Regional Trade Liberalization Research Articles

Heterogeneous Impacts of Regional Trade Liberalization on Export Entry and Training: A Multi-Destination Perspective

Heterogeneous Impacts of Regional Trade Liberalization on Export Entry and Training: A Multi-Destination Perspective

‘Zimbabwe is open for business’: a legal perspective on the post-2017 use of Statutory Instruments

ABSTRACT Post-2017 Zimbabwean laws have remained hostile to business, contradicting Emmerson Mnangagwa’s promise to citizens and the international business community to make Zimbabwe flourish economically. Seven million Zimbabweans were on the brink of starvation in 2018 forcing Mnangagwa to use Statutory Instruments (SIs) to promote business, create employment, and defeat poverty. Yet, many Zimbabweans remain prevented from meaningfully contributing to reviving the economy. This article considers if the Mnangagwa administration’s political priorities and economic choices have undermined the very legal framework of the SIs intended to promote business confidence amongst citizens. The aspiration to better the lives of citizens by implementing regional trade liberalisation policies is based on theories of flexible integration and derogation. This article interrogates the legal frameworks of selected Statutory Instruments (SIs) and evaluates their impact on Zimbabwean livelihoods. It argues that Mnangagwa’s administration has implemented SIs arbitrarily, making it difficult for citizens to contribute positively to the creation of wealth for all. This is important because it shows the dangers of subordinating economic policies under the political imperative to remain in power. Reform of the legal provisions of SIs is needed to balance the political and economic aspirations of citizens.

Impacts of supply-side climate change mitigation practices and trade policy regimes under dietary transition: the case of European agriculture

The European Union’s Green Deal proposal and Farm to Fork strategy call for both demand and supply measures to reduce emissions from the food system. While research clearly illustrates the importance of dietary transitions, impacts of potential supply-side measures are not well understood in relation to competitiveness concerns and leakage effects. This study assesses trade and GHG emission impacts of two supply-side mitigation strategies (intensification vs. extensification) in the EU, UK and Switzerland (EU + 2), against a 2050 baseline featuring healthy/sustainable diets adopted by European consumers. To capture potential leakage effects arising from changing external trade flows, the two supply-side strategies are assessed against three trade policy regimes (i.e. status quo, regional trade liberalization with and without border carbon adjustment), resulting in six scenarios formulated with detailed inputs from the EUCalc model and other literature and simulated with a purported-designed CGE model. Results show that intensification, while improving the EU + 2’s external trade balance, does not reduce emissions in the EU + 2, compared to the baseline. In contrast, extensification leads to a substantial emission abatement that augments reductions from the assumed dietary transition in the baseline, resulting in a combined 31% agricultural emission reduction in EU + 2 during 2014–2050. However, this is at the expense of reduced net agrifood exports by US$25 billion compared to the baseline and significant carbon leakage at a rate of 48% (i.e. nearly half of agricultural emission reduction in the EU + 2 ‘leaked’ to elsewhere). Furthermore, implementing the EU + 2’s prospective regional trade agreements results in increased territorial emissions. Although a border carbon adjustment by the EU + 2 can improve its trade balance and partially shift mitigation burdens to other countries, the associated reductions in global emissions (and carbon leakage) would be marginal. Finally, different trade and emission effects are identified between the crop and livestock sectors, pointing to the desirability of a mixed agriculture system with intensified livestock sector and extensified crop agriculture in the EU + 2 that balances emission reduction goals and competitiveness concerns.

