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Begin New Search Topic International Trade and Finance Political Geography North America Content Type Working Paper

1. Industrial policy for electric vehicle supply chains and the US-EU fight over the Inflation Reduction Act

Author:
Chad P. Bown
Publication Date:
05-2023
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
The Inflation Reduction Act (IRA) of 2022 provoked a transatlantic trade spat. After the law was passed, the Biden administration addressed some of the concerns raised by the European Union by writing controversial rules to implement the legislation. These regulations are expected to have complex effects that, in some instances, may offset the intended impact of other provisions in the original legislation. This paper examines how the law, its implementing regulations, policy decisions on leasing, as well as potential critical minerals agreements all have the potential to affect the electric vehicle (EV) supply chain. The EV case study showcases the political-economic complications involved in US and EU attempts to cooperate over clean energy transition policy to address the global externality of carbon dioxide emissions. EVs are but one example of the challenge facing partners with integrated supply chains and similar levels of economic development that share concerns about climate change, rising inequality, workers, other social issues, and democracy itself. The EV conflict laid bare the differing US and EU prioritization of these issues relative to economic efficiency, World Trade Organization rules, the approach to nonmarket economies, and national security vulnerabilities that arise from depending on an authoritarian regime such as China for import sourcing of critical inputs.
Topic:
Industrial Policy, International Trade and Finance, European Union, Supply Chains, and Electric Vehicles
Political Geography:
Europe, North America, and United States of America

2. Biden, Israel, and China: Making a Difficult Threesome Work

Author:
Steven R. David
Publication Date:
05-2022
Content Type:
Working Paper
Institution:
Jerusalem Institute for Strategy and Security (JISS)
Abstract:
It is wrong to expect Israel, a middle-level economy, to decouple from China when far wealthier countries (including the United States) show no signs of following suit. Israeli companies should not be subject to restrictions not placed on companies elsewhere, including the United States itself.
Topic:
Diplomacy, International Trade and Finance, Hegemony, and Conflict
Political Geography:
China, Middle East, Israel, Asia, North America, and United States of America

3. Cutting through the Value Chain: The Long-Run Effects of Decoupling the East from the West

Author:
Gabriel Felbermayr, Alexander Sandkamp, and Hendrik Mahlkow
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
With ever-increasing political tensions between China and Russia on one side and the EU and the US on the other, it only seems a matter of time until protectionist policies cause a decoupling of global value chains. This paper uses a computable general equilibrium trade model calibrated with the latest version of the GTAP database to simulate the effect of doubling non-tariff barriers - both unilateral and reciprocal - between the two blocks on trade and welfare. Imposing trade barriers almost completely eliminates bilateral imports. In addition, changes in price levels lead to higher imports and lower exports of the imposing country group from and to the rest of the world. The targeted country group increases exports to the rest of the world and reduces imports. Welfare falls in all countries involved, suggesting that governments should strive to cooperate rather than turning away from each other. By imposing a trade war on Russia, the political West could inflict severe damage on the Russian economy because of the latter’s smaller relative size.
Topic:
International Cooperation, International Trade and Finance, European Union, Conflict, Trade Wars, Protectionism, and Rivalry
Political Geography:
Russia, China, Europe, Asia, North America, and United States of America

4. Public responses to foreign protectionism: Evidence from the US-China trade war

Author:
David Steinberg and Yeling Tan
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
America's recent turn toward protectionism has raised concerns about the future viability of the liberal international trading system. This study examines how and why public attitudes toward international trade change when one's country is targeted by protectionist measures from abroad. To address this question, the authors fielded three original survey experiments in the country most affected by US protectionism: China. First, they find consistent evidence that US protectionism reduces Chinese citizens' support for trade. This finding is replicated in parallel experiments on technology cooperation, and further validated outside of the China context with a survey experiment in Argentina. Second, they show that responses to US protectionism reflect both a "direct reciprocity" logic—citizens want to retaliate against the United States specifically—and a "generalized reciprocity" logic that reduces support for trade on a broader, systemic basis.
Topic:
Economics, International Trade and Finance, Protectionism, and Competition
Political Geography:
China, Asia, North America, and United States of America

