Trade Regime Research Articles

Trading in the era of carbon standards: how can trade, standard setting, and climate regimes cooperate?

Abstract Regulatory cooperation is indispensable for increasing the quality of carbon-related product regulations and standards (CPRS), reducing trade tensions over them, facilitating their alignment, and, eventually, promoting the convergence of different national emission reduction levels towards a universal carbon price. In this article, we explore how trade and trade-related arrangements and institutions can be used to intensify regulatory cooperation on CPRS. We focus on the following questions: when, where, and how does regulatory cooperation on CPRS take place within the international trading system, and what are the ways to strengthen regulatory cooperation on CPRS? While admitting the key role of market forces and the large market factor in the alignment of carbon standards, we argue that this de facto trade-driven alignment requires a steering from state-to-state regulatory cooperation, as well as cooperation of government agencies with private certification schemes in helping producers, especially from developing countries, to comply. Moreover, the potential for more systematic collaboration between the multilateral institutions for climate change and trade should be explored. This could include the establishment of a joint UNFCCC–WTO forum for the exchange of policy-relevant technical and scientific information on key issues surrounding CPRS and consolidation of the relevant database.

Colombian biodiversity is governed by a rich and diverse policy mix.

We lack an understanding of how diverse policymakers interact to govern biodiversity. Taking Colombia as a focal case, we examined six decades of biodiversity governance (1959-2018). Here we analysed the composition of the policy mix, and how it has evolved over time, how policies differ among lead actors and ecosystems, and whether the policy mix addresses the primary threats to biodiversity. We identified 186 biodiversity-related policies that govern multiple ecosystems, use different instruments and address the main threats to biodiversity (that is, agriculture and aquaculture, and biological resource use). We found policy gaps in the governance of invasive species and wildlife trade. Biodiversity policy integration into some sectoral policies, such as climate change, poverty and pollution, has become more common in the past decade. Our results point to an increased need for effective coordination across sectors and actors, as new ones influence and implement the policy mix.

Foreign Trade, Human Capital and Economic Growth in India under the Liberalised Trade Regime

This study revisits trade–growth dynamics in India augmenting the role of human capital for the liberalised trade regime. The autoregressive distributed lag-bounds testing approach finds cointegrating relation of income with the different combinations of export, import, exchange rate, trade openness, education and health dimension of human capital. The long-run and short-run dynamics of such relations confirm that both export and import enhance income growth that testifies export-led and import-led growth premises. Trade openness proves detrimental to growth, while human capital spurs growth. However, the growth gains from the human capital vary across alternative measures of human capital. A battery of diagnostic tests corroborates these inferences robustly. Policy manifestation for trade promotion might be beneficial for higher economic growth in India. JEL Codes: F43, F13, F14, O24

Export- and import-based economic models for predicting global trade using deep learning

Forecasting global foreign trade is essential for developing government trade policies and management strategies for multinational corporations. However, achieving an accurate trade forecast is challenging because of the complex structural relationships between exports, imports and other economic variables. Many traditional forecasting models, such as time series, econometric, and machine learning, provide less accurate forecasts for trade data. This paper proposes an ensemble learning approach to improve forecasting performance by hybridizing the structural relationships between trade and deep learning models to predict foreign trade for ten major countries. The proposed method first establishes a cointegration relationship between exports and imports and their structural variables. The cointegrated models are then used to predict the future of trade, which is used as a benchmark model for comparison. A hybrid deep learning algorithm uses the cointegrated variables as input variables to predict trade data, and then are compared with time-series forecasts and economic structural models. The experimental results reveal that the ensemble learning method can achieve excellent forecasting performance for the tested periods of trade data. In most cases, the root means square error and mean absolute percentage error values are smaller than the time series and economic structural models.

Do Women Make More Protectionist Trade Policy?

Women have more protectionist trade preferences than men do. We assess whether this well-documented relationship between gender and protectionism in the mass public carries over into a relationship between women’s political representation and (a) party platforms, and (b) governments’ trade policy choices. Looking across countries and over time, we demonstrate that with an increase in women’s representation, political party trade policy positions become more protectionist. For government trade policy choices, we identify more nuanced results. The protectionist effect of women’s representation is limited to the most visible products: consumption goods. Women’s representation has no effect on intermediate inputs, where firm demands for trade liberalization are more pronounced and policy makers are thus constrained in implementing a protectionist agenda. These findings contribute to scholarship on the descriptive–substantive representation link, add a new dimension to our understanding of trade politics, and demonstrate the importance of applying a gendered lens to international political economy research.

