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Article
Publication date: 21 March 2016

Davit Sahakyan

The purposes of this paper are to provide a new framework for the (re)assessment of North-South relations, with a specific focus on North-South preferential trade

Abstract

Purpose

The purposes of this paper are to provide a new framework for the (re)assessment of North-South relations, with a specific focus on North-South preferential trade agreements (PTAs); advance a new mechanism of how first-order, i.e. Southern countries’ first, North-South PTAs can affect the outcomes of second-order, i.e. Southern countries’ subsequent, North-South PTA negotiations; and re-examine the effects of North-South power asymmetries on the outcomes of North-South PTA negotiations.

Design/methodology/approach

The paper focuses on how North-South power asymmetries affect the outcomes of North-South PTA negotiations. It introduces the concept of “first-order” and “second-order” North-South PTAs to show that the “order” of an agreement can be a crucial factor in PTA negotiations. The claims of the paper are also supported by primary data obtained through the author’s personal interviews with European Union and USA trade officials and policy-makers (see Appendix).

Findings

The paper advances a new theoretical framework that takes a longer-term view on North-South trade relations, whereby, against the backdrop of the proliferating PTAs, first-order North-South agreements can raise the bargaining powers of Southern countries during subsequent North-South PTA negotiations, with strong implications for both developed and developing countries.

Research limitations/implications

The paper is largely theoretical. A systematic empirical study of North-South PTAs will be required to validate or refute the theoretical framework advanced in this paper.

Originality/value

The paper introduces a new variable, namely the “order” of an agreement, which affects the logic of North-South PTA negotiations. Hence, the paper sets out a new theoretical framework that allows for a more accurate assessment of North-South power asymmetries and their effects on the outcomes of North-South PTA negotiations.

Details

Journal of International Trade Law and Policy, vol. 15 no. 1
Type: Research Article
ISSN: 1477-0024

Keywords

Article
Publication date: 12 January 2003

M. Rafiqul Islam

The subject‐matter of this article is the recently altered trade policy and practice of Australia and their consistency with the WTO multilateral trading policies and…

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Abstract

The subject‐matter of this article is the recently altered trade policy and practice of Australia and their consistency with the WTO multilateral trading policies and principles. Following its unhappy experience with the power and politics driven trading under GATT, Australia unequivocally supported the legalistic approach of the WTO trading system during the Uruguay Round. Its active participation in the WTO has given it a fair share of global free trade. The rule‐based trading framework of the WTO protects, more often than not, Australia from powerful trading states and blocs using their economic clout to gain unfair terms of trade. Australia has recently opted to pursue its multi‐track trading together with its commitments to WTO multilaterial trade liberalization. Since 2002, it has been negotiating a preferential bilateral free trade agreement with its preferred trading partners. The flurry of such negotiations has resulted in the conclusion of a preferential bilateral free trade agreement with Singapore in 2003. Negotiation towards a similar agreement with the U.S. is ongoing. A preferential trade agreement (PTA) is by nature discriminatory and as such inconsistent with the Most Favoured Nation (MFN) rule under GATT Article I. Despite this apparent contradiction, GATT Article XXIV permits bilateral PTAs as an exception to the MFN rule under certain explicit conditions, which militate against discriminatory, differential and unequal trading deals among WTO members. This article examines the extent to which the existing and potential PTAs of Australia comply with the conditions of GATT Article XXIV. It concludes that these PTAs are not complementary, if not obstructive alternatives, to the WTO multilateral free trading system. They are not in the best long‐term trading interest of Australia either.

Details

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

Keywords

Book part
Publication date: 15 July 2017

Crina Viju, Stuart J. Smyth and William A. Kerr

Strong evidence has shown that increased agricultural productivity and opened international trade are required to maintain and enhance food security. The multilateral…

Abstract

Strong evidence has shown that increased agricultural productivity and opened international trade are required to maintain and enhance food security. The multilateral trading system has been unable to keep trade open for one subset of agricultural products – those that use biotechnology in production. This chapter assesses whether preferential trade agreements can represent potential alternative sources of trade rules for dealing with trade in the products of biotechnology. This chapter analyzes and compares three case studies of preferential trade agreements (Canada-EU Comprehensive Economic and Trade Agreement, EU-US Transatlantic Trade and Investment Partnership, and Trans-Pacific Partnership), by focusing on negotiations pertaining to products of biotechnology. The three preferential trade agreements have shown little inventiveness in their attempts to put in place rules of trade for the products of modern agricultural biotechnology and have established forums where only issues can be discussed. They are forums to talk and talk without any means to force closure on negotiations. Given the inability to deal with the issue of biotechnology at the WTO or other multilateral forums, the recent and current negotiations of major preferential agreements represent the second best alternative which still needs to be analyzed and still needs to be understood by policy makers, academics, and the population at large. This chapter represents a first step in that direction.

