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Article
Publication date: 19 June 2017

Gabriela Ortiz Valverde and Maria C. Latorre

The purpose of this paper is as follows: first, it aims to explain the overall economic implications of the trans-pacific partnership (TPP). Second, it aims to provide an…

Abstract

Purpose

The purpose of this paper is as follows: first, it aims to explain the overall economic implications of the trans-pacific partnership (TPP). Second, it aims to provide an in-depth analysis of the TPP’s quantitative impact on an upper-middle economy such as Mexico, as well as on the USA.

Design/methodology/approach

The analysis is performed using a computable general equilibrium (CGE) model.

Findings

The results suggest that in the short run, both Mexico and the USA would slightly benefit from the TPP. Tariff reductions would lead to less bilateral trade between Mexico and the USA and the stronger integration of both countries with the rest of the TPP members. The opposite is true after a decrease in non-tariff barriers (NTBs). Overall, in terms of the impact on Mexico, trade integration with the rest of the TPP members prevails. This suggests that a TPP without the USA could still be beneficial.

Originality/value

Previous studies on the TPP have mainly focused on its impact for the USA, which is also analysed in the present study. The effects of the TPP are estimated for a broad set of micro and macroeconomic variables, paying particular attention to the reductions of NTBs.

Details

Journal of International Trade Law and Policy, vol. 16 no. 2
Type: Research Article
ISSN: 1477-0024

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Article
Publication date: 30 October 2020

Krisley Mendes and André Luchine

This study aims to identify and classified non-tariff measures (NTMs) on Brazilian imports of robusta coffee beans, calculated a tariff-equivalent of non-tariff barriers

Abstract

Purpose

This study aims to identify and classified non-tariff measures (NTMs) on Brazilian imports of robusta coffee beans, calculated a tariff-equivalent of non-tariff barriers (NTBs) and assessed the effects of removing NTBs from upstream and downstream domestic instant coffee supply chain.

Design/methodology/approach

The analysis uses documentary research to identify NTMs and the price-wedge method is applied to estimate a tariff-equivalent. The effects of suppressing the tariff-equivalent were evaluated using a partial equilibrium model with constant elasticity of substitution (Armington, 1969) and by incorporating vertical integration and uncertainty (Hallren and Opanasets, 2018).

Findings

The results show that NTMs seemingly hinder the entrance of coffee beans into the domestic market. The tariff-equivalent was estimated at 13.61%. Suppressing it reveals that the share of domestic coffee beans used to produce domestic instant coffee falls 0.21 p.p. while the share of domestic instant coffee consumed by the international trade rises 8.60 p.p.

Originality/value

What makes this paper original is that this paper investigated the effects of NTMs in a developing country, namely, Brazil. Although Brazil is one of the largest agricultural producers in the world, it has not appeared in literature in this type of analysis until now. Furthermore, it contributes to the literature on using existing techniques to investigate the impact of NTM removal on individual products in a specific country, in contrast to more recent papers that discuss using multi-country and multi-product data sets at the HTS-6 level. Thus, this paper demonstrates how a case study approach can be useful in quantifying policy changes.

Details

Journal of International Trade Law and Policy, vol. 19 no. 3
Type: Research Article
ISSN: 1477-0024

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Article
Publication date: 1 August 1999

Alan Zimmerman

Barriers, especially non‐tariff barriers (NTBs), have been shown to have an important impact upon international trade in services. Foreign direct investment and market…

Abstract

Barriers, especially non‐tariff barriers (NTBs), have been shown to have an important impact upon international trade in services. Foreign direct investment and market entry strategy theory do not adequately address the importance of NTBs in the decision‐making process. Previous studies indicate that service firms need to establish local presence to be successful in a foreign market. Where firms are unable to enter a market because it is blocked by trade barriers, some researchers suggest managers engage in specific entry strategies or strategic actions to overcome barriers. This study, based on in‐depth interviews with insurance executives, shows that trade barriers are one of several factors managers evaluate when deciding whether to enter a market. However, barriers can become a critical factor if they create prohibitive costs or difficulties. Based on the findings, this study proposes a new model of market entry decision making which hypothesizes that barriers can become a go/no‐go decision factor.

