Trade Measures Research Articles

The characteristics of non-tariff measures in Vietnam foreign trade

Non-tariff measures (NTMs) are the key instruments in the trade policy in recent years. The high rate of integration in the world market are required the high prevalence of NTMs imposed on products. In fact, developing countries have less concern about the vital role of NTMs than developed nations. Vietnam are the exporting-led economy with the highest rate of trade openness and the diversification of products and market structure. The aim of the paper identifies the characteristics of Vietnam’s non-tariff measures imposing on imports. The role of non-tariff measures in Vietnam parallel with the increasingly prevalence of these measures in the world economy.

МЕЖДУНАРОДНАЯ ТОРГОВЛЯ В КАТЕГОРИЯХ ДОБАВЛЕННОЙ СТОИМОСТИ: ВОПРОСЫ МЕТОДОЛОГИИ

The article is aimed to investigate and discuss methodological issues and challenges related to the measurement of international trade in value added terms. Basing on the analysis of the concept of Global Value Chains (GVCs) and the substance of related theoretical categories, the author gives his own vision of the place that the Trade in Value Added (TiVA) concept occupies in the modern economic theory. It is pointed out that various approaches to the definition of value added, global chains, global value added chains, global import intensity, and other terms appeared recently. The author focuses on the problem of double-counting of intermediary goods (that leads to overstatement of the importance of trade) and on the estimations of the differences between exports in value added terms (so-called domestic value added embodied in foreign final demand) and gross exports. Such discrepancies reach as much as 25% of gross flows. Special attention is paid to the use of the World Input–Output Database (WIOD) in the analysis of the international trade. Its usefulness is illustrated by applying it to both intermediate goods and final products of Russian manufacturing exports. The author agrees with those economists who believe that conceptual framework of international trade in value added has been enhanced in the latest decade. Following Koopman et al. (2010) it is shown that a country’s exported value added can be broken down into three large components, including domestic value added, returned domestic value added and foreign value added. The author’s conclusion is as follows: Global Value Chains should not be regarded in themselves. They appear only where their total benefits exceed their total costs including transactional and other costs. Acknowledgements. The article was prepared at the Primakov National Research Institute of World Economy and International Relations, Russian Academy of Sciences and supported by a grant from the Russian Science Foundation (project no. 14-28-00097 “The optimization of Russian external investment ties under deterioration of relations with the EU”).

A Study on the Legal Issues Arising from the Investigation on Various Industrial Impacts of Trade in Services Outside of the WTO Framework

This paper examines existing multilateral trade agreements except the WTO in terms of their regulations concerning investigation on industrial impacts of trade in services. The main purpose of the paper is to provide possible legal reference for continuing to promote negotiations on emergency safeguard measures in WTO trade in service. Mainly through Legal Positivism, in terms of identifying industrial impacts of trade in services, there are clear and objective regulations within the European Union and in its multilateral agreements with Eastern European countries; NAFTA permits Mexico to take protectionist measures in banking and financial services, and has established relevant standards for industrial impacts; the bilateral trade agreements signed by China and other countries are mostly treaties of principle, thus not unpractical. To reach an agreement on this issue so as to facilitate trade in services, this paper suggested that the international community should promote the WTO to adopt investigation on industrial impacts of trade in services, so as to further increase multilateral disciplines.

Trade in Intangibles and a Global Value Chain-Based Framework of International Trade

This paper aims to develop a framework for the measurement of global trade that integrates trade-in-intangibles and trade-in-goods and services in the context of globalisation, and applies it for the analysis of global trade imbalance. Through in-depth discussions of the five modes through which trade-in-tangibles are carried out, it develops an integrated framework from the perspective of global value chains. Applying this framework to the estimation of trade imbalance of the U.S., its overall trade deficit reduces nearly half of its size from USD750 billion to USD396 billion in 2016 with a cautious adjustment without taking into account the income from trade-in-intangibles in most of the U.S. firms accrued through outsourcing and collaboration. It argues that the global trade imbalance and policy responses to solve this should be discussed using a framework that fully incorporates different types of trade activities in the 21st century as its basis. The fragmented global production finely orchestrated by MNEs implies that it is impossible for one single country involved in the GVCs to achieve high value-added per capita and mass employment at the same time. This is a new paradox of globalisation. Re-distribution of the often hidden or shifted income from the entities who gained a lot from the trade in intangibles to the rest of the society is crucial to reducing the inequalities. Tax avoidance by shifting these benefits abroad should be curbed.

