study of American tariffs and trade policies in over a century. Irwin's text examines commercial restrictions from the Navigation Acts of the 1640s up to President Donald Trump's inaugural address of 2017. He focuses on the three principal goals of tariffs, which he dubs the three "R's." According to Irwin, revenue, restriction, and reciprocity have been the goals of American trade policy. The book is divided into three parts. During the first part, which covers the colonial period through the Civil War, the national government used tariffs to fill its coffers. Irwin examines the Navigation Acts, the Tariff of 1789, Alexander Hamilton's economic vision, the Embargo Act, the Tariff of 1816, the Tariff of 1824, the tariff of Abominations, the Nullification Crisis, the Walker Tariff of 1846, the Tariff of 1857, and the Morrill Tariff of 1861 in this section. Irwin reminds readers that the tariff, in spite of what some might say, did not cause the Civil War. "The South did not secede because of the Morrill tariff; the Morrill tariff was enacted because the South seceded. In addition, the bill was signed by Democrat James Buchanan, not Republican Abraham Lincoln," Irwin writes (p. 209). From Reconstruction until the Smoot-Hawley Tariff of 1930, the second era that Irwin discusses, the government imposed tariffs to restrict foreign imports as a way to protect American manufacturers. Here Irwin analyzes the Gilded Age and Progressive era tariffs including the Mongrel Tariff of 1883, the McKinley Tariff of 1890, the Dingley Tariff of 1897, the Payne-Aldrich Tariff of 1909, the Underwood Simmons Tariff of 1913, the Fordney-McCumber Tariff of 1922, and the Smoot-Hawley Tariff of 1930, which he refers to as the Hawley-Smoot Tariff since the bill first appeared in the House after Willis Hawley, chairman of the Ways and Means Committee, drafted it and introduced it in that chamber. In the third and final era, which ranged from the New Deal to the present, Irwin maintains that American trade policy shifted towards achieving reciprocity with trade partners. Irwin covers the Reciprocal Trade Agreements Act, the General Agreement on Tariffs and Trade [End Page 651] (GATT), the Trade Expansion Act of 1962, the Smithsonian Agreement, the Trade Act of 1974, and the Trade Agreements Act of 1979. Irwin recognizes a slight return to protectionism under Ronald Reagan. Irwin notes, "Reagan himself was often conflicted between his strong belief in free trade and limited government and his desire to help out American industries and their workers" (p. 573). Irwin concludes that Reagan increased tariffs marginally in order to prevent Congress from increasing them even higher. After Reagan, Irwin ends this section by discussing the North American Free Trade Agreement (NAFTA) as well as trade relations with China before postulating (correctly) that a new era might emerge under President Donald Trump. Throughout this thoroughly researched text, Irwin informs readers that the enactment of tariffs never occurred in a vacuum. Outside events as well as political and economic factors typically influenced the implementation of tariffs. Budget surpluses prompted the lowering of tariffs at various times. The need for revenue or agitation from industries led to increases in tariffs. Divided government created stalemates in Washington that left tariff policies in place even though neither side supported the current rates. Clashing over Commerce will be required reading for business and economic historians. It will serve as an excellent reference for any tariff debated throughout American history. One only has to go to the index to find information on any tariff enacted in American history. Simply put, Clashing over Commerce is now the standard work on tariffs in American history. William Bolt william bolt is an associate professor of history at Francis Marion University. He is the author...

The Special Relationship and the Challenge of Export Diversification: Cuban Exports of Fruits and Vegetables to the United States, 1900 to 1962

For almost sixty years, Cuban exports to the United States enjoyed an advantage not available to any other country: at least a 20 percent reduction in import duties on items subject to a US tariff. This article explores the extent to which Cuba was able to take advantage of this special relationship to diversify its agricultural exports to the United States. I argue that US trade preferences toward Cuba played different roles in different periods. The 1903 Reciprocity Convention provided the incentive for the development and growth of a number of nontraditional fruit and vegetable exports to the US market. The combination of growing US protectionism and expanding US production of similar crops cut short this trajectory, as did external shocks. The 1934 Reciprocal Trade Agreement that granted these exports even more favorable duty concessions during the US winter season had a minimally positive effect. In the post–World War II period, the lack of supportive domestic policies, the rise of nontariff barriers to trade, and growing competition from Mexico also constrained the growth of these nontraditional exports. Thus, Cuban exports of fresh and processed fruits and vegetables to the United States rarely reached four percent of total exports, reflecting the dominant role of sugar.