Details

Journal of Business & Industrial Marketing, vol. 14 no. 3
Type: Research Article
ISSN: 0885-8624

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Article
Publication date: 25 February 2020

Debashis Chakraborty, Julien Chaisse and Shameek Pahari

This paper aims to analyze whether the domestic policy reforms in India would suffice, or there is a need to conform to stricter international standards as well. The paper…

Abstract

Purpose

This paper aims to analyze whether the domestic policy reforms in India would suffice, or there is a need to conform to stricter international standards as well. The paper is arranged along the following lines. First, the paper offers a brief review of the cooperation in the field of harmonization of vehicle regulations which is provided by the so-called WP.29 Forum. Second, the United Nations Economic Commission for Europe (UNECE) standards and their membership along with Indian participation in the forum are presented. Third, reforms in India through the “Make in India” (MII) initiative and its trade in the auto-component segment are analyzed. Fourth, the possible non-tariff barriers (NTBs) on imports of auto-components in select partner countries is computed and presented. Fifth, the penetration pattern of partner countries in India’s automotive sector export value chain is analyzed. Finally, based on the observations, key policy conclusions are drawn both from global and Indian perspectives.

Design/methodology/approach

This paper blends expertise in law and economics and enables readers to have a finer understanding of the automotive sector which is one of the most internationalized product groups in world trade, characterized by not only cross-border movement of final products, but also of intermediate products like auto-parts and components as well as major global investment and relocation decisions. This paper focuses on India for four crucial reasons, which makes India both a key player (and potential disruptor) at global level and the rather complex approach chosen by the country vis-a-vis many regulations (including UNECE and WTO), reflecting its tendency to rely on domestic consolidation through measures such as the 2014 MII initiative.

Findings

The data analysis in the current paper indicates that after conforming to the UNECE 1998 standard, India’s relative trade with these countries has increased both in terms of auto-components and automobile products. Moreover, the value contribution from these partner countries in India’s exports is rising. On the other hand, the relative share of the UNECE 1958 countries in India’s trade basket has declined and a mixed trend is noticed for the common contracting parties (CPs). In addition, the share of the countries without accession to any of the UNECE agreements in India’s trade has shown an upward trend. The observation indicates that the divergence in automotive product standards might crucially influence India’s trade flows. It seems that in the short run, an orientation for exporting to UNECE 1998 partners and non-members emerges as a dominant strategy, underlining a specialization in medium-quality segment. Nevertheless, the long-term robustness of such a move deserves closer analysis, particularly by focusing on whether India may need to join the UNECE 1958 agreement to sustain its export growth. Before joining UNECE 1998, the sector has enjoyed protection through high tariff barriers. Given the differing perspective on opening-up, automobile sector earlier emerged as an obstacle in conclusion of EU–India Bilateral Trade and Investment Agreement (BTIA), which is being negotiated since 2007. However, after entry into an regional trade agreement (RTA), tariff preference in itself may not provide a country the requisite market access. The recent standard-setting exercises in ASEAN, a group with which India is deepening trade integration since 2010, may be considered as a case in point.

Research limitations/implications

The analysis so far indicates that absence of participation in UNECE 1958 standard may restrict future options for India. Presently, Indian vehicle exports are reaching UNECE 1998 member countries (e.g., Ford India sending Ecosport to USA). It is also directed towards African and Latin American countries, presently not part of any agreement. However, the ASEAN countries, currently partnering India through free trade agreement (FTA), are increasingly moving towards UNECE 1958 standards. India’s sectoral trade surplus with ASEAN countries over 2009-2013 to 2014-2018 has declined from US$548.44mn to US$529.53mn, respectively. The potential challenges in reaching ASEAN and other UNECE 1958 member countries, in turn, may influence the relocation decisions of global auto majors in India, defeating the core purpose of MII initiative.

