Do Preferential Trade Agreements Promote Growth? An Evaluation of the Caribbean Basin Economic Recovery Act

The few empirical studies which examine the effects of preferential trade liberalization on growth find no direct relationship between membership in a PTA and growth across countries. This is somewhat surprising, given the large literature which argues that trade liberalization is likely to encourage more rapid growth. However, sensitivity analysis has shown that this link between freer trade and growth may be indirect, as freer trade strongly increases investment, and higher investment strongly increases growth. This paper tests for both direct and indirect effects of preferential trade liberalization on growth and investment, by examining the impact of the Caribbean Basin Economic Recovery Act--a non-reciprocal PTA implemented by the U.S. in 1984 to encourage growth and development in Caribbean and Central American countries. A two-equation simultaneous system is estimated, using pooled data on twelve beneficiary countries, from 1970-1998. Results suggest that CBERA did not result in any "trade-induced investment-led growth." It may have had a direct impact on growth in the region, but the effect was small, and significant only when combined with trade and foreign exchange reforms on the part of the beneficiary countries themselves. However, preferential trade liberalization through the production-sharing program, and unilateral and regional trade reforms in beneficiary countries and in the US did lead to investment-led growth, and to higher growth directly, in the CBERA countries.International Development, International Relations/Trade,

Trade and the environment : a survey of the literature

The recent revitalization of concern for environmental quality has generated many questions about the interaction between trade and the environment. Most of these questions have to do with the impact of environmental regulation on trade patterns and gains from trade. If a tradeoff is perceived, it is often argued that some intervention becomes appropriate: either a specific trade policy or the establishment of an international environmental standard. Present GATT policy then becomes an issue of debate. Should GATT revise its rules to accommodate the specific trade measures suggested? How can GATT ensure that the environmental objective is not a disguise for a trade barrier? Should GATT establish some international environmental standard with procedures to ensure compliance? The importance given to trade liberalization and exchange rate policy reform as part of adjustment for development has raised another set of questions: Is there a direct link between the removal of trade barriers and environmental degradation? If so, how should liberalization strategies incorporate this cost? Should trade policy be used to meet environmental objectives? The author surveys the literature on the main questions being debated in both of these areas. Among her conclusions: (1) More stringent regulations in one country are thought to result in reduced competitiveness and perhaps industrial flight and the development of pollution havens. The many empirical studies that have tried to test these hypotheses have shown no evidence to support them. (2) Countervailing duties or an international environmental standard have no place here. Both concepts ignore the reallocation of resources that must occur if externalities are to be efficiently incorporated into costs. They also ignore the fact that standards should be based on local calculations of marginal costs and benefits. Only if an exporter's standards are below what is locally optimal would a countervailing duty be justified. (3) Subsidies are likely to be trade barriers in disguise and should generally not be accommodated. They are not usually an efficient means of achieving an environmental objective and may hinder the efficient allocation of resources away from pollution-intensive industries. (4) Imposing a tariff when pollution spills over national boundaries can be no more than a second-best policy. If the tariff is based on damage to the victim country alone, it will not reduce trade in the polluting product enough; if it maximizes the welfare of the victim, it may reduce trade in the product too much. (5) There seems to be a case for establishing some international code of product standards, to prevent the use of such standards as nontariff barriers.Environmental Economics&Policies,Economic Theory&Research,Water and Industry,TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT,Health Monitoring&Evaluation

Are foreign investors attracted to weak environmental regulations? Evaluating the evidence from China

One of the most contentious debates today is whether pollution-intensive industries from rich countries relocate to poor countries with weaker environmental standards, turning them into pollution havens. Empirical studies to date show little evidence to support the pollution haven hypothesis, but suffer potentially from omitted variable bias, specification, and measurement errors. The authors estimate the strength of pollution-haven behavior by examining the location choices of equity joint venture (EJV) projects in China. They derive a location choice model from a theoretical framework that incorporates the firm's production and abatement decision, agglomeration, and factor abundance. The authors estimate conditional logit and nested logit models using new data sets containing information on a sample of EJV projects, effective environmental levies on water pollution, and estimates of Chinese pollution-intensity for 3-digit ISIC (International Standard Industrial Classification) industries. Results from 2,886 manufacturing joint venture projects from 1993-96 show that EJVs from all source countries go into provinces with high concentrations of foreign investment, relatively abundant stocks of skilled workers, concentrations of potential local suppliers, special incentives, and less state ownership. Environmental stringency does affect location choice, but not as expected. Low environmental levies are a significant attraction only for joint ventures in highly-polluting industries with partners from Hong Kong, Macao, and Taiwan (China). In contrast, joint ventures with partners from OECD sources are not attracted by low environmental levies, regardless of the pollution intensity of the industry. The authors discuss the likely role of technological differences in explaining these results.Environmental Economics&Policies,Economic Theory&Research,Water and Industry,Decentralization,Public Health Promotion,Environmental Economics&Policies,Water and Industry,Economic Theory&Research,Health Monitoring&Evaluation,ICT Policy and Strategies