Regional convergence and trade liberalization under weak state capacity: evidence from Mexico

Regional convergence and trade liberalization under weak state capacity: evidence from Mexico

The AfCFTA impact on agricultural and food trade: a value added perspective

AbstractThe African Continental Free Trade Area agreement will create the largest single market in the world in terms of the number of countries and people. We analyse the effects of regional trade liberalisation on production fragmentation and networks using a global computable general equilibrium model adapted to take into account the value-added structure of international trade. This permits the analysis of the impact of trade policies in the presence of global upstream and downstream linkages through a counterfactual analysis. The analysis goes beyond previous studies by focusing on member countries’ agricultural and food integration in regional and global value chains through backward and forward linkages. Our simulation results suggest that the agreement could have a significant impact on trade patterns in terms of value-added structure and extra- or intra-regional destinations. The reduction in trade costs within the region has a higher incidence on agriculture and food backward intra-regional integration than on forward participation, but this pattern varies substantially across countries. We find that the continental agreement translates in more widely spread benefits across sectors if we consider the income generated within each sector (value added) rather than simply accounting for gross exports.

Effects of regional trade policy on tariff revenue: Evidence from latent gains/Losses by Nigeria

The study identified all Nigeria’s products of trade, with a view to ascertaining and computing volumes of net trade and corresponding latent gains and or losses sustained in pursuit of Economic Community of West African States (ECOWAS) trade policy objectives. Data were soured from United Nations Commodity Trade (UNComtrade), via Trade Analysis and Information System Window. The inherent most-favored-nations tariffs were identified and applied in computation of the latent revenue gains and losses sustained in pursuit of the sub-regional duty free trade. The net trade (Exports-Imports) and latent revenue gains or losses per product for the years under review were evaluated to ascertain the level to which the country contributes through each traded product in sustaining the regional trade liberalization policy as gauged or inferred. A country being net importer or net exporter of any product is an indication of latent gains or losses in tariff revenue, respectively. The study concludes that Nigeria sustains ECOWAS trade liberalization policy by losing accruable/latent revenues in products where she is net exporter (supplier) to the sub-regional members who import at zero tariff charges, and gains inherent revenues in products where she is a net importer; hence, the losses outweigh gains. All members are advised to pursue and improve the sub-regional trade policy by engaging in production of goods that have extended value chain, culminating to net product exporter status in products where she has a comparative advantage. In this way, members will on the long run maintain an increasing threshold of net export to push the sub-regional policy agenda of growth and development. Key words: Trade policy, tariff, net trade, revenue gains/losses.

The Effectiveness of China's Foreign Trade Liberalization

Abstract This paper studies the ex-post trade effects of China's multilateral, regional and bilateral trade liberalization using augmented gravity and panel data estimation methods for the period 1995–2016. China's accession to the WTO was revealed to have had a significant impact on the volume of trade as well as on bilateral exports and imports. Regional trade agreements and the majority of bilateral trade agreements were found not to be effective in increasing China's foreign trade. Only the agreements with Chile, Costa Rica and Switzerland were effective in increasing China's trade volume. Moreover, the results for Chile were driven by increases in both exports and imports, while for Costa Rica and Switzerland only by increased imports from these countries.

Взаимодействие США со странами СТСЭП в рамках торговой политики администрации Дж. Буша-младшего

The article is devoted to the study of the formation of the US foreign trade course in the Asia-Pacific region. Special attention is paid to the factors in bilateral relations with the TPSEP countries, which had a key influence on the decision of the George W. Bush administration to join the partnership. The author comes to the conclusion that failures in the implementation of the multilateral format of regional trade liberalization contributed to the fact that the United States entered the negotiation process on the TPSEP.

Analysis of the Impact of RCEP on China’s Mining Market

<p>RCEP (Regional Comprehensive Economic Partnership), a modern, comprehensive, high-level and mutually beneficial agreement was signed<span style="font-family: 'Times New Roman';">, which</span> marks the official establishment of the free trade zone with the largest participating population, the most diverse membership structure and the greatest development potential in the world. Benefit<span style="font-family: 'Times New Roman';">ed</span> from RCEP<span style="font-family: 'Times New Roman';">, the</span> regional trade liberalization <span style="font-family: 'Times New Roman';">can be achieved and the</span> rising global inflation expectations <span style="font-family: 'Times New Roman';">can be reached</span>. The mining industry, especially the metal industry, may usher in a new period of development opportunities. However, potential risks still need to be paid attention to. For example, the implementation of RCEP is <span style="font-family: 'Times New Roman';">far less than expectations; </span>the situation of Sino-US trade has further deteriorated<span style="font-family: 'Times New Roman';">;</span> and the implementation of economic stimulus policies in Europe and the United States falls <span style="font-family: 'Times New Roman';">out</span> of expectations.</p>

