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Author: Arvind Panagariya Publisher: World Scientific Publishing Company ISBN: 9813102888 Category : Business & Economics Languages : en Pages : 245
Book Description
The signing of the North American Free Trade Agreement (NAFTA) and recent expansions of the European Union have led to renewed efforts to create preferential trade areas (PTAs) around the world including Asia, Africa and Latin America. Because PTAs liberalize trade with union members but not the rest of the world, they are not necessarily a healthy development. By dividing the world into trade blocs, they also threaten to undermine the multilateral trading system.This collection of recently published essays by a leading critic of regionalism offers an assessment of the economic impact of PTAs on member countries and the world. The first set of essays present a theoretical analysis of the issues using simple economic models, and study the relationship between regionalism and multilateralism. Subsequent essays evaluate the role of PTAs in Asia, North America and Latin America. The general theme of the book is that, on balance, trade liberalization through PTAs is a mistake. Trade diversion, and the creation of complicated and discriminatory tariff regimes with increased tariffs for non-member countries — the consequences of PTAs — are likely to undermine the multilateral trading system.The book will be useful to academics as well as policy makers and policy analysts. Many of the essays have been featured in newspapers and journals such as the Financial Times, Economist, Journal of Commerce and International Herald Tribune. Some of these essays are already on many reading lists in the United States.
Author: Duc Bao Nguyen Publisher: ISBN: Category : Languages : en Pages : 0
Book Description
The subject of this dissertation focuses on the analysis of different aspects of the relationship between regional trade agreements (RTAs) and the multilateral trading system. We aim to provide a fresh understanding and views of the role of RTAs and regionalism in general as an important feature of international trade policy today. In chapter one we revisit the ex post effects of RTAs on member countries' trade and extrabloc trade by adopting an empirical approach. We explore how regional trading blocs have influenced trade among members as well as trade with nonmembers. Our analysis confirms the widespread trade-enhancing effects of RTAs on member countries' trade; however, in many cases, they lead to trade diversion effects that are detrimental to the rest of the world. Chapter two takes a closer look at how the implementation period of trade liberalization and partners' levels of development affect the RTA dynamic effects on trade over time. We obtain distinct patterns of ex post RTA effects on trade across North-North RTAs, South-South RTAs and North-South RTAs. We empirically validate that RTAs formed by trading partners experiencing similar economic development status (North-North RTAs or South-South RTAs) are likely to lead to a larger increase in members' trade during a shorter implementation period. Chapter three studies the mechanism through which RTAs impact the effect of financial development on trade flows between exporting and importing countries. In this joint work with Anne-Gaël Vaubourg, we show that the trade-enhancing role of financial development in the exporting country--especially through intermediated finance--is mitigated when there is an RTA between this country and its trading partner.
Author: Ernest H. Preeg Publisher: University of Chicago Press ISBN: 9780226679624 Category : Business & Economics Languages : en Pages : 174
Book Description
In his new book, Ernest Preeg analyzes international trade and investment in the 1990s and lays out a comprehensive U.S. trade strategy for the uncertain period ahead. He examines the influence of the World Trade Organization (WTO) and argues that economic globalization is beneficial to the U.S. economy in the short- to medium-term while raising important questions about national sovereignty and security over the longer term. Preeg believes regional free trade agreements will soon encompass the majority of world trade, but they can conflict with the WTO's multilateral objectives. The central challenge for U.S. trade strategy, then, is to integrate the now largely separate multilateral and regional tracks of the world trading system. The first essay assesses U.S. interests in economic globalization, the second examines recent steps toward free trade at the multilateral and regional levels, and the next three offer an in-depth critique of U.S. regional free trade objectives in the Americas, across the Pacific, and possibly with Europe. The final essay presents a multilateral/regional synthesis for going from here to free trade over the coming decade.
Author: Arvind Panagariya Publisher: World Scientific ISBN: 9789810238421 Category : Business & Economics Languages : en Pages : 248
Book Description
Trade diversion and the creation of complicated and discriminatory tariff regimes with increased tariffs for non-member countries - the consequences of PTAs - are likely to undermine the multilateral trading system."--Jacket.