Spillovers from US Monetary Policy: Evidence from a Time-varying Parameter GVAR Model

This paper develops a global vector autoregressive (GVAR) model with time-varying parameters and stochastic volatility to analyze whether international spillovers of US monetary policy have changed over time. The proposed model allows assessing whether coefficients evolve gradually over time or are better characterized by infrequent, but large breaks. Our findings point towards pronounced changes in the international transmission of US monetary policy throughout the sample period, especially so for the reaction of international output, equity prices, and exchange rates against the US dollar. In general, the strength of spillovers has weakened in the aftermath of the global financial crisis. Using simple panel regressions, we link the variation in international responses to measures of trade and financial globalization. We find that a broad trade base and a high degree of financial integration with the world economy tend to cushion risks stemming from a foreign shock such as a US monetary policy tightening, whereas a reduction in trade barriers and/or a liberalization of the capital account increase these risks.

Of Sustainable Development in Africa: Addressing the (In)Congruence of Plastic Bags Regulations with International Trade Rules

Several aspects of the trade policies of African countries suffer from neglect in the legal literature. When they are the object of research, the focus is sometimes limited to their participation in the dispute settlement system or on the enforceability of special and differential treatment provisions. While practice displays that African countries have almost never been the target of complaints for a number a reasons, those approaches do not always take into consideration African countries’ domestic measures affecting the flow of goods and services, which could eventually trigger disputes. This paper, which intends to fill that gap and add to the existing stream of research, tackles trade measures geared toward sustainable development and environmental protection in Africa, especially the growing body of legislation to restrict the use plastic bags. The multilateral trading rules give the Members of the World Trade Organization (WTO) flexibility to pursue social and environmental policies provided the latter are compliant with the provisions of the covered agreements. While some African countries that have taken the steps to address plastic bags have either made use of quantitative restrictions or licencing schemes, others have combined these border measures with domestic regulations. Coming from all parts of the continent, and all being WTO Members, this is their contribution to the debate on sustainable development goals spelled out in the Marrakesh Agreement Establishing the WTO. The paper reviews these countries’ regulations, not only individually but also in the framework of regional economic integration schemes in which they are parties, in search of their compatibility with the multilateral trade rules.

An Enhanced Analytical Framework for Evaluating the Effects of Trade Costs along Global Value Chains

In this paper, I present a new multi-regional input-output (MRIO) database with tariffs differentiated by agent. To construct the MRIO, I apply the Broad Economic Categories (BEC) system of concordances to detailed trade and tariff data from the Tariff Analytical and Simulation Tool for Economists (TASTE) Database version 9 to obtain measures of trade and tariff revenues by end-use. I use this trade data by end use to expand the GTAP Database version 9.2, thus incorporating direct linkages from foreign suppliers to domestic producers, investors, and consumers. Further, the new database comprises distinct composite tariff rates for producers, investors, and consumers. I use a constrained optimization procedure to ensure MRIO trade flows aggregate to the original GTAP Database. Through illustrative simulations, I demonstrate the effect of (1) new cross-border trade linkages and (2) tariff escalation for trade policy analysis. I further demonstrate how the addition of differentiated tariffs in the MRIO enhances policy analysis beyond preceding versions of the MRIO.

대중국 서비스무역 활성화 방안: 주요 업종별ㆍ지역별 분석 (A Research on the Activation Measures of Korea-China Service Trade: Focused on the Major Industrial and Regional Analysis)

Korean Abstract: 본 연구는 중국 서비스무역 현황과 육성 및 개방 정책을 살펴보고, 주요 업종(의료, 문화콘텐츠, 물류)과 주요 지역(광둥, 베이징, 상하이, 산둥)의 서비스무역 발전 현황과 시장 경쟁, 무역장벽 및 대외협력 사례에 대해 분석하였다. 이를 통해 주요 업종별ㆍ지역별 대중국 서비스무역 확대방안을 제안하였고, 한ㆍ중 FTA 서비스ㆍ투자 관련 후속협상에 대비한 정책적 시사점을 제시하였다. English Abstract: The Chinese economy has moved away from its past high speed growth rate of 10% per year, and begun to grow at a more moderate rate between 6 and 7%. This slowdown in the growth rate is due to changes in the domestic and international economic environment, which have led to weaker contribution from manufacturing industries, exports and investment, elements that drove China’s economic growth in the past. However, China is actively pushing for a shift in the growth paradigm by responding swiftly to the new economic environment, and continues to show growth in the middle range. In particular, due to the policies for fostering the service sector, the service sector is rapidly replacing the status of the manufacturing sector, and thus the growth speed, economic structure, growth engine, employment and overall economy are being driven by the service sector. The Chinese government is pushing for the opening of the service sector and fostering the producer service industry through its 13th Five-Year Plan. Aiming to realize these goals, this China emphasizes a high level of open market and external cooperation, and focuses on the development of the service industry and the expansion of the service trade as it did in the past by opening policies. China’s service trade volume was estimated to reach $657.1 billion in 2016 and exceed $1 trillion in 2020. Among Korean exports to the mass market, the share of service exports is growing from 9.7% (2011) to 14.5% (2016), and China has emerged as Korea’s largest service market and largest service trade surplus country since 2013. The fact that China’s service trade and Korea’s exports of services to China are both expanding rapidly should serve as an opportunity to increase the role of Korea’s services trade with China in the future. This study seeks to explore new export engines that can boost trade in the services sector. To this end, the study examines ways to boost services trade with China based on an analysis of industries and regions with good prospects.

