407 research outputs found

    Reassessing the safeguards mess

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    The WTO Agreement on Safeguards was hailed as an important achievement of the Uruguay round, rightly so, given that it managed to outlaw the use of voluntary export restraints. Intended to facilitate the use of transparent, temporary, and non-discriminatory instruments to assist domestic industries injured by import competition, World Trade Organization (WTO) jurisprudence undermined the realization of this objective. Worse, erratic case law created negative externalities, ranging from greater recourse to more discriminatory trade practices and use by the United States (US) of the types of managed trade that the Agreement of Safeguards was meant to abolish. As in the classic bootlegger-Baptist metaphor in the literature on regulation, the unintended consequence of WTO jurisprudence on safeguards has been more rather than less selective protection (discriminatory trade policies). As, if not more important, it made it more difficult for WTO members to use an instrument intended to assist governments in sustaining political support for an open trade regime. In this paper, we describe the source of discomfort and suggest ways to address it in a meaningful manner

    Global value chains and the design of trade agreements

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    We explore the role of global value chains (GVCs) in the design of preferential trade agreements (PTAs). We propose a theory that focuses on firms involved in backward and forward GVC activities to identify the main actors pushing for deep trade integration. To address the critical issue of endogeneity of trade flows for trade policy, our identification strategy exploits a transportation shock: The sharp increase in the maximum size of container ships, which more than quadrupled between 1995 and 2017. The key variation in our instrument hinges on the fact that only deepwater ports can accommodate these new larger ships. Our strategy is flexible enough to generate excludable instruments for different value-added components of exports, which allows us to disaggregate the causal effect of GVC participation into backward and forward GVC activities. We find that trade through GVCs increases the probability of forming deep PTAs that include provisions regulating both trade-related and non-trade-related policies. We find also evidence that GVC activities affect the flexibility of PTAs. Our results indicate that trade intermediation by producers is the main driver of the design of trade agreements

    Non-economic objectives, globalisation and multilateral trade cooperation

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    Global trade and investment are increasingly affected by unilateral policies motivated by both economic and noneconomic objectives such as safeguarding national and economic security, combatting climate change, and promoting social values. Many of the associated interventions target the global value chains that have been a driver of globalisation. Taken together, the rise in unilateralism increases policy uncertainty and associated risk premia, distorts trade and investment decisions, and adversely affects prospects for developing countries to attain sustainable development goals. This new study summarises extant multilateral disciplines on use of trade policies motivated by noneconomic objectives, documents the rising use of such measures and presents pragmatic suggestions to sustain multilateral trade cooperation in a world characterised by rising geopolitical and geo-economic rivalry and existential threats.-- 1. National security and other non‑economic objectives -- 2. Economic and non-economic objectives -- 3. The increasing use of trade policy for non-economic objectives -- 4. International disciplines on the use of trade for non-economic objectives -- 5. National security practice in the GATT period (1948-94) -- 6. National security in the post-1995 WTO era -- 7. Potential WTO reforms -- 8. Clubs -- 9. Conclusion -- Annexe

    Development goals, commercial interest and EU aid-for-trade

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    The extent to which official development assistance (ODA) conforms to internationally agreed goals and principles of aid effectiveness may be influenced by donors’ national interests. Disentangling the extent to which national ODA is motivated by development goals vs. commercial self-interest is difficult. European Union (EU) member states provide external aid through EU-level institutions and independently through national aid programs. Theory suggests pooled EU-level aid facilitates satisfying development effectiveness principles while bilateral ODA is more likely to reflect national interests. We investigate this hypothesis for a subset of ODA, aid for trade (AfT), provided by donors to recipient countries between 2002-2018. We find a strong, statistically significant positive relationship between AfT provided by EU donors and their exports to recipient countries. In contrast, AfT provided by EU institutions and non-European states enhances merchandise imports from recipient countries

