From Here to Free Trade PDF Download

Author: Ernest H. Preeg
Publisher: University of Chicago Press
ISBN: 9780226679624
Category : Business & Economics
Languages : en
Pages : 174

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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: Renfeng Xiao
Publisher:
ISBN:
Category :
Languages : en
Pages :

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Book Description
There have been considerable discussions about why countries have interests in forming preferential trade agreements (PTAs), which typically take the forms of a "free trade area" (FTA) with Rules of Origin (ROO) and a "customs union" (CU) (World Bank, 2005). This dissertation contains three essays with three different models of trade under oligopoly to analyze various issues on preferential trade agreements. The first essay examines welfare implications of forming preferential trade arrangement (PTAs) between two asymmetric countries that differ in their market sizes. Key findings are as follows. First, when market size asymmetry between two countries is not too large and ROO requirements are not too restrictive, the formation of an FTA with effective ROO can be welfare-improving to both members. Second, the formation of a PTA is more likely to emerge between countries of similar in their market sizes, ceteris paribus. Third, compared to the pre-PTA equilibrium, there are greater reductions in external tariffs under an FTA than under a CU such that a non-member country is relatively better off under the FTA. The second essay presents a three country model of trade under Bertrand price competition to analyze differences in welfare implications between an FTA with ROO and a customs union (CU). It is shown that the maximum limit of ROO requirements over which there are welfare gains from trade for FTA members depends crucially on the degree of substitutability of final goods (or the intensity of product market competition). It is also found that member countries and their final-good exporters are better off in a CU than in an FTA. There are greater reductions in external tariffs under an FTA than under a CU such that a non-member country is relatively better off under the FTA. The third essay presents a three country model of FTA with Cournot quantity competition and derives the maximum enforceable level of ROO over which there are welfare gains from trade to each member country. It is shown that ROO and external tariffs are strategic complements such that the higher is the regional input restrictions, the higher is the external tariff necessary to induce firms to fully comply with ROO requirements. It is also shown that an FTA with effective ROO has a positive effect on the final-good trade. But the trade-diverting effect does not occur in the final-good sector.

Author:
Publisher:
ISBN:
Category : Investments
Languages : en
Pages : 114

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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: Eric W. Bond
Publisher: World Scientific Publishing Company
ISBN: 9789813141841
Category : Business & Economics
Languages : en
Pages : 350

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Book Description
This book contains the main contributions of Eric Bond in the areas of international trade policy, trade agreements, and economic growth. The central focus of this volume is the author's pioneering work on the role of differences in market power across countries in explaining incentives to join preferential trade agreements and the form of trade agreements. Other topics include the interactions of physical and human capital accumulation in determining trade patterns and growth rates and the impact of non-tariff measures on international trade and investment. The volume also gives insights into the role of firm heterogeneity in domestic and international trade.

Author: Arvind Panagariya
Publisher: World Scientific
ISBN: 9789810238421
Category : Business & Economics
Languages : en
Pages : 248

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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: Aaditya Mattoo
Publisher: World Bank Publications
ISBN: 1464815542
Category : Political Science
Languages : en
Pages : 768

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Book Description
Deep trade agreements (DTAs) cover not just trade but additional policy areas, such as international flows of investment and labor and the protection of intellectual property rights and the environment. Their goal is integration beyond trade or deep integration. These agreements matter for economic development. Their rules influence how countries (and hence, the people and firms that live and operate within them) transact, invest, work, and ultimately, develop. Trade and investment regimes determine the extent of economic integration, competition rules affect economic efficiency, intellectual property rights matter for innovation, and environmental and labor rules contribute to environmental and social outcomes. This Handbook provides the tools and data needed to analyze these new dimensions of integration and to assess the content and consequences of DTAs. The Handbook and the accompanying database are the result of collaboration between experts in different policy areas from academia and other international organizations, including the International Trade Centre (ITC), Organisation for Economic Co-operation and Development (OECD), United Nations Conference on Trade and Development (UNCTAD), and World Trade Organization (WTO).

Author: Shen Qu
Publisher:
ISBN:
Category : Economics
Languages : en
Pages : 264

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Book Description
The third chapter of this dissertation builds the firm selection channel in Melitz (2003) into the "protection for sale" model and yields novel predictions on the relationship between a sector's degree of firm heterogeneity and level of trade protection. We assume heterogeneous firms lobby the government for protection in the unilateral setting (as well as liberalization in the cooperative setting). A lower domestic tariff imposed on a sector will raise prices of the imported varieties and drive out relatively weaker foreign exporting firms, but will allow some less productive (and thus smaller) domestic ones to survive. In each sector, lobbying activities are (endogenously) dominated by larger firms that face the trade-off between driving out weaker foreign competitors (with a higher tariff) and weeding out less efficient domestic competitors (with a lower tariff). We are able to derive explicit formulas for the protection structures across different sectors, in both the unilateral and the cooperative setting. In particular, we link the "curvatures" of the productivity distributions of both domestic and foreign firms in a sector to the sector's endogenous tariff level. We find that how a sector's domestic firm heterogeneity impacts its protection level depends on whether the political economy consideration is dominant, and that how a sector's foreign firm heterogeneity affects its protection level hinges on whether the home government sets tariffs unilaterally or cooperatively.

Author: Margarita M. Kalamova
Publisher: Peter Lang Gmbh, Internationaler Verlag Der Wissenschaften
ISBN: 9783631621394
Category : Business & Economics
Languages : en
Pages : 131

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Book Description
The essays of this book are contributions to the empirical Literature in International Trade and Public Economics. They deal with the relationship between the structure and quality of the public sector and the process of economic integration. Two of the essays add to the empirical determinants of trade and foreign direct investment (FDI) and to the numerous applications of the theory of government decentralization. Decentralization tends to discourage inward FDI and domestic trade and to increase imports and exports. A third essay focuses on the effect of governments' intangible assets - such as consumer perceptions about countries and products from these countries - on FDI. A country's nation brand is shown to have a significant and large positive effect on investment flows.

Author: Jagdish N. Bhagwati
Publisher: A E I Press
ISBN: 9780844739694
Category : Business & Economics
Languages : en
Pages : 168

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Book Description
"Essays in this volume were presented originally at a conference organized jointly by the American Enterprise Institute, Washington, D.C., and the Center for International Economics at the University of Maryland at College Park on June 12-13, 1996"--Pref. Includes bibliographical references and index.

Author: Zijun Luo
Publisher:
ISBN:
Category :
Languages : en
Pages :

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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.