The EU's conditioning of the ‘extraterritorial’ carbon footprint: A call for an integrated approach in trade law discourse

Circumventing the territorial system boundaries of the climate change regime, the European Union continues to regulate foreign production processes contributing to the carbon footprint of goods and services consumed in its market. While it is well established that such measures raise issues of ‘extraterritoriality’, legal discourse remains divided on the applicable jurisdictional rules. This is particularly evident in the field of trade law, where persistent discussions remain as to the ‘true’ extraterritoriality of trade measures, and the jurisdictional limitations under the law of the World Trade Organization, particularly the General Agreement on Tariffs and Trade. Turning, however, to the customary international law of State jurisdiction, there are valuable opportunities for clarification that have received insufficient attention to date. This article therefore proposes a more integrated approach to the jurisdictional analysis, advocating a sequential interest‐balancing test that further harmonizes customary principles with specific trade law concerns.

Labour Standard Enforcement through Economic Treaties

Recent economic treaties contain references to labour standards with increasing specificity and stringent enforcement mechanisms. However, despite evidence for continuing massive violations of workers’ rights, forced and child labour, these mechanisms are very seldom used. This article focuses on enforcement in respect of gross and continuing violations of so-called peremptory standards i.e. those generally recognised as norms from which no derogation is permitted (cogent law or ius cogens). It looks at a number of new trade and investment agreements, and conditional tariff preferences. Goods and services produced in violation of clearly peremptory standards not only raise the question of importer involvement. These violations may also cause trade distortions against which importers may take countermeasures, sometimes explicitly in cooperation with non-state stakeholders. Sanctions may consist, for instance, in suspensions of tariff concessions or outright import bans in response to labour standard violations creating trade and investment conditions. A possible barrier against sanctions are the non-discrimination rules enshrined in all economic treaties which seem to overprotect policy space and hence to also prevent, for instance, countermeasures against social dumping. This is particularly true for the rules framework of the World Trade Organization (WTO) which has no social clauses, but also for economic treaties with few stringent commitments, and a dearth of case law. Adjudicators in litigation cases would then have to decide whether ius cogens does take precedence over WTO and other economic treaty rules. Even though this has never occurred, this article argues that when trade measures are taken against violations of cogent law, they will withstand legal challenges better than would appear from looking at comparable WTO cases involving public morals. At the same time, producers respecting these international bottom lines for employment policies can defend their treaty-enshrined market access rights against unilateral standard setting and protectionism in disguise. It is too early to contend that economic treaty implementation has become more holistic by adding social and environmental dumping to the list of trade distortions subject to trade remedies. Nonetheless, this article concludes that some peremptory labour standards have become easier to enforce. International Economic Treaty Law still protects against non-trade distorting sanctions. But the new venues described here can limit the race to the bottom, and contribute to sustainable employment even in countries needing ‘more’ rather than ‘better’ jobs.

Neo-Globalization: Premises, Processes and the Future

Globalization, or the worldwide movement towards a high measure of economic, financial, trade, technology and communications integration, is a concept in need of an overhaul. The roots which have rested largely on President Reagan’s economic policy foundations of the early 80’s are wearing off. Free market, deregulation, income and wealth tax cut, reduced government spending and tight fiscal and monetary policies are challenged by events and disruptions. Economic growth vehicles are shifting away from manufacturing and services and locus of economic activity is moving towards China and its environs. Progression towards protective politics in the United States as much as the adoption of Brexit in Britain have hastened the blur.