5. Brothers in arms: The value of coalitions in sanctions regimes

Author:
Sonali Chowdhry, Julian Hinz, Katrin Kamin, and Joschka Wanner
Publication Date:
10-2022
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
This paper examines the impact of coalitions on the economic costs of the 2012 Iran and 2014 Russia sanctions. By estimating and simulating a quantitative general equilibrium trade model under different coalition set-ups, we (i) dissect welfare losses for sanction-senders and target; (ii) compare prospective coalition partners and; (iii) provide bounds for the sanctions potential — the maximum welfare change attainable — when sanctions are scaled vertically, i.e. across sectors up to an embargo, or horizontally, i.e. across countries up to a global regime. To gauge the significance of simulation outcomes, we implement a Bayesian bootstrap procedure that generates confidence bands. We find that the implemented measures against Iran and Russia inflicted considerable economic harm, yielding 32 – 37% of the vertical sanctions potential. Our key finding is that coalitions lower the average welfare loss incurred from sanctions relative to unilateral implementation. They also increase the welfare loss imposed on Iran and Russia. Adding China to the coalition further amplifies the welfare loss by 79% for Iran and 22% for Russia. Finally, we quantify transfers that would equalize losses across coalition members. These hypothetical transfers can be seen as a sanctions-equivalent of NATO spending goals and provide a measure of the relative burden borne by coalition countries.
Topic:
Globalization, International Trade and Finance, Markets, Sanctions, Alliance, and Embargo
Political Geography:
Russia, China, Europe, Asia, North America, and United States of America

6. Ambivalence About International Trade in Open- and Closed-ended Survey Responses

Author:
Arturo Chang, Thomas Ferguson, Jacob Rothschild, and Ben Page
Publication Date:
10-2021
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
Spontaneous, open-ended survey responses can sometimes better reveal what is actually on people’s minds than small sets of forced-choice, closed questions. Our analysis of closed questions and trade-related open-ended responses to 2016 ANES “likes” and “dislikes” prompts indicate that Americans held considerably more complex, more ambivalent, and – in many cases – more negative views of international trade than has been apparent in studies that focus only on closed-ended responses. This paper suggests that contrast between open- and closed-question data may help explain why the effectiveness of Donald Trump’s appeals to trade resentments surprised many observers.
Topic:
International Trade and Finance, Survey, Models, and Polls
Political Geography:
North America and United States of America

7. Mexico’s Automotive Industry: A Success Story?

Author:
Jorge Carreto Sanginés, Margherita Russo, and Annamaria Simonazzi
Publication Date:
10-2021
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
In less than three decades Mexico’s automotive industry has gone from a minor role to the 7th largest world producer of automotive vehicles. The Mexican experience is part of the more general case of the “integrated peripheries.” The development of these cannot be accounted for separately from the developments occurring in its core country. Unlike the core-periphery literature, however, our analysis emphasizes that the various clusters of cores and integrated peripheries are not alike. In the case under study, the core has been systematically lagging behind the main transformations pioneered by its competitors. The paper traces the evolution of the Mexican automotive industry, emphasizing the difficulties faced by a late-comer country in developing an independent industry, and the importance of policy choices as well as the macroeconomic context in affecting its development. NAFTA represents the culmination of an integration process that has profoundly transformed the structure of the Mexican automotive industry, deepening its dependence on the US market. While there is no doubt that it has contributed to the spectacular growth of the Mexican auto industry, whether it also increased its resilience or, rather, its dependence is still an open question. This issue is particularly relevant in view of the transformations that are taking place in the automotive sector and in the geopolitical scenario. These include the end of NAFTA and the advent of USMCA, the entry of powerful competitors into the global market, and the transition to electric and autonomous vehicles, which all entail risks and opportunities. The lens of the centre-periphery relationship can help to understand the present integration of North America and its future direction.
Topic:
International Trade and Finance, NAFTA, Regionalism, Industry, and Motor Vehicles
Political Geography:
North America and Mexico

8. The EU-US Trade and technology Council: Mapping the Challenges and Opportunities for Transatlantic Cooperation on Trade, Climate, and Digital

