Multilateral Trade Liberalisation and FDI: An Analytical Framework for the Implications for Trading Blocs

The proliferation of regional integration agreements (RIAs) over the past several years has led to significant changes in the global configuration of trade and investment activity. Multinational enterprises now face the prospect of multilateral trade liberalisation that could significantly affect the foreign direct investment (FDI) incentive structures that were established within the range of current RIAs. RIAs that provide preferential market access to member countries modify firms’ incentives to undertake FDI activities and can lead to various permutations of trade and investment creation and diversion. This article provides an analytical framework for understanding the implications of multilateral trade liberalisation for the incentive structures of firms to conduct FDI and discusses how multilateral liberalisation could undo many of the FDI activities that were initiated in response to previous RIAs.foreign direct investment, incentives, multilateral trade liberalisation, regional integration agreements, Demand and Price Analysis, Financial Economics, International Relations/Trade, Political Economy,

The effects of the TRIPS Agreement on international protection of intellectual property rights

Draft version ‐ final version forthcoming in International Trade JournalInternational Relations/Trade,

Best Management Practices to Enhance Water Quality: Who is Adopting Them?

This study investigates the determinants affecting producers’ adoption of some Best Management Practices (BMPs). Priors about the signs of certain variables are explicitly accounted for by testing for inequality restrictions through importance sampling. Education, gender, age, and on-farm residence are found to have significant effects on the adoption of some BMPs. Farms with larger animal production are more apt to implement manure management practices, crop rotation, and riparian buffer strips. Also, farms with larger cultivated acres are more inclined to implement herbicide control practices, crop rotation, and riparian buffer strips. Belonging to an agro-environment club has a positive impact for most BMPs.adoption, Bayesian analysis, best management practices, priors, runoff, water quality, Agribusiness, Agricultural and Food Policy, Crop Production/Industries, Farm Management, Food Consumption/Nutrition/Food Safety, Land Economics/Use, Livestock Production/Industries, Q12, Q25, C11,

A Gravity approach to evaluate the significance of trade liberalization in vertically-related goods in the presence of non-tariff barriers

A gravity-based model is developed to explain bilateral trade flows in primary and processed agri-food commodities. It innovates by explicitly accounting for the vertical production linkages between primary and processed agri-food products, tariffs, and subsidies and by estimating the restrictiveness of non-tariff barriers in the upstream sector. Our application focuses on cattle/beef trade flows between forty-two countries. The structural parameters of the model are used to simulate trade flows under various scenarios of import tariffs and domestic and export subsidies reductions. The United States and Australia emerge as the exporting countries that stand to benefit the most from cuts in tariffs and subsidies as bovine meat imports in the European Union and Japan significantly increase. A bootstrap procedure is used to generate confidence intervals around predicted trade liberalization outcomes.Gravity model; cattle/beef trade

Processed Food Trade of Greece with EU and Non-EU Countries: An Empirical Analysis

This paper examines the implications of the European Union (EU) regional trade preferences for processed food trade between Greece and its EU partners, and between Greece and non-EU countries. The empirical analysis relies on the gravity model, and uses different estimation techniques. The results show that the EU regional trade preferences led to substantial increases in processed food trade between Greece and its EU partners, emphasizing trade creation effects. The magnitudes of these increases are higher than the intra-EU average, and are more pronounced for Greece’s imports than for Greece’s exports. The results also indicate that the EU regional trade preferences brought about decreases in processed food trade between Greece and non-EU countries, implying trade diversion effects. The findings in this paper suggest that the Greek food processing industry would benefit from enhanced production, innovation, and market strategies to expand exports to the EU market and to counter import competition in the domestic market

Changes in Canada’s Preferential Trade Network and the Welfare Effects in Agricultural Markets

There have been some important changes in Canada’s preferential trade network over the last few years. At the regional level, the re-negotiations over the NAFTA produced the generally-resembling USMCA. At the inter-regional level, the CETA and the CPTPP marked significant steps toward promoting Canada’s trade with distant countries. This paper overviews the corresponding regional and inter-regional trade preferences for agricultural products. It examines the welfare effects of the USMCA and more pronounced regional preferential schemes, and those of the CETA and the CPTPP for Canada in the agricultural markets. It assesses the welfare outcomes from different scenarios involving various combinations of presence and absence of regional and inter-regional trade preferences. The analysis underlines that the deepening of the North American market integration would lead to increases in national welfare. It shows that inter-regional trade preferences could exceed the USMCA/NAFTA in promoting imports in some cases, resulting in increases in Canada’s national welfare. However, inter-regional trade preferences may not entirely substitute for the losses in welfare resulting from the absence/elimination of regional trade preferences in some other cases. This paper suggests that Canada would generally benefit from higher national welfare levels across agricultural markets through a simultaneous network of regional and inter-regional trade preferences

