scholarly journals The “New” Economics of Trade Agreements: From Trade Liberalization to Regulatory Convergence?

Econometrica ◽  
2021 ◽  
Vol 89 (1) ◽  
pp. 215-249 ◽  
Author(s):  
Gene M. Grossman ◽  
Phillip McCalman ◽  
Robert W. Staiger
Keyword(s):  
Mutual Recognition ◽  
Trade Agreement ◽  
Trade Agreements ◽  
Fixed Costs ◽  
Consumption Externalities ◽  
Product Attributes ◽  
Regulatory Policies ◽  
The Difference ◽  
Consumer Tastes ◽  
Regulatory Convergence

What incentives do governments have to negotiate trade agreements that constrain their domestic regulatory policies? We study a model in which firms design products to appeal to local consumer tastes, but their fixed costs increase with the difference between versions of their product destined for different markets. In this setting, firms' profit‐maximizing choices of product attributes are globally optimal in the absence of consumption externalities, but national governments have unilateral incentives to invoke regulatory protectionism to induce firm delocation. An efficient trade agreement requires commitments not to engage in such opportunistic behavior. A rule requiring mutual recognition of standards can be used to achieve efficiency, but one that requires only national treatment falls short. When product attributes confer local consumption externalities, an efficient trade agreement must coordinate the fine details of countries' regulatory policies.

The Effect of Binding Commitments on Services Trade

2019 ◽  
Vol 19 (3) ◽  
pp. 365-378 ◽  
Author(s):  
Dan Ciuriak ◽  
Ali Dadkhah ◽  
Dmitry Lysenko
Keyword(s):  
Free Trade ◽  
Market Access ◽  
Free Trade Agreements ◽  
Trade Agreement ◽  
Trade Agreements ◽  
Trade Barriers ◽  
Trade Restrictions ◽  
Services Trade ◽  
The Difference ◽  
Trade Of Services

AbstractIt has long been established in theory that uncertainty impacts on firm behaviour. However, the empirical basis for quantifying the uncertainty-reducing effects of trade agreements has not been firmly established. In this paper, we develop estimates of the effect of reducing uncertainty regarding regulation of foreign services markets by making commitments that are bound under a trade agreement. Specifically, we identify the effect on services trade of services trade restrictions, as measured by the OECD's Services Trade Restrictiveness Index (STRI), and the separate effect of ‘water’ in binding commitments, as assessed by the difference between countries’ commitments under the General Agreement on Trade in Services (GATS) or free trade agreements (FTAs) and applied levels of market access, as captured by STRI scores. Using a gravity model, we find that services trade responds positively but inelastically to reductions in services trade barriers, as measured by the STRI and, in our preferred regression, the response to actual restrictions is more than twice – specifically 2.4 times – as strong as the response to comparable reductions in uncertainty, as measured by water. Moving from GATS commitments to FTA commitments leads to a 4.7% increase in services trade because of the reduction in uncertainty.

scholarly journals Why Do Economies Enter into Preferential Agreements on Trade in Services? Assessing the Potential for Negotiated Regulatory Convergence in Asian Services Markets

2016 ◽  
Vol 33 (1) ◽  
pp. 56-73 ◽  
Author(s):  
Pierre Sauvé ◽  
Anirudh Shingal
Keyword(s):  
World Trade Organization ◽  
World Trade ◽  
Trade Agreement ◽  
Trade Agreements ◽  
Preferential Trade Agreements ◽  
Services Trade ◽  
Regulatory Frameworks ◽  
The World ◽  
Merchandise Trade ◽  
Regulatory Convergence

More than one-third of the World Trade Organization-notified services trade agreements that were in effect between January 2008 and August 2015 involved at least one South or Southeast Asian trading partner. Drawing on Baier and Bergstrand's ( 2004 ) determinants of preferential trade agreements and using the World Bank's database on the restrictiveness of domestic services regimes (Borchert, Gootiiz, and Mattoo 2012 ), we examine the potential for negotiated regulatory convergence in Asian services markets. Our results suggest that Asian economies with high levels of preexisting bilateral merchandise trade and wide differences in services regulatory frameworks are more likely candidates for services trade agreement formation. Such results lend support to the hypothesis that the heightened “servicification” of production generates demand for the lowered services input costs resulting from negotiated market openings.

AN ANALYSIS OF THE EU’S INVESTMENT POLICY AFTER CETA: EFFECTS ON THE BULGARIAN ECONOMY

2020 ◽  
Author(s):  
Nikolay Marin ◽  
◽  
Mariya Paskaleva ◽  
Keyword(s):  
Bilateral Trade ◽  
Positive Impact ◽  
Value Added ◽  
Trade Agreement ◽  
Trade Agreements ◽  
Investment Policy ◽  
National Parliaments ◽  
Total Employment ◽  
Investment Protection ◽  
New Generation