Vertical industry and strategic trade policy

This paper investigates whether and how vertical industries have the characteristics to be targeted with the subsidy policy instrument. Under both price and quantity competition, the results of the established literature are reversed when exporters are in vertical relations. In particular, the conventional result that the emerging subsidising equilibrium is Pareto inefficient (the well-known prisoner's dilemma outcome) vanishes in the following cases: (1) under quantity competition, when products are sufficiently differentiated, and (2) under price competition, when products are neither too differentiated nor too substitutes. In such cases, the policy intervention leads to welfare improvement with respect to the free trade regime in both producing countries. Moreover, under price competition, export subsidization becomes the rule instead of taxation. Our results suggest that, depending on the degree of competition, vertical industries can be efficiently targeted through the subsidy policy.

ESG, risk, and (tail) dependence

While environmental, social, and governance (ESG) trading activity has been a distinctive feature of financial markets, the debate if ESG scores can also convey information regarding a company’s riskiness remains open. Regulatory authorities, such as the European Banking Authority (EBA), have acknowledged that ESG factors can contribute to risk. Therefore, it is important to model such risk dependencies and quantify what part of a company’s riskiness can be attributed to the ESG scores. This paper aims to question whether ESG scores can be used to provide information on (tail) riskiness. By analyzing the (tail) dependence structure of companies with a range of ESG scores, that is within an ESG rating class, using high-dimensional vine copula modeling, we are able to show that risk can also depend on and be directly associated with a specific ESG rating class. Empirical findings on real-world data show positive not negligible ESG risks determined by ESG scores, especially during the 2008 crisis.

State Capitalism in the GATT/WTO Legal Order

ABSTRACT Originally, the multilateral trading regime did not address state capitalism in a comprehensive manner, since none of the General Agreement on Tariffs and Trade founders had espoused this form of economic governance. The General Agreement on Tariffs and Trade did contain specific provisions dealing with state trading and with subsidies, but nothing more. This situation has remained unchanged over the years, except for tightening the screws in areas already regulated (like subsidies), even though the General Agreement on Tariffs and Trade/World Trade Organization membership has become more and more heterogenous, with some members being overtly state capitalists. This was the case because these new members were either too small to really matter (e.g. Hungary) or because it was hoped that bigger players would transform into market economies (e.g. China). In hindsight, this has proved to be a grave error, since many of the difficulties that the world trading system currently faces originate in the unsatisfactory disciplining of state intervention in the workings of the economy of World Trade Organization members.

WTO plurilateral agreements: A multilateral approach in action

Background: The World Trade Organization (WTO), established in 1995, emphasizes multilateralism, necessitating unanimous consent for decisions and agreements among member states. However, the intricate nature of global trade often hinders unanimous agreement. To address this, the WTO has seen the rise of plurilateral agreements, which differ from purely multilateral ones. Plurilateral agreements involve specific WTO members negotiating commitments in particular policy areas. Unlike standard regional trade agreements, plurilaterals offer flexibility, allowing participating states to address issues of economic interest. This approach enables tailored solutions and promotes collaboration among like-minded countries to advance shared objectives without universal consensus.
 Research purpose: This article explores the realm of WTO plurilateral agreements, examining their structure, evolution, and impact on the multilateral trading system. It delves into the dynamics of these agreements, which offer a practical avenue for addressing pressing trade-related issues. By scrutinizing the interplay between plurilateral agreements and the overarching principles of multilateralism within the WTO, this research aims to shed light on the extent to which plurilateral complements the multilateral approach, contributing to a deeper understanding of the evolving global trade landscape.
 Methods: This article employs a mixed-method research methodology, which includes a thorough literature review, analysis of relevant reports on plurilateral agreements, and examination of secondary data sources. The study combines quantitative and qualitative analyses within GATT/WTO activities to assess changes in plurilateral agreements. Data on plurilateral agreements were sourced from the WTO database and ministerial reports. This dual approach offers a robust framework for comprehensively evaluating the evolving landscape of plurilateral agreements in the GATT/WTO framework.
 Conclusions: WTO plurilateral agreements offer enhanced flexibility in trade governance and play a pragmatic role in addressing complex trade issues. While they do not replace the fundamental principle of multilateralism, they serve as complementary mechanisms to facilitate progress on specific trade-related issues. These agreements also have the potential to influence the evolution of trade governance and support multilateralism within the WTO, providing tailored solutions in a dynamic global trade landscape.