Author:
Guillaume Van der Loo, Thijs Vandenbussche, and Andreas Aktoudianakis
Publication Date:
09-2021
Content Type:
Working Paper
Institution:
EGMONT - The Royal Institute for International Relations
Abstract:
The EU-US Summit on 15 June 2021 marked the beginning of a renewed transatlantic partner- ship and set an ambitious joint agenda for EU-US cooperation post-COVID-19. The new Biden administration offers the EU the opportunity to re-establish transatlantic relations, which reached their lowest point since World War II under the turbulent Trump administration, and to address the bilateral disputes and tensions that have emerged, partly as a result of Trump’s ‘America First’ policies. One of the key deliverables of the Summit was the establishment of the EU-US Trade and Technology Council (TTC). The TTC aims to deepen EU-US relations on trade and investment and to avoid new technical barriers to trade by cooperating on key poli- cies such as technology, digital policy issues and supply chains. Despite the optimism in Brussels and Washington about renewing and strengthening transat- lantic cooperation, there are several challenges for EU-US cooperation. In the areas of trade, digital and climate in particular several differing views or outstanding disputes (most of them inherited by the Trump administration) will need to be addressed by the new TTC (the first meeting is scheduled on 29-30 September 2021) or other joint bodies. Only then will the EU and the US be able to deliver on the new ambitious transatlantic agenda. This paper will there- fore discuss the key challenges and opportunities for EU-US cooperation in the three inter- related areas of trade, digital and climate. For each of these areas, the outcome of the June 2021 EU-US Summit will be discussed and the challenges and opportunities for delivering on the renewed transatlantic agenda will be analysed. Moreover, this paper will present several policy recommendations, for the TTC or on EU-US cooperation in general, on how to advance the transatlantic partnership.
Topic:
Climate Change, Diplomacy, International Cooperation, International Trade and Finance, Science and Technology, European Union, Digitalization, and Summit
Political Geography:
Europe, North America, and United States of America

9. International Intellectual Property after the New NAFTA

Author:
Jeremy de Beer
Publication Date:
01-2020
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
The Canada-United States-Mexico Agreement (CUSMA) is the new high-water mark in international intellectual property (IP) law. CUSMA includes most of the Trans-Pacific Partnership provisions that were suspended in the Comprehensive and Progressive Trans-Pacific Partnership, except for a few pharmaceutical-related provisions amended after signing. Canada will be required to make meaningful changes to domestic IP laws, including copyright term extension, criminal penalties for tampering with digital rights management information, restoration of patent terms to compensate for administrative and regulatory delays, broader and longer protection for undisclosed testing data and other data, new civil and criminal remedies for the misappropriation of trade secrets, and additional powers for customs officials to seize and destroy IP-infringing goods.
Topic:
International Trade and Finance, Regional Cooperation, Intellectual Property/Copyright, NAFTA, and USMCA
Political Geography:
United States, Canada, North America, and Mexico

10. Toward a Robust Architecture for the Regulation of Data and Digital Trade

Author:
Dan Ciuriak and Maria Piashkina
Publication Date:
04-2020
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
The rapid digital transformation occurring worldwide poses significant challenges for policy makers working within a governance framework that evolved over centuries. Domestic policy space needs to be redefined for the digital age, and the interface with international trade governance recalibrated. In this paper, Dan Ciuriak and Maria Ptashkina organize the issues facing policy makers under the broad pillars of “economic value capture,” “sovereignty” in public choice and “national security,” and outline a conceptual framework with which policy makers can start to think about a coherent integration of the many reform efforts now under way, considering how policies adopted in these areas can be reconciled with commitments under a multilateral framework adapted for the digital age.
Topic:
International Trade and Finance, Reform, Digital Economy, Multilateralism, and Digitization
Political Geography:
United States, China, Europe, Asia, and North America

11. The cross-border impacts of China’s official rate shocks on stock returns of Chinese concepts shares listed on U.S. market

Author:
Dong Weijia
Publication Date:
02-2020
Content Type:
Working Paper
Abstract:
This paper examines a new cross-border effect of an emerging country’s interest rate changes on the stock returns of its domestic firms listed overseas. First, we discover that the increase in China’s official interest rate greatly affects the NYSE-listed Chinese stocks, thereby suggesting that similar to Chinese domestic investors, the institutional investors in a mature market sometimes exhibit irrational sentiment driven by an emerging economy’s unexpected monetary policy shocks. Second, we highlight some novel asymmetric impacts of China’s official rate changes on Chinese concepts stock prices and reveal that these effects differ from the conventional nonlinear effects of monetary policies. For instance, a bull and bear regime has no statistically significant asymmetric effect on NYSE, whereas interest rate rise has different cross-border impact on Nasdaq and NYSE markets. These interesting findings are mainly driven by the smart investors in the U.S. stock market who are knowledgeable about the differences between NYSE- and Nasdaq-listed stocks and carefully analyze the different impacts of China’s official interest rate changes on the fundamentals of different types of Chinese concepts stocks.
Topic:
International Trade and Finance, Bilateral Relations, and Investment
Political Geography:
China, Asia, North America, and United States of America

