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Author: David Robert DeRemer Publisher: ISBN: Category : Languages : en Pages :
Book Description
This chapter shows that both claims fail to hold when countries have subsidies for the marginal cost of production and subsidies for firm entry. The source of inefficiency is countries free-riding off of each other's entry subsidies. A market access rule that preserves both a trading partner's home volume and export volume can prevent opportunism in domestic policy choices. The results suggest that the rise of trade in imperfect competition was a factor in limiting the effectiveness of the 1947 GATT rules, long before other challenges for the world trading system like offshoring became predominant.
Author: David Robert DeRemer Publisher: ISBN: Category : Languages : en Pages :
Book Description
This chapter shows that both claims fail to hold when countries have subsidies for the marginal cost of production and subsidies for firm entry. The source of inefficiency is countries free-riding off of each other's entry subsidies. A market access rule that preserves both a trading partner's home volume and export volume can prevent opportunism in domestic policy choices. The results suggest that the rise of trade in imperfect competition was a factor in limiting the effectiveness of the 1947 GATT rules, long before other challenges for the world trading system like offshoring became predominant.
Author: Zijun Luo Publisher: ISBN: Category : Languages : en Pages :
Book Description
This dissertation comprises three chapters in international trade and the economics of conflict. These chapters are put together according to two dimensions. From the international relations dimension, Chapter 1 analyzes free trade, which is the most "liberal" form of international relation; Chapter 2 analyzes different types of trade agreements, which is the most common and "moderate" form of international relation; and Chapter 3 analyzes conflict, which is the most violent and "extreme" form of international relation. From the proximity dimension, free trade usually occurs between countries that are far from each other, trade agreements usually signed by countries with in a region, and conflict usually happens between two very close countries. Chapter 1 develops a novel model of international trade in which transportation costs are driven by trade imbalance of an individual country. This task is accomplished by assuming a representative transportation firm in each country that competes with its counterparts from other countries for international operation. The model of trade imbalance driven costs complements results from traditional international trade model in that it sheds light on how trade costs are affected by country size. With multiple countries and a continuum of production firms in each country under monopolistic competition, we derive an index of transportation costs to capture bilateral trade barriers for country pairs. This index is time-variant, which makes it suitable for panel data studies. Based on the index, simulation and simplified three-country free trade model show that countries with a relatively larger size incur a trade deficit while smaller size implies a trade surplus under free trade. A gravity equation is derived and estimated using Poisson Pseudo Maximum Likelihood. Estimation results support the fitness and robustness of the theoretical model of trade using the constructed transportation cost index. Further, statistical test shows that this transportation cost index is a better approximation of bilateral trade cost than distance. A growing number of recent regional trade agreements (RTAs) have introduced provisions concerning cross-border investments. Likewise, a substantial number of RTAs have been preceded by agreements regarding cross-border investments. In Chapter 2, we develop a partial equilibrium three-country model to examine the relationship between RTAs and FDI while also allowing for double taxation. Our analysis shows that the formation of an RTA between two regional countries with wage asymmetry is welfare-improving for the low-wage country and the region, but can be welfare-deteriorating for the high-wage country. We extend our analysis to examine the role of repatriation taxes in the determination of firm location when an RTA is and is not established. Our final result suggests that the signing of an RTA would not induce the relocation of a plant from the high-wage country to the low-wage country unless a reduction of the repatriation tax rate also occurs. In Chapter 3, we attempt to resolve the "inefficiency puzzle of war" by developing a general equilibrium model of bargaining and fighting with endogenous destruction. In the analysis, we consider the scenario that two contending parties engage in bargaining to avoid fighting when there are direct costs (e.g., arms buildups) and indirect costs (e.g., destruction to consumable resources) of conflict. Taking into account different modes of "destruction technology" (in terms of weapons' destructiveness) without imposing specific functional form restrictions on conflict technology and production technology, we characterize their interactions in determining the Nash equilibrium choice between fighting and bargaining. We find that bargaining is costly as the contending parties always allocate more resources to arming for guarding their settlement through bargaining (but under the shadow of conflict) than in the event of fighting. Contrary to conventional thinking that bargaining is Pareto superior over fighting, we show conditions under which fighting dominates bargaining as the Nash equilibrium choice. The positive analysis may help explain the general causes of fighting, strikes, international conflict, and wars without incomplete information or misperceptions.