General Equilibrium Effects of Trade Liberalization in ECOWAS Countries: Structural Gravity Approach

This study estimates the general equilibrium effects of the Economic Community of West African States (ECOWAS) free trade agreement, established in 1990, using the structural gravity model. Following the Anderson et al. (2015) methodology, we used country fixed effects as a proxy for multilateral resistance terms, which are considered as general equilibrium trade costs, to estimate the effects of regional trade liberalization on the ECOWAS member countries welfare. This study used data on 45 partners’ industrial trade flows from 1980 to 2006. The results indicate that trade liberalization has had positive effects on ECOWAS members welfare, via consumer or producer welfare channels. The latter channel induces an important change in real GDP relative to the former channel-countries with higher levels of producer welfare than consumer welfare experience greater changes in real GDP.

Cross-border medical travels from Cambodia: pathways to care, associated costs and equity implications.

In low- and middle-income countries, patients may travel abroad to seek better health services or treatments that are not available at home, especially in regions where great disparities exist between the standard of care in neighbouring countries. While awareness of South-South medical travels has increased, only a few studies investigated this phenomenon in depth from the perspective of sending countries. This article aims to contribute to these studies by reporting findings from a qualitative study of medical travels from Cambodia and associated costs. Data collection primarily involved interviews with Cambodian patients returning from Thailand and Vietnam, conducted in 2017 in the capital Phnom Penh and two provinces, and interviews with key informants in the local health sector. The research findings show that medical travels from Cambodia are driven and shaped by an interplay of socio-economic, cultural and health system factors at different levels, from the effects of regional trade liberalization to perceptions about the quality of care and the pressure of relatives and other advisers in local communities. Furthermore, there is a diversity of medical travels from Cambodia, ranging from first class travels to international hospitals in Bangkok and cross-border 'medical tourism' to perilous overland journeys of poor patients, who regularly resort to borrowing or liquidating assets to cover costs. The implications of the research findings for health sector development and equitable access to care for Cambodians deserve particular attention. To some extent, the increase in medical travels can stimulate improvements in the quality of local health services. However, concerns remain that these developments will mainly affect high-cost private services, widening disparities in access to care between population groups.

Regional Convergence and Trade Liberalization under Weak State Capacity: Evidence from Mexico

Long-term regional convergence hypothesis is examined for 32 Mexican states in a regional growth model with poverty traps using a new dataset on regional income inequality for the period 1940-2011. Although zero-growth poverty trap hypothesis is rejected for 28 out of 32 states, the evidence confirms β-convergence and σ-convergence for the period 1940-1980 and indicates the breakup of convergence in post-1980 period. The break in the convergence process is attributed to trade liberalization carried out under weak state capacity and clientelistic patronage environment without independent and effective regulators. The widening of regional inequality is characterized by an increase in growth in high-income U.S.-border states and no such increase in poorer states that cannot converge to the frontier under such conditions. When long-term convergence relationship is conditioned on unobserved long-run effects, the speed of convergence for pre-1980 period is around 2% per year and diminishes with the estimation horizon. Sensitivity analysis based on income-specific quantile regressions emphasizes substantial heterogeneity in the speed of convergence across states.

Is there a role for trade liberalization in mitigating the impacts of climate change on agriculture?

