Trade Liberalization Research Articles

Theoretical Origins and Implications of the Western Linear Development Models in Contemporary International Relations and Development Economics

Beginning with Lenin's criticism of imperialism and working through the modernization theory presented by academics such as Walt Rostow, this study attempts to investigate these development theories' theoretical roots and consequences. This paper examines the theoretical origin and contemporary implications of Imperialism, neocolonialism, neoliberalism, and trade liberalization, focusing on applying linear development models in international relations and development economics. Using critical theoretical frameworks, including Lenin's theory on imperialism, dependency theory, and modernization theory, analyzed the transformation of economic control from colonialism to the neocolonial practice perpetuated by transnational corporations and international monetary institutions. Cases including the reconstruction of the Haitian earthquake in 2010, President Trumans inaugural address, and Chiles neoliberal economic reforms under Pinochet provide an empirical examination of how trade liberalization and neoliberal policy strengthen the economic reliance of developing countries and increase their internal inequality. By challenging the traditional Western linear development model, this paper criticized how the global economic system perpetuates a hierarchical relationship between the Global South and North.

Is Southeast Asia falling into a Latin American-style middle-income trap?

Output and productivity growth slowed in Southeast Asia after the 1997 financial crisis. Latin America experienced a more extreme slowdown following their radical 1980s (post-ISI) neoliberal reforms. This paper explores the causes of the “middle-income trap” and asks if Southeast Asia is following Latin America’s footsteps. In non-resource manufacturing the trap typically manifests when countries are priced out of labor-intensive activities but fail to penetrate more technically sophisticated markets. Natural resource exporters experience the trap when their “extractivist” strategies run out of steam and new engines of productivity growth, such as the processing of raw materials fail to materialize. Mainstream growth theory posits that middle-income countries can escape the trap by doubling down on orthodox policies such as more trade and financial liberalization, further deregulation, and investment in human capital. Yet evidence from countries that have evaded the trap does not support these claims; instead, they have formulated national strategies to promote investment in activities with greater long-term productivity growth potential, especially manufactured exports. The capacity to built flexible industrial strategies is also key. Resource-rich middle-income countries must reinvigorate and sustain their productivity growth by reengineering existing “extractivist” strategies to strengthen backward and forward linkages and leverage natural resource-based industrialization.

Factors Influencing Export of Soya Bean Oil from India: A Panel Gravity Model Analysis

Soya bean, the ‘miracle bean’, belongs to the family Leguminoceae, subfamily Papilionoidea. Soya bean oil is one of the most widely consumed cooking oils and is rich in linolenic acid. In the past 20 years the export of soya bean oil from India was mainly focused on Bhutan, Jordan, Canada, Singapore and Myanmar. The data was collected from 2002-03 to2021-22. The sources of data were Food and Agriculture Organization Statistics (FAOSTAT), Directorate General of Commercial Intelligence and Statistics (DGCIS), International Monetary Fund (IMF), Statista and Trade map. The panel data was estimated by the Feasible Generalized Least Squares (FGLS) method. For soya bean oil the per capita GDP of India's trading partners, distance, trade openness, and exchange rates are the most significant factors affecting bilateral trade. While partner countries' prosperity and liberal trade policies boost trade, greater distances and unfavorable exchange rates hinder it. India's GDP and domestic inflation show minimal impact on trade flows. Wooldridge test indicated no first-order auto-correlation.

Trade Liberalization, Foreign Investment and Economic Growth: Experience from Non-Oil Producing Countries in Africa

This study focuses on trade liberalization, foreign investment and economic growth in non-oil-producing countries of Africa using the panel autoregressive distributed lag (ARDL) model. Annual time series data spanning from 2000 to 2023. The study reveals a strong long-term relationship between trade liberalization, foreign direct investment (FDI), and economic growth in non-oil-producing African countries. This finding is evidenced by the rejection of the “no long-run relationship” hypothesis, indicating a solid and enduring connection among these factors, which aligns with previous research. Most variables conform to theoretical expectations, supporting the hypothesis that trade liberalization and FDI contribute positively to economic growth. However, FDI and exchange rates exhibit unexpected deviations, likely reflecting structural challenges common in non-oil African economies, such as barriers that limit stable FDI inflows and hinder sustainable growth. The error correction term (ECT) further suggests that these economies adjust quickly from deviations, with respective short-run adjustment rates of 90%, 10%, and 50% in different model specifications. This high responsiveness indicates that, despite short-term disruptions, these economies tend to revert swiftly to their long-term growth trajectories. Based on the findings, we recommend that policies should be directed towards the pursuit of consistent and sustainable trade liberalization by reducing trade barriers, and reduction of obstacles to foreign investment to improve economic growth in non-oil-producing countries of Africa.

