Trade Policy Research Articles

Low-carbon transition or low-carbon trap? — An instrumental variable regression analysis based on carbon decoupling and energy equity

ABSTRACT Although the low-carbon transition has enormous potential for improving economic and environmental benefits, it may also lead to social equity issues, trapping certain regions in a low-carbon dilemma. Based on panel data from the Yangtze River Economic Belt for the period 2007–2019, this study empirically analyzes the impact of carbon decoupling on energy equity, employing the carbon emission trading policy and natural wetlands as joint instrumental variables. The findings reveal that: (1) from 2007 to 2019, the average level of carbon decoupling in the Yangtze River Economic Belt was recorded at 0.415, maintaining a weak decoupling state overall and nearly forming an “inverted V” shape; (2) in the instrumental variable regression results, for every 1% increase in the level of carbon decoupling, the energy equity in the Yangtze River Economic Belt decreased by an average of 0.095% (p < .01); (3) environmental burden played a partial mediating role between carbon decoupling and energy equity, with the mediation effect value being −0.007 (p < .05); (4) green energy consumption and marketization can variably mitigate the adverse effects of carbon decoupling. Examining the sustainability of the economic-environmental system from the perspective of energy equity contributes to shaping a low-carbon economy that maintains social justice and sustainability, thereby avoiding falling into a low-carbon trap.

Can Trade Policy Uncertainty Drive Green Innovation? Empirical Evidence From the US–China Trade War

ABSTRACTChina's rapid economic growth in recent years has coincided with heightened environmental regulations and an upsurge in greenhouse gas emissions, necessitating a greater emphasis on green innovation to mitigate environmental risks. Concurrently, the US–China trade war has elevated trade policy uncertainty (TPU). This study uses the TPU surge from the trade war as a quasi‐natural experiment, employing text analysis of annual reports to assess firms' TPU perceptions. Using a difference‐in‐differences method, we find that increased TPU significantly hinders green innovation. Firms' responses vary with environmental advantages, regulation levels, and government subsidies. Mechanisms include reduced environmental investment, decreased executive attention to environmental issues, and corporate social responsibility. These findings underscore the importance of a stable trading environment for promoting green innovation.

Making green cocoa: Deforestation, the legacy of war, and agrarian capitalism in Côte d'Ivoire

AbstractThis article examines the legacy of war on environmental policy, contributing to recent literature on the linkages between armed violence, conservation, rural livelihoods and global value chains. It argues that environmental norms reshape agricultural practices, but also the means by which people claim control over land and labour. Using the case of cocoa in Côte d'Ivoire, this paper examines the impact of ‘zero‐deforestation’ policies on the country's last agricultural frontier: its western forestlands, where migration and deforestation have driven the development of the cocoa economy for years. The region is now feeling the effects of global trade policies such as the European Deforestation‐Free Regulation (EUDR), competition for the last remaining forests and social fault lines inherited from the war. This article traces the origins of the zero‐deforestation policy, its national and local impact and its implications for social struggles over the control of land and labour.

Analysis of Wheat Export Performance in India

Wheat is a plant which is valued highly for its kernel as an edible part and an important source of carbohydrates. India ranks second position in wheat production in the world with a contribution of roughly 13.53 per cent to global wheat output (Naga Latha et. al., 2022). The study analyses the export performance of wheat and examines the trends in the growth performance of wheat in terms of area, production and productivity, export quantity and export value during 1973-2022 which is a period of 50 years. The analysis reveals that the highest compound growth rate in terms of area was 1.16 per cent, production was 4.49 per cent and productivity was 3.29 per cent respectively. The results of the study on the compound growth rates during the study periods have shown positive and increasing value which indicates high potential for the export of wheat from India. In the analysis of instability, there exists a high positive correlation between the export quantity and value of export in the overall period. Wheat area, production and productivity exhibit higher variability and instability in the overall period. Period II shows lower variability and instability, indicating increased stability. Period I exhibits moderate variability and instability. The overall period has the highest instability, suggesting unpredictable production. Instability indices show high instability at 126.97 per cent in Period I and 138.18 per cent overall, while Period II exhibits moderate instability at 101.94 per cent. Market volatility, trade policies, economic fluctuations, weather patterns and production variability contribute to these fluctuations. As of trend analysis, there is a positive and significant increase. The NPC value of wheat during the overall period was 0.051, it indicates that the commodity is not protected. NPC&lt;1 indicates that the commodity is exportable and possesses export competitiveness and hence the hypothesis i.e. Indian wheat has better competitiveness in the International market.