Nationalisms, Liberalism, and Game of Force: The New Transformations of Global Governance Between WHO and WTO in the 21st Century

The COVID-19 pandemic and the conflict in Ukraine have brought to the surface problems of the modern world that the international community has not seriously addressed. These problems appear to be, on the one hand, the management of global public health and, on the other, relations between states on international trade. These situations are linked to circumstances that have altered the power relations of states over the years, challenging the centrality of the West and the already fragile power of UN institutions. This research analyses the international situation of two UN bodies: the WHO and the WTO, addressing the governance crisis on public health and international trade and trying to understand the causes of the decline in the leadership of their institutions. Adopting a thorough literature review, the findings show how faulty leadership within the UN has led to a significant increase in nationalism among emerging nations, distrust and lack of cooperation. The divergent political visions of members have radically shaken the international balance, triggering a cycle of change in the governance of global health and global trade on a new premise, that of ‘multilevel’ global governance.

Who Watches the Watchers? An Analysis of the Indian Insider Trading Regime Vis-à-vis the Parliamentarians

Who Watches the Watchers? An Analysis of the Indian Insider Trading Regime Vis-à-vis the Parliamentarians

数字贸易治理视角下跨境数据流动规则的发展与应对

数字贸易治理视角下跨境数据流动规则的发展与应对

Performance and Continuing of Exporter-Importer Relationship: A Case Study of Pakistan’s Exporters

The main objective of this study is to explore whether the quality relationship influences the export business, which leads to the exporter’s satisfaction and determines the long-term and sustainable exporter business. The study conducted a survey and collected data from 434 firms involved in the export business based on a convenience sampling approach. The companies were contacted from all over Pakistan. The study employed the partial least squares technique for the data analysis. The estimation results support all three hypotheses. The study finds a significant relationship between "relationship quality" variables and Firms’ financial and strategic performance. Further, there is a significant positive relationship between firms’ financial and strategic performance and exporters’ satisfaction and a significant positive link between exporters’ satisfaction and the continuity of the business. Based on results, practical implications for firms’ management and government policymakers were found, suggesting that companies should focus on maintaining the quality relationship, and government trade incentives should be firm-specific. A model is developed where relationship quality variables, Commitment, Satisfaction, and Trust, are factors that impact export performance. This model explains how variables interact, especially in the business relationship. This model is the first attempt to investigate sustainable exports from Pakistan.

Halal Certification of Indonesian Cosmetics Products

This article aims to explore the impact of halal certification of Indonesian products and the interplay between halal certification, Indonesia’s economic interest and International Trade Regime. This research uses qualitative approach taking Indonesia case study by collecting secondary data from varied sources. The findings indicate that the massive awareness of halal products especially cosmetic is not solely motivated by religious motive. The halal product is not substantially driven by religiosity. In fact, to understand the meaning of halal, this paper argues that companies that trade halal product do not follow Islamic values. Further, this paper suggests that Islam does not support economic system that prioritizes a few parties, put women as an object, not environmentally friendly, or wasteful. On the contrary, it promotes an order that is not fair for all. However, this paper further argues that halal trend in Indonesia trade system is more about the rise of Islamic populism. WTO therefore, has to be cautious on accommodating halal labelling in international trade. It must be opened to the needs of Islamic countries yet it has to be aware that it may become new form of protectionism which is unfair for global trade standards.

Greening International Trade: Unilateral Tendencies and the Role of International Institutions

International climate and trade regimes are becoming increasingly interchangeably linked to each other. Over the last months’ discussions about greening the international trade have rapidly increased, aiming to take concrete steps towards climate mitigation. Some countries such as the EU have come up with courageous unilateral measures such as the Carbon Border Adjustment Mechanism (CBAM), and Germany forwarded by introducing to the G7 the idea of a Climate Club. Bypassing international institutions might be flexible to move forward, but at the same time may create fragmentation of the international regimes. This policy brief maps the new unilateral tendencies towards climate-related measures on trade policy and also examines the internal dynamic within the international organization. Firstly, it starts by analyzing how the regime complexity of climate change has left space for non-multilateral tendencies to emerge. Second, it maps the new tendencies and then explores how we got there. And lastly, it draws some insights into the potential risk of a more fragmented international climate regime may pose for international cooperation.