Practical implications

Given the scenario, a number of policy choices for India emerge. First, joining UNECE 1958 may not be a short-run option for India, but after evaluating the evolving trade pattern, in the long run, the country may consider adopting certain core 1958 standards, in line with its economic interests. Such a move may facilitate greater export flows from India to UNECE 1958 countries. The experience of Indonesia and Vietnam, who have conformed to select UNECE 1958 standards in spite of not being formally part of any agreement, deserves mention in this regard. Second, it is observed that India’s trade balance (TB) is not improving for several Regional Comprehensive Economic Partnership (RCEP) member countries, in spite of obtaining tariff preferences through an existing trade bloc. Part of the poor performance has been explained by Indian exporters often using the most favoured nation route rather than the preferential route, to avoid the associated compliance-related complexities. The standards and mutual recognition agreements (MRAs) conformance provisions in ASEAN–India FTA are also found to be weaker vis-à-vis the comparable provisions for other ASEAN-centric bilateral RTAs with other RCEP members. This underlines the need for both rules of origin (ROO) reforms and agreement on MRAs, which may enhance the trade potential in general and in automotive sector in particular. In the short run, India should therefore attempt to enhance exports to the UNECE 1998 members and CPs, given the commonality in standards. However, in the long run, there is a need to explore harmonization with certain core 1958 standards, to promote exports in general and even within its RTAs in particular.

Originality/value

The automotive sector is one of the most internationalized product groups in world trade. It is known that harmonization of product standards with partner countries can facilitate bilateral trade flows. Presently, three agreements exist for harmonization of automotive standards relating to passenger and vehicle safety under the aegis of UNECE – UNECE 1958, UNECE 1997 and UNECE 1998. Through a series of reforms and launch of the MII initiative in 2014, India has deepened its presence in world automotive sector trade and aspires to play a bigger role in coming days. Moreover, India is a WTO member and has joined the UNECE 1998 standard in 2006, which means that several important conventions regulate and bind the country. The current paper intends to analyze whether the domestic policy reforms in India would suffice in promoting the exports from this sector, or there is a need to conform to stricter international standards. The data analysis reveals that India’s relative trade orientation is deepening towards the UNECE 1998 members and countries not part of any UNECE agreements. On the other hand, the relative trade share of the UNECE 1958 countries in India’s trade basket has declined and a mixed trend is noticed for the common CPs. The analysis indicates that the divergence in automotive product standards might crucially influence India’s trade flows in general and participation in international production networks in particular. The paper argues that in the long run, India needs to consider adherence to certain UNECE 1958 standards as well as speeding up the pending domestic reforms.

Details

Journal of International Trade Law and Policy, vol. 19 no. 1
Type: Research Article
ISSN: 1477-0024

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Article
Publication date: 12 February 2018

Christian Ritzel, Andreas Kohler and Stefan Mann

The purpose of this paper is to determine if the institutional quality of developing countries (DCs) and least-developed countries (LDCs) contributes to a significant…

Abstract

Purpose

The purpose of this paper is to determine if the institutional quality of developing countries (DCs) and least-developed countries (LDCs) contributes to a significant increase in the utilization rate of the Swiss generalized system of preferences in the agro-food sector.

Design/methodology/approach

The authors use state of the art regression techniques accounting for zero values to identify if the institutional quality – separately depicted by the Worldwide Governance Indicators, the Index of Economic Freedom and the Human Development Index – can contribute in overcoming non-tariff barriers (NTBs) to trade.

Findings

The institutional quality exerts a consistent positive effect on the level of utilization of trade preferences.

Research limitations/implications

Swiss food trade represents, of course, only a very small share of world trade, therefore it would be worthwhile to extend the analysis to other countries and sectors.

Practical implications

Industrialized countries’ development policies should more strongly focus on capacity building in DCs and LDCs to strengthen trade-related institutions.

Originality/value

The study focuses on an often underemphasized element in international trade relations – the role of the institutional quality in overcoming NTBs to trade.

Details

International Journal of Social Economics, vol. 45 no. 2
Type: Research Article
ISSN: 0306-8293

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Article
Publication date: 29 November 2018

Evelyn S. Devadason, V.G.R. Chandran Govindaraju and Shujaat Mubarik

The purpose of this paper is to investigate the potentials and barriers to trade in the Malaysia–Chile partnership.

