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Author: Renfeng Xiao Publisher: ISBN: Category : Languages : en Pages :
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: Renfeng Xiao Publisher: ISBN: Category : Languages : en Pages :
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: Jagdish N. Bhagwati Publisher: A E I Press ISBN: 9780844739694 Category : Business & Economics Languages : en Pages : 168
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: 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: Takatoshi Ito Publisher: University of Chicago Press ISBN: 0226379000 Category : Business & Economics Languages : en Pages : 431
Book Description
The practice of trading across international borders has undergone a series of changes with great consequences for the world trading community, the result of new trade agreements, a number of financial crises, the emergence of the World Trade Organization, and countless other less obvious developments. In International Trade in East Asia, a group of esteemed contributors provides a summary of empirical factors of international trade specifically as they pertain to East Asian countries such as China, Japan, Korea, and Taiwan. Comprised of twelve fascinating studies, International Trade in East Asia highlights many of the trading practices between countries within the region as well as outside of it. The contributors bring into focus some of the region's endemic and external barriers to international trade and discuss strategies for improving productivity and fostering trade relationships. Studies on some of the factors that drive exports, the influence of research and development, the effects of foreign investment, and the ramifications of different types of protectionism will particularly resonate with the financial and economic communities who are trying to keep pace with this dramatically altered landscape.
Author: Renfeng Xiao
Author: Renfeng Xiao
Author: Denis E. Medvedev
Author: Sarah Stölting
Author: Jagdish N. Bhagwati
Author: Nathaniel P. S. Cook
Author: Christopher Paul Blaha
Author: 
Author: 
Author: Jung Hur
Author: Takatoshi Ito