Using a computable general equilibrium framework, this paper uses Sri Lanka and Bangladesh as case studies in examining the associated macroeconomic and sectoral impacts under two different climate change scenarios. Our results indicate that a nation’s welfare deteriorates due to technical efficiency losses from climate change. Neither unilateral nor regional trade liberalization as a mitigating option improves welfare in these countries. For Sri Lanka, global full trade liberalization of all commodities is the optimum policy with some welfare gains. For Bangladesh on the other hand, regional partial agricultural trade liberalization is the optimum option with the least welfare deterioration. These results show that under climate change, countries within South Asia should respond differently to climate-induced crop productivity changes and no one optimum policy fits all.

(Structural Factors of Global Trade Slowdown and Their Implications)

Korean Abstract: 본 연구는 세계무역의 현황을 살펴보고 세계무역 변화의 구조적인 요인을 분석하여 우리나라 무역의 안정적 성장을 위한 정책적 시사점을 도출하기 위해 추진하였다. 이를 위해 세계투입산출 데이터베이스를 이용하여 세계무역의 구조 변화를 분석하고, 부가가치무역의 변동을 항목별로 분해하였다. 제2장에서는 2000년대 중반 이래의 세계무역 추이와 GDP 비중 등을 살펴보고 주요국별 및 주요 산업별 수출증가율의 변화를 살펴보았다. 제3장에서는 세계무역의 구조가 어떻게 변화하고 있는지를 살펴보았다. 제4장에서는 세계적 무역둔화 요인을 분해하기 위해 세계투입산출표를 이용하여 수출부가가치(VAX: value added exports)의 변화를 분해하였다. 제5장에서는 2017년 세계무역의 회복 요인을 평가하고 앞서의 분석 결과를 토대로 우리나라 무역에 대한 정책시사점을 도출하였다. 본 연구의 분석결과는 수출부가가치의 제고와 국내산업의 핵심역량 강화를 위한 정책 마련에 활용될 것으로 기대된다. English Abstract: The global trade slowdown since 2012 is reputed to be very astonishing in that it was unpredictable in terms of the magnitude. This trade slowdown was cyclical in that it mainly resulted from the global economic recessions especially in China and Europe. Also, this phenomena can be explained by structural reasons such as the fall in the income elasticity of trade, that is, the rise in income does not contribute to the trade expansion as it used to. This study aims to investigate the structural change in global trade mainly using the world input-output database and to decompose the change in value added exports into three relevant factors. This study reveals that the composition of global commodity demand has changed in recent years and the share of intermediate goods to the total import has declined as the low economic growth rate, low price level, high interest rate, and high unemployment rate have dominated the global economy since 2012. Chinese re-balancing turns out to have reduced the demand for import from the world as China, the global factory, transitioned from an export-oriented development strategy to policy focusing on domestic demand. The global value chain turns out to have diminished since the global financial crisis, thereby contributing to the global trade slowdown. The non-tariff barriers such as anti-dumping duties, TBT, and SPS, among others, have been more prevalent in recent years while the average tariff rates in most of the countries have been falling since the mid-1990s. On the other hand, this paper estimated value added exports (VAX) by using the World Input-Output Database released in 2016, in order to analyze causes of the recent global trade slowdown. We also decomposed the change in value added exports into the three factors of value-added coefficients, change in input structure, and change in final demands. According to the results, the change in value added exports in Korea are largely explained by the change in input structure, and change in value-added coefficients. Since 2012, the increase in final demands has played a major role in the recovery of value added exports at world level, while in Korea, increase in input structure explains more of rise in value added exports. That is to say, the change in value added export is cyclical at the world level, while structural in the case of Korea. The findings of this study indicate that it is crucial for Korea to reinforce the core competence of domestic industries in line with the following. First, Korean industries need to diversify their export products and gear up for standardization of parts and materials, thereby pursuing preemptive industrial restructuring. Second, Korean industries need to strengthen the knowledge intensity of high-skilled labor and make the best of global value chains. Third, the Korean government needs to support processes to improve transaction practices and incentive systems for large companies and small- and medium-sized companies, thereby establishing a fair market mechanism. Finally, the Korean government will need to contribute to multilateral as well as regional trade liberalization.