In this paper we analyze the changes of the EU’s investment policy provoked by the mixed trade agreements. The EU’s investment policy has turned towards attaining bilateral trade agreements. One of these “new-generation” agreements is the Comprehensive Economic and Trade Agreement (CETA). It is in a process of being ratified by the national parliaments of the EU members. This study is focused on the general characteristics of CETA and the eventual problems posed by its regulatory and wide-ranging nature. We prove that the significance of this agreement pertains not only to the economic influence, that it will have on the European and Canadian economies, but CETA is also the first trade agreement to have been negotiated with a focus on investment protection and a change in the EU’s investment policy. The current study reveals the influence arising from the conclusion of CETA on the Bulgarian economy with an emphasis on electronic industry, machinery industry and manufacturing. We estimate both – the direct and indirect effects on Bulgaria’s exports, imports, value added and employment. In order to estimate the influence, we apply the multi-regional input-output model. It is proved that CETA will have a low but positive impact on the Bulgarian economy. After constructing different scenarios of development, we prove that the influence of CETA on the Bulgarian economy will amount to 0.010% GDP. The average total employment will be increased by more than 172 jobs in Bulgaria, which in turn, relative to the labor market, represents less than 0.01% of the total employment.

Bilateral Treaties and The Most-Favored-Nation Clause: The Myth of Trade Liberalization in the Nineteenth Century

2008 ◽  
Vol 60 (2) ◽  
pp. 147-188 ◽  
Author(s):  
Olivier Accominotti ◽  
Marc Flandreau
Keyword(s):  
International Trade ◽  
Trade Liberalization ◽  
Empirical Evidence ◽  
Trade Agreement ◽  
Trade Agreements ◽  
Point Of View ◽  
Most Favored Nation ◽  
The World ◽  
Most Favored Nation Clause ◽  
Bilateral Treaties

Textbook accounts of the Anglo-French trade agreement of 1860 argue that it heralded the beginning of a liberal trading order. This alleged success holds much interest from a modern policy point of view, for it rested on bilateral negotiations and most-favored-nation clauses. With the help of new data on international trade (the RICardo database), the authors provide empirical evidence and find that the treaty and subsequent network of MFN trade agreements coincided with the end of a period of unilateral liberalization across the world. They also find that it did not contribute to expanding trade at all. This is contrary to a deeply rooted belief among economists, economic historians, and political scientists. The authors draw a number of policy lessons that run counter to the conventional wisdom and raise skepticism toward the ability of bilateralism and MFN arrangements to promote trade liberalization.

Impact of flavours, device, nicotine levels and price on adult e-cigarette users’ tobacco and nicotine product choices

2021 ◽  
pp. tobaccocontrol-2021-056599
Author(s):  
Yong Yang ◽  
Eric N. Lindblom ◽  
Ramzi G. Salloum ◽  
Kenneth D. Ward
Keyword(s):  
Open System ◽  
Closed System ◽  
Smoking Status ◽  
Discrete Choice Experiments ◽  
User Characteristics ◽  
Product Attributes ◽  
Product Choices ◽  
Nicotine Level ◽  
The Difference ◽  
The Impact

IntroductionTo understand the impact of e-cigarette devices, flavours, nicotine levels and prices on adult e-cigarette users’ choices among closed-system and open-system e-cigarettes, cigarettes and heated tobacco products (HTPs).MethodsOnline discrete choice experiments were conducted among adult (≥18 years) e-cigarette users (n=2642) in August 2020. Conditional logit regressions were used to assess the relative impact of product attributes and the interactions between product attributes and user characteristics, with stratified analyses to examine differences by smoking status and primarily used e-cigarette device and flavour.ResultsOn average, participants preferred non-tobacco and non-menthol flavours most, preferred open-system over closed-system e-cigarettes and preferred regular nicotine level over low nicotine level. However, the preference varied by demographics, smoking status and the primarily used e-cigarette device and flavour. The differences in preference among products/devices were larger than the difference among flavours or nicotine levels. Participants who primarily used closed-system e-cigarettes exhibited similar preferences for closed-system and open-system e-cigarettes, but those who primarily used open-system e-cigarettes preferred much more open-system over closed-system e-cigarettes. HTP was the least preferred product, much lower than cigarettes in general, but participants living in states where IQOS is being sold had similar preferences to cigarettes and HTPs.ConclusionsPeople are unlikely to switch to another product/device because of the restriction of flavour or nicotine level. If non-tobacco and non-menthol flavours were banned from open-system e-cigarettes, users may switch to menthol flavour e-cigarettes. Intervention strategies should be tailored to specific groups.