The macroeconomic determinants of trade openness in Latin American countries: A panel data analysis

Background Trade openness shows a positive impact on economic growth, supported by economic theory, and export diversification and economic complexity show a positive dynamic in trade openness in the world; however, a specificity is generated in South American countries. Therefore, the objective of the research is to analyse the macroeconomic determinants of trade openness in Latin American countries. Methods The research approach was quantitative and explanatory using panel data methodology from the databases of the World Bank, Harvard University and the Economic Commission for Latin America and the Caribbean for the period 2000-2020. Results The fixed effects panel data model showed that the variables that had a negative impact on trade openness were GDP, the economic complexity index and the logistic performance index, while the variables that had a positive impact were exports of high-tech products (a proxy for innovation), exports, imports, research and development expenditure and interregional trade in goods. Conclusions Therefore, during the analysis period of 2000-2020 in South America, based on the panel data analysis under fixed effects, a total of 8 countries had a negative impact on trade openness, and only the economies of Chile, French Guiana, and Brazil had a positive impact on trade openness; these economies are characterized by their better performance in the economic complexity index, their higher percentage of budget for research and development expenses, and their trade policies oriented towards the industrialization of their value-added products.

Texas trade in forest products industry

Texas boasts abundant forest resources, providing substantial economic and ecological benefits statewide. This study examines the trends in forest product trade within Texas over the past two decades, focusing on key disruptions during this period. The analysis categorizes the forest products industry into two main markets: solid wood and paper and pulp, further dividing the industry into five core sectors. The findings indicate that Texas operates as a net importer of solid wood and wood furniture products while serving as a net exporter of wood pulp and, paper and paperboard products. Both import and export values have generally shown a gradual increase over time. Notably, Mexico emerged as Texas’s primary trade partner for both imports and exports in 2023. Additionally, Texas ranks as the second-largest exporter of paper and paperboard products nationally while also being the second-largest importer of solid wood products and wood furniture products. The study highlights the profound impact of the COVID-19 pandemic response on Texas’s trade dynamics, emphasizing the crucial need for ongoing monitoring of trade policies and international relationships. These factors have the potential to exert significant influence on Texas’s trade landscape in the foreseeable future.

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

Iraq is one of the prominent countries that used to have important industries and enjoyed consumer acceptance, competitiveness, and presence in regional and global markets. However, after 2003 and due to trade liberalization, there needed to be more 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. Moreover, the research problem 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 production apparatus's deficiencies, backwardness, and stagnation, rendering it unable to meet total domestic demand. The research aims 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 because of the low prices of imported goods. Paper type Research paper.

Intellectual Property Commercialization Policy to Expand Financing Options for Indonesian Creative Economy Businesses

This study aims to develop alternate strategies for completing the creative economy Intellectual Property collateral financing policy so that it may be implemented in Indonesia. The methods used descriptive qualitative research with SWOT analysis to analyze the implementation of Intellectual Property-based financing schemes' supporting and inhibiting factors. The preparation of alternative strategies based on the SWOT matrix produces nine strategies. The nine alternative strategies produced were evaluated and tested using four practical policy analysis criteria: Effectiveness, Efficiency, Legality, and Administrative Robustness. Three primary recommendations emerged from testing alternative approaches: first, a plan to fortify industry regulations related to financial services, which will serve as a model for financial institutions implementing credit provisions based on Intellectual Property collateral and expediting the realization of financing products backed by Intellectual Property Rights. Second, a plan to standard Intellectual Property valuation formula or economic value of Intellectual Property and establish an ecosystem for the Intellectual Property market to promote more consistent Intellectual Property valuations and third, managing credit risk through joint ventures with insurance companies, the debtor will pay the insurance costs that allow the Bank or Financial Institutions to transfer risks to third parties if the Intellectual Property value declines.

The Rise of Green Trade Policy and Its Impact on the International Market

With the increasing severity of global environmental issues, governments and international organizations are gradually recognizing the key role of green trade policies in promoting environmental sustainability. Green trade policies aim to facilitate a green transition in global trade through the formulation and implementation of environmental protection measures. These policies include carbon pricing mechanisms, green tariffs, environmental subsidies, and international coordination of environmental standards. This paper systematically analyzes the definition and development of green trade policies and explores their impact on the international market. The main content covers the reshaping of international trade flows and patterns, changes in global competitive dynamics, and the optimization and adjustment of global supply chains. The study reveals that green trade policies not only drive increased demand for eco-friendly products and technologies in the international market but also reshape global competitive dynamics and promote the greening and smart transformation of global supply chains. In the future, with the further refinement of green trade policies and strengthened international cooperation, the global economy is expected to achieve more sustainable development.

