Market access in global and regional trade

José de Sousa, Thierry Mayer, Soledad Zignago 20 November 2012

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Considering the current context, with WTO negotiations seemingly stalled and rising protectionist pressures since the beginning of the crisis, a rigorous measure of market access difficulties, as encountered by exporters, will encourage a more informative policy debate.

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Topics:  Competition policy International trade

Tags:  protectionism, market access, border effects

Global trade in services: Fear, facts, and offshoring

J. Bradford Jensen 19 November 2012

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Should the US, or indeed the EU, Japan, Canada, or Australia, fear increased trade in services? As the ‘Really Good Friends of Services’ discussions gain momentum in Geneva, it seems an important time to ask1.

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Topics:  International trade

Tags:  global imbalances, WTO, international trade, protectionism

Import protection update: Antidumping, safeguards, and temporary trade barriers through 2011

Chad P Bown 18 August 2012

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Monitoring national trade policies took on increased importance at the peak of uncertainty of the Great Recession in 2008-2009. However, despite initiatives from the WTO, World Bank, and Global Trade Alert (GTA), even the most interested trade policy observer could be understandably confused by recent reports on protectionist trends. For example, in February 2012 the WTO (2012a) reported optimistically that "concerning anti-dumping, the most frequently used trade remedy instrument, there has been a significant decline in initiations of new investigations...

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Topics:  International trade

Tags:  protectionism

Non-tariff measures and the WTO

Marc Bacchetta, Cosimo Beverelli 31 July 2012

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Data limitations make it difficult to document general trends in the use of non-tariff measures. Nevertheless, WTO internal sources of information suggest that the incidence of ‘public policy’ measures – that is, technical barriers to trade (TBT) and sanitary and phytosanitary (SPS) measures – has been on the rise (on this and other protectionist measures see Evenett 2012).

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Topics:  International trade

Tags:  WTO, barriers to trade, GATT, protectionism, non-tariff measures

Rising protectionism and the subordination of trade policy

Simon J Evenett interviewed by Viv Davies,

Date Published

Fri, 07/20/2012

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See Also

See also:

Débâcle: The 11th GTA report on protectionism (Simon Evenett, 14 June 2012)

Mounting tensions pose a test for world trade (Vox Talk with Simon Evenett, 25 November 2011)

Transcript

View Transcript

Viv Davies: Hello and welcome to Vox Talks, a series of audio interviews with leading economists from around the world. I’m Viv Davies from the Centre for Economic Policy Research, it’s 17 July 2012 and I’m speaking with Professor Simon Evenett of the University of St Gallen about the recent rise of protectionist measures in the world trading system. We also discuss the implications of the rise in regional trade agreements, the potential effect of Russia joining the WTO, and the impact of slow growth and recession in Europe on the region’s trade with the rest of the world.

I began by asking Simon what the recent rise in protectionism means for world trade. 

Simon Evenett: It means that the world economy is facing a greater risk of more closed markets and a stalled recovery because of protectionism. The recent uptick in protectionism has been mentioned not just by the WTO but by the European Commission, the International Chamber of Commerce and the so-called B20 group of business leaders. The findings of the Global Trade Alert report were discussed by some of the participants at Los Cabos, the G20 summit, and I think the profile of this issue has been raised appropriately by a large range of individuals and organisations.

Viv: What sort of protectionist measures are we seeing most commonly used now?

Simon: Measures being used at the moment are a combination of traditional antidumping, the so-called trade defence measures, some resort to subsidies by countries, especially those who have engaged in industrial policymaking initiatives, and also a number of export restrictions which are limiting the supply of commodities and other items to the world economy.

Viv: And what does this mean for the efficacy of WTO rules? Are they not working?

Simon: WTO rules have been negotiated over time and are still fairly incomplete. Where they are tough they’re very valuable and have probably done a good job in deterring some protectionism, but I would put a greater emphasis on the rules being incomplete and this inducing a switch in the form of protectionism. Overall I think the WTO rules have altered the composition of protectionism more than its level.

Viv: So who’s the biggest offender in terms of implementing protectionist measures? And who’s suffering the most as a consequence of protectionism?

Simon: Global Trade Alert cuts the data up in a number of different ways, and depending on different metrics you come out with different lead offenders. But amongst the top offending countries are Japan, the European Union countries taken together, Brazil, India, and China. Those are perhaps the worst five. Argentina also recurs heavily in the list of offenders.

In terms of the countries which have been hit the most these are the biggest exporters in the world, so obviously China, the United States, the major European nations, have been hit many, many times. We've seen over 500 hits for some of those countries since November 2008.

Viv: We’re also seeing quite a rise in the number of regional trade agreements being made. In 2010, for example, the China-ASEAN Free Trade Area was established; the European Union, too, is making deals with Colombia and Peru, with possible deals in the pipeline with India, Japan and the US. Is the rise of regional trade agreements a good thing for world trade?

Simon: The rise of regional trade agreements is probably mixed for the world trading system. There’s a long-standing concern amongst economists that regional trading agreements divert trade away from more competitive firms towards those which have tariff breaks.

But the other offsetting feature is that regional trading agreements have been fairly effective in introducing rules on behind-the-border policies, regulatory policies which affect domestic and foreign businesses as well. So any balance sheet of the costs and benefits is going to have to weigh up these two factors.