Pathways to China's Carbon Neutrality and Clean Energy Transition: Evidence from the Three Decades Long Stricter Environmental regulations

This study highlights the ongoing debate surrounding China's slow low-carbon transition despite a rapid shift towards clean energy. However, this debate is crucial for finding pathways to China's pledge to carbon neutrality. Using Auto-Regression Distributed Lag model over the time series data spanning 1990-2020, study attempts to add to the literature by exploring the nexus betwixt environmental regulations, renewable energy transition, and carbon dioxide emissions along with incumbent macroeconomic factors i.e., economic growth and trade. The findings conclude that stringent environmental regulations spur renewable energy transition and combat carbon dioxide emissions. However, energy intensive growth suggests China's priority for development targets ˗ leading to continued increase in fossil fuels despite the remarkable increase in renewable energy resources in country's total energy mix. Moreover, trade remains the crucial component of economic growth but found helping for renewable energy transition in the short-run. The two-way causality between these factors validate the regression results. Whereas the inelastic and insignificant relationship between stringent environmental regulations, renewables, and carbon dioxide emissions in the long run – highlights prospective challenges in terms of efficiency, management, and subsidy-related issues. Thus, the study suggest that trade liberalization helps the country to achieve its carbon abatement goals. However, further market based policy reforms toward stricter environmental regulations are needed for innovation driven efficiency in the energy sector.

The pro-competitive consequences of trade in frictional labor markets

What are the pro-competitive consequences of trade in frictional labor markets? This paper develops and estimates a dynamic general equilibrium trade model to show that the interplay between endogenously variable markups in product markets and frictions in labor markets has important implications for aggregate as well as distributional consequences of trade. In particular, I show that once markups are allowed to respond to trade liberalization, unemployment and residual wage inequality rise almost three times more than in a model with constant markups (in the steady state). The presence of labor market frictions makes the pro-competitive gains from trade liberalization negative.

The dynamics of trade liberalization, export performance, and economic growth in Tanzania: a time series analysis 1980–2020

The dynamics of trade liberalization, export performance, and economic growth in Tanzania: a time series analysis 1980–2020

Prospects the Democracy in Ukraine - Based on Changes in Economic Conditions Since the Russian Invasion

The article aims to clarify the deep relevance and dependence of economic basis and democracy level, which includes how does the former play a role in the formation, the maintenance and the future development of the latter. Economic prosperity, the leader of production activities, power of the middle class, diversification of Economic sector and trade liberalization is the object focus on in this study. It will focus on noteworthy oneUkraine. The aggression from Russia has caused huge macroeconomic changes in Ukraine. Therefore, this article examines the current economic influence of such drastic external factors as a military invasion. This paper will combine the theory of how the economic situation affects the level of democracy with specific economic data and practical research in Ukraine. Then look at the positive and negative aspects, some changes can improve the level of democracy, while others will harm the level of democracy in Ukraine.

Rules of Origin Within ASEAN and RCEP: Has It Been Resolved?

As a well-established trading bloc, rules of origin (ROO) for ASEAN are expected to benefit member states’ businesses by providing preferential tariff treatment which is the fundamental purpose of trade liberalization. However, these rules are prevented from being applied thoroughly due to the lack of government trust in certain member states in business actors and targets of duty collection for customs authorities. The self-certification by business actors has proven to be a solution to the problem but ASEAN A-X Formula may be counterproductive to ROO, eliminating the foundation of regionalization and potentially causing trade deflection. The First Protocol of ASEAN Trade in Goods Agreement (ATIGA) amendment simplifies the procedure of operational certification for ROO. Furthermore, the Regional Comprehensive Economic Partnership (RCEP) as a significant trading pact including ASEAN members and five major trading partners has adopted proof of origin allowing self-certification applied earlier in the European Union and NAFTA. Alternative solutions should also be explored since distrust and national financial interests have not been resolved. Recently, blockchain embedded with smart contracts has been applied in various business sectors which should be further applied in free trade area (FTA) applications. Blockchain’s characteristics as an immutable ledger originating from the hashing process and cryptography would address the problem of ASEAN ROO application. Therefore, this study aimed to analyze the effectiveness of ROO within ASEAN and RCEP. A literature review and doctrinal study methodology were applied in this analysis.