Effect of non-tariff measures on international tea trades

Purpose The purpose of this paper is to analyze the impacts of differences in sanitary and phytosanitary measures as non-tariff measures (NTMs) in the tea trade between importing and exporting countries. With the progress of trade liberalization, there has been a shift of focus to NTMs as alternative or potential trade barriers. Design/methodology/approach In order to quantify an NTM on tea trade and implement its empirical application, this study designed an index of differences in maximum residue levels (MRLs) for the pesticide endosulfan and introduced it into a gravity trade model. The estimation challenges in the presence of heteroscedasticity and many zero-trade flows are resolved by taking the Heckman and Poisson pseudo-maximum likelihood estimators. Findings This study found that differences in MRLs, arising from the stricter standards in importing countries lead to a significant decrease in tea trade value. This negative impact of differences in MRLs is found to be slightly less than that of tariffs, implying that in this case, the NTM acts as a policy substitute for import tariffs in the global tea trade. Originality/value The main contribution of this study is to suggest and quantify the differences in MRLs across countries as a substantial NTM on the global tea trade and provide its empirical application.

Seeds, Trade, Trust: Regionalization Commitments under the SPS Agreement

Most of the disciplines set out in WTO agreements anticipate nationwide trade measures. Article 6 of the Agreement on the Application of Sanitary and Phytosanitary Measures is one of a few provisions that explicitly refers to region-based trade measures. This article explores Article 6 by reviewing relevant negotiation history, roles of international organizations, and case law (India – Agricultural Products, US – Animals, and Russia – Pigs (EU)). In addition, to further explore the topic, this article provides a consistency analysis of a specific measure implemented by Japan against wheat shipped from the USA amid detections of unauthorized genetically modified wheat in the USA. Unique features of plant trade that need to be taken into account when applying Article 6 will be introduced throughout this article.

Impact of trade facilitation reforms on tax revenue

PurposeThe purpose of this paper is to contribute to the empirical literature of the macroeconomic effect of trade facilitation reforms by examining the impact of the latter on tax revenue in both developed and developing countries. The relevance of the topic lies on the fact that at the Bali Ministerial Conference of the World Trade Organization (WTO) in 2013, Trade Ministers agreed for the first time since the creation of the WTO (in 1995) on an Agreement to facilitate trade around the world, dubbed Trade Facilitation Agreement (TFA). The study considers both at-the-border and behind-the border measures of Trade Facilitation.Design/methodology/approachTo conduct this study, the authors rely on the literature related to the structural factors that explain tax revenue mobilization. The authors mainly use within fixed effects estimator. The analysis relies on 102 countries (of which 23 industrial countries) over the period 2004-2007 (based on data availability). A focus has also been made on African countries, within the sample of developing countries.FindingsThe empirical analysis suggests evidence of a positive and significant effect of trade facilitation reforms on non-resources tax revenue, irrespective of the sample of countries considered in the analysis.Research limitations/implicationsThis finding should contribute to dampening the fear of policymakers in developing countries, including Africa that the implementation of the TFA would entail higher costs, without necessarily being associated with higher benefits. An avenue for future research would be to extend the period of the study when data would be available.Originality/valueTo the best of the authors knowledge, this study had not been performed in the literature of the determinants of tax revenue mobilization, although fact-based analysis was performed.

Trade Measures to Prevent Illegal Fishing and the WTO: An Analysis of the Settled Faroe Islands Dispute

AbstractThere has been increasing litigation in the WTO on environmental issues in recent years, much of it about fishing. Two cases,Chile–SwordfishandFaroes–Herring, brought to light the potential for conflict between trade and fisheries law through the imposition of port state measures by WTO members to prevent illegal, unreported, and unregulated (IUU) fishing, although both cases were settled before reaching Panel stage. Port state measures aim to combat IUU fishing by allowing countries to close their ports to IUU fish. This includes using trade measures and trade-related measures, such as import bans and transshipment bans, which may violate WTO law. The potential for conflict is even more acute now that the Port State Measures Agreement (PSMA) has come into force. This paper takes as its studyFaroes–Herring, where the Faroes challenged certain EU regulations aimed at preventing IUU fishing through the use of port state measures. It examines whether these regulations comply with WTO law, and makes recommendations as to how a Panel or Appellate Body can resolve this type of dispute. Specifically, it focuses on ways in which international fisheries law can be incorporated in this process to avoid a conflict between international trade and fisheries law.