Fostering a resilient regional economy in the SADC through regional integration

AbstractResilience in regional economic growth in the Southern African Development Community (SADC) can potentially be increased through the implementation of a regional policy which emphasizes regional integration. This will include the removal of tariff and non‐tariff based barriers to trade through trade liberalization and designing more efficient spatial linkages that facilitate increased intra‐regional trade. However, resilience in the region's economic growth is hindered by sluggish implementation of regional trade liberalization and spatial integration policies, as tariff and non‐tariff barriers to trade remain. The aim of the paper is to evaluate regional integration in fostering resilience in economic growth through its enhancement of economic interaction between member states, as well as facilitating increased spatial connectivity and the efficient movement of intra‐regional trade. In this paper, case studies of regional integration models as applied in eight developing country regional trading blocs, including the SADC, are used to determine the effect of intra‐regional trade on the resilience of economic growth in the face of an external economic crisis, namely the 2008 Global Financial Crisis and subsequent recession. Results of the above analysis indicate that intra‐regional trade through regional integration accelerates a region's recovery of its pre‐shock growth path. Despite considerable intra‐regional trade, the recovery of the SADC is hindered by the sluggish post‐shock growth of South Africa, its dominant economy. Based on the findings, it is recommended that intra‐regional trade be strengthened between SADC member states through increased economic integration, trade facilitation through development corridors, and capacitating dynamic regional institutions to oversee economic resilience strategies based on adjustment and adaptation.

‘Preparing ourselves to become an international organization’: Thailand Tobacco Monopoly’s regional and global strategies

ABSTRACTThe Thailand Tobacco Monopoly (TTM) controlled the country’s tobacco industry from its formation in the 1940s, until the government dropped restrictions on imported cigarettes in the late 1980s in response to pressure from the United States. The TTM has since competed with transnational tobacco companies (TTCs) in a semi-monopoly market in which TTCs have steadily increased their market share. Coupled with a decline in national smoking prevalence, the result of Thailand’s stringent tobacco control agenda, the TTM now accounts for a diminishing share of a contracting market. In response, the monopoly has looked to regional trade liberalisation, and proximity to markets with some of the world’s highest smoking rates to expand its operations. Expansion strategies have gone largely unrealised however, and the TTM effectively remains a domestic operation. Using TTM publications, market and trade reports, industry publications, tobacco industry documents and other resources, this paper analyses TTM expansion strategies, and the limited extent to which they have been achieved. This inability to expand its operations has left the monopoly potentially vulnerable to global strategies of its transnational competitors. This article is part of the special issue ‘The Emergence of Asian Tobacco Companies: Implications for Global Health Governance’.

Re‐Examining China's Charm Offensive Toward Asia: How Much Reshaping of Regional Order?

Drawing mostly on Chinese‐language sources, this article examines Chinese assessments of the effectiveness of China's earlier “charm offensive” in increasing China's regional influence and reshaping the regional order according to its preferences. The main argument is that China achieved mixed success. China was successful in preventing others from adopting hostile anti‐China balancing postures, and especially before 2005, successful in attaining support and momentum for its preferred vision of East Asian regional cooperation and regional trade liberalization. China was less successful, however, in shaping the regional security order, although experts recognized the incremental improvements in what would be a gradual process in minimizing the dominance of U.S. alliances. Around 2005, however, Chinese experts noted increased resistance to China's preferred vision for regionalism and regional economic cooperation. The article concludes by examining analytical themes that enabled China to successfully exert regional influence or represented challenges to its efforts to reshape the region.

