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  • Author: Medin Hege
  • Publication Date: 01-2014
  • Content Type: Working Paper
  • Institution: Norwegian Institute of International Affairs
  • Abstract: This paper presents a simple new trade theory model with results that contradict those from standard model. A home market effect in domestic sales of manufactured goods is found to co-exist with a reversed home market effect in exports of manufactured goods. In consequence, for a small country the number of manufacturing firms that sell in the domestic market is lower than proportional whereas the number of exporters is higher than proportional to country size. The proportion of firms that export, decreases with relative size of the home market. Empirical support for the latter prediction is found in a cross-sectional dataset on firm level exports for 116 countries.
  • Topic: International Relations, Economics, International Political Economy, International Trade and Finance
  • Author: Innwon Park
  • Publication Date: 03-2014
  • Content Type: Working Paper
  • Institution: Norwegian Institute of International Affairs
  • Abstract: Both intra - and inter-regional trade agreements are proliferating in East Asia. Deepening regional interdependence through trade and investment, and the necessity for stability and revitalization of the regional economy since the East Asian financial crisis in the late 1990s led the East Asian countries to adopt discriminatory RTAs. Accordingly, East Asian commercial policy stance has shifted from unilateral to bilateral to mega-lateral liberalization. This report attempts to assess the East Asian countries' efforts to liberalize the regional market by cooperating with each other. We investigate (i) why RTAs have been proliferating in East Asia, (ii) what the main characteristics of East Asian RTAs are, (iii) whether the East Asian countries are natural trading partners for each other to enhance welfare gains from RTAs, and (iv) whither East Asian RTAs. From our analysis, we recommend following policy options. First, East Asian RTAs should follow an expansionary RTA path (for example, AFTA and five ASEAN+1 FTAs → RCEP and/or TPP → FTAAP). Second, as we consider the high dependence on external economies through global trade and investment, East Asia needs to cooperate with major external trading partners by forming cross-regional RTAs with the EU and US. Third, in order to enable East Asian economies to take the more desirable expansionary RTA path, harmonizing or simplifying ROO, the cumulation of value contents among the RTA members in East Asia, and enhancing trade facilitation should be a prerequisite considering the complicated web of RTAs, regional production networks, and the consolidation of the FTAAP.
  • Topic: Economics, International Trade and Finance, Regional Cooperation
  • Political Geography: East Asia, Asia
  • Author: Rich Karl, Magda Rich, P.G. Chengappa
  • Publication Date: 03-2014
  • Content Type: Working Paper
  • Institution: Norwegian Institute of International Affairs
  • Abstract: Despite estimates that the global butterfly trade generates over US$100 million annually in sales of pupae for exhibitions and deadstock for a range of collector and artisanal uses, almost no research has been conducted that unpacks the dynamics of these value chains. This paper remedies this gap by highlighting the governance structure of the value chain, with important implications on the benefits for chain participants, upgrading strategies, sectoral sustainability, and the potential for new market entrants. This research on live butterfly chains reveals the fragility of current modes of economic organization that promote overproduction as threatening the long-term viability for the industry as a whole. The authors propose an alternative governance model based on the use of individually transferrable quotas, or ITQs, as a means of improving the performance of certain butterfly value chains.
  • Topic: Economics, Government, International Trade and Finance, Governance
  • Author: Rich Karl, Magda Rich, P.G. Chengappa, Arun Muniyappa, Yadava C.G, Ganashruthi M.K., Pradeepa Babu B.N., Shubha Y.C.
  • Publication Date: 03-2014
  • Content Type: Working Paper
  • Institution: Norwegian Institute of International Affairs
  • Abstract: Certification programs has been employed in many agricultural products as a means to encourage and communicate compliance with standards associated with various attributes, such as organic, fair-trade, GMO free, and eco-friendly, among others. Such programs further seek to provide added value, through a price premium, to producers and supply chain actors associated with the label. In this paper, we review a number of global labeling and certification programs that could add value for coffee farms in India through the promotion of conservation and environmental protection. We provide results from a survey conducted on a sample of coffee farms in Coorg district, India to assess their awareness and perceptions related towards certified coffee and environmental conservation in general. Survey results illustrate strong positive associations with the environment by coffee planters, particularly among certified and organic producers. However, price premiums for certified and organic coffee are relatively small. While the potential of conservation-oriented certification for coffee in Coorg could be relatively limited outside of a few individual-level niches, branding Coorg more generally as a conservation-oriented region could hold promise, leveraging and personalizing the uniqueness of the natural offerings from Coorg and tapping into burgeoning associations with place and region in India.
  • Topic: Agriculture, Economics, Environment, International Trade and Finance
  • Political Geography: India
  • Author: Medin Hege
  • Publication Date: 04-2014
  • Content Type: Working Paper
  • Institution: Norwegian Institute of International Affairs
  • Abstract: The new trade theory, which emerged in the early 1980s, emphasised economies of scale and market failures as driving forces behind international trade. As opposed to the earlier theory, which mainly assumed perfect competition, the new trade theory provided a rationale for industrial policy. This article shows how industrial policy targeting specific firms or industries may be socially desirable within the new trade theory framework. Models from new economic geography and the more recent 'new' new trade theory with heterogeneous firms are also discussed. The main focus is put on models with pecuniary externalities.
  • Topic: Economics, International Cooperation, International Trade and Finance, Political Economy, Politics