Changes in Canada’s Preferential Trade Network and the Welfare Effects in Agricultural Markets

There have been some important changes in Canada’s preferential trade network over the last few years. At the regional level, the re-negotiations over the NAFTA produced the generally-resembling USMCA. At the inter-regional level, the CETA and the CPTPP marked significant steps toward promoting Canada’s trade with distant countries. This paper overviews the corresponding regional and inter-regional trade preferences for agricultural products. It examines the welfare effects of the USMCA and more pronounced regional preferential schemes, and those of the CETA and the CPTPP for Canada in the agricultural markets. It assesses the welfare outcomes from different scenarios involving various combinations of presence and absence of regional and inter-regional trade preferences. The analysis underlines that the deepening of the North American market integration would lead to increases in national welfare. It shows that inter-regional trade preferences could exceed the USMCA/NAFTA in promoting imports in some cases, resulting in increases in Canada’s national welfare. However, inter-regional trade preferences may not entirely substitute for the losses in welfare resulting from the absence/elimination of regional trade preferences in some other cases. This paper suggests that Canada would generally benefit from higher national welfare levels across agricultural markets through a simultaneous network of regional and inter-regional trade preferences

Domestic support and tariff reductions in the presence of non-tariff barriers: A gravity model for primary and processed agricultural products

Agricultural trade liberalization negotiations are currently at a crossroads. Progress was made to eliminate export subsidies, but small open economies’ demand for lower domestic support and tariffs on agricultural goods do not find much support among large policy active countries. Many non-tariff barriers still also impede agricultural trade. This paper presents the theoretical foundations of a gravity model to explain trade flows of both primary agricultural commodities and processed foods. At the consumer level, commodities are differentiated according to their country of origin while primary agricultural goods are homogenous from the buyers’ perspective. However, primary goods can not be substituted costlessly across destinations from the sellers’ perspective due to differences in technical and sanitary regulations between countries. These assumptions yield well-behaved import demand functions at the consumer level and export supply functions at the producer level. Imperfect substitutability at the consumption and production levels is summarized in two important structural parameters. The role of these parameters in explaining bilateral trade patterns is illustrated for a three-country world market using a numerical example. The simulation investigates whether it is more important for a small open economy that large policy active countries reduce agricultural tariffs or domestic support. It also addresses the implications of tariff escalation on trade flows

Domestic support and tariff reductions in the presence of non-tariff barriers: A gravity model for primary and processed agricultural products

Agricultural trade liberalization negotiations are currently at a crossroads. Progress was made to eliminate export subsidies, but small open economies’ demand for lower domestic support and tariffs on agricultural goods do not find much support among large policy active countries. Many non-tariff barriers still also impede agricultural trade. This paper presents the theoretical foundations of a gravity model to explain trade flows of both primary agricultural commodities and processed foods. At the consumer level, commodities are differentiated according to their country of origin while primary agricultural goods are homogenous from the buyers’ perspective. However, primary goods can not be substituted costlessly across destinations from the sellers’ perspective due to differences in technical and sanitary regulations between countries. These assumptions yield well-behaved import demand functions at the consumer level and export supply functions at the producer level. Imperfect substitutability at the consumption and production levels is summarized in two important structural parameters. The role of these parameters in explaining bilateral trade patterns is illustrated for a three-country world market using a numerical example. The simulation investigates whether it is more important for a small open economy that large policy active countries reduce agricultural tariffs or domestic support. It also addresses the implications of tariff escalation on trade flows

A Gravity approach to evaluate the significance of trade liberalization in vertically-related goods in the presence of non-tariff barriers

A gravity-based model is developed to explain bilateral trade flows in primary and processed agri-food commodities. It innovates by explicitly accounting for the vertical production linkages between primary and processed agri-food products, tariffs, and subsidies and by estimating the restrictiveness of non-tariff barriers in the upstream sector. Our application focuses on cattle/beef trade flows between forty-two countries. The structural parameters of the model are used to simulate trade flows under various scenarios of import tariffs and domestic and export subsidies reductions. The United States and Australia emerge as the exporting countries that stand to benefit the most from cuts in tariffs and subsidies as bovine meat imports in the European Union and Japan significantly increase. A bootstrap procedure is used to generate confidence intervals around predicted trade liberalization outcomes