The Impact of Multilateral Trade Liberalisation on Economic Development: Some Empirical Evidence

AbstractThis article examines the impact of multilateral trade policy liberalisation on countries' levels of economic development, proxied by their real per capita income. The study is particularly relevant in the current context of growing rhetoric against international trade, which could fuel domestic protectionism and would likely undermine multilateral trade liberalisation. The analysis has been conducted on a panel data set of 155 countries, over non‐overlapping four‐yearly sub‐periods during 1995–2014. The empirical results suggest strong support for the view that multilateral trade liberalisation promotes economic development. Hence, the rise in unilateral protectionist trade measures around the world would likely endanger the prospects of further multilateral trade liberalisation and ultimately undermine countries' prospects of economic development.

Deliberative Trade Policy: Rethinking Global Governance of International Trade

This paper picks up an argument that I developed in an earlier contribution (2007) in which I introduced the concept of ‘deliberative trade policy’. This approach analyzes the entire set of trade policy institutions and measures as means and media of communicating about preferences of institutional design. In this overview, I connect the concept with Amartya Sen’s conception of justice and his distinction between ‘transcendental institutionalism’ and ‘realization focused comparisons’. I show that the traditional economic view takes the former stance in focusing on efficiency as a standard for evaluating institutions. The deliberative view follows the second stance. A central analytical leitmotif is to track political externalities of democracy globally, and to develop criteria and measures of inclusiveness of trade policies aka internalization of externalities. I apply these ideas on preferential trading agreements and on WTO reforms.

Think Global, Act Unilateral? WTO Limitations on Trade Measures to Enforce Ocean Conservation

The traditional territory-based structure of international law makes protecting global common goods a major challenge. This is particularly true with respect to the ocean, an environment where overlapping areas under the jurisdiction of different states coexist with very mobile resources and a medium in which pollution can spread quickly. This paper examines recent developments that allow a greater role in enforcing fisheries conservation measures for consumer states and port states, affecting the law applicable de facto to fishermen and fishing vessels regardless of the flag they fly and the area where the fishing occurs, and considers the WTO-legality of conservation measures adopted by two major fish importers, the EU and the US. Following the sea change brought by the Appellate Body report in US – Shrimp, WTO law permits consumer states to impose requirements with respect to environmental conservation beyond their borders. The jurisprudence that authorizes the use of product specifications applicable abroad, subject essentially to non-discrimination requirements, would seem to permit port state measures that deny certain vessels freedom of transit. On the other hand, the WTO-consistency of country-wide sanctions for Members that fail to adopt and enforce conservation measures may depend on these measures finding support in multilateral instruments and decisions.

Should China be Granted Market Economy Status? : In View of Recent Development

The Protocol for China’s accession into the WTO stipulated certain types of differential treatment for China, including the determination of normal value in anti-dumping investigations for the transitional period of 15 years. This treatment was authorized by the Protocol in response to concerns raised by other WTO Members at the time of China’s entry into the WTO. Since the transition period was over in November 2016, there is an argument supporting the grant of market economy status to China, although the Protocol does not require the automatic grant of market economy after the passage of the transitional period. However, China’s recent trade measures, which have been adopted to press another WTO Member to meet its political objective, raise a question as to whether China is indeed ready for market economy status. This article analyzes such case and offers a view on the grant of market economy status to China.

Trade Measures for Regulating Transboundary Movement of Electronic Waste

International trade in used electrical and electronics equipment (UEEE) provides an avenue for socio-economic development in the developing world and also serves as a conduit for transboundary dumping of waste electrical and electronic equipment (WEEE) also referred to as electronic waste or e-waste. The latter problem arises from the absence of a regulatory framework for differentiating between functional UEEE and junk e-waste. This has resulted in both functional UEEE and junk e-waste being concurrently shipped to developing countries under the guise of international trade in used electronics. Dealing with these problems will require effective regulation of international trade in UEEE from both exporting and importing countries. Although, the export of e-waste from the European Community to developing countries is currently prohibited, significant amount of e-waste from the region continue to flow into developing countries due to lax regulatory measures in the latter. Hence, there is need for a regulatory regime in developing countries to complement the prohibitory regime in the major e-waste source countries. This paper proposes trade measures modelled in line with WTO rules which could be adopted by developing countries in addressing these problems. The proposed measures include the development of a compulsory certification and labelling system for functional UEEE as well as trade ban on commercial importation of UEEE not complying with the said certification and labelling system. The paper then goes further to examine these proposed measures in the light of WTO rules and jurisprudence.