The Trade and Welfare Impact of Australian Quarantine Policies: The Case of Pigmeat

Abstract: We analyze the trade and welfare impact of quarantine measures imposed by Australiaon imports of pigmeat. In particular, we account for changes to Australia’s pigmeat quarantinepolicy over time including those changes related to the recent resolution of a WTO disputebetween Australia and the European Union. Using a random utility model, and applying it tocorner solutions in import decisions, tariff equivalents (by major trading partner) are estimatedfor the different pigmeat quarantine regimes implemented by Australia during the period 1988-2009. The welfare impact on consumers, producers, and foreign exporters is computed using apartial equilibrium model calibrated on the econometric estimates. The quarantine regimes havea strong effect on trade and welfare with a tariff equivalent above 113% of average real worldprices over the period analyzed.pigmeat; pork; australia; non-tariff measure; NTM; quarantine; import ban; trade

Modelling Regional Trade Agreements

In the last twenty years, regional trade agreements have proliferated. These have usually taken the form of customs unions (CUs) or free trade areas (FTAs). This thesis concentrates mostly on the formation and behaviour of CUs. Union members levy a common external tariff (CET) on non-members. Existing theoretical models, however, do not agree on how the CET rate is chosen. Every model imposes a different choice rule exogenously. In this thesis, for the first time, plausible choice rules, based on the CU's social welfare function, are derived endogenously. The strategic behaviour of members and non-members, reveals that responsibility for CET choice tends to be assumed by the member that can induce the rest of the world to levy those tariffs members prefer to face. Relatively few general results exist describing the relationship between country characteristics and trade bloc formation. Here, new light is shed on this issue, by systematically analysing bloc formation in an asymmetric world, and investigating the role of preferences in coalition formation. It is found that global free trade is most likely to arise when all countries are similar. Customs unions tend to form between relatively well-endowed countries or those with similar preferences. It is also demonstrated that CUs will usually Pareto dominate FTAs, except where preferences differ significantly. The role of transfers in CU formation has received relatively little attention in the regionalism literature. In this thesis, optimal intra-union transfers are introduced and their impact on CET choice is investigated. The impact of transfers on CU behaviour depends on the direction of the transfer. When the relatively inelastic member is the recipient, the CU responds less aggressively to non-member tariff choices than it does when transfers are not permitted. However, if the relatively elastic member is the transfer recipient, the union's aggression increases. Moreover, when one union member exercises a similar degree of control over both CET and transfer choice, then the equilibrium CET tends to be lower than in the corresponding no-transfers situation

Camouflaged Trade Agreements

We raise the possibility that at least some of the free trade areas observed in practice are customs unions in disguise. We distinguish between generalized and standard customs unions. While members of the former can choose different external tariff rates, members of the latter levy a common external tariff. The chief insight is that, in practice, it is typically not possible to differentiate between a generalized customs union and a free trade area. We demonstrate that generalized customs unions will be established and offer an ex­planation for the design of Article XXIV of the General Agreement on Tariffs and Trade

How Does Uncertainty Affect the Choice of Trade Agreements?

This paper analyzes how uncertainty and the timing of its resolution influence the formation and design of regional trade agreements. Two sources of uncertainty — in demand and costs — are considered. We compare the case in which uncertainty is resolved “early” (before tariffs are chosen), with the case in which uncertainty is resolved “late” (after tariffs are chosen). These cases are, in turn, compared with the benchmark case of no uncertainty. We demonstrate that, as long as some decisions are made after uncertainty is resolved, trade agreements have option values. These option values differ across agreements, reflecting members’ different degrees of (trade policy) freedom to respond to changes in the trading environment. Moreover, these option values may be sufficiently large as to lead prospective members to opt for a more flexible trading arrangement (such as a free trade area) over a less flexible agreement (such as a customs union). Indeed, countries may even prefer to stand alone than join a free trade area under some circumstances. Finally, we show that the timing of the resolution of uncertainty can significantly impact the type of trade agreement that countries wish to form

Camouflaged Trade Agreements

We raise the possibility that at least some of the free trade areas observed in practice are customs unions in disguise. We distinguish between generalized and standard customs unions. While members of the former can choose different external tariff rates, members of the latter levy a common external tariff. The chief insight is that, in practice, it is typically not possible to differentiate between a generalized customs union and a free trade area. We demonstrate that generalized customs unions will be established and offer an ex­planation for the design of Article XXIV of the General Agreement on Tariffs and Trade