    Foreign direct investment and structural transformation in Africa

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    This paper analyzes the relationship between inward FDI and structural transformation of local labour markets in Africa. We combine geolocalized information on the distribution of FDI with a novel database that provides information from 40,665,627 individuals in 2,570 subnational units over the period 1987-2019. Results are suggestive of a positive effect of FDI on structural transformation. FDI contributes to an increase in employment, and shifts of workers towards modern industries and higher-skilled occupations. No effects are found on self-employment. Results are heterogeneous, reflecting the characteristics of the foreign investor and of the business activity undertaken by foreign firms in the local market. Geospatial analysis of changes in performance of domestic firms exposed to nearby FDI projects provides evidence of horizontal spillovers and inter-industry linkages, suggesting a complementary mechanism through which FDI drives structural change

    Trade effects of non-economic provisions in trade agreements

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    We assess the relationship between non-trade provisions (NTPs) pertaining to labor standards and the environment in preferential trade agreements (PTAs) and bilateral exports of environment and labor-intensive products between PTA partners, controlling for aid-for-trade, development assistance for labor and environment-related projects, and the enforceability of NTPs. NTPs are associated with greater exports of environment- and labor-intensive goods from high-income PTA members, while there is a negative relationship between NTPs and labor-intensive exports from developing countries. Bilateral exports of donors granting aid for trade are strongly associated with a higher propensity of recipients to participate in deep PTAs. Results are consistent with arguments that NTPs may increase trade costs for developing countries and that NTPs in part reflect commercial interests of high-income countries

    Comment on 'Can the World Trade Organization act as a bulwark against deglobalization?'

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    Published online: 2 October 2023This article was published Open Access with the support from the EUI Library through the CRUI - Wiley Transformative Agreement (2020-2023

    Development goals, commercial interest and EU aid-for-trade

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    Published online: 22 September 2023The extent to which official development assistance (ODA) conforms to internationally agreed goals and principles of aid effectiveness may be influenced by donors’ national interests. Disentangling the extent to which national ODA is motivated by development goals vs. commercial self-interest is difficult. European Union (EU) member states provide external aid through EU-level institutions and independently through national aid programs. Theory suggests pooled EU-level aid facilitates satisfying development effectiveness principles while bilateral ODA is more likely to reflect national interests. We investigate this hypothesis for a subset of ODA, aid for trade (AfT), provided by donors to recipient countries between 2002 and 2018. We find a strong, statistically significant positive relationship between AfT provided by EU donors and their exports to recipient countries. In contrast, AfT provided by EU institutions and non-European states enhances merchandise imports from recipient countries

    Noneconomic Objectives, Global Value Chains and International Cooperation

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    Systemic conflicts increasingly affect the global value chains (GVCs) underpinning globalization by creating policy uncertainty and politicizing trade and investment decisions. Unilateral policies to attain competitiveness and noneconomic objectives (NEOs), including national security, create incentives for international cooperation to attenuate policy spillovers. Recent initiatives seeking to do so are organized around supply chain governance and need not be anchored in trade agreements. Whether such cooperation is feasible and can be designed to be effective in realizing NEOs is unclear. Plurilateral GVC-centered cooperation offers a potential path for states to pursue NEOs and reduce policy uncertainty for international business. Research offers little guidance to policymakers on the design of such cooperation. Akey open question is to determine whether explicit market access commitments are necessary to sustain cooperation. Creating mechanisms for the epistemic communities that are concerned with a specific NEO or policy area to interact with stakeholders and lead firms operating international production networks can help inform the design of cooperation to attain NEOs more efficiently

    Digital trade, data protection and EU adequacy decisions

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    Using a structural gravity model, we assess whether EU adequacy decisions on data protection are associated with bilateral digital trade. Controlling for digital-relevant bilateral covariates, including preferential trade agreements and other binding data flow arrangements, we find that countries that received EU adequacy exhibit an increase in digital trade between 6-14 percent, representing a trade cost reduction up to 9 percent. This is mostly driven by the EU granting adequacy to the U.S., reflecting the dominance of the EU and U.S. in global digital trade. We also find that countries that have an EU adequacy determination exhibit greater digital trade among each other, suggestive of a network or club effect. Complementary country-specific analysis of post-adequacy digital trade performance using synthetic control methods confirms the positive effects of adequacy.This work was partially supported by the ESRC Centre of Inclusive Trade Policy, UK (Hoekman
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