Details

World Agricultural Resources and Food Security
Type: Book
ISBN: 978-1-78714-515-3

Keywords

Abstract

Details

The Political Economy of Policy Reform: Essays in Honor of J. Michael Finger
Type: Book
ISBN: 978-0-44451-816-3

Open Access
Article
Publication date: 29 November 2018

Philipp Galkin, Carlo Andrea Bollino and Tarek Atalla

China is a major energy import powerhouse, its trade deals have significant impact on international energy trade and global energy markets. The purpose of this paper is to…

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Abstract

Purpose

China is a major energy import powerhouse, its trade deals have significant impact on international energy trade and global energy markets. The purpose of this paper is to explore the role of energy in China’s preferential trade agreements (PTAs) and their impact on Chinese imports of oil, gas and coal.

Design/methodology/approach

An extended trade gravity model framework is applied to explore the dynamics of China’s annualized energy import flows from the 22 economies that have PTAs with it for the period 1995–2015.

Findings

The effect of PTAs on trade patterns varies across the product groups and agreement clauses. The dominant factor affecting trade flows of coal, crude oil and oil products is the average tariff level. Its impact is less significant for gas imports, which are more affected by policy arrangements represented by a PTA variable. The depth and scope of a PTA do not affect Chinese energy imports patterns.

Research limitations/implications

This paper is focused on exploring the effect of China’s trade and foreign relations strategies on its energy imports through the prism of its PTAs. Estimating the direct impact of China’s initiatives in the areas of trade, investment, security, culture, etc., on its trade flows of energy products and other product groups using the methodological framework proposed in this study would contribute to better understanding of the issue.

Practical implications

The findings can assist both China and energy exporting countries that target Chinese market in better understanding the drivers of trade flows of energy products and design their PTA strategies accordingly.

Originality/value

This study applies the trade gravity model framework to assess the impact of specific components of preferential trade agreements – tariff reduction and depth and scope of agreement – on energy trade flows differentiated by product group.

Details

International Journal of Emerging Markets, vol. 13 no. 6
Type: Research Article
ISSN: 1746-8809

Keywords

Article
Publication date: 4 September 2017

Christian Ritzel, Andreas Kohler and Stefan Mann

The purpose of this article is to provide empirical evidence about the potential positive effects of switching from given non-reciprocal trade preferences granted under…

Abstract

Purpose

The purpose of this article is to provide empirical evidence about the potential positive effects of switching from given non-reciprocal trade preferences granted under the Swiss Generalized System of Preferences (GSP) for developing countries (DCs) to negotiated reciprocal trade preferences under a Free Trade Agreement (FTA).

Design/methodology/approach

In a case study of Tunisia’s exports to Switzerland, the authors apply methods of matching econometrics, namely, Propensity-Score Matching and Nearest-Neighbor Matching. Hereby, they are able to identify the average treatment effect on the treated.

Findings

Overall preferential exports increased by 125 per cent after the entry into force of the FTA in 2005 until the end of the observation period in 2011. Additionally, an analysis of the agro-food and textile sectors likewise indicate boosting preferential exports in the amount of 100 per cent.

Research limitations/implications

Case studies in this vein have their disadvantages. The greatest disadvantage is the lack of generalization. In contrast to studies estimating the potential effects of an FTA for several countries, the authors are not able to generalize their results based on a single case.

Practical implications

Because trade preferences under the Swiss GSP are offered to the country group of DCs as a whole, non-reciprocal trade preferences are not tailored to the export structure of a particular DC. By switching from non-reciprocal to negotiated reciprocal trade preferences, DCs such as Tunisia expect to negotiate terms which are tailored to their export structure as well as better conditions than competitors from countries which are still beneficiaries of the GSP.

Originality/value

To the authors’ knowledge, this is the first study to investigate explicitly the switch from non-reciprocal to reciprocal trade preferences using econometric matching techniques.

Details

International Journal of Development Issues, vol. 16 no. 3
Type: Research Article
ISSN: 1446-8956

Keywords

Article
Publication date: 11 October 2018

Regis Simo

The purpose of this paper is to show how the pattern of trade relations between the USA and African countries is gradually shifting toward reciprocity. It therefore…

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Abstract

Purpose

The purpose of this paper is to show how the pattern of trade relations between the USA and African countries is gradually shifting toward reciprocity. It therefore demonstrates that the African Growth and Opportunity Act (AGOA) was conceived to be a building block toward future bilateral trade agreements.

Design/methodology/approach

This paper adopts a historical approach to the USA’s policy toward Africa in general and in trade matters in particular. It critically reviews the chronology of US involvement in the continent.

