Border Carbon Adjustments and the Potential for Protectionism

Balancing legitimate fears that carbon leakage could undermine the impact of any global climate change agreement are countervailing fears that leakage will be the excuse for protectionism in the guise of “Border Carbon Adjustments”. This would have dangers for the world trading system, risking disputes due to ambiguities in the details of WTO rules over what types of border measures are potentially and actually admissible. Even with good quality data, there is considerable potential for judgemental discretion, and hence opportunistic manipulation, in estimating the carbon charges to levy on an imported product. This is even with agreement on whether to use importer or exporter coefficients. A clear distinction needs to be made between environmental and competitiveness motives for border adjustments. The key argument is that the traditional symmetry between origin based taxes (production) and other charges and those based on the destination (consumption) principle breaks down in the case of carbon charges. This paper explores the potential for regional agreements to ensure origin as the basis for carbon levies in the aftermath of the Copenhagen Accord, while recognising the challenges that this poses for the mutual recognition of emissions regimes in particular.Competitiveness, carbon leakage, cap-and-trade (C&T), trade policy, WTO and regionalism.

Emerging trends in WTO dispute settlement : back to the GATT?

As the number of cases in the World Trade Organization (WTO) dispute settlement system has increased, there has been a greater effort by the academic community to analyze the data for emerging trends. Holmes Rollo, and Young seek to develop this literature using data up to the end of 2002 to ask whether recent trends confirm previously identified patterns and to examine whether there are divergences from the overall pattern according to the type of dispute. They focus on three questions in particular: What explains which countries are most involved in complaints under the dispute settlement understanding? Is there a discernible pattern to which countries win? Is there a difference to these patterns depending on the type of measure at the heart of the complaint? The authors find that: A country's trade share is a pretty robust indicator of its likelihood to be either a complainant or a respondent. The frequently remarked absence of the least developed countries from the dispute settlement system can be explained by their low volume of trade. There is not much, if any, evidence of a bias against developing countries either as complainants or respondents. Regulatory issues are fading as reasons for disputes and trade defense disputes are the rising issue. Complainants overwhelmingly win (88 percent of cases). There is no strong evidence that the rate of completion of cases is biased against newly industrializing countries or traditional less developed countries.Payment Systems&Infrastructure,Judicial System Reform,Environmental Economics&Policies,Economic Theory&Research,Information Technology,Judicial System Reform,Economic Theory&Research,Information Technology,TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT,Trade and Services

Blueprint for UK to leave EU shows just how hard it would be

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The UK trade landscape after Brexit

The UK will need to negotiate more than 100 new trade agreements if it leaves the EU customs union. • Negotiations with the WTO and the EU are the most pressing. If the UK does not manage to reset its place in the WTO before leaving the EU, this could lead to legal and diplomatic complexities and possible trade conflicts. • Trade partners in regional and bilateral agreements may want to change the terms of their existing agreements; and the UK may wish to include services trade – which is of increasing importance to its commercial performance – in these arrangements. • To reduce the negotiation load, the UK could opt for temporary ‘peace clauses’ to maintain existing terms of trade during negotiations. • In view of the narrow base of domestic expertise in conducting trade negotiations, the UK will need to recruit and train a large body of new specialist staff; these negotiators will have to consult with domestic vested interests as well as negotiate with the European Commission and external governments. • If the UK is to expose its markets to greater competition, it also needs to be ready to help potentially disadvantaged groups at home to adjust. • To ease negotiations with third countries, joining existing (or intended) mega-regional agreements could be advantageous; however, doing so may also result in loss of sovereignty. • The most immediate challenges the UK faces arise from its reduced negotiating power as a sole actor, the initial lack of personnel and training in trade negotiation, time pressure, and concerns that the EU will seek to play hardball in order to discourage other member states from leaving the union

Negotiating the UK's post-Brexit trade arrangements

This paper considers the agenda for UK trade negotiations over the post-Brexit period. There are several groups of countries that will need to be dealt with and we consider the priorities among them. Negotiations with the WTO and the EU are the most important and the most pressing in time, and should be pursued simultaneously. On the former, the UK must try quickly to establish its independent WTO status, which will be greatly facilitated by minimising the changes it proposes to its tariffs schedules. On the EU the UK needs to consider the choices between remaining in the customs union, creating an FTA with the EU and maintaining the ‘regulatory union’ that is the European Economic Area (EEA). Only when relations with the EU and WTO are clear will it be feasible to negotiate trade deals of various sorts with other countries, ranging from those with which we already have deals via the EU to those that currently trade with us on ‘WTO rules’. All of this takes time and we argue that it may be worth pursuing transitional arrangements to extend certain current trading arrangements a few years beyond Brexit in order to make time for serious negotiations

Qualified market access: an economic, empirical and legal analysis

In the aftermath of the debate on trade and “collective preferences” launched by Pascal Lamy in 2004, this paper considers a proposal for non-product related production process measures developed within the European Parliament, which involved surcharges on the imports of products produced in ways which do not satisfy the EU’s rules mainly but not exclusively for agricultural commodities and in particular on animal welfare. The proposal called “Qualified Market Access” would also have made the revenues from surcharges available to exporting countries to finance compliance. This paper discusses the philosophy behind this specific proposal to qualify market access and address consumer preferences and competitiveness concerns, as identified in a number of other actual and proposed measures, including the ban on seal fur imports into the EU and the ensuing challenge to this measure in the WTO Dispute Settlement Body. The paper contends that it cannot be ruled out that such a measure would be welfare improving if consumers have strong preferences regarding what other people consume, in which case labelling alone will not work and the case for such a proposal cannot be excluded a priori, even from a legal perspective. However, in reviewing the evidence, the paper concludes that there is no empirical evidence to support such a proposal

The World Trade Organisation: a safety net for a post-brexit UK trade policy?

By electing to leave the European Union, the United Kingdom has chosen, among many other things, to leave the customs union and the single market that includes all member states and reassert its status as an individual member of the World Trade Organisation (WTO). In doing so it will take sole responsibility for the control and governance of its external trade policy with all other WTO members (including the EU) within the framework of WTO rules. This Briefing Paper aims to explore the nature of those WTO commitments and how they might impact the UK from the yet-to-be-set date of the UK’s exit from the EU (B(rexit)day)

Potential effects of the proposed transatlantic trade and investment partnership on selected developing countries

On 13 February 2013, the President of the United States, the President of the European Commission and the President of the European Council jointly announced that the EU and the US had agreed to launch negotiations on a Transatlantic Trade and Investment Partnership (TTIP). According to the final report of the High Level Working Group on Jobs and Growth (HLWG), the TTIP will aim at the: - elimination or reduction of conventional barriers to trade in goods, such as tariffs and tariff-rate quotas - elimination, reduction, or prevention of barriers to trade in goods, services, and investment - enhanced compatibility of regulations and standards elimination, reduction, or prevention of unnecessary “behind the border” NTBs to trade in all categories - enhanced cooperation for the development of rules and principles on global issues of common concern and also for the achievement of shared global economic goals This paper evaluates some of the potential effects of EU-US TTIP economic integration on the trade in goods of 43 low-income countries (LIC). It first assesses the impact of removing the most-favoured nation (MFN) tariffs that apply to trade between the EU and the US. It then examines the impact of regulatory integration on sanitary and phytosanitary (SPS) measures and technical barriers to trade (TBT) on LIC