Agricultural trade liberalization, governance quality, and technical efficiency in the agricultural sector of Southeast Asia

International trade has been regarded as an essential factor in enhancing a country's productivity and efficiency. Nevertheless, developing countries squander money and resources as a result of their deficient institutional quality, impeding their ability to profit from specialization and trade. Therefore, this study intends to investigate the impact of agricultural trade liberalization and governance quality on technical efficiency in Southeast Asia's agricultural sector using balanced panel data spanning from 2002 to 2021. The research utilizes translog stochastic frontier analysis (SFA) with a single-stage maximum likelihood estimation (MLE) to simultaneously calculate the time-varying technical efficiency scores and explore the core factors influencing agricultural inefficiency. The findings reveal that the average output-oriented technical efficiency for ASEAN-8 countries was 94 %. This suggests that there is significant potential to enhance technical efficiency in agricultural production by up to 6 % by addressing the adverse impacts of technical inefficiency. The research findings further point out that Malaysia is the most technically efficient country, having a technical efficiency score of 99.82 %, followed by Vietnam (99.75 %), Thailand (99.70 %), Lao PDR (98.90 %), Myanmar (95.42 %), Indonesia (91.64 %), the Philippines (90.65 %), and Cambodia (76.11 %). The results of disaggregated agricultural trade liberalization demonstrate a significant reduction in agricultural inefficiency in Southeast Asia through agricultural exports and imports. The findings also emphasize that improvements in the rule of law positively contribute to agricultural efficiency, whereas enhancements in terms of voice and accountability and regulatory quality appear to reduce it. Based on these findings, the government should consider enlarging open and liberalized trade policies in order to facilitate the exchange of technology and knowledge within the agriculture sector. Additionally, the government should involve farmers, agricultural cooperatives, local communities, and other relevant stakeholders in the decision-making process to ensure that policies address the specific needs and constraints faced by the sector.

A constitutional perspective on EU arms controls: mediating trade, security, and humanitarian responsibility

Abstract This article examines how European Union (EU) arms control measures are tailored to its constitutional foundations. EU Member States subject shipments of arms and components to controls so as to screen them for risks and potentially block them. In this context different Member States may make different geopolitical and humanitarian risk assessments. Existing EU measures have achieved only limited security screening harmonisation, and have left room for Member States to shirk their obligations under international humanitarian law. But in case of joint arms production, which the EU subsidises to become more autonomous, one Member State’s arms controls may block another State’s exports and thereby jeopardise cooperation. This article posits that any reform of EU arms controls should start by re-evaluating their present legal basis. A constitutional competence analysis shows that controls on arms shipments to non-EU states should be regulated in part through the Common Commercial Policy (CCP), and not just through the Common Foreign and Security Policy (CFSP). This would be consistent with other EU regulatory regimes for trade security. While a joint CFSP-CCP approach cannot fully prevent conflict, since this would require further foreign policy harmonisation, it could help foster security convergence and strengthen humanitarian due diligence mechanisms.

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.

Trade Policy Space, Aid for Trade and, Intra-African and External African Manufactured Exports

Boosting intra-African manufactured exports is a critical objective of African leaders. The present analysis examines whether trade policy space and Aid for Trade (AfT) flows can contribute to achieving this objective. The analysis covers an unbalanced sample of 36 African countries over the period from 2004 to 2020, and uses estimators that allow obtaining the short-term (i.e., within-country effect) and long-term (i.e., between-country effect) effects of each regressor. The estimators are the combination of the feasible generalized least squares estimator on the one hand, and the Seemingly Unrelated Regression on the other hand, in the context of a hybrid model. The findings indicate that both trade policy space and AfT flows can help promote - including in a complementary way - African manufactured exports, especially intra-African manufactured exports. In this regard, trade policy space and AfT flows are instrumental in meeting African leaders’ objectives of promoting intra-African trade. The implications of the findings are discussed.

Re-Imagining Trade Policy and Energy Efficiency: Groundbreaking Pathways to Strengthen Environmental Sustainability in South Korea

Re-Imagining Trade Policy and Energy Efficiency: Groundbreaking Pathways to Strengthen Environmental Sustainability in South Korea

Job destruction or job creation?: Evidence from carbon emission trading policies

Based on the panel data of 285 cities in China from 2007 to 2019, this paper constructs a theoretical framework to analyze the employment effect of carbon emission trading policy, and quantitatively evaluates the effectiveness, decomposition effect and influence mechanism of carbon emission trading policy on employment based on PSM-DID method. The study shows that the carbon emissions trading policy has a positive impact on the level of urban employment while producing significant environmental governance effects, and that its positive impact on employment in the pilot cities stems from the negative effect of reducing employment destruction rather than from the positive effect of increasing the job-creating effect. Carbon emissions trading policy promotes employment in the pilot cities through structural transformation effects, specifically through the three paths of green technology innovation, energy structure optimization and industrial structure upgrading. At the same time, the impact of the policy on employment varies significantly across cities of different locations, sizes and resource endowments. The study proposes that the construction of the national carbon market should be accelerated, a market-oriented green technology innovation system should be constructed, the optimization of the energy structure and the upgrading of the industrial structure should be promoted, and training in employment skills should be strengthened. The theoretical analysis of this study provides a theoretical basis for the micro-mechanism of carbon emissions trading policy, and the empirical results provide practical reference for the change of employment structure and the high-quality development of employment.