Findings

Although it was designed as a preferential trade arrangement, AGOA was intended to evolve into reciprocal trade agreements. This is what the USA started doing even prior to the entry into force of the AGOA, by entering into Trade and Investment Framework Agreements with individual countries or blocs. It also transpires that the deployment comes as a response to the European Union which is already engaged in the redefinition of its own trade relations with Africa since 2004.

Originality/value

The paper is important in many respects. Not only it is a study of the US practice as preference-granting country, but it is also interested in the typology of trade agreements concluded by the USA in other regions of the world. This is important to indicate and analyze the types of provisions African countries should be expected to face when the time of entering into reciprocal binding trade treaties arrives.

Details

Journal of International Trade Law and Policy, vol. 17 no. 3
Type: Research Article
ISSN: 1477-0024

Keywords

Article
Publication date: 6 September 2013

Elimma Ezeani

At its inception, the Doha Round offered the hope of a more inclusive World Trade Organisation (WTO); one where developing countries in particular envisioned would allow…

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Abstract

Purpose

At its inception, the Doha Round offered the hope of a more inclusive World Trade Organisation (WTO); one where developing countries in particular envisioned would allow them the policy space to enable their socio‐economic advancement even as they carried out their obligations as Member States of the rules‐based international trade system. While the rewards of this novel development round are awaited, WTO Member States are making a marked shift away from the foundation principles of multilateralism on non‐discriminatory treatment, and pursuing independent trade deals outside the rules. An emerging acceptance of this shift comes with an idea that countries can converge after divergence – that alternatives to multilateralism can still yield agreements that will operate in a multilateral rules‐based framework, post Doha. To this end, this article reviews the challenges facing the Doha negotiations as it pertains to developing country concerns and the shortcomings of the existing development framework. It critically examines the issues arising from the stalemate of the Doha negotiations and the efforts of the international trading system to continue engaging in trade in the face of globalisation, increasing unemployment, decreased wages and living standards in the backdrop of a global recession. It examines the emerging convergence theory which recognises departures from the uniform trading arrangements under multilateralism, without recognising this as a tacit acceptance of a return to protectionism with its consequences. The paper aims to discuss these issues.

Design/methodology/approach

Reference is made to primary and secondary research material on the subject including WTO rules and agreements.

Findings

The article finds that the stalemate in this Doha Round reveals more than just dissatisfaction between Member States on the nature and scope of the rules that must guide their global trading activities. It reveals the fragility of rules and the potential inefficacy of a system that attempts to regulate nebulous activity – trade in the face of divergent needs and concerns.

Research limitations/implications

The research is library/desk based.

Originality/value

This work is an original contribution and is not under consideration elsewhere.

Details

Journal of International Trade Law and Policy, vol. 12 no. 3
Type: Research Article
ISSN: 1477-0024

Keywords

Book part
Publication date: 24 September 2010

Robert Scollay and John Gilbert

Regional trading arrangements are proliferating at a rapid pace in the Asia-Pacific region, although the architecture that will eventually emerge remains uncertain. In…

Abstract

Regional trading arrangements are proliferating at a rapid pace in the Asia-Pacific region, although the architecture that will eventually emerge remains uncertain. In this chapter we explore the economic implications for both China and its trading partners of the current crop of preferential arrangements and potential future developments in the Asia-Pacific region, using computable general equilibrium simulations. By doing so the chapter aims to identify factors that are likely to weigh heavily in the economic interests of the different participants in some of the alternative ways in which the trade architecture of the region might develop, and the extent of convergence or divergence in these interests.

Details

New Developments in Computable General Equilibrium Analysis for Trade Policy
Type: Book
ISBN: 978-0-85724-142-9

Keywords

Book part
Publication date: 1 October 2008

Eric W. Bond and Constantinos Syropoulos

Purpose – This chapter examines how preferential liberalization between a pair of countries affects the terms of trade and welfare of the liberalizing countries and on the…

Abstract

Purpose – This chapter examines how preferential liberalization between a pair of countries affects the terms of trade and welfare of the liberalizing countries and on the rest of the world (ROW). We adopt a model with symmetric countries that generalizes previous work by relaxing assumptions on functional forms, which allows for the possibility that exports of member countries are complements for exports of the ROW.

Methodology/approach – This chapter uses general equilibrium welfare analysis for a three-country trade model.

Findings – We show that Kemp–Wan tariff adjustments require a decrease (increase) in the external tariff of members in a preferential trade agreement to accompany internal liberalization in the neighborhood of internal free trade when member goods are substitutes (complements) for non-member goods. However, the adjustment path of the external tariff to reductions in the internal tariff could be non-monotonic when preferences are not of the CES type.

Practical implications – Our results are of interest for the design of rules for multilateral trade agreements with respect to preferential liberalization, since they indicate how tariffs must be adjusted to eliminate negative impacts on non-member countries.

Details

Globalization and Emerging Issues in Trade Theory and Policy
Type: Book
ISBN: 978-1-84663-963-0

Keywords

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