Trade liberalization and export performance in China: Export-margin approach with firm-level data in 1995–2019

A key challenge facing developing countries is how to promote export performance through trade liberalization (TL). Using large and highly disaggregate firm-level data with 6-digit HS categories for 1995–2019, we investigate the issue for China based on the recent literature of export margins (XM). Export growth is decomposed into extensive and intensive margins (EM and IM), and IM further into price and quantity margins (PM and QM). We develop three empirical hypotheses based on a theoretical model that includes external economies of scale (EES) and industrial agglomeration (IA) as well as TL-XM links. Then we take China's entry to World Trade Organization (WTO) in 2001 as a quasi-natural experiment in difference-in-difference (DID) regressions. The estimate results suggest that TL increases both EM and IM (and QM) but reduces PM after China's entry to TWO in 2001. The finding is robust to various specifications of the empirical model and measurements of the variables. The further estimations show significantly positive effects of EES, IA, and their interactive terms with TL on EM, IM, and QM. The positive effects are larger for medium-tech industries than low-tech and high-tech industries.

Dampak Perdagangan Bebas AFTA Terhadap Transformasi Ekonomi Indonesia

Free trade plays a crucial role in global economic development, especially in the era of globalization, and the ASEAN Free Trade Area (AFTA) aims to create a single market within the ASEAN region through the liberalization of trade in goods. This study examines the impact of AFTA on Indonesia's economic transformation, including increased export and import volumes as well as regional economic integration, highlighting benefits such as the growth of exports in manufacturing, agriculture, and consumer goods, alongside strengthening domestic industries. However, free trade poses risks, such as competition from imported products that could pressure local producers. Using a qualitative approach through literature studies, the findings show a significant increase in export and import volumes following AFTA implementation, although regional development disparities remain a challenge. This study emphasizes the need for strategies to improve product quality, enhance infrastructure, and build sectoral synergy to ensure inclusive economic integration and drive Indonesia's overall economic progress.

THE IMPACT OF ENVIRONMENTAL STANDARDS AND REQUIREMENTS ON TRADE LIBERALIZATION: EMPIRICAL EVIDENCE FROM OECD COUNTRIES

Objective: This study aims to measure the impact of environmental standards and requirements on trade liberalization in the OECD countries from 1990 to 2021. Theoretical Framework: The study utilizes economic and environmental theories to examine the relationship between regulatory policies and trade liberalization, utilizing key frameworks such as environmental economics, the Kuznets curve, and global trade models to analyze this interaction. Method: We used unconditional quantile regression methods to examine the relationship between environmental regulations and trade liberalization. The model includes variables such as environmental policy stringency, environmental taxes, carbon emissions, and renewable energy production. Results and Discussion: The study concluded that stringent environmental policies increased freedom of trade at different levels of trade liberalization. The results also confirm that environmental tax policies are particularly effective in promoting trade liberalization in countries with weak or low levels of trade liberalization. The results further suggest that in the case of countries where trade liberalization is weak or below average, carbon emissions are associated with increased trade liberalization. Furthermore, renewable energies contribute to deepening levels of trade liberalization in countries characterized by higher-than-average levels of trade liberalization. Research Implications: This study provides insights into how environmental policies can be strategically used to promote trade liberalization. The findings may influence policy-making in areas such as environmental taxation, energy transition, and international trade. Originality/Value: This study explores the impact of environmental regulations on trade liberalization, highlighting how different policies can either promote or hinder trade freedom, especially in economies at different stages of liberalization.

