The contribution of trade policy to the openness of the Dutch economy

The last four decades, Dutch exports and imports grew annually about 7.5%, while re-exports rocketed in the last two decades. Using a gravity approach this paper finds that the increase in trade is largely caused by income developments. Trade policy, consisting of reductions in import tariffs and other trade barriers and the creation of the EU internal market, also has a significant impact on trade growth, although much smaller. Without any liberalisation of trade policy since 1970 the ratio of trade (excluding re-exports) to GDP would have been about 8%- points lower. By estimating the trade enhancing-effect of trade policy on GDP we conclude that trade policy has contributed 6% to 8% to the growth of national income in Netherlands since the 1970s. Foreign Direct Investments (FDI) experienced a massive but erratic growth, mostly in the last two decades. Income developments could explain half of that growth; deregulations of national capital markets explain only a small part of FDI growth.

International Trade Education: Do We Need a New Model for the Global Market?

Professionals in the field of international trade policy tend to receive their knowledge on-the-job, often with a considerable component of mentoring. While this was a reasonable knowledge transfer mechanism in a period when interest in trade policy was confined to narrow constituencies and a limited range of trade policies, it may no long be appropriate in the era of globalization. In recent years both those with an interest in trade policy and the range of issues that come under the purview of trade policy have increased substantially, yet there is little formal education provided on trade policy. As a result, there is a shortage of trained professionals in the field of trade policy. While the shortage is widespread in developed countries, it is endemic in developing countries - leading to a major training effort by the World Trade Organization, regional trade organizations and through bilateral aid. These efforts are stopgap measures and solving the problem will require the incorporation of trade policy in academic curricula. The reasons for trade policy training retaining its traditional form are explored and suggestions regarding alternatives provided.developing countries, education, trade policy, International Relations/Trade,

The evolution of European Union Preferential Trade Agreements

Changes which have taken place in recent years in the foreign trade policy of the European Union are quite important and in particular include its attitude towards preferential trade agreements (PTAs). Although the EU’s trade policy history shows that PTAs have been used in the past, only in recent years has their importance increased. The Union is now linked to about 50 different trade liberalizing agreements. With the change of motives for undertaking bilateral negotiations, the spatial extent has also changed. Preferential trade agreements have become one of the primary means of creating the modern foreign trade policy of the European Union

The Rural Economy Research Centre

End of project report ENARPRIThe economic impact of trade policy reform receives less attention than the impact of trade policy on the environment. In part this may be due to the secondary importance attributed to environmental issues when economic consequences take centre stage. However, another consideration may be the difficulties of bringing together models which examine the economic impact of trade policy reform and models which can provide measures of environmental indicators. This study combines a partial equilibrium economic commodity model with a model for the estimation of agricultural input usage and GHG emissions. The paper examines one aspect of the relationship between trade policy and the environment, namely that between agricultural trade policy reform and indicators relating to emissions of Greenhouse Gases (GHG) from agriculture. The paper examines the impact of agricultural production levels and production practices on the level of GHG emissions from agriculture in Ireland under a Baseline of the recent reform of EU agricultural policy and an alternate scenario where trade policy reforms resulting from a future World Trade Organisation Doha Development Round agreement to reveal the extent to which there are significant environmental impacts which should be considered in addition to the conventional economic considerations.FAPRI-Ireland Partnershi

Trade Adjustment Assistance (TAA) and Its Role in U.S. Trade Policy

[Excerpt] When Congress passed the Reciprocal Trade Agreements Act (RTAA) of 1934, it reflected an important transition in “national trade policy” away from “protectionism” toward greater “trade liberalization.” This shift continues to be the dominant, but hardly uncontested, trade policy of the United States. The substantial national gains from trade have long been recognized, yet trade liberalizing legislation often faces strong political opposition because related costs, although much smaller, affect a vocal and concentrated constituency. Congress first addressed this inherent tension with legislation that allowed for the reimposition of tariffs and other trade barriers when domestic industries were threatened or hurt by imports. In 1962, however, Congress adopted an additional approach by providing trade adjustment assistance (TAA) directly to trade-affected firms and workers. It remains a controversial pillar of U.S. trade policy today. This report discusses the role of TAA in U.S. trade policy, from its inception as a legislative option in the early 1950s, to its core role as an alternative to import relief that many argue has served to promote the long-term U.S. trade liberalization agenda. It will also consider the extent to which TAA has been linked to both renewal of trade agreements authority, and passage of trade agreement implementing legislation. TAA has become an integral part of an increasingly complex U.S. trade policy. Understanding the origins of TAA, the historical congressional debate, and legislative options considered by Congress over the past 50 years may help inform the current discussion of TAA reauthorization