12. Cooperation in Trade in Services

Author:
Akshay Mathur and Purvaja Modak
Publication Date:
06-2020
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
Over the past decade, there has been a shift in global trade from trade in goods to trade in services. Unlike goods, services are intangible and consumed by the user directly, without intermediate supervision. Thus, the only way to ensure the quality of a service is to enforce standards on the service provider. This is the responsibility of domestic sector-specific regulatory institutions established by the government. This paper examines the current state of services trade in India and Canada, considers India’s services trade with Canada and outlines a number of measures the countries could take to support services trade.
Topic:
International Cooperation, International Trade and Finance, Services, and Trade Policy
Political Geography:
Canada, India, Asia, and North America

13. Fostering Growth in Digital Trade through Bilateral Cooperation in the Development of Trade Rules

Author:
Don Stephenson
Publication Date:
06-2020
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
Like foreign policy, trade policy is the outward expression of domestic policy — both economic and social — and trade negotiations are to advance the national interest. Both India and Canada have important commercial interests in digital trade and both have counterbalancing social policy concerns, but they have important differences as well. Their equitable participation in digital trade must overcome an imbalanced competitive landscape through measures to facilitate access to technology and infrastructure, financing, and training in digital technology literacy and data-based business models. As yet, there is no international consensus on how trade rules should be adapted to foster digital trade. Consistent with the Track 1.5 Dialogue objectives, this paper calls on Canada and India to partner and lead in advancing the digital trade agenda. It recommends creating a bilateral process to identify common causes and areas for collaboration; convening a business-to-business conversation supported with research and analysis; and focusing on the impact of digital technology, looking at not only electronic commerce but also trade in traditional service sectors.
Topic:
International Cooperation, International Trade and Finance, Digital Economy, and Trade Policy
Political Geography:
Canada, India, Asia, and North America

14. India-Canada Energy Cooperation

Author:
Amit Bhandari
Publication Date:
07-2020
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
The energy sectors of India and Canada complement each other: India is a large and growing oil importer, while Canada is a large and growing exporter of oil and gas. However, as they invested in oil fields across the world, Indian oil companies have missed out on the Canada story. Investing in Canada’s oil sector can help India guard against the risk of spikes in oil prices and provide Canada with long-term demand security. In this paper, first presented as a backgrounder at Track 1.5 meetings in Mumbai, India, in November 2019, Gateway House outlines its findings on the feasibility of Indian investment in Canada’s petroleum sector, suggesting a path forward and best prospects for investment.
Topic:
Energy Policy, International Trade and Finance, Oil, Gas, and Investment
Political Geography:
Canada, India, Asia, and North America

15. Environmental Provisions in CUSMA: A New Approach

Author:
Silvia Maciunas
Publication Date:
07-2020
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
The environmental chapter in the newly ratified Canada-United States-Mexico Agreement (CUSMA) builds on the environmental chapters of its predecessors: the North American Free Trade Agreement and the North American Agreement on Environmental Cooperation between Canada, the United States and Mexico. Although CUSMA contains greater environmental provisions in the form of pollution prevention, the control of toxic substances and illegal fishing, and the conservation of wild flora and fauna, it fails to address climate change, the most critical challenge of our time.
Topic:
Environment, International Trade and Finance, Regional Cooperation, NAFTA, and Trade Policy
Political Geography:
Canada, North America, Mexico, and United States of America

16. Tracing the Local Impacts of Exports on Poverty and Inequality: The Case of Mexico

Author:
Hernan Winkler
Publication Date:
11-2020
Content Type:
Working Paper
Institution:
Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:
Evidence about the effect of exports on welfare at the local level is scarce. Using a unique dataset of international trade and poverty maps for almost 2,000 Mexican municipalities between 2004 and 2014, the study presented in this paper provides new evidence on the impact of a significant rise in exports on poverty and inequality at the local level. The analysis implements an instrumental variable approach that combines the initial structure of exports across municipalities with global trends in exports from developing to developed countries by sector. The results show that a 10 percent increase in the ratio of exports to workers reduces income inequality measured by the Gini coefficient by 0.17 points (using a 0 to 100 scale), but no significant effects on poverty reduction or average household incomes are identified. The lack of impacts on average incomes is driven by a rise in the supply of labor at the local level because municipalities with higher export growth experienced an increase in labor force participation and attracted more net migration, particularly of unskilled workers. Therefore, while total labor incomes grew in response to an increase in exports, average labor incomes per worker did not change. Declining remittances also blunted the effect of growing exports on household incomes.
Topic:
International Trade and Finance, Migration, Poverty, Inequality, and Local
Political Geography:
North America and Mexico