Author: Asrat Tesfayesus Publisher: ISBN: Category : Languages : en Pages : 204
Book Description
In the advent of WWII, artificial trade barriers had reached their 20th century peaks. Drastic protectionist measures, aggravated by a worldwide economic depression, led to the significant decline in international trade which in effect further prolonged the economic crises. However, after the end of WWII, among other serious measures taken to promote international economic integration, the General Agreement on Tariffs and Trade (GATT) was put into effect. Since 1948, the GATT has been effectively used as an instrument to gradually and substantially reduce international trade barriers. These reductions were implemented after multilaterally agreed upon reciprocal concessions were negotiated and signed during the 8 different Rounds that the GATT successfully facilitated. While the primary objective of liberalizing trade is at the essence of these rounds, what negotiators negotiate about in how to share the gains from trade that ensue is less apparent. Furthermore, the GATT as an instrument has been functioning under the auspices of the World Trade Organization (WTO) since 1995. With more countries involved and more varied tradable outputs to negotiate over, the magnitude of the pareto improving gains from trade is increasingly substantial. Since its inception, the WTO has put tremendous effort and resources to continue the process of trade liberalization. However, the Doha Round, the only WTO Round, has yet to show any substantial progress after 12 years since it began in 2001. Why member states fail to reach an agreement has yet to be answered. In this dissertation, I shed some light on both questions. First, using a select number of developing countries I provide an empirical support to the terms of trade theory; which argues that negotiators negotiate and enter into trade agreement in order to escape from a terms of trade prisoner's dilemma. Negotiators agree to reciprocally internalize externalities they impose on each other in order to create a more efficient international trade environment. Secondly, I argue that in light of the participation of a larger number of asymmetrically informed member states dealing with a much greater scope of issues that have to all be settled at once, the delay in the Doha Round completion can be explained by negotiating parties engaging in a war of attrition. A negotiator who does not know its trading partners' cost of waiting and valuation of outcome is more likely to attempt to wait it out until all trading partners concede. Consequently, the group as a whole is left with an inefficient amount of delay that could potentially be alleviated by an imposition of a strict deadline by which time an agreement has to be reached. Finally, I provide some empirical evidence to show how the war of attrition story is aggravated by the sudden proliferation in the use of Regional Trade Agreements (RTA) since the early 1990s.
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: Graeme Baber Publisher: Routledge ISBN: 1351258982 Category : Law Languages : en Pages : 316
Book Description
The multilateral trade agreements in the Annexes to the Agreement Establishing the World Trade Organization provide a comprehensive structure for international trade. Why would trading partners in different countries feel the need to go outside this framework in order to set up preferential trade arrangements? This book considers the structure of the World Trade Organization’s agreements and the types of preferential trade arrangements, and deliberates the value of the latter in the light of the operation of the former. Preferential Trade Agreements and International Law offers a comprehensive examination of preferential trade agreements and considers the features of specific regional and bilateral trade agreements without drawing upon systematic features and trends. It shows the latest state of knowledge on the topic and will be of value to researchers, academics, policymakers, and students interested in international trade and economic law.
Author: Patricia Anne Mueller Publisher: ISBN: Category : Languages : en Pages : 187
Book Description
Chapter 1: I examine the welfare benefit of committing to a trade agreement when a politically-motivated government faces monopolistically competitive firms lobbying for tariff protection against imports. In my model, lobbying is costly to producers: each firm must pay a portion of the industry's upfront-lobby-formation fee as determined by a sequential bargaining game. I show that monopolistically competitive producers under-hire capital to avoid paying a larger share of lobbying costs. As a result, more varieties are produced than is socially optimal, and each firm operates at a higher-than-optimal marginal cost. Commitment to a trade agreement leads to a consolidation of firms in the market and a reduction in the tariff level. I show that a government benefits from committing to a trade agreement (i) on goods with very elastic or very inelastic demand, (ii) when the weight the government places on receiving political contributions from lobbyists is small, and (iii) when producers are strong bargainers and are able to capture the majority of the rents from protection. Chapter 2: In a model in which a small-country government faces domestic political-economy pressure and uncertainty over its terms of trade, a welfare-maximizing government benefits from having access to both rigid and flexible tariff policy options. I show that a welfare-maximizing government may prefer to join both a deep-integration regional trade agreement (helping it commit to free trade with key trading partners, thus correcting production distortions resulting from rent-seeking by politically organized sectors), and a large flexible agreement like the World Trade Organization (providing the flexibility in tariff levels and the institutional structure to pursue temporary tariff protection in response to shocks or unfair trade practices). My paper builds on the framework of Maggi and Rodriguez-Clare (1998), adding uncertainty over world prices and adding the option to join a trade agreement with the flexibility of a temporary escape clause.