Author: Publisher: ISBN: Category : Investments Languages : en Pages : 114
Book Description
The world trading system is governed through an ever expanding web of trade agreements, which subtly but powerfully determine the terms of market competition and how rents are distributed between countries, rms and consumers. This thesis studies two such agreements: rstly, Customs Unions regional agreements with a wide coverage of goods and a common external tari and secondly the Information Technology Agreement, a plurilateral agreement to eliminate import tari s on a narrow range of goods. The Silent Success of Customs Unions, the rst chapter, joint work with Hinnerk Gnutzmann, studies theoretically the incentives of governments which may be subject to lobbying to form bilateral trade agreements, considering both exceptions to the MFN principle permitted under GATT/WTO rules: namely, the Free Trade Area, where partner countries liberalise internal tari s to zero but retain independent in their external policy, and a Customs Union, which goes beyond FTA by requiring the countries to adopt a harmonised common external tari . We show that it is always a political equilibrium to implement CU. Crucially, while CUs may be formed because of lobbying, we show that they improve the welfare of member countries as long as trade with the rest of the world remains positive. In line with these results, we show empirically that CUs are much more important to world trade in terms trade volume and membership scope than so far acknowledged in the literature. Surprisingly little is known empirically about the e ect of Customs Unions on tari policy. In my second chapter, Determining the Common External Tari in a Customs Union: Evidence from the Eurasian Customs Union, I seek to ll the void. Using a large panel data set from the Eurasian Customs Union (ECU), established from 2010 between Russia, Belarus and Kazakhstan, I demonstrate the importance of mutual protectionism: member states user their bargaining power to spill over to CU partners high tari s for those goods which were previously strongly protected nationally. There is little evidence of the reverse 3 4 CONTENTS e ect, i.e. tari s being negotiated down for lines that were previously handled liberally in national tari policy. This e ect is demonstrated using three methodologies: analysis of variance using unique explanatory power of each variable, determining Shapley value from analysis of variance and OLS regression. The chapter also develops a simple model to rationalise the e ect. Trade facilitation, the reduction of administrative and other barriers barriers, has become a key policy priority. Customs Unions may eliminate internal border controls. But how strongly can such measures bene t trade? In the ECU, the elimination of borders proceeded in two stages, which allows me to study the Trade Impact of Non Tari Trade Costs in chapter 3. I control for tari changes and other factors to show that the growth in internal trade between the ECU member countries can be attributed to reduced trade costs, rather than trade diversion due to tari increases. The natural experiment of border removal thus allows more precise estimates of trade costs than approaches that capture non tari costs merely as a residual. Finally, The Layers of the Information Technology Agreement Impact joint work with Christian Henn turns to plurilateral agreements. We show how the WTO's Information Technology Agreement (ITA) a ected trade ows and value chain participation in the IT sector. We show that this agreement did not only lead to increased imports, but by reducing the cost of intermediate goods ITA members were also able to increase their exports of nal goods. Our estimation strategy is based on the plausibly exogenous entry of late signatories to the agreement, who rati ed the ITA as part of a broader policy objective. Using product level data, we are able to take into account the various layers of ITA impact, dissecting the impact of tari reduction, tari elimination to zero, and over and above tari reductions, including through rm relocation via intermediate goods channel. We nd that having zero tari s is associated with more imports of intermediate than nal goods, and with participation in global value chains. This nding also supports the line of thought that trade policy certainty attracts investment.
Author: Publisher: Elsevier ISBN: 0444639268 Category : Business & Economics Languages : en Pages : 600
Book Description
Handbook of Commercial Policy explores three main topics that permeate the study of commercial policy. The first section presents a broad set of basic empirical facts regarding the pattern and evolution of commercial policy, with the second section investigating the crosscutting legal issues relating to the purpose and design of agreements. Final sections cover key issues of commercial policy in the modern global economy. Every chapter in the book provides coverage from the perspectives of multilateral, and where appropriate, preferential trade agreements. While most other volumes are policy-oriented, this comprehensive guide explores the ways that intellectual thinking and rigor organize research, further making frontier-level synthesis and current theoretical, and empirical, research accessible to all. Covers the research areas that are critical for understanding how the world of commercial policy has changed, especially over the last 20 years Presents the way in which research on the topic has evolved Scrutinizes the economic modeling of bargaining and legal issues Useful for examining the theory and empirics of commercial policy
Author: Publisher: Elsevier ISBN: 044463925X Category : Business & Economics Languages : en Pages : 870
Book Description
Handbook of Commercial Policy explores three main topics that permeate the study of commercial policy. The first section presents a broad set of basic empirical facts regarding the pattern and evolution of commercial policy, with the second section investigating the crosscutting legal issues relating to the purpose and design of agreements. Final sections cover key issues of commercial policy in the modern global economy. Every chapter in the book provides coverage from the perspectives of multilateral, and where appropriate, preferential trade agreements. While most other volumes are policy-oriented, this comprehensive guide explores the ways that intellectual thinking and rigor organize research, further making frontier-level synthesis and current theoretical, and empirical, research accessible to all. Covers the research areas that are critical for understanding how the world of commercial policy has changed, especially over the last 20 years Presents the way in which research on the topic has evolved Scrutinizes the economic modeling of bargaining and legal issues Useful for examining the theory and empirics of commercial policy
Author: Aaditya Mattoo Publisher: Oxford University Press ISBN: 019923521X Category : Business & Economics Languages : en Pages : 675
Book Description
This title provides a comprehensive introduction to the key issues in trade and liberalization of services. Providing a useful overview of the players involved, the barriers to trade, and case studies in a number of service industries, this is ideal for policymakers and students interested in trade.
Author: Hamid Beladi Publisher: Emerald Group Publishing ISBN: 0444531904 Category : Business & Economics Languages : en Pages : 478
Book Description
Part of the "Frontiers in Economics & Globalization" series, this book deals with a range of trade and development issues in terms of the general equilibrium structure. It shows how neo-classical models of trade theory can be used to highlight many challenging global problems.
Author: David Robert DeRemer
Author: David Robert DeRemer
Author: Zijun Luo
Author: Luca David Opromolla
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Author: 
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Author: Takeshi Yamaguchi
Author: Aaditya Mattoo
Author: Asian Development Bank. Office of Regional Economic Integration
Author: Hamid Beladi