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1. Global trends in countries‘ perceptions of the Belt and Road Initiative

Author:
Alicia Garcia-Herrero and Robin Schindowski
Publication Date:
04-2023
Content Type:
Working Paper
Institution:
Bruegel
Abstract:
Drawing on global media reports, we conduct a sentiment analysis of the image of China’s Belt and Road Initiative (BRI) and the evolution of its image over time. Our main finding is that perceptions of the initiative deteriorated significantly in many geographies from 2017 to 2022. The notable exception is in sub-Saharan Africa where the BRI’s image remains positive, even if slightly less so than in the past. This is notwithstanding increases in debt levels with China, much of which now face potential restructuring. Furthermore, we find significant inter- and intra-regional differences in the average sentiment towards China’s landmark project, as well as a much worse image of the initiative in countries which, until today, are not part of the BRI. Finally, we focus on the European Union, Africa and China’s immediate neighbourhood to better understand the complexities behind the perceived benefits and challenges associated with China’s Belt and Road Initiative.
Topic:
Bilateral Relations, European Union, Geopolitics, Economy, and Trade
Political Geography:
China, Europe, and Asia

2. Carbon Capture and Storage - Publics in five countries around the North Sea prefer to do it on their own territory

Author:
Christine Merk, Gisle Andersen, Åsta Dyrnes Nordø, and Torben Helfrich
Publication Date:
07-2023
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
Carbon Capture and Storage (CCS) has been identified as an essential part of the lowest-cost path toward reaching the goals of the Paris Agreement. In Europe, an accelerated pace of CCS development indicates that a CO2 transport and storage system could be established by 2030. However, we know little about how the public views the market for transport and storage of CO2 currently under development in Europe. In early 2023, we conducted an experimental comparative survey to study public opinions on cross-border CO2 trade for storage in Denmark, Germany, the Netherlands, Norway and the UK. The share of respondents that perceive CCS as somewhat positive or very positive varies considerably between the countries; we find the highest share in Denmark (69%), followed by the UK (68%), Norway (67%), the Netherlands (57%) and the lowest share in Germany (49%). Especially concerns about environmental risks and costs lead to more negative views, while perceptions of job creation and economic opportunities lead to more positive evaluations. The experimental results show that importing CO2 for storage is among the least preferred options in all countries, while the storage of CO2 that has been captured in the own country is the most preferred option; the gap in the share of positive evaluations is substantial and amounts to up to 20 percentage points in the UK. Respondents who feel that countries are responsible for reducing national greenhouse gas emissions and storing their own captured CO2 drive the pattern of a more positive evaluation of a domestic CCS value chain and a more negative evaluation of importing CO2.
Topic:
Climate Change, Trade, Carbon Emissions, and Perception
Political Geography:
Europe and North Sea

3. The US-EU Trade and Technology Council: Assessing the record on data and technology issues

Author:
Juan Carlos Fernández-Rodríguez and Frances G. Burwell
Publication Date:
04-2023
Content Type:
Working Paper
Institution:
European Policy Centre (EPC)
Abstract:
Since its creation, the Trade and Technology Council (TTC) has endorsed a Declaration for the Future of the Internet (DFI), designed a Joint Roadmap for transatlantic cooperation on artificial intelligence (AI) and identified quantum technology as a high priority. While these achievements can be considered success stories, this Discussion Paper argues that the TTC is now facing a dilemma. Different approaches to technology and digital governance and the lack of regulatory autonomy make the TTC best suited to address emerging issues that do not require changes in legislation. Yet, this is precisely what stakeholders want it to address. So, how can the TTC ensure its continuity without regulatory authority? The Paper offers five key recommendations: Make AI a test case and build from the lessons of the Joint AI Roadmap; Engage in issues where there is an initial strong value alignment and no regulation; Work on moonshot ideas such as the “metaverse” or low-earth orbit governance; Take oversight over the special task forces it has created to tackle critical issues such as the US Inflation Reduction Act (IRA); Think more actively about how to push its efforts into multilateral forums with like-minded partners.
Topic:
Science and Technology, European Union, Trade, and Data
Political Geography:
Europe, North America, and United States of America

4. EU-Ukraine wartime trade: Overcoming difficulties, forging a European path

Author:
Svitlana Taran
Publication Date:
08-2023
Content Type:
Working Paper
Institution:
European Policy Centre (EPC)
Abstract:
During the first year of Russia’s war in Ukraine, EU trade-liberalisation measures and EU-Ukraine Solidarity Lanes provided Ukraine with alternative export routes and allowed the country to reorient part of its exports to the EU market. However, the insufficient logistics capacity and lack of adequate coordination and cooperation during the operation of Solidarity Lanes led to tensions between Ukraine and its Eastern European neighbours. While a compromise between the European Commission and the Eastern European countries allowed the extension of temporary trade-liberalisation measures for a further year, resolving the immediate crisis, more is needed to ensure their smooth operation. This Discussion Paper provides recommendations on how the EU can further intensify efforts to facilitate Ukraine’s trade flows and prevent sudden trade disruptions and restrictions. These include: Enhance the strategic alignment and connectivity between Ukraine and the EU; Ensure security guarantees and increase the capacity of seaport corridors; Enhance coordination and unity between the Commission, EU member states and Ukraine; Avoid sudden and unjustified Solidarity Lanes' disruptions; Protect critical port and export infrastructure from Russia’s attacks; Facilitate EU-Ukraine trade liberalisation and Ukraine’s integration into the EU Single Market.
Topic:
Security, European Union, Trade Liberalization, Trade, and Russia-Ukraine War
Political Geography:
Russia, Europe, and Ukraine

