With the US presidential debates, talk of trade protectionism is on the rise. This is worrisome for economists, who generally argue that protection hurts consumers by raising final good prices, particularly in a world with increasingly integrated global value chains. This column presents new evidence for ‘cascading protection’, showing that US protection of inputs has increased the probability of petitions for protection by their downstream users.
Aksel Erbahar, Yuan Zi, 10 October 2016
Gary Hufbauer, Euijin Jung, 29 September 2016
Donald Trump has consistently made headlines with unusual and potentially dangerous economic policy proposals, including threatening to pull out of the WTO, renegotiating trade agreements, and imposing tariffs on imports from Mexico and China. This column explores the legal and economic dimensions of these proposals. Old and modern legal statutes could allow a US president to implement such policies, and the repercussions for the US economy could be severely negative.
Ricardo Meléndez-Ortiz, 26 July 2016
Trade ministries, just as other parts of government, need to respond to calls from the public and from global leaders for action on major issues. This column argues that armed with potential policy options identified through the E15Initiative, the WTO is equipped to contribute to solutions in many areas. Purposeful efforts over the coming months and years could help to boost the WTO’s essential and valuable place in ensuring a responsive and inclusive furtherance of globalisation and trade and investment integration that delivers sustainable development outcomes for all.
Emanuel Ornelas, 14 May 2016
For over half a century, one pillar of the world trading system has been the principle of ‘special and differential treatment’ (SDT) for developing countries. This column explores how SDT has impacted trade policy around the world. Although this strategy aims to help developing countries, in design and practice it seems to be biased against them. While there is no support for SDT as a growth-promoting strategy, there is a clear need for further research that explicitly tackles the empirical challenges that it presents.
Shujiro Urata, 16 February 2016
A series of mega-regional free trade agreements are currently being negotiated. This column argues that Japan is in a unique position to be able to negotiate with due regard for consistency among these agreements. It should thus seek to bring negotiations to a successful end and to expand and integrate the mega-regional FTAs. This will help rebuild the world trade regime so as to pave the way for achieving economic growth for the entire world.
Bernard Hoekman, Petros Mavroidis, 03 February 2016
The 2015 Nairobi WTO Ministerial unshackled governments from the deadlocked Doha Development Agenda and opened the door for new issues and new approaches. The Ministerial Declaration calls on new initiatives to be agreed by consensus. This column argues that WTO procedures permit ‘clubs’ of countries to agree on additional policy disciplines if the benefits extend on a non-discriminatory basis to all WTO members. Consensus is not needed for such clubs.
Tsuyoshi Kawase, 10 January 2016
An agreement on the Trans-Pacific Partnership has finally been reached, after many twists and turns. This column examines the new set of rules comprising the agreement, and asks whether the TPP is, as claimed, a 21st century agreement or just an expanded version of a US-style FTA. While the TPP is undoubtedly a highly ambitious agreement that includes areas unaddressed by WTO disciplines, its success rests ultimately on the dispute settlement procedures.
Gary Hufbauer, 21 December 2015
The WTO members struck a deal in Nairobi at their Ministerial Conference that many have found hard to understand. Leading up to the conference, there was widespread agreement that the WTO’s multilateral negotiations – known as the Doha Development Agenda – should be finished or finished off, as they had dragged on too long already (since 2001). This column, by one of the world’s most seasoned trade policy experts, argues that the Nairobi Declaration finished off Doha for good, but it also finished several important elements of the original agenda. Both developed and developing nations won important gains.
Chad Bown, Douglas Irwin, 19 December 2015
Accurately establishing the GATT’s starting point is important for assessments of its contributions to the post-war trading system, on which much of contemporary trade policy continues to be based. However, a frequently cited statistic is that average tariffs immediately prior to the first GATT negotiations in Geneva in 1947 were at or above 40%. This column largely debunks the 40% myth and suggests that average tariffs in 1947 were around 22%.
Kent Jones, 30 November 2015
WTO members have somehow found it extremely difficult, in the 21st century, to reach a comprehensive multilateral agreement to expand mutual gains from trade. This column argues that success in expanding global trade will depend on major trading countries’ willingness to seek new institutional paths to multilateral agreements, through new negotiating modalities, openness to the expansion of regional agreements to new members, and in establishing reciprocity expectations for members according to their development status.