The Turkey-UK Free Trade Agreement in Terms of Economic Diplomacy

2021 ◽  
Vol 23 (Fall 2021) ◽  
pp. 193-211
Author(s):  
Kaan Yiğenoğlu
Keyword(s):  
Free Trade ◽  
Free Trade Agreement ◽  
Bilateral Trade ◽  
Free Trade Agreements ◽  
Trade Agreement ◽  
Trade Agreements ◽  
The European Union ◽  
Economic Relations ◽  
Economic Diplomacy ◽  
The Uk

This article scrutinizes relations between economic diplomacy and free trade agreements by focusing on the Turkey-UK free trade agreements which came into force in 2021. Accordingly, the article first introduces the concept of economic diplomacy, an important issue as it has been shown that bilateral trade agreements, nowadays preferred by many countries, can be used as a tool of economic diplomacy. The article then discusses the history and development of free trade agreements signed by Turkey, including its long-running experience of economic integration with the European Union. Although Turkey began establishing free trade agreements in the 1990s, it has been concentrating on and accelerating its use since 2000. Based on economic and political reasons underlying the free economic agreements, the reasons why Turkey and the UK have reached such an agreement are summarized. Economic relations between the two countries are then analyzed and the details of the agreement are investigated in the context of the changes that it provides.

scholarly journals The ASEAN Free Trade Agreement and Vietnam’s Trade Efficiency

2017 ◽  
Vol 13 (4) ◽  
pp. 192 ◽  
Author(s):  
Hai Thi Hong Nguyen ◽  
Thang Ngoc Doan
Keyword(s):  
Free Trade ◽  
Free Trade Agreement ◽  
Free Trade Agreements ◽  
Trade Agreement ◽  
Trade Agreements ◽  
Trade Volume ◽  
Large Space ◽  
Trading Partners ◽  
Efficiency Performance ◽  
Stochastic Gravity

This study employs a stochastic gravity model to estimate the efficiency performance of Vietnam’s trade with its main trading partners from 1995-2015. Trade efficiency is measured as the ratio of actual trade volume to the maximum likelihood. Moreover. it analyzes the effects of both natural and man-made trade barriers on trade efficiency. The empirical results suggest that the actual trade of Vietnam appears to be much smaller than a possible efficiency level and that there is large space for further progress. Export efficiency outweighs that of import. Vietnam’s ASEAN Free Trade Agreement membership has, in general, improved the trade efficiency, whereas tariffs and domestic devaluation have impaired it. Our findings lead to the recommendation that Vietnam should join more Free Trade Agreements and break down the man-made barriers.

Endogenous Preferential Trade Agreements: An Empirical Analysis

2003 ◽  
Vol 2 (1) ◽  
Author(s):  
Christopher S Magee
Keyword(s):  
Political Economy ◽  
Empirical Analysis ◽  
Bilateral Trade ◽  
Trade Agreement ◽  
Trade Agreements ◽  
Preferential Trade Agreements ◽  
The Political ◽  
Preferential Trade ◽  
Trading Partners ◽  
Regional Agreements

Abstract This paper provides one of the first assessments of the hypothesis that two countries are more likely to form a preferential trade agreement (PTA) if they are already major trading partners. The paper also tests a number of predictions from the political economy literature about which countries are expected to form regional agreements. The results show that countries are more likely to be preferential trading partners if they have significant bilateral trade, are similar in size, and are both democracies. Finally, the paper measures the effect of preferential agreements on trade volumes while, unlike previous studies, treating PTA formation as endogenous.

scholarly journals LA INSERCIÓN COMERCIAL DE CHINA EN LATINOAMÉRICA

2019 ◽  
Vol 78 (310) ◽  
pp. 137
Author(s):  
Jorge Alberto López Arévalo ◽  
Óscar Rodil Marzábal
Keyword(s):  
Costa Rica ◽  
Free Trade ◽  
Fixed Effects ◽  
Bilateral Trade ◽  
Free Trade Agreements ◽  
Trade Agreements ◽  
Trade Integration ◽  
Negative Effect ◽  
The Difference ◽  
Positive Effect

<p>Este trabajo estudia los intercambios bilaterales de China con México, Chile, Costa Rica y Perú desde la óptica del comercio intraindustrial durante 1995-2017. En particular, se analizan las diferencias en el patrón de inserción intraindustrial en un contexto marcado por la existencia (Chile, Costa Rica y Perú) o no (México) de acuerdos de libre comercio con China. El estudio se completa con un análisis econométrico (efectos fijos) de los determinantes del comercio intraindustrial. Los resultados muestran una inserción de bajo perfil intraindustrial, con la excepción de algunas partidas específicas relativas a productos eléctricos y de la industria automotriz. Por otro lado, se confirma el efecto positivo del tamaño de la economía, de la inversión extranjera directa y de la diferenciación de producto, así como negativo de la diferencia en el nivel de ingreso; mientras que existe una indefinición en el papel de los acuerdos de libre comercio con China.<br /><br /></p><p>THE TRADE INTEGRATION OF CHINA IN LATIN AMERICA</p><p> </p><p><strong>ABSTRACT</strong><br />This paper studies China’s bilateral trade with Mexico, Chile, Costa Rica and Peru from the perspective of intra-industrial trade during 1995-2017. In particular, the differences in the pattern of intra-industrial insertion are analyzed in a context characterized by the existence (Chile, Costa Rica and Peru) or not (Mexico) of free trade agreements with China. An econometric analysis (fixed effects) of the determinants of intra-industrial trade completes the study. The results show a low intra-industrial profile, except for some specific items related to electrical products and the automotive industry. The positive effect of the size of the economy, foreign direct investment and product differentiation is also confirmed, as well as the negative effect of the difference in income level. However, there is an undefined role for free trade agreements with China.</p>

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