5. Catastrophe: The Global Cost of the Ukraine War

Author:
Carl Conetta
Publication Date:
05-2023
Content Type:
Working Paper
Institution:
Project on Defense Alternatives
Abstract:
The war has been a disaster for Ukraine, but also a calamity for the world. This brief article provides a concise overview of the war’s profound global effects, beginning with the combatants’ cost in lives and treasure. Beyond this it assesses the war’s impact on global trade and economy; energy and food price inflation and their effects on poverty, hunger, and mortality; the redirection of humanitarian and official development assistance; the total sum of aid to the Ukrainian war effort, and the estimated cost of postwar reconstruction and recovery. Also examined is the war’s effect on global defense spending. The article also provides copious citations to support further inquiry.
Topic:
Economy, Trade, and Russia-Ukraine War
Political Geography:
Europe and Ukraine

6. Comparative Advantages in the Digital Era – A Heckscher-Ohlin-Vanek Approach

Author:
Dario Guarascio and Roman Stöllinger
Publication Date:
07-2022
Content Type:
Working Paper
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
This paper revisits the Heckscher-Ohlin-Vanek (HOV) theorem and investigates its fit for digital tasks and ICT capital, which both represent endowment factors that are expected to shape the digital transformation. We use a theory-consistent methodology for calculating the measured net factor content of trade (Trefler and Zhu, 2010) and apply it to a unique dataset on digital and non-digital tasks performed in detailed occupations, as well as recent data on ICT capital stocks. Equipped with these data we provide new evidence on the factor-based trade patterns for 25 EU countries and use it to test the HOV theorem. Overall, the performance of the sign test and the rank test is good if not impressive. In 83% of the cases countries are net exporters of those factors with which they are abundantly endowed, with a higher score achieved for digital tasks than for ICT capital. We conclude that the fit of the HOV theorem for highly relevant endowments of the digital era is as good as that of traditional endowment factors.
Topic:
European Union, Business, Trade, and Digital Transition
Political Geography:
Europe

7. The Digital Silk Road and China’s Influence on Standard Setting

Author:
Alex He
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
China is striving to become a leader in international standard setting, and the Digital Silk Road, part of China’s Belt and Road Initiative to expand its global infrastructure and markets, is key to realizing this goal. Both roads depend on standard connectivity, fuelled by Chinese private companies that are the driving force behind China’s growing role as a leader in technology development and shaping standards in both domestic and global markets. However, China faces strong competition to gain more influence in international standard-setting bodies, which are dominated by the European Union and the United States.
Topic:
Infrastructure, Digital Economy, Trade, Digital Culture, Silk Road, and Digitalization
Political Geography:
China, Europe, Asia, North America, and United States of America

8. The New Wave of Defensive Trade Policy Measures in the European Union: Design, Structure, and Trade Effects

Author:
Fredrik Erixon, Oscar Guinea, Philipp Lamprecht, Vanika Sharma, and Renata Zilli
Publication Date:
05-2022
Content Type:
Working Paper
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
This study undertakes a comprehensive review of proposed and adopted defensive trade policy instruments in the EU, with the purpose of better understanding their design, functioning, and implications. The study covers eight policy instruments at different stages of development. These are: Anti-Coercion Instrument (ACI), International Procurement Instrument (IPI), Carbon Border Adjustment Mechanism (CBAM), Foreign Subsidy Instrument (FSI), Corporate Sustainability Due Diligence (DD), Level Playing Field Provisions in the EU-UK Trade and Cooperation Agreement (LPF), Enforcement Regulation (ER), and the Deforestation Initiative (DI). It is understandable that the EU seeks both redressive and retaliatory measures in its trade policy. However, these measures would have the total effect of Europe producing more for itself and being less dependent on imports. This is a significant policy shift, because in their totality the defensive trade policies make the EU more inward-looking. This can lead to major negative consequences. An extensive distortion of trade and markets would reduce the gains from trade and prompt a reallocation of European resources. Notably, the EU is a larger supplier of goods and services than it is a buyer, and an inward-looking policy that leads to retaliation from EU’s trading partners can harm its exports and trade surplus. There are also potential strategic consequences that could follow, and their importance has increased considerable as a result of the Russian war against Ukraine. Under these measures, the EU could introduce new trade frictions with friends and allies, and with countries that the EU seeks closer cooperation with to provide for a safer geopolitical environment. For each of these defensive measures, the study takes an extensive look at the objectives of the instruments, their legality, proportionality, and subsidiarity, the working of the instruments and the division of labour between institutions, as well as their enforceability in conjunction with existing multilateral and bilateral rules affecting the EU. It also attempts to capture the impact and potential for retaliation for the EU and its partners as a result of the implementation of the instruments. The study highlights the areas where the instruments lack clarity, particularly in the implementation of the instrument, the division of labour between the EU and EU member states, and the compliance of the instruments with WTO rules and bilateral FTA provisions. The instruments share some general characteristics. Many of the instruments have been created as retaliatory measures against coercion and unfair trade practices by partner countries. Very often, the partner countries most affected by the instruments are also the same. The United States, China, Russia, the UK, and Turkey are likely to be on the receiving end of the instruments due to the significant volumes of trade and economic interdependence with the EU, but also because they either do not follow the same trade rules as the EU, or the EU wants to maintain with them the current level of competitiveness. Most instruments also use restrictions to the EU market as the main policy lever. The objective is not just about creating an equal playing field but also ensuring that the rest of the world follows EU rules. Particularly, the EU aims at regulating non-EU companies directly and unilaterally through EU policies, which increases the risk of retaliation against the EU. At the same time, there are also important areas of departure in the specifics of each instrument, as illustrated by the varying objectives, measures, compatibility with international obligation, affected sectors, and whether the measures apply automatically or at the discretion of the EU.
Topic:
Defense Policy, Political Economy, European Union, and Trade
Political Geography:
Europe