Emilie Anér, Anna Graneli, Magnus Lodefalk, 14 October 2015
A large body of research has established a positive link between immigrants and bilateral trade. However, the temporary movement of people across borders has received less attention. This column uses Swedish data to analyse the impact of temporary cross-border movement on trade. Recently arrived migrants are found to reduce the negative impact of distance on foreign trade, by assisting firms to overcome informal and informational barriers to trade with their origin country. Facilitating movement of people across borders can be a highly useful tool for engaging in and benefitting from specialised and internationalised production networks.
Vincent Anesi, Giovanni Facchini, 08 August 2015
In international trade disputes, coercion is often used against governments whose trade practices are deemed unfair. This column presents a theoretical model that offers a new rationale for the greater effectiveness of multilateral compared to unilateral coercion, and hence provides a new argument in favour of commitment to international organisations.
Ralph Ossa, 11 June 2015
The WTO has so far failed to deliver any significant multilateral trade liberalisation. However, this column argues that concluding from this that the WTO is a failure would clearly be premature. Its punchline is that the WTO’s success at preventing trade wars far outweighs its failure to promote trade talks. Overall, the WTO is therefore much more successful than the ailing Doha Round suggests.
Ryuhei Wakasugi, 02 June 2015
The Chinese government significantly restructured and modernised its economy to gain WTO accession in December 2001. This column examines how WTO entry affected different types of firms. It finds that both private and State-owned firms became more productive after WTO entry yet these productivity gains did not translate into a higher propensity to export for State-owned enterprises.
Simon Evenett, Alejandro Jara, 09 December 2014
The WTO’s dispute settlement procedure was set up to help governments challenge policies that contravene WTO agreements. This column argues that two recent cases show that cases can be settled without resolving the problem and sometimes at the expense of other trading partners. This is an abuse of the system and a step backwards for the world trading system.
Jayant Menon, 10 November 2014
With WTO trade talks on the brink of failure (again), global trade governance is being decided elsewhere. This column argues that China and the US are pushing competing visions for free trade in Asia-Pacific. The US-led Trans-Pacific Partnership, TPP, could be challenged by a China-led ‘Beijing Road Map’ that may be announced at this week’s APEC summit. Neither vision is an end-game but merely one more stroke on an ugly picture of trade agreements characterised by an unsustainable amount of disorder and incoherence.
Bernard Hoekman, Camilo Umana Dajud, 24 September 2014
The evolution of the world trading system no longer supports the delivery of opportunities that follow from innovations in international business. This column is a statement by participants at a roundtable held in the EU Centre for Global Affairs, University of Adelaide, on 22 August 2014, which offers suggestions to improve global trade governance. Given that Australia is hosting the G20 Summit in November, the roundtable focused on actions that the G20 should consider to help attain its objective of boosting global growth performance.
Jeffrey Frankel, 09 September 2014
Subsidies for food and energy are economically inefficient, but can often be politically popular. This column discusses the efforts by new leaders in Egypt, Indonesia, and India to cut unaffordable subsidies. Cutting subsidies now may even be the politically savvy choice if the alternative is shortages and an even more painful rise in the retail price in future. Ironically, it is India’s new Prime Minister Modi – elected with a large electoral mandate and much hype about market reforms – who is already shrinking from the challenge.
Chad Bown, Kara Reynolds, 10 August 2014
WTO dispute settlement is well-known for its high-profile cases – e.g., US-EU clashes over bananas, hormone-treated beef, genetically modified organisms, subsidies to Boeing and Airbus, etc. – some of which cover annual trade in the billions of dollars. Are the trade stakes from such disputes representative of the WTO caseload? This column presents evidence from a newly available data set and reveals some surprising facts about the prevalence of both large and small WTO disputes.
Bernard Hoekman, Petros Mavroidis, 16 July 2014
The proliferation of trade ‘clubs’ indicates that governments are keen on engaging in trade liberalisation. This column argues that the creation of new trade clubs under the umbrella of the WTO is inevitable. Such issue-specific (plurilateral) agreements keep the cord with the WTO tight, while allowing countries to cooperate on issues outside of WTO’s grounds.