The AGOA as stepping stone for USA–Africa free trade agreements

PurposeThe purpose of this paper is to show how the pattern of trade relations between the USA and African countries is gradually shifting toward reciprocity. It therefore demonstrates that the African Growth and Opportunity Act (AGOA) was conceived to be a building block toward future bilateral trade agreements.Design/methodology/approachThis paper adopts a historical approach to the USA’s policy toward Africa in general and in trade matters in particular. It critically reviews the chronology of US involvement in the continent.FindingsAlthough it was designed as a preferential trade arrangement, AGOA was intended to evolve into reciprocal trade agreements. This is what the USA started doing even prior to the entry into force of the AGOA, by entering into Trade and Investment Framework Agreements with individual countries or blocs. It also transpires that the deployment comes as a response to the European Union which is already engaged in the redefinition of its own trade relations with Africa since 2004.Originality/valueThe paper is important in many respects. Not only it is a study of the US practice as preference-granting country, but it is also interested in the typology of trade agreements concluded by the USA in other regions of the world. This is important to indicate and analyze the types of provisions African countries should be expected to face when the time of entering into reciprocal binding trade treaties arrives.

“Big” Treaties, Small Effects

It seems obvious that agreements to cut tariffs will raise trade between their signatories. But recent studies show that some agreements widely considered to be landmarks in economic history had either a remarkably small impact on trade or none at all. Among those agreements are the Cobden-Chevalier Treaties and the long series of tariff accords concluded under the auspices of the GATT/WTO. Both sets of agreements cut import duties on many goods that applied to all trading partners entitled to most-favored-nation treatment, but neither increased aggregate trade between their members. This article examines the agreements concluded by the United States under the 1934 Reciprocal Trade Agreements Act (RTAA). The authors use an original data set that records changes in tariffs and US imports at the product-line level for each of the twenty-seven bilateral agreements. No comparable data exist either for the nineteenth-century trade network or for the postwar trade regime. The results show that the RTAA treaties failed to raise aggregate US imports from its treaty partners. They also show that these agreements did lead to a large and significant rise in US imports of specific products from specific countries. Because the same bargaining protocol that produced the RTAA agreements also governed the European treaty network and the GATT/WTO, the argument advanced in this article can also help to explain why neither treaty exerted a significant impact on aggregate trade between their signatories.

Trading Interests: Domestic Institutions, International Negotiations, and the Politics of Trade

To explain trade policies, a large literature draws on domestic institutions. Institutions that are more responsive to narrow-interest groups are expected to succumb to protectionist demands, resulting in higher average tariffs. This literature has largely ignored the role of reciprocal trade agreements and of exporter interests. This joint omission results in a biased view of trade politics. Exporters benefit from expanding market access abroad. With reciprocity, they lobby for domestic tariff cuts in exchange for liberalization abroad, which alters the link between domestic institutions and trade policies. Institutions favoring narrow interests should privilege both protectionist groups and exporters and hence have an indeterminate effect on average tariff levels. Instead, more interest group influence should result in more dispersed tariff rates across products. This article provides empirical evidence for this proposition, helps reconcile existing findings in the literature, and offers a specific exam...

What does the EU-SADC EPA really say? An analysis of the economic partnership agreement between the European Union and Southern Africa

ABSTRACTAfter more than 10 years of negotiations, the European Union and six members of the Southern Africa Development Community (SADC) successfully concluded talks on an economic partnership agreement (EPA). The EPA is a reciprocal trade agreement under the umbrella of the Cotonou Agreement, under which all parties commit to trade liberalisation but under which the SADC EPA countries can exempt sensitive products from liberalisation so as to take account of their level of development. This article explains in detail the contents of the agreement, examines the degree of trade liberalisation, and explores the lesser known provisions of the EPA. The article then argues that part of the agreement's developmental character resides in the numerous provisions that offer benefits to SADC EPA states but not to the EU. It also highlights provisions that could be invoked to help African states in the process of economic diversification. Finally, contrary to some detractors, the article takes the view that policy space for policy-makers remains by and large respected.