The effect of trade liberalization on marriage and fertility: evidence from Indian census

Abstract Using a district-level panel constructed from five waves of decennial Indian censuses covering 1971–2011, we examine the medium-term (1991–2001) and long-term (1991–2011) impacts of the 1991 Indian trade liberalization on marriage and fertility rates among young women aged 15–34. We exploit the fact that countrywide tariff reductions varied across industries creating exogenous local labor market shocks based on the initial employment composition of the district. We find heterogeneous results across urban and rural areas. We find that urban areas of the districts that experienced larger tariff cuts experienced relative increases in marriage rates compared to the districts that experienced smaller tariff cuts. Tariff cuts positively affect workforce participation among both young men and women in urban areas. However, there is no impact of tariff cuts on the marriage rate or workforce participation among young population (15–34) in rural areas. In contrast, tariff cuts reduced fertility rates mostly in rural areas.

Trade Liberalization and Mortality Rates: Evidence of Pro-Cyclical Mortality From Brazil.

We trace the evolution of all-cause mortality rates in Brazilian regions with varying exposure to trade-induced economic shocks before, during, and after liberalization reforms in the 1990s. We find consistent evidence of pro-cyclical mortality, with areas more exposed to tariff reductions experiencing larger declines in mortality across varying time horizons. The observed decline in mortality rates is evident across sex, age groups, and for both internal and external causes of mortality. We falsify the observed relationship between mortality and tariff reductions with analyses of causes of death that are plausibly unrelated to economic activity. Concerning proximate mechanisms involved in our finding of pro-cyclical mortality, we show that healthcare infrastructure expanded in local economies more affected by the trade-induced economic shock. This expansion was characterized by the increased capital-intensity of care, facilitated by the import of diagnostic technologies that reduce mortality from internal causes. We also find supporting evidence for the idea that pro-cyclical mortality is partially caused by a decrease in transport and non-transport-related accidents. Overall, our findings highlight an underappreciated dimension of trade policy effects, namely public health.

Has Trade Liberalization Promoted Energy Efficiency in Enterprises?

Improving energy efficiency is a way for China’s economy to achieve sustainable development. Using data on listed industrial enterprises in China from 2000 to 2022, we investigate the impact of trade liberalization on the energy efficiency of Chinese firms and its mechanism of action at the micro-firm level. Our findings suggest that trade liberalization has greatly contributed to firms’ energy efficiency and the main conclusions in this paper still hold after a series of robustness tests. Further research shows that two channels that contribute to the improvement of firms’ energy efficiency are the expansion of the firm’s size and the improvement of production efficiency induced by trade liberalization. Another significant route according to which trade liberalization influences energy efficiency improvements by firms is the dynamic decomposition of industrial energy efficiency, which shows that 70.07% of industrial energy efficiency enhancement is due to structural adjustments. The heterogeneity analysis results show that the energy saving impact of trade liberalization is stronger for non-exporting, foreign-funded, growth-oriented enterprises that are based in the eastern region. Our study presents new ideas for the realization of energy conservation and emissions reduction from the perspective of trade liberalization, which is instructive in regard to the improvement of sustainable development of enterprises.

Trade liberalization and total factor productivity in Brazil: A vecm modeling.

This paper aims to investigate trade openness's effects on total factor productivity (TFP) using monthly data from December 1991 to March 2024. The analysis also incorporated absorptive capacity to examine the behavior of TFP components. Our findings from a multivariate VECM model indicated that absorptive capacity did not significantly impact TFP, even in the short term. Conversely, the increase in openness contributes to raising TFP by about 26 and 0.16 percentage points in the short and long term, respectively. Additionally, absorptive capacity and trade openness Granger-Cause short- and long-term components of TFP. These results are statistically significant at conventional significance levels. Policymakers should consider the dynamic effects of their policy actions on other sectors of the economy that were not initially the focus of the policy. Policymakers should develop concrete policies that improve the efficient use of resources in production chains to potentialize the productive impact of trade liberalization, including investment in human capital, ICT, and research and development.

