Resource-based industries and development of the AANZFTA

Often sensitive industries such as those dependent on agricultural resources are left out of FTAs. On the other hand, FTAs can bring in specific non-WTO aspects like competition policy to facilitate trade. In this paper, the development of the AANZFTA is analysed within a framework characterising "good" FTAs, and in terms what it may deliver with respect to resource-based industries. Past FTAs involving partner countries, changes over time, interviews with and submissions from relevant parties are analysed. The analysis suggests that the AANZFTA will be a more difficult agreement to develop to fruition than have bilateral agreements between the parties.Free Trade Agreements, sensitive sectors, rules of origin, International Relations/Trade, Resource /Energy Economics and Policy,

Poultry sector support and protection, structural change and disease risk

Poultry sectors’ domestic support and trade protection, or assistance, influences the way they develop, in particular their structure, trade, investments, and aspects of disease risk. Nominal Rates of Assistance (NRAs) measuring adjusted gaps between international and domestic prices were used in analysis of relationships between these factors. Structural data took the form of average chickens per holding as well as the predominant FAO Sector (I Industrial - IV Traditional). General “bird flu” incidence was obtained from an official website. Assistance constrains efficient trade, encourages smuggling/informal trade, diminishing the incentives for good management, leading to greater disease risk. It also constrains efficient investment, leading to greater disease risk through weaker SPS, research and other relevant institutions. Assistance can also constrain structural change, hindering development of efficient industrial production systems, or maintaining larger traditional sectors, resulting in greater disease risks. The research illustrates that “true” (unassisted) exporters tended to have low NRAs and “true” importers high NRAs. Negligible trading countries mainly had low NRAs apart from those with strong self-sufficiency policies. Structurally, all countries experienced concentration with relative growth in industrial sector holdings. The NRA and structure scatter plot illustrated that the “true” exporters and “true” importers fell into two groups of mixed structures; low (high) NRAs, more (lower) market incentives and lower (higher) HPAI incidences. HPAI experiences also appeared to be regionally based. A clear conclusion is that assistance does not determine structure – some countries had strong enough political economy objectives to be willing to pay the high cost of over-riding open market forces on their structures. However, assistance did determine whether structures were distorted and not economically efficient. Technically efficient developed structures in conjunction with (export) market incentives driving economic efficiency and encouraging better risk management, appear to positively impact on HPAI risk. High assistance levels hinder open markets’ role in the demise of inefficient, poorly managed productions systems, whether they be traditional or not, and creates greater disease risk

Australian-Indonesian Live Cattle Trade-What Future?

Australian live cattle exports were a growing $1 billion trade from northern Australia to Indonesia for finishing and slaughter for Indonesian consumers. This all changed in recent years with the trade being disrupted by a series of constraints which have shrunk the trade and raised uncertainty. Will it ever get back on trend or continue to shrink and disappear? Greater integration between Australia�s live cattle trade and Indonesia�s cattle feeding and processing industries through investment and technological transfer offers the potential of not only better meeting Indonesia�s beef security but also strong processed meat opportunities in rich neighbours to the benefit of both countries. A continuation of the recent volatile and uncertain trade will be detrimental to both countries, with Indonesia losing a food-secure, reliable livestock supply to which value was added, and Australia a significant industry for one more dependent on costlier markets

THE CHANGING CLIMATE FOR FOREIGN DIRECT INVESTMENT INTO JAPAN

Japans prolonged recession over the last five years has provided the impetus for regulatory reform and industry restructuring. Historically, the flow of Foreign Direct Investment (FDI) into Japan has been small for an economy of its size. The high degree of vertical integration and relatively closed business networks that characterised the corporate system made it hard for newcomers to gain access, while the tradition of lifetime employment limited the ability of foreign firms to recruit quality staff. Dramatic declines in the price of Japanese equities and land since the collapse of the bubble economy of the early nineties has been accompanied by a sharp increase in foreign participation in the Japanese economy. Traditional business relationships are opening up, regulations are being dismantled or revised and increased foreign involvement is now accepted as inevitable, even through mergers and acquisitions (M&A). Potentially profitable openings created by restructuring and reform is likely to see the trend towards greater foreign investment in Japan maintained over the next decade, especially in non-manufacturing.FDI, Japan, Vertical Integration