A Measurement of Aggregate Trade Restrictions and Their Economic Effects

Abstract This study develops a new Measure of Aggregate Trade Restrictions (MATR) using data from the IMF's Annual Report on Exchange Arrangements and Exchange Restrictions. MATR is a measure of direct and indirect official government policy related to the international flow of goods and services. MATR is simple, plausible, quantitative, easily updated, based on relevant measures of trade policy and other international restrictions affecting trade (e.g., payment restrictions), and covers an unbalanced sample of up to 157 countries from 1949 to 2019. MATR is strongly correlated with, and—importantly—more comprehensive, in terms of country and time coverage, than existing measures of de jure openness; it is also granular. As such, MATR empowers empirical analysis to increase coverage in research related to trade restrictions and other trade-related openness policies. MATR is used in the study to show that direct and indirect restrictions to trade are associated with significant contractions in output.

Exploring the Nexus between Greenhouse Emissions, Environmental Degradation and Green Energy in Europe: A Critique of the Environmental Kuznets Curve

This study examines the intricate relationship between economic growth and European environmental degradation via the Environmental Kuznets Curve (EKC). Our results contest the traditional inverted U-shape model of the Environmental Kuznets Curve, indicating that the theory may not be consistently applicable across European countries. Utilizing CS-ARDL and MMQR modelling, we reveal substantial regional disparities. Western European nations demonstrate a typical Environmental Kuznets Curve (EKC) pattern in the short term, characterized by an initial increase in emissions alongside GDP development, followed by a subsequent fall. Conversely, Eastern and Balkan nations exhibit a U-shaped connection, described by an early decline in emissions followed by a subsequent increase as their development levels increase. The influence of renewable energy differs, as it decreases emissions in the short term in Western Europe. However, its long-term impacts are variable, especially when contrasted with its more pronounced effect on emissions in Eastern and Balkan countries. Furthermore, trade openness intensifies environmental degradation in the short-term across all regions, although its long-term impact diminishes, particularly concerning greenhouse gases (GHG). The relationship between renewable energy and trade openness is substantial for the short-term reduction of carbon dioxide emissions, but this effect declines with time. The results indicate that a uniform environmental policy throughout Europe may lack efficacy. Customized strategies to expedite the transition in Western Europe and more specific interventions in Eastern Europe are essential to harmonize economic progress with environmental sustainability. Future research should examine the determinants of the diminishing long-term effects of renewable energy and the interplay between trade and environmental policies.

EU food price inflation amid global market turbulences during the COVID‐19 pandemic and the Russia–Ukraine War

AbstractSince the COVID‐19 pandemic and the Russia–Ukraine War, global food markets have been in turmoil. Agricultural input and energy prices doubled between 2020 and 2022, with immediate consequences on food accessibility. We examine the drivers of the EU food inflation patterns, and how trade integration shapes these dynamics. We find that food price inflation has been mainly driven by surges in agricultural production costs and, to a lesser extent, by global food price increases. Trade openness has not exacerbated the inflating dynamics during this period. We conclude with reflections on inflationary, production, and trade policies.

How Does China’s Carbon Emissions Trading Policy Affect the Financing of High-Carbon Enterprises?

Evaluating the impact of carbon emissions trading (CET) policy on the operations and development of high-carbon enterprises is of great practical importance in a context where policy-makers aim to balance steady growth and reduce carbon emissions. Based on the panel data of A-share listed enterprises, this paper comprehensively employs the difference-in-differences (DID) and the difference-in-differences based propensity score matching (PSM-DID) methods to investigate the impact of China’s CET policy on the financing constraints and financing ability of high-carbon enterprises. The results indicate that: first, the level of financing constraints of high-carbon enterprises in China has significantly increased with the implementation of the CET policy from 2012 to 2019. Second, the impact shows significant heterogeneity in various industries, carbon markets, and the characteristics of enterprises. Third, the CET policy reduces the long-term debt financing ability of high-carbon enterprises by 22.26 percent during the sample period, but it has no significant impact on short-term debt financing ability. JEL Classification: C33, D92, G32, Q43, Q58

An Empirical Analysis of Sectoral Export Demand Elasticities and Trade Policies: The Case of India

An Empirical Analysis of Sectoral Export Demand Elasticities and Trade Policies: The Case of India