Trade Growth, Production Fragmentation, and China's Environment

Trade growth for a relatively poor country is thought to shift the composition of industrial output towards dirtier products, aggravating environmental damage. China's rapidly growing trade and serious environmental degradation appear to be no exception. However, much of China's trade growth is attributable to the international fragmentation of production. This kind of trade could be cleaner, if fragmented production occurs in cleaner goods, or if China specializes in cleaner stages of production within these goods. Using Chinese official environmental data on air and water pollution, and official trade data, we present evidence that (1) China's industrial output has become cleaner over time, (2) China's exports have shifted toward relatively cleaner, highly fragmented sectors, and (3) the pollution intensity of Chinese exports has fallen dramatically between 1995 and 2004. We then explore the role of fragmentation and FDI in this trend toward cleaner trade. Beginning with a standard model of the pollution intensity of trade, we develop a model that explicitly introduces production fragmentation into the export sector. We then estimate this model using pooled data on four pollutants over ten years. Econometric results support the view that increased FDI and production fragmentation have contributed positively to the decline in the pollution intensity of China's trade, as has accession to the WTO and lower tariff rates.

Decomposing PRC - Japan - US trade: Vertical specialization, ownership, and organizational form

We used the United States (US) International Trade Commission's uniquely detailed 1995-2007 PRC customs data to better understand the pattern of trade between the People's Republic of China (PRC) and its two largest trading partners, Japan and the US. Our review finds that only a small share of these flows can be characterized as arm's length, one-way trade in final goods. Instead, we found extensive two-way trade, deep vertical specialization, concentration of trade in computer and communication devices, and a prominent role for foreign-invested enterprises. While these characteristics define both bilateral relationships, important differences between the two pairs do emerge, suggesting that trade costs influence the method by which multinational firms choose to integrate their production with the PRC. Consequently, we argue that dialogue on East Asian trade liberalization should include the possibility of significant production gains for the US from its inclusion in any regional agreements

Are Foreign Investors Attracted to Weak Environmental Regulations? Evaluating the Evidence from China

One of the most contentious debates today is whether pollution-intensive industries from rich countries relocate to poor countries with weaker environmental standards, turning them into pollution havens. Empirical studies to date show little evidence to support the pollution haven hypothesis, but suffer potentially from omitted variable bias, specification, and measurement errors. Dean, Lovely, and Wang estimate the strength of pollution-haven behavior by examining the location choices of equity joint venture (EJV) projects in China. They derive a location choice model from a theoretical framework that incorporates the firm\u27s production and abatement decision, agglomeration, and factor abundance. The authors estimate conditional logit and nested logit models using new data sets containing information on a sample of EJV projects, effective environmental levies on water pollution, and estimates of Chinese pollution-intensity for 3-digit ISIC (International Standard Industrial Classification) industries. Results from 2,886 manufacturing joint venture projects from 1993-96 show that EJVs from all source countries go into provinces with high concentrations of foreign investment, relatively abundant stocks of skilled workers, concentrations of potential local suppliers, special incentives, and less state ownership. Environmental stringency does affect location choice, but not as expected. Low environmental levies are a significant attraction only for joint ventures in highly-polluting industries with partners from Hong Kong, Macao, and Taiwan (China). In contrast, joint ventures with partners from OECD sources are not attracted by low environmental levies, regardless of the pollution intensity of the industry. The authors discuss the likely role of technological differences in explaining these results. This paper - a product of the Infrastructure and Environment Team, Development Research Group - is part of a larger effort in the group to understand the impact of environmental policies in developing countries

A low-temperature phase of bis(tetrabutylammonium) octa-l3-chloridohexachlorido- octahedro-hexatungstate

The article discusses the low-temperature phase of bis(tetrabutylammonium) octa-µ3-chlorido-hexachlorido-octahedro-hexa-tungstate, which undergoes a reversible phase transition at 268 K. The unit cells of the room- and low-temperature polymorphs of this compound are found to be closely related. The hydrocarbon chain of one of the tetrabutylammonium cations is found to be disordered at both 150 and 200 K

The Democratic Biopolitics of PrEP

PrEP (Pre-Exposure Prophylaxis) is a relatively new drug-based HIV prevention technique and an important means to lower the HIV risk of gay men who are especially vulnerable to HIV. From the perspective of biopolitics, PrEP inscribes itself in a larger trend of medicalization and the rise of pharmapower. This article reconstructs and evaluates contemporary literature on biopolitical theory as it applies to PrEP, by bringing it in a dialogue with a mapping of the political debate on PrEP. As PrEP changes sexual norms and subjectification, for example condom use and its meaning for gay subjectivity, it is highly contested. The article shows that the debate on PrEP can be best described with the concepts ‘sexual-somatic ethics’ and ‘democratic biopolitics’, which I develop based on the biopolitical approach of Nikolas Rose and Paul Rabinow. In contrast, interpretations of PrEP which are following governmentality studies or Italian Theory amount to either farfetched or trivial positions on PrEP, when seen in light of the political debate. Furthermore, the article is a contribution to the scholarship on gay subjectivity, highlighting how homophobia and homonormativity haunts gay sex even in liberal environments, and how PrEP can serve as an entry point for the destigmatization of gay sexuality and transformation of gay subjectivity. ‘Biopolitical democratization’ entails making explicit how medical technology and health care relates to sexual subjectification and ethics, to strengthen the voice of (potential) PrEP users in health politics, and to renegotiate the profit and power of Big Pharma