Author: Thomas Zylkin Publisher: ISBN: Category : Economics Languages : en Pages : 294
Book Description
My graduate research has been organized around two main themes: (i) the causes and consequences of trade integration and (ii) the strategic nature of armed conflict. The expansion of international trade over the past sixty years has played a major role is determining the fates of nations, both for better and for worse, and likewise has the potential to shape our futures in ways we need to be able to anticipate. Similarly, the death, destruction, and diversion of productive resources associated with violent conflict continue to present a critical obstacle to shared prosperity. The papers I am presenting as the chapters of my dissertation are representative of the contributions I am interested in making in these important research areas. My research on trade integration spans both the micro-level of what forms trade integration may take as well as higher level concerns about how freer trade will affect both the world economy as well as the individual economies within it. Two chapters of my dissertation, "Beyond Tariffs: Quantifying Heterogeneity in the Effects of Free Trade Agreements" and "Finding the Influence of Communication on Trade" are devoted to this subject. In "Beyond Tariffs", for example, I show, using NAFTA as an empirical case study, that the effects of free trade agreements on individual nations may not be what we might expect to observe ex ante based on tariffs. Relying solely on tariffs to project NAFTA's effects not only greatly underestimates the overall welfare increases for all three NAFTA countries--Mexico's in particular--but also overstates the positive effects of NAFTA on U.S. producer prices. It follows that "heterogeneity" in the effects of free trade agreements, both within and across agreements, may not be well-understood. In "Finding the Influence of Communication", I investigate whether the sharing of a common language promotes trade in a way similar to trade policy and, if so, what the consequences of increased language learning will be for global trade. Most notably, I find the effect of communication in native languages on trade tends to be underestimated in the absence of controls for communication in non-native languages. Surprisingly, while I find strong evidence for the causal impact of foreign language acquisition on manufacturing trade, I do not find similarly strong evidence for services trade. I also find that, unsurprisingly, adding to the world's population of English speakers has by far the largest impact on trade of any major world language. Interestingly, however, when I remove all non-language barriers to trade, I find the forces of geography and history may have greatly impeded the relative appeal of Chinese as a competing global language. The third chapter of my dissertation, "The Problem of Peace: A Story of Corruption, Destruction, and Rebellion", joint with Constantinos Syropoulos, deals with a different kind of question: what are the economic incentives that drive the emergence of destructive conflicts, and of intra-state conflicts ("civil conflicts") in particular? Specifically, we investigate how the central presence of state (fiscal) institutions in civil conflicts generates unique explanations for the emergence of conflict itself. International trade plays an important role in this chapter as well, but mainly as a backdrop for illustrating the unique trade-offs between "peace" and "welfare" that may arise in this context. It is possible for changes in international prices to move in favor of promoting settlements, but such settlements can be associated with (socially wasteful) increases in arming and/or taxation. We also explore, among other things, how limiting the government's fiscal capacity may tilt the balance towards peaceful settlement.
Author: Arvind Panagariya
Author: Duc Bao Nguyen
Author: Ernest H. Preeg
Author: Arvind Panagariya
Author: Jung Hur
Author: Pramila Crivelli
Author: Asrat Tesfayesus
Author: Zijun Luo
Author: Graeme Baber
Author: Patricia Anne Mueller
Author: Thomas Zylkin