Preferential Trade Agreements as Insurance

We investigate preferential trade agreement (PTA) formation when risk-averse countries face demand uncertainty and hence, have an insurance motive for pursuing trade integration. In this environment, when deciding which type of PTA - if any - they wish to form, countries seek to maximise their net welfare; that is, their expected utility minus a risk premium. The desire for insurance influences not just whether a particular PTA forms, but also the preferred depth of integration. We analyze the insurance implications of free trade agreements (FTAs), customs unions (CUs), and countries choosing to stand alone. We further distinguish between shallow CUs and deep CUs; in the former, members maximise the sum of their individual net welfare, while in the latter, they maximise the net value of the sum of their individual expected welfare. We show that differences in country risk attitudes, the levels of risk they face, and the degree to which these risks are correlated with each other (each and together) influence the formation and design of TAs. When countries' demands are uncorrelated, they form a deep CU if their levels of risk aversion are sufficiently different. If, however, their risk attitudes are similar, countries opt for shallower trade integration - either a shallow CU or a FTA - if they face low levels of uncertainty, and choose to stand alone if one country faces a sufficiently high level of uncertainty. When countries' demands are correlated, they tend to form a deep CU if their demands are strongly negatively correlated, a FTA if their demands are strongly positively correlated and a shallow CU when their demands are weakly correlated. Intuitively, differences in their degree of risk aversion act as an additional source of comparative advantage. Deeper integration- particularly via a CU - permits less risk-averse members to essentially export their relative partiality for risk to more risk-averse partners, thereby effectively providing the latter with insurance

Flexibility in Trade Bloc Design

A key characteristic of any trade bloc is its “flexibility” – the extent to which it can be modified or augmented by existing members. This paper investigates how prospective trade bloc members value the flexibility of proposed trade agreements in a changing trading environment. We demonstrate that country characteristics as well as the nature of the trade shock influence a nation’s desire for trade bloc flexibility. Our model of endogenous coalition formation yields predictions that are consistent with three stylized facts which characterize regionalism: (i) overlapping trade agreements, (ii) the popularity of free trade areas relative to customs unions and (iii) renegotiation or disbandment of existing trade agreements is rare. Finally, for the first time in the literature, we provide clear predictions about the identity of “hub” and “spoke” trade bloc members when overlapping free trade areas arise in equilibrium

Order out of Randomness : Self-Organization Processes in Astrophysics

Self-organization is a property of dissipative nonlinear processes that are governed by an internal driver and a positive feedback mechanism, which creates regular geometric and/or temporal patterns and decreases the entropy, in contrast to random processes. Here we investigate for the first time a comprehensive number of 16 self-organization processes that operate in planetary physics, solar physics, stellar physics, galactic physics, and cosmology. Self-organizing systems create spontaneous {\sl order out of chaos}, during the evolution from an initially disordered system to an ordered stationary system, via quasi-periodic limit-cycle dynamics, harmonic mechanical resonances, or gyromagnetic resonances. The internal driver can be gravity, rotation, thermal pressure, or acceleration of nonthermal particles, while the positive feedback mechanism is often an instability, such as the magneto-rotational instability, the Rayleigh-B\'enard convection instability, turbulence, vortex attraction, magnetic reconnection, plasma condensation, or loss-cone instability. Physical models of astrophysical self-organization processes involve hydrodynamic, MHD, and N-body formulations of Lotka-Volterra equation systems.Comment: 61 pages, 38 Figure

The Large Observatory for x-ray timing

The Large Observatory For x-ray Timing (LOFT) was studied within ESA M3 Cosmic Vision framework and participated in the final down-selection for a launch slot in 2022-2024. Thanks to the unprecedented combination of effective area and spectral resolution of its main instrument, LOFT will study the behaviour of matter under extreme conditions, such as the strong gravitational field in the innermost regions of accretion flows close to black holes and neutron stars, and the supra-nuclear densities in the interior of neutron stars. The science payload is based on a Large Area Detector (LAD, 10 m2 effective area, 2-30 keV, 240 eV spectral resolution, 1° collimated field of view) and a WideField Monitor (WFM, 2-50 keV, 4 steradian field of view, 1 arcmin source location accuracy, 300 eV spectral resolution). The WFM is equipped with an on-board system for bright events (e.g. GRB) localization. The trigger time and position of these events are broadcast to the ground within 30 s from discovery. In this paper we present the status of the mission at the end of its Phase A study