Global Trade Tensions: Analyzing the WTO Legality of the U.S. Inflation Reduction Act and Strategic Responses

With the profound changes in the global economic landscape and the increasing proximity of the United States and China in terms of power contrasts, the hegemonic anxiety of the U.S. has been increasing, leading to the adoption of a series of protection measures in the field of trade. Among them, the Inflation Reduction Act, as an important part of the U.S. trade protectionist policy, its implementation has not only aggravated the tension in international trade, but also violated the relevant rules of the World Trade Organization (WTO). This paper elaborates the specific content of the Act and its impact on international trade, especially its large-scale subsidy policy in the field of green energy and its potential impact on the global supply chain. Subsequently, this paper analyzes in depth the illegality of the Act under the WTO framework from the perspective of prohibited subsidies and non-discriminatory principles, and argues with specific cases. Finally, this paper puts forward China's response strategy, aiming to provide theoretical support and practical guidance for China in dealing with U.S. trade protectionist policies. The purpose of this paper is to reveal the nature and impact of the U.S. trade protectionism policy, to provide theoretical support for China to safeguard its legitimate rights and interests in global trade, and to provide useful reflections and insights for China to promote trade liberalization and facilitation, strengthen international cooperation, and jointly respond to challenges in the context of global economic integration.

The Impact of Trade Openness on the Reality Industry in Iraq for the Period (2004-2022)

Iraq is one of the prominent countries that used to have important industries and enjoyed consumer acceptance, as well as competitiveness and presence in regional and global markets. However, after 2003 and due to trade liberalization, there was a general weakness in the structure of the Iraqi economy. This directly affected the reality of the Iraqi industrial sector, leading to the entry of goods and products from all over the world. With the increase in population and government expenditures, which relied on commodity imports to meet local needs, all aspects of industry in the country were eliminated. The importance of research lies in shedding light on the role of international trade (import and export) in global economies, highlighting the shortcomings in trade policy management, demonstrating the impact of trade openness on the industrial sector's contribution to economic development, and the need for realistic measures to rescue this vital sector from deterioration in Iraq. And the problem of the research is based on the direct negative impact of trade liberalization policy on the reality of the industrial sector in the country. Increased reliance on foreign sources to meet local economic needs is attributed to the deficiencies, backwardness, and stagnation of the production apparatus, rendering it unable to meet total domestic demand. The aim of the research is to shed light on the role of foreign trade in global economies and to clarify the shortcomings in trade policy management, as well as the extent of the impact of trade liberalization on the reality of the industrial sector in achieving economic development. The research found that the industrial sector in Iraq was negatively affected throughout the period (2004-2022) due to the compulsory trade liberalization policy, which led to the shutdown of factories and plants as a result of the low prices of imported goods. Paper type Research paper.

The impact of trade liberalization on China–ASEAN trade relations along the belt and road: An augmented gravity model analysis

While trade liberalization has become increasingly important in global economic integration, little is known about its specific impact on China–ASEAN bilateral trade relations within the Belt and Road Initiative framework, particularly regarding cultural factors. This study addresses this gap by examining how trade liberalization affects bilateral trade dynamics between China and ASEAN nations, with special attention to linguistic and religious proximity as potential moderators. Using an augmented gravity model and panel data from 2012 to 2022, we find that increased trade liberalization significantly enhances bilateral trade volumes, with stronger effects in export trade compared to imports. Moreover, shared linguistic foundations and religious beliefs amplify these positive effects, particularly in ASEAN countries with lower economic development levels. These findings provide crucial insights for policymakers seeking to strengthen regional economic integration and optimize trade cooperation strategies along the Belt and Road.

The potential impact of environmental goods trade liberalization on trade and emissions

We combine econometric estimation with quantitative modeling to generate projections on the trade, GDP, and emissions effects of a potential trade liberalization agreement involving energy-related environmental goods (EREGs) and environmentally preferable products (EPPs). Trade liberalization can contribute to reduced emissions in two ways in our projections: (i) a reduction of import prices of goods promoting energy efficiency; and (ii) a reduction in the costs of intermediate and capital goods used in the production of electricity from renewable-energy sources. Four scenarios are evaluated, combining reductions in tariffs and non-tariff measures (NTMs) for EREGs and EPPs. Using simulations with the WTO Global Trade Model we find (i) an increase in exports of EREGs and EPPs both at the global level and in most regions; (ii) a modest increase in GDP in all regions because of falling tariffs, NTMs, and increased energy efficiency; and (iii) a modest reduction in global emissions of about 0.6%. The dominant channel is energy efficiency, whereas the costs of EREGs as intermediates in renewable energy production play a minor role, with or without end-use control.