Special Economic Zones, Global Value Chains, and the Degree of Economic Linkages in the Dominican Republic

The Dominican Republic is often considered an example of the successful implementation of Special Economic Zones (henceforth SEZs) in the Western hemisphere. The zones fueled economic growth during the 1980s and 1990s and, while they experienced a sharp decline in employment due in part to the expiry of the end of the Multi-Fiber Agreement and stronger international competition in the textile and apparel industry in 2005, signs of recovery have been observed since 2009. Surgical equipment, chemicals and plastics, and footwear have recently emerged as the new drivers of export dynamism in the zones (World Bank, 2015). The objective of this report is to inform the policy discussion around the developmental impact of SEZs in the Dominican Republic by empirically assessing i) the implications of regulatory reforms aimed at complying with WTO disciplines regarding the elimination of incentives conditioned on export performance for SEZs firms, ii) the extent to which SEZs participate in Global Value Chains, and iii) their linkages with domestic suppliers. The report is organized as follows: The second section presents the historical importance of SEZ as an engine of economic growth in the country. The third section depicts the structural shift in terms of production in SEZs and evaluates the degree of value addition taking place in the Dominican Republic. The fourth section evaluates the degree and evolution of linkages between SEZs and local firms. The fifth section shows the impact of the regulatory changes in the SEZ regimen undertaken to comply with WTO disciplines. Finally, some conclusions and policy recommendations are presented in section six

How to increase technology transfers to developing countries: a synthesis of the evidence

The existing United Nations Framework Convention on Climate Change (UNFCCC) has failed to deliver the rate of low-carbon technology transfer (TT) required to curb GHG emissions in developing countries. This failure has exposed the limitations of universalism and renewed interest in bilateral approaches to TT. Gaps are identified in the UNFCCC approach to climate change TT: missing links between international institutions and the national enabling environments that encourage private investment; a non-differentiated approach for (developing) country and technology characteristics; and a lack of clear measurements of the volume and effectiveness of TTs. Evidence from econometric literature and business experience on climate change TT is reviewed, so as to address the identified pitfalls of the UNFCCC process. Strengths and weaknesses of different methodological approaches are highlighted. International policy recommendations are offered aimed at improving the level of emission reductions achieved through TT

Non-tariff and overall protection: evidence across countries and over time

This paper analyzes the evolution of the incidence and intensity of non-tariff measures (NTMs). It extends earlier work by measuring protection from NTMs over time from a newly available database and provides evidence on the evolution of NTMs. In particular, building on Kee, Nicita and Olarreaga (2009), this paper estimates the ad valorem equivalents (AVEs) of NTMs for 97 countries at the product level over the period 1997 to 2015. We show that the incidence and the intensity of NTMs were both increasing over this period, with NTMs becoming an even more dominant source of trade protection. We are also able to investigate the evolution of overall protection derived jointly fromtariffs and NTMs. The results show that the overall protection level, for most countries and products, has not decreased despite the fall in tariffs associated with multilateral, regional and bilateral trade agreements in recent decades. We also document an increase in overall trade protection during the recent 2008 financial crisis. Overall, this study sheds light on an under-researched aspect of trade liberalization: the proliferation and increase of NTMs

Agriculture in the Trans-Pacific Partnership

The Trans-Pacific Partnership is a trade and investment agreement under negotiation by 12 countries in the Pacific Rim. This report assesses this partnership's potential impacts on the region's agriculture in 2025

Reforming Non-Tariff Measures: From Evidence to Policy Advice

High levels of trade costs persist in the world trading system, despite recent progress in tariff reduction, trade facilitation, and logistics. At least some of these costs can be attributed to non-tariff measures (NTMs), policies imposed by governments other than ordinary customs duties which have an impact on the price at which exports and imports are traded, the quantities traded, or both. Such costs are particularly worrisome if they have a discriminatory or protectionist effect, or violate countries’ international commitments. However, even NTMs designed to carry out domestic regulatory objectives - for example, protection of human, animal or plant health, consumer or workplace safety, or the environment - can have substantial effects on international trade, which should be considered when such policies are developed. This book discusses some of the analytical methods that can be used to accompany the process of policy development for NTMs. It discusses the broad economic rationale for improving the design of NTMs;, illustrates the main forms of quantification of NTMs and their effects, including inventory approaches, price-based approaches, and quantity-based approaches; proposes a new analytical and measurable concept of "regulatory distance" to help guide deep integration efforts at the regional level; provides a discussion of the effects of NTMs on household expenditures, poverty, and firm competitiveness; and shows how empirical analysis of NTMs can be used to inform policy advice. As such, it should provide a valuable addition to the arsenal of tools available for applied analysis of international trade policy

Transshipment in the United States

Data representing transshipment or re-exports are almost always excluded from analytical portrayals of international trade, yet transshipment is potentially an important phenomenon in understanding a number of economic questions, and is increasing in importance. Rapid technological change in areas such as containerization and hub-and-spoke routing has promoted the practice of transshipment. While there are significant gaps in the data, the share of re-exports in global exports has undoubtedly increased rapidly, from perhaps 1 in 20 in the mid- 1980s to perhaps 1 in 6 today. Econometric analysis of U.S. domestic exports and foreign exports (re-exports) over pairs of U.S. ports and destinations suggests that re-exports are significantly more sensitive than domestic exports to factors influencing transaction costs, including distance, containerization, price-fixing liner agreements, and port efficiency and restrictive port policies in the importing country

The Policy Case for Tackling Non-Tariff Measures

Chronicles efforts to reduce the high tariff and non-tariff barriers (NTBs) imposed by many low-income countries until the 1980s; confirms the link between trade liberalization and growth; and discusses the broad economic rationale for improving the design of non-tariff measures (NTMs). Though tariffs have been lowered progressively over the last 30 years, overall trade costs have remained high, in particular for low-income countries; NTMs often create conflicts of interest and employ increasing complexity. Regional efforts to impose NTB reduction, harmonization, and mutual recognition agendas have come from the Association of Southeast Asian Nations (ASEAN) as well as from East Africa. In an alternative approach each country views NTM streamlining as part of a broader but largely domestic regulatory improvement agenda. Cambodia has put in place an NTM committee, mandating transparency, evaluation, and improvement of procedures; Mexico’s experience stresses four key strengths of political anchor, international support, institutional setup, and engagement of national administration