Либерализация внешней торговли Японии в рамках программ абэномики

In XXI century in Asian-Pacific region processes of integration were activated which influenced the international trade strategy of Japan. The strategy includes Japan’s intensive involving into international integration processes, specifically in Asian-Pacific region , signing free trade agreements. Therefore, Japan develops economic partnership with the countries of Asian-Pacific region which are not typical in terms of traditional historic partnerships, for instance with ASEAN members - Laos, Cambodia, Myanmar and Vietnam. Moreover, Japan strengthens ties with India and Australia as one of the biggest economies in the region by signing EPAs. Another significant step in regional trade liberalization was signing Trans-Pacific Partner future of TPP is blurred due to uncertainty after president’s elections in the USA. In Latin America Japan revitalizes its partnerships with such vast economies as Brazil, Chili, Peru. In terms of foreign economic strategy Japan is interested in providing its energy security consequently Russia gains a role of a trade partner and attracts Japanese investments primarily in energy projects in Russian Far East. Despite good results within launching and signing trade agreements the overall result doesn’t influence effectively Japan’ s presence in different markets and still in some regions cannot compete with Chinese and Korean companies firstly due to stagnation of national economy since the financial crisis in 90ies XX century and nuclear disaster in Fukishima-1.

Vitality Of Village Umkm In The Arena Of Asean Economic Community (Aec)

A horizon of expectation seems to be much brighter when the regional cooperation among the Southeast Asian countries intensify due to their meeting commitment of integration. The culmination of the regional cooperation commitment in Southeast Asia is an agreement to become a solid community within the framework of the Asean Community . One aim of the Asean Community is to form a joint economic community among the countries in Southeast Asia, commonly known as the Asean Economic Community (AEC). AEC opens space for the flow of goods and services from ASEAN member countries freely, including items that have been developed by Usaha Mikro Kecil dan Menengah (UMKM) – Micro Small and Medium Enterprises. In Indonesia, especially in Malang, UMKM provide the foundation of the regional economic development. The implementation of AEC will slowly and surely give implications to UMKM and regional economy, more specifically the areas with less attention preparing for UMKM to face the Southeast Asian regional free market. It is an early gate to determine whether the position of this proved-to-be-resilient economic actors (read: UMKM) will be involved or will be squashed to be a spectator when the other countries of the region make Indonesia as a new trading arena. This research will conduct a preliminary assessment towards the local government’s innovation in facing the implementation of AEC, primarily that relates to organizing UMKM at the local/village level. The purpose of this study is to gain an understanding in greater detail in accordance with the local government's response and strategies in Malang Raya to prepare village UMKM in dealing with the implementation of AEC. The study also attempts to find the initial design of strengthening the village UMKM that is adaptive to current regional and global trade liberalization. Field research will be conducted in Malang Regencies, Malang City, and Batu City, where all these areas have village UMKM that are enough to contribute to the local economy.

REGIONAL TRADE LIBERALISATION AS A PRISONERS’ DILEMMA GAME: UNDERSTANDING THE EFFECTS OF STRATEGIC FACTORS ON REGIONAL COOPERATION

African governments regularly advocate regionalism as a means for facilitating economic development, but the record of intergovernmental cooperation to implement regional initiatives has been disappointing. Conventional explanations for this record are based on a simplistic portrayal of the challenges of cooperation; if it is in the interest of governments to cooperate, they do, if not, they do not. This article uses an alternative framework, derived from a game-theoretic perspective to show that regional trade liberalisation initiatives do not succeed or fail simply because of the presence or absence of mutual gains from cooperation. I employ the ‘game theoretic’ analysis to illustrate that attempts by a group of self-interested governments to reap mutual gains from trade liberalisation encounter a strategic problem commonly known as the Prisoners’ Dilemma .The inability to overcome this type of problem explains why regional initiatives may fail despite their obvious potential for being mutually rewarding and enjoying the support of participant governments. This study uses the SADC trade liberalisation initiative to illuminate the collective action problem that typically afflicts similar initiatives and how it can be resolved. The aim is not just to present a new theoretical perspective on regional cooperation in Africa, but also to illuminate the practical challenges that must be addressed if African trade liberalisation initiatives are to succeed.