As tariffs come down over time, the trade diversion costs are probably getting smaller and smaller. They’ll probably be concentrated more in agriculture than in manufacturing, whereas the behind-the-border issues just seem to get more and more important over time. So on net I’m cautiously positive about regional trading agreements being a good force in the world economy, but I don’t believe you can argue that they’ve delivered a lot of economic benefits in most cases.

Viv: Okay. So Russia is, at last, just about to join the WTO. What do you think are the likely implications and consequences of that?

Simon: There are few people rejoicing that Russia is joining the WTO. This is partly because the Russian position on negotiations is not likely to be one which is open to further liberalisation. If anything the recent policy moves in Russia have been towards more protectionism and the substitution of imports. Overall, people are concerned about what the impact of Russia’s accession will be on negotiations and on the balance of those negotiations.

Furthermore, Russia will soon be subject to WTO dispute settlement and could well be the target of a number of enforcement actions by other countries, and this could make for some fractious times in Geneva as well. On net this is not the happiest development but, still, it’s better to have Russia inside the World Trade Organisation’s tent and hopefully over time its policy priorities will evolve.

Viv: What impact is the slow growth and recessionary environment having on Europe’s trade with the rest of the world? And what are the likely implications?

Simon: There’s a big knock-on effect of western European slow growth on trade with both eastern Europe and with China, and this is where we’ve seen the most immediate impact. This in turn I think is inducing, in the case of China, further government measures, including indirect subsidisation through their banking system as well as other measures to stimulate domestic demand.

The transatlantic effect of that has been rather limited but that’s because, again, the American and Canadian trade exposure is, while numerically rather large, proportionately not so big as a share of their exports. Not every region is particularly affected.
When it comes to the impact within Europe, again you would expect to see something of a downtick in imports in the periphery countries, which I think we are seeing, whereas Germany and some of the northern countries appear to be exporting plenty to the rest of the world. They seem to have substituted away some of their export dependency on the periphery for other, faster-growing, parts of the world. That realignment I think you’ll see continue.

Viv: Finally, Simon, what sort of future do you see for world trade? Are you optimistic?

Simon: I think world trade has been not a key priority of governments, or at least promoting world trade hasn’t been. I think trade policy has been subordinated below other policy objectives throughout this crisis. For as long as that is the case, one has to be a bit wary and cautious about where the world trading system is heading. I don’t think the current situation is anything to feel happy about. It’s certainly not excessively gloomy or anything like the 1930s, but I do think we need to be cautious and defenders of the world trading system need to be making a case for trade policy and openness as a government priority, instead of being outmanoeuvred by the other key players in the macroeconomic policy debates and debates about financial stabilisation.

 

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Topics

International trade
Tags
Russia, WTO, protectionism, Global Trade Alert, free trade agreements

Related Article(s)

Antidumping as cooperation The shifting geography of global value chains: Implications for developing countries and trade policy The UK economy in a global world
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Antidumping as cooperation

Chad P Bown, Meredith Crowley 14 July 2012

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The rules-based World Trade Organization (WTO) system has no externally binding enforcement mechanism. There are no prison sentences, coordinated boycotts, or fines that outsiders can impose so as to discourage countries from engaging in bad trade policy behaviour. If one country violates the agreement that promises (relatively) free trade, the adversely affected trading partner is responsible for enforcement (Bagwell and Staiger 1990).

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Topics:  International trade

Tags:  antidumping, protectionism

Productivity and firm selection: Quantifying the ‘new’ gains from trade

Gregory Corcos, Massimo Del Gatto, Giordano Mion, Gianmarco I.P. Ottaviano 10 July 2012

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Since the 1988 Cecchini report, there have been many attempts at quantifying gains from trade in the EU. Compared with the state of the art in international trade theory, the main limitation of that literature is its neglect of firm heterogeneity, which implies that only scale economies drive endogenous changes in productivity within sectors. In recent models with heterogeneous firms trade liberalisation has, instead, an additional positive impact on sectoral productivity through the selection of the most efficient firms (Bernard et al. 2003, Melitz 2003).

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Topics:  International trade

Tags:  protectionism, gains from trade

Débâcle: The 11th GTA report

Simon J Evenett,

Date Published

Thu, 06/14/2012

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http://globaltradealert.org/11th_GTA_report

Débâcle: The 11th GTA Report

by Simon J Evenett

Published 14 June 2012

 

Download the report from the Global Trade Alert website here.

 

 

Tags
protectionism, Global Trade Alert, GTA

Myths about trade, jobs, and competitiveness

Charles Roxburgh, Richard Dobbs, Jan Mischke 31 May 2012

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This is not a happy time for mature economies. They are facing:

  • Anaemic growth; a jobless recovery;
  • The decline of manufacturing;
  • Debt and trade deficits;
  • Rising inequality; and
  • A perception that they are losing ground to those in the developing world.

With domestic consumption weak, many mature-economy policymakers are looking to stimulate investment and net exports – focusing in particular on manufacturing.

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Topics:  Development International trade

Tags:  competitiveness, globalisation, emerging markets, protectionism, jobs

Export policy and food price escalation

Nadia Rocha, Paolo Giordani, Michele Ruta 09 May 2012

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International food prices have been a key policy concern in recent times (Evenett and Jenny 2012). Figure 1 shows why. During the periods 2006-7 and 2008-10, international food prices shot up by well over 50%. If we compare these prices with those of the last two decades, the label ‘food crises’ does not seem overblown.

Figure 1. International food prices 1990-2010

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Topics:  International trade

Tags:  food prices, protectionism, export policy, food crises

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