Book reviews

Teaching/Communication/Extension/Profession,

The changing climate for foreign direct investment into Japan

Japan’s prolonged recession over the last five years has provided the impetus for regulatory reform and industry restructuring. Historically, the flow of Foreign Direct Investment (FDI) into Japan has been small for an economy of its size. The high degree of vertical integration and relatively closed business networks that characterised the corporate system made it hard for newcomers to gain access, while the tradition of lifetime employment limited the ability of foreign firms to recruit quality staff. Dramatic declines in the price of Japanese equities and land since the collapse of the bubble economy of the early nineties has been accompanied by a sharp increase in foreign participation in the Japanese economy. Traditional business relationships are opening up, regulations are being dismantled or revised and increased foreign involvement is now accepted as inevitable, even through mergers and acquisitions (M&A). Potentially profitable openings created by restructuring and reform is likely to see the trend towards greater foreign investment in Japan maintained over the next decade, especially in non-manufacturing

A comparison of Indonesian and Vietnamese approaches to agriculture in the ASEAN-China FTA

Both Indonesia and Vietnam, as members of ASEAN, have negotiated a free trade agreement with China (ACFTA). ASEAN Member States can independently negotiate their tariff reductions. Both countries are generally aware of the opportunities access to the large Chinese market may present, but both are concerned to differing degrees about being flooded with Chinese imports, including agricultural products. As the time for implementation approaches, Indonesia has expressed a desire to renegotiate its tariff reduction schedules to protect sensitive sectors, including agriculture. By contrast, Vietnam, just over the border from China and with a history of informal trade, seems more accepting of the prospects. A global general equilibrium model, GTAP, is used to compare the potential impacts of the ASEAN-China Free Trade Agreement on the Indonesian and Vietnamese agricultural sectors. Tariff line data are aggregated to eight primary and four processed agricultural sectors. This enables the differential impact of separate sensitive sectors for Indonesia and Vietnam to be identified. The simulated results following full implementation indicate both countries would improve their trade and welfare if the agreement is implemented as negotiated and tariff cuts are effective, although the extent of exemptions for sensitive products represent differing degrees of missed opportunities for each country. At the sectoral level, both countries can expect some reductions, compared with the baseline, in output of some agricultural sectors, but generally these changes are relatively small unless significant non-tariff barriers are addressed. From an economic perspective, structural adjustment should not be constrained in such circumstances.International Relations/Trade,

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Teaching/Communication/Extension/Profession,

Investigation of a dynamic economic system : the specification of Australian beef cattle supply

This thesis is concerned with investigating the practical determination of an appropriate specification for a dynamic economic system, that of Australian beef cattle supply. As such, it may be logically divided into four parts. Part 1, consists of Chapters I, II and III, which are necessary and lengthy scene-setting Chapters in various guises. Chapter I contains a general introduction to practical specification searches and an overview of the thesis. Chapter II and related Appendices develop the chosen application through all its component stages of economic specification, data considerations and econometric specification, introducing some new developments. Chapter III introduces the major quantitative aspects of the specification search for later development. Part 2, made up of Chapters IV, V and VI, concerns those quantitative components that utilise available data and contain the main technical developments of the thesis. Chapter IV considers the diagnostic testing component, especially those related to data questions both individually and jointly. Chapter V considers the model selection component, especially in relation to the comprehensive model made up of individual (non-nested) models. Chapter VI develops extensions to both the components considered that are relevant to the chosen application. Part 3, comprises Chapters VII and VIII, and contains applications of the earlier developments. Chapter VII specifically applies some of the extended techniques that were developed to an empirical example suited to their illustration. Chapter VIII applies the procedures in general to the chosen application that was developed earlier. Part 4, consists of Chapter IX which contains a summary incorporating an overall strategy for specifications searches and brief concluding comments