Abstract

Purpose

The purpose of this paper is to investigate the potentials and barriers to trade in the Malaysia–Chile partnership.

Design/methodology/approach

This paper estimates two-way export potentials from an augmented three-dimensional panel gravity model of bilateral trade between Malaysia and the Latin America and the Caribbean (LAC) region, spanning the 1990–2014 period. Utilizing interviews with government officials and industry experts in Malaysia and Chile, this paper also provides insights into market access issues.

Findings

The empirical findings of this study suggest that Malaysia has trade potential in Chile, but Chile is “overtrading” with Malaysia. By major products traded, both countries are found to be “overtrading,” as the export basket remains concentrated in this partnership. Through the interviews, fewer restrictions are reported by the various stakeholders, as the extent of trade engagement remains somewhat low. The main challenge identified within specific sectors in both the countries relates mainly to procedures established to secure compliance with labeling regulations for food products.

Research limitations/implications

The sectoral findings reveal that there is indeed scope for expanding exports beyond the current major products traded, particularly in base metal and scientific and measuring equipment from the Malaysia and Chile perspectives, respectively. Thus, product diversification matters to intensify trade cooperation between the two countries. Non-tariff measures need to be streamlined by both parties to ensure further product diversification to food trade, particularly for Chile.

Originality/value

The limited literature on cross-regional trade within the broader framework of Southeast Asia and LAC only support the fact that potentials do exist but do not appear to provide much research evidence. Empirically, this paper will add to the existing literature on the potentials that hold in the Malaysia–Chile partnership. Further, a lack of adequate information remains on market access and other barriers in both the nations to facilitate decisions on trade opportunities. The findings of the study fill that vacuum of information pertaining to market access and trade facilitation through interviews with various stakeholders in Malaysia and Chile.

Details

International Journal of Emerging Markets, vol. 13 no. 5
Type: Research Article
ISSN: 1746-8809

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Article
Publication date: 14 June 2018

Qiaomin Li and Hee Cheol Moon

The purpose of this paper is to simulate the effects of the Regional Comprehensive Economic Partnership (RCEP) on trade and income, with a particular interest in the…

Abstract

Purpose

The purpose of this paper is to simulate the effects of the Regional Comprehensive Economic Partnership (RCEP) on trade and income, with a particular interest in the effect on China and Korea.

Design/methodology/approach

This paper adopts a Computable General Equilibrium (CGE) model developed by Li et al. (2017) to simulate the effect of RCEP. The CGE model is grounded in the firm heterogeneity theory. Within this framework, the feature of dynamic movements of firms allows the CGE model to capture the extensive margin of trade increase. Aside from that, the CGE model separates foreign direct investment (FDI) from domestic investment, which helps to explain the effect of the removal of FDI barriers.

Findings

Results show that RCEP will increase trade of China by 1.5 percent. The income of China will increase by 2.5 percent. The trade increase of Korea will be $8bn, and its income will increase by 0.6 percent. In terms of welfare, China will gain $214bn and Korea will gain $23~35bn, taking 2~3 percent of Korea’s GDP. Also, the reduction of behind-the-border barriers presents very significant effects.

Originality/value

The main contribution of this paper is to quantitatively assess the potential effects of RCEP on trade and income. The positive findings would propel RCEP parties, especially China and Korea, to reach an agreement as soon as possible.

Details

Journal of Korea Trade, vol. 22 no. 3
Type: Research Article
ISSN: 1229-828X

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Book part
Publication date: 7 May 2019

Katarzyna Żukrowska

Considering the dynamic correlation between advances in information and communication technology (ICT) and contemporary politics, this chapter provides an economist…

Abstract

Considering the dynamic correlation between advances in information and communication technology (ICT) and contemporary politics, this chapter provides an economist insight into the role of ICT in the global economy. It is argued that the analysis of the relationship between ICT and politics would be incomplete if the direct and indirect influence ICT exerts on international economy was not considered. This chapter examines the features of the international trade in ICT seen as a complex reflection of the current stage of liberalization achieved at the forum of the World Trade Organization (WTO) and subsequent spillovers to other domains of economic and political collaboration worldwide. It is argued that ICT and its development not only result in the “shrinking of the distance” in the world economy but also stimulate economic liberalization, further reshuffling production from more- to less-advanced economies and, finally, help to overcome trade imbalances on the global scale. In brief, a case is made that ICT creates the conditions conducive to the enhancement of international political and economic collaboration.