Monarchism, an Emerging Canadian Identity, and the 1866 British North American Trade Mission to the West Indies and Brazil

ABSTRACTIn 1865, the colonies of eastern British North America created a joint commission to investigate the possibility of reciprocal trade agreements with other parts of the Western hemisphere. In early 1866, the commissioners visited the West Indies and the Empire of Brazil, where they met officials and business leaders. No actual tariff agreements resulted from the commissioners’ travels, the main concrete result of the 1866 trade mission being the establishment of a direct steamship service between Canada and the West Indies. The study of contemporary discussions of the trade mission deepens our understanding of the history of relations between the British West Indies and British North America in the aftermath of emancipation and the end of the ‘Old Colonial System’. Moreover, these discussions reveal different elements of an emerging Canadian identity. Discourse of Britishness influenced the 1866 trade mission, but so did a sense of affinity linking Canada to the other monarchical territories in the Western hemisphere, such as the Empire of Brazil. For their part, some contemporaries in the West Indies welcomed the Canadian trade initiative because they wished for a counterweight to the growing influence of the United States in the region. The article also presents new information about British policy towards Latin America, particularly Mexico and Brazil, as well as British commercial diplomacy more generally. The article is based on materials in archives in the United Kingdom and Canada as well as a range of printed primary sources.

Protectionist Executives

ABSTRACTThe trade policy literature long presumed that legislatures favor relatively more protectionist policies than executives do, but more recent studies have found little evidence to support the idea. This article clarifies these mixed results with a simple formal model. It finds that legislative protectionism requires very specific circumstances involving the combination of universalistic legislative norms and a particular economic geography, with trade policy interests large relative to legislative districts but small compared to countries. Empirical evidence on this latter point suggests that the necessary spatial patterning is likely to have diminished in many countries since the 1930s, when the Smoot-Hawley Tariff and the Reciprocal Trade Agreements Act focused attention on institutional differences. The assumption of legislative protectionism based on theories and measures of that era thus may not hold today, and widespread presumptions about institutional preferences may accordingly be uncomfortably fragile.

The 'Special Relationship' and the Challenge of Diversifying a Sugar Economy: Cuban Exports of Fruits and Vegetables to the United States, 1902-1962

For almost sixty years of the 20th century Cuban exports to the United States enjoyed certain advantages not available to any other sovereign country: at least a 20% reduction in import duties on items subject to a US tariff and privileged access to the US market for its main export, cane sugar. Given this competitive advantage, as well as its comparative advantage of climate and geographic proximity, this paper considers the degree to which Cuba was able to diversify its agricultural exports. The 1902 Reciprocity Convention provided the incentive for the development of a number of non-traditional fruit and vegetable exports geared to the US market. In less than two decades, Cuba became almost the sole foreign supplier of pineapples and grapefruit. Moreover, after the 1934 Reciprocal Trade Agreement which granted Cuba even more favorable duty concessions during the US winter season, it became the dominant foreign supplier of vegetables such as cucumbers, okra and eggplant, and an important source of fresh tomatoes. Further, in the post-World War II period, in most years the value of Cuban exports of processed fruit to the US exceeded that of fresh fruit. Yet, Cuban exports of fresh and processed fruits and vegetables to the US rarely comprised 4% of total Cuban exports. The concentration of land, labor, capital and agricultural research on sugar cane, along with external factors -- such as increasing US domestic production of similar crops and competition from Mexico -- served as a powerful disincentive to the sustained growth of non-traditional agricultural exports.

Special and Differential Treatment of Developing Countries in the WTO

AbstractIn this paper, we examine the theoretical rationale for WTO rules on the special and differential treatment (SDT) of developing countries. We describe a model of bilateral trade between a small country and a large trading partner, in which the small country suffers from a domestic commitment problem in trade policy. This problem arises because investors in the import-competing sector lobby the government to enact and maintain protectionist policies. We show that a reciprocal trade agreement, in which the large country lowers its tariffs conditionally on the small country doing the same, creates a ‘carrot and stick’ mechanisms that helps the small country to overcome its commitment problem. If capacity in the import-competing sector can only be reduced gradually, the agreement may need to allow the small country to delay the implementation of its trade liberalization commitments, in line with SDT provisions in the WTO. Our analysis suggests that, if reconciled with the principle of reciprocity, SDT can help developing countries to liberalize and improve their trading prospects.

Preferentialism in Trade Relations: Challenges for the World Trade Organization

This paper argues that preferential trade agreements (PTAs) and the World Trade Organization (WTO) are not substitutes, and while PTAs are without doubt here to stay, dispensing with a multilateral venue for doing business in trade matters is not a serious option. It is therefore necessary to seek out better accommodation between PTAs and the WTO than has been apparent to date. The law of the General Agreement on Tariffs and Trade (GATT)/WTO has systematically fallen short in imposing discipline on discriminatory reciprocal trade agreements, while procedural requirements, such as notifications, have been partially observed at best, and dispute settlement findings have tended to reinforce existing weaknesses in the disciplines. One approach to remedying this situation is to explore a different kind of cooperation — that of soft law. A soft law approach to improving coherence and compatibility between the WTO and PTAs may hold some promise, but the option also has its pitfalls.