9. EU-Georgia Relations at a Critical Juncture: A Case for European Strategic Autonomy

Author:
Ioannis N. Grigoriadis and Mariam Gugulashvili
Publication Date:
09-2022
Content Type:
Working Paper
Institution:
Hellenic Foundation for European and Foreign Policy (ELIAMEP)
Abstract:
Despite the substantial progress that Georgia has made in implementing the EU Association Agreement and related reforms, it has been experiencing democratic backsliding since 2018. The divergence of Georgia’s ruling party from a pro-European trajectory, as well as the political polarization that has been dominant in recent years, have contributed to the deterioration of ties between Georgia and the EU. Unlike Ukraine and Moldova, Georgia, which was once seen as a “reform pioneer,” was not given candidate status in June 2022. Georgian public opinion has always supported membership of Euro-Atlantic institutions, with more than 80% of Georgians today being Euro-enthusiasts and overwhelmingly in favour of joining the EU. The EU is Georgia’s largest donor and trading partner. Georgia’s key strategic option boils down to Russia vs. the West. Georgia should foster closer relations with certain EU member states that could provide key support for its EU membership aspirations.
Topic:
Bilateral Relations, European Union, Trade, and Strategic Autonomy
Political Geography:
Europe and Georgia

10. Post-Brexit imports, supply chains, and the effect on consumer prices

Author:
Jan David Bakker, Nikhil Datta, Josh de Lyon, Luisa Opitz, and Dilan Yang
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
UK in a Changing Europe, King's College London
Abstract:
This report documents the decrease in imports and shows how the patterns of imports vary across sectors following the UK’s departure from the Single Market and Customs Unit at the end of 2020. The authors, Jan David Bakker, Nikhil Datta, Josh De Lyon, Luisa Opitz, and Dilan Yang, focus on comparisons between imports from the EU and imports from non-EU countries. Some products, such as fats, oils, and waxes, experienced a sizeable decrease in trade volumes with EU countries compared to those of non-EU countries in January 2021. Other products, such as minerals, experienced minimal deviation in imports from the EU versus non-EU. We also document that the timing of import changes varies across products: in some cases, the deviation occurs pre-TCA, and there is some evidence of stockpiling; in other cases, the changes only occur post-TCA, and can be either short term or persistent. The fall in imports from the EU will affect the UK economy through its impact on supply chains. Two-thirds of international trade is in products used as inputs to production. We show that imports from the EU fell for products that are used as inputs to production in many industries in the UK. For some sectors such as agriculture, fishing, and car manufacturing, there is evidence that imported inputs began to be sourced from non-EU countries pre-TCA. For others, including vegetable oil, animal fats, prepared animal feeds, and pharmaceuticals, the adjustments occurred post-TCA. Evidence suggests that increased access to intermediate inputs can boost productivity, so a reversal is likely to cause a fall in productivity. Imports also provide cheaper goods to consumers, as well as a wider variety of choice. Focussing on food products, we show that the drop in imports after Brexit caused an increase in prices. Products that were more heavily reliant on imports from the EU increased in price following the election of Boris Johnson in 2019, pre-TCA and then increased further post-TCA. This report therefore shows that changes in imports of goods from the EU have affected UK firms’ supply chains. Part of this change is driven by the adjustment costs incurred as part of the new trading relationship and is likely to be short term, but another part is likely to reflect a long-term increase in the cost of inputs from the EU, which make up a sizable contribution of total imports. This could have a knock-on effect for consumers who will face higher prices, and for workers whose jobs will be affected by adjustments in the supply chain.
Topic:
European Union, Brexit, Trade, Imports, and Supply Chains
Political Geography:
United Kingdom and Europe