Details

Politics and Technology in the Post-Truth Era
Type: Book
ISBN: 978-1-78756-984-3

Keywords

Content available
Article
Publication date: 18 September 2020

Lijuan Cao, Tianxiang Li, Rongbo Wang and Jing Zhu

The outbreak of the novel COVID-19 virus has spread throughout the world, causing unprecedented disruption to not only China's agricultural trade but also the world's…

Abstract

Purpose

The outbreak of the novel COVID-19 virus has spread throughout the world, causing unprecedented disruption to not only China's agricultural trade but also the world's agricultural trade at large. This paper attempts to provide a preliminary analysis of the impact of the COVID-19 pandemic on China's agricultural importing and exporting from both short- and long-term perspectives.

Design/methodology/approach

This study seeks to analyze how the outbreak of COVID-19 could potentially impact China's agricultural trade. With respect to exports, the authors have pinpointed major disruptive factors arising from the pandemic which have affected China's agricultural exports in both the short and long term; in doing so, we employ scenario analysis which simulates potential long-term effects. With regard to imports, possible impacts of the pandemic regarding the prospects of food availability in the world market are investigated. Using scenario analysis, the authors estimate the potential change in China's food market—especially meat import growth—in light of the implementation of the newly signed Sino-US Economic and Trade Agreement (SUETA).

Findings

The results show that China's agricultural exports have been negatively impacted in the short-term, mostly due to the disruption of the supply chain. In the long term, dampened external demand and potential imposition of non-tariff trade barriers (NTBs) will exert more profound and lasting negative effects on China's agricultural export trade. On the other hand, despite panic buying and embargoing policies from some exporting and importing countries, the world food availability and China's food import demand are still optimistic. The simulation results indicate that China's import of pork products, in light of COVID-19 and the implementation of SUETA, would most likely see a sizable climb in quantity, but a lesser climb in terms of value.

Originality/value

Agricultural trade in China has been a focal-point of attention in recent years, with new challenges slowing exports and increasing dependence on imports for food security. The outbreak of the COVID-19 pandemic adds significant uncertainty to agricultural trade, giving rise to serious concerns regarding its potential impact. By exploring the impact of the unprecedented pandemic on China's agricultural trade, this study should contribute to a better understanding of the still-evolving pandemic and shed light on pertinent policy implications.

Details

China Agricultural Economic Review, vol. 13 no. 1
Type: Research Article
ISSN: 1756-137X

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Article
Publication date: 1 April 2018

Claudia Fernández-Pacheco Theurer, Jose Luis López Ruiz and María C. Latorre

The purpose of this paper is to review the economic studies on Brexit, highlighting that they have focused mainly on its negative impact on trade. The economic intuition…

Abstract

Purpose

The purpose of this paper is to review the economic studies on Brexit, highlighting that they have focused mainly on its negative impact on trade. The economic intuition behind these outcomes is provided, explaining why they are asymmetric with the UK being much more harmed than EU-27.

Design/methodology/approach

The importance of foreign multinationals in the UK and of UK’s multinationals abroad is shown using a non-standard quantification, which may be preferable than conventional methodologies. In addition, EU trade and investment legislative regimes are explained. Particular attention is paid to the change after the 2009 Lisbon Treaty which transfers foreign investment to the exclusive competence of the EU as opposed to EU states.

Findings

The data show that EU-27 is a much less important investment than trade partner for UK.

Originality/value

Although modelling the economy-wide impact of multinationals is challenging, the data and EU legislative framework analyzed suggest it is very much worthwhile. Other considerations about UK’s diminished leveraging power to negotiate after its EU’s withdrawal are also considered.

Details

Journal of International Trade Law and Policy, vol. 17 no. 1/2
Type: Research Article
ISSN: 1477-0024

Keywords

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