What Is Behind The Stunning Economic Success Of The Netherlands? The Dutch Economic Miracle: A Strategic Perspective

Purpose of the study: This paper examines the main factors and prerequisites for the intensive economic development of the Netherlands by taking into account the contribution of tourism, logistics, industry, and agriculture to the economic miracle. Methodology: In this work, the historical methods, as well as the theory of relative advantages and the general methods of scientific research, were used. Main findings: The preconditions for the rapid growth of the Dutch economy include successful domestic reforms carried out by the Government at the end of the 1990-is; a favorable trade regime focused on the freedom to exercise an economic or commercial activity; as well as deep integration of the country with the European Union that allows it to take full advantage of the European single market and remain one of the economic leaders within this Community. Research limitations/implications: In this study, authors propose a roadmap for those countries that are struggling because of the lack of well-thought national planning policy. They also hope that their information may be useful for Ukraine in the process of post-war reconstruction in the future. Novelty/Originality of this study: This article represents an attempt to create a comprehensive picture of the Dutch economic miracle that includes export performance, logistical activities of Rotterdam Port, Schiphol, and Eindhoven International Airports, and the functioning of the highly efficient tourism industry that encompasses the Netherlands and the region of the Dutch Caribbean. In the article, both authors combine historical knowledge

Trade Liberalisation Policies, Intra-regional Trade and Opportunities for Sustainable Agricultural Development

Many of the Near East (NE) countries are currently opening their agricultural markets at three distinct but interacting levels: unilateral liberalisation, regional integration schemes and multilateral trade liberalisation. These changes hold important implications for intra- and extra-regional trade, use of agricultural resources and sustainability of agricultural development in the NE countries. Unilaterally, and since the late 1980s, most countries of the region have liberalised their agriculture sectors by eliminating or reducing input subsidies, removing or reducing guaranteed producer prices, reducing the number of subsidised commodities and liberalising the exchange rate and the trade regime. Most of the implicit and explicit subsidies for agricultural inputs and outputs were withdrawn. However, some of the NE countries were able to continue supporting agriculture mainly for food security reasons. Experiences showed that domestic reform is necessary but not sufficient condition for economic growth.

Openness and Economic Growth in Pakistan

Trade and growth theories generally predict a positive relationship between openness to international trade and economic growth. There are a number of channels through which openness is thought to influence economic growth. First, a liberal trade regime enhances efficiency through greater competition and improved resource allocation. Second, greater access to world markets allows economies to overcome size limitations and benefit from economies of scale. Third, imports of capital and intermediate goods can contribute to the growth process by enlarging the productive capacity of the economy. Fourth, trade can lead to productivity gains through international diffusion and adoption of new technologies. Empirical studies on the relationship between openness and economic growth have largely supported the view that openness has a favourable impact on economic growth. It is not surprising, then, that the proposition that more open economies tend to grow faster has gained wide acceptance in academic as well as policy circles. The objective of this paper is to examine the relationship between openness and economic growth in the context of Pakistan’s economy. Section 2 reviews the literature on openness and economic growth. Section 3 provides an overview of trade liberalisation in Pakistan. Data and methodology are described in Section 4, while Section 5 presents the empirical results. Section 6 concludes the discussion.

The Impact of FDI on Economic Growth under Foreign Trade Regimes: A Case Study of Pakistan

Foreign Direct Investment (FDI) as a growth-enhancing component has received great attention of developed countries in general and less developed countries in particular in recent decades. It has been a matter of great concern for many economists that how FDI affects economic growth of the host country. In a closed economy, with no access to foreign saving, investment is financed solely from domestic savings. However, in open economy investment is financed both through domestic savings and foreign capital flows, including FDI. The investments in form of FDI enable investment-receiving (host) countries to achieve investment levels beyond their capacity to save.

Trade Liberalisation and Labour Demand Elasticities: Empirical Evidence for Pakistan

Trade has predominantly contributed in the development of world economies for more than mere agricultural development and industrialisation. Trade involves many regions across the globe. The more the regions involved, the more will be the benefits. Trade is an interaction between economies for the exchange of goods, services, skills, knowledge and expertise, which is required for bringing in the desired changes like increase in the availability of choices, reduction of extreme poverty, and enhancement of physical and mental capability. As the wave of market oriented moves has spread over the economic sphere, global trend has also been witnessed in the liberalisation of capital account, foreign exchange, credit, domestic consumption and trading sector of many countries. The concept, which has been predominantly emphasised by the economies, is that of “trade liberalisation”, which has become the key element of any development policy since late 1970s after the fundamental change in the economic policy at global level. The concept of trade liberalisation stems from Neo-liberalism thinking that has advocated market oriented economic reforms for social order and economic prosperity that aims to improve efficiency and stability in the economy. Trade liberalisation process can be defined in many different ways. In the words of Krueger (1978), “any policy, which reduces the anti export bias will lead towards liberalisation of trade and reduction in import license premium is the fundamental step towards liberalised trade regime”.