Trade Policy, Trade Costs, and Developing Country Trade

This paper briefly reviews new indices of trade restrictiveness and trade facilitation that have been developed at the World Bank. The paper also compares the trade impact of different types of trade restrictions applied at the border with the effects of domestic policies that affect trade costs. Based on a gravity regression framework, the analysis suggests that tariffs and non-tariff measures continue to be a significant source of trade restrictiveness for low-income countries despite preferential access programs. This is because the value of trade preferences is quite limited: a new measure of the relative preference margin developed in the paper reveals that this is very low for most country-pairs. Most countries with very good (duty-free) access to a market generally have competitors that have the same degree of access. The empirical analysis suggests that measures to improve logistics performance and facilitate trade are likely to have the greatest positive effects in expanding developing country trade, increasing the trade impacts of lowering remaining border barriers by a factor of two or more.Tariffs; nontariff measures; trade facilitation; logistics; economic development; Doha Round

Increasing the Openness of the Trade Policy Process: Challenges and Implications

Trade policy – once a subset of foreign policy far removed from domestic concern, focused squarely on border issues and subject to the rules of international diplomacy – is now a central concern on the public policy agenda as trade issues have become increasingly entwined with traditionally domestic policy issues. Consequently, demands have been made for more openness in trade policy formation and, in response, many governments have undertaken openness initiatives. Despite these developments there has been only a little research into the increased openness of trade policy processes in general and no research aimed at developing a consistent framework for categorizing various openness initiatives and permitting a meaningful comparison of initiatives between trading partners. In this paper, the general issue of increasing the openness of trade policy is examined, an openness framework is proposed and the implications for trade policy are assessed.openness, openness framework, trade policy, transparency, International Relations/Trade,

Trade Adjustment Assistance (TAA) and Its Role in U.S. Trade Policy

[Excerpt] When Congress passed the Reciprocal Trade Agreements Act (RTAA) of 1934, it reflected an important transition in national trade policy away from “protectionism” toward greater “trade liberalization.” This shift continues to be the dominant, but hardly uncontested, trade policy of the United States. The substantial national gains from trade have long been recognized, yet trade liberalizing legislation often faces strong political opposition because related costs, although much smaller, affect a vocal and concentrated constituency. Congress first addressed this inherent tension with legislation that allowed higher tariffs and other trade barriers to be reimposed when domestic industries were threatened or hurt by imports. In 1962, however, Congress adopted an additional approach by providing trade adjustment assistance (TAA) directly to trade-affected firms and workers. It remains a much-debated, but enduring pillar of U.S. trade policy today. This report discusses the role of TAA in U.S. trade policy, from its inception as a legislative option in the early 1950s, to its core role as a cornerstone of modern trade policy that many argue has served to promote the long-term U.S. trade liberalization agenda. It will also consider the extent to which TAA has been linked to both renewal of trade agreements authority1 and trade agreement implementing legislation. This includes action taken on TAA in the 112th Congress as part of a grand trade bargain that included passage of implementing bills for free trade agreements (FTAs) with Colombia, Panama, and South Korea. Understanding the origins of TAA, the historical economic and congressional debate, and legislative options considered by Congress over the past 50 years may help inform the recurring discussion on TAA reauthorization

The post-Lisbon role of the European Parliament in the EU's Common Commercial Policy: Implications for bilateral trade negotiations. EU Diplomacy Paper 05/2012, July 2012

This paper sets out to conduct an empirical analysis of the post-Lisbon role of the European Parliament (EP) in the EU’s Common Commercial Policy through an examination of the ‘deep and comprehensive’ bilateral Free Trade Agreements (FTAs) currently negotiated as part of the EU’s Global Europe strategy. The EU-Korea and EU-India FTAs are used as case studies in order to determine the implications of the EP’s enhanced trade powers on the processes, actors and outcomes of EU bilateral trade policy. The EP is now endowed with the ‘hard power’ of consent in the ratification phase of FTAs, acting as a threat to strengthen its ‘soft power’ to influence negotiations. The EP is developing strategies to influence the mandate and now plays an important role in the implementation of FTAs. The entry of this new player on the Brussels trade policy field has brought about a shift in the institutional balance of power and opened up the EP as a new point of access for trade policy lobbyists. Finally, increased EP involvement in EU trade policy has brought about a politicisation of EU trade policy and greater normative outcomes of FTAs

Comparative Trade Policy

Current research has found ambiguous results with respect to the effects of the type of electoral regime on trade policy. The present paper proposes a solution to this indeterminacy. It is shown that the equilibrium level of trade protection can be relatively higher, as well as lower, under a majoritarian electoral rule compared to proportional representation. The equilibrium outcome is shown to depend on the number of voters in swing districts who own a factor specific to the exporting industry in relation to those who possess claims to the specific input employed by the import-competing sector. It is further argued that political rents are lower (higher) under majoritarian elections if there are more factor owners in the swing districts with stakes in the exporting (import-competing) industry.Endogenous Tariff Formation; Trade Policy; Electoral Rules