17. 11th U.S.-China High-Level Political Party Leaders Dialogue

Author:
Joshua Cavanaugh
Publication Date:
06-2020
Content Type:
Working Paper
Institution:
EastWest Institute
Abstract:
A select delegation of leaders from the U.S. Democratic and Republican Parties and the global business community traveled to Beijing, China to meet with senior officials from the Communist Party of China (CPC) on November 18-21, 2019. The discussions were part of the 11th U.S.-China High-Level Political Party Leaders Dialogue organized by the EastWest Institute (EWI) in partnership with the International Department of the Central Committee of the Communist Party of China (IDCPC). Launched in 2010, the U.S.-China High-Level Political Party Leaders Dialogue seeks to build understanding and trust between political elites from the U.S. and China through candid exchanges of views on topics ranging from local governance to foreign policy concerns. The dialogue process consistently involves sitting officers from the CPC and the U.S. Democratic and Republican National Committees. In the 11th iteration of the dialogue, the CPC delegation was led by Song Tao, minister of IDCPC. Gary Locke, former secretary of the United States Department of Commerce, former governor for the state of Washington and former United States Ambassador of China; and Alphonso Jackson, former secretary of the United States Department of Housing and Urban Development; lead the U.S. Democratic and Republican delegations, respectively. Throughout the dialogue, members of both delegations spoke freely on relevant topics including foriegn policy trends, trade disputes and emerging areas of economic cooperation. EWI facilitated a series of meetings for the U.S. delegation, which included a productive meeting with Wang Qishan, vice president of the People’s Republic of China at the Great Hall of the People. The delegates also met with Yang Jiechi, director of the Office of the Central Commission for Foreign Affairs; Dai Bingguo, former state councilor of the People’s Republic of China; and Lu Kang, director of the Department of North American and Oceanian Affairs at the Ministry of Foreign Affairs. The U.S. delegates visited the Asian Infrastructure Investment Bank and met with their president, Jin Liqun, as well as the Schwarzman College at Tsinghua University to engage prominent scholars on the future of the U.S.-China relationship.
Topic:
Foreign Policy, Diplomacy, International Trade and Finance, and Economic Cooperation
Political Geography:
United States, China, Asia, and North America

18. Preferential Trade Agreements vs. Multilateralism: In the New Trump-World, Does Canada Face an Impossible Choice?

Author:
Judit Fabian
Publication Date:
03-2020
Content Type:
Working Paper
Institution:
Canadian Global Affairs Institute (CGAI)
Abstract:
International trade is often framed in starkly divergent terms: either countries choose multilateral trade agreements (MTAs) and advance the cause of global economic liberalization, or they choose preferred trade agreements (PTAs) and put the entire system at risk. Canada has a long track record of pursuing PTAs and with the Trump administration’s opposition to multilateralism, and longstanding opposition in elements of the Republican and Democratic parties, this trend will likely continue. The question is whether progress will come at the expense of the global trade system. Some economists believe PTAs to be trade-diverting, reducing trade with more efficient producers outside the agreement. Others insist that PTAs can create trade by shifting production to lower-cost producers in one of the participating countries. One prominent contrary argument holds that PTAs lead to discontinuities in tariff regimes between countries and regions, increasing transaction costs, disrupting supply chains, creating opportunities for corruption and harming global welfare, especially in developing nations. While debate continues about the effects of PTAs, a closer examination suggests that worries are overblown about their negative impacts on global trade flows. Evidence indicates that they support rather than harm the international trading system. Countries shut out of PTAs are more motivated to seek out agreements in new markets, increasing liberalization overall. They may also seek a reduction in most-favoured nation (MFN) tariffs, which would deprive PTAs of their major tariff benefits. Studies have found complementarity between preferential and MFN tariffs, revealing that PTAs promote external trade liberalization. Even if a PTA reduces a given country’s incentive to push for multilateral liberalization, it raises the odds of that country liberalizing its trade to avoid getting left behind. PTAs are a response to the difficulties of securing sweeping multilateral agreements. The World Trade Organization (WTO) Agreements authorize them under GATT Article XXIV, GATS Article V, and the enabling clause, and the WTO facilitates a degree of governance over PTAs through its dispute settlement process. Over the past 25 years, countries have adopted these deals at a rapid pace. Between 1994 and 2005, the number of PTAs increased from 50 to 200. By April 2018, 336 were in effect. At the same time, global trade has increased significantly. Between 1994 and 2010, the volume of world merchandise exports more than doubled. The proliferation of PTAs has resulted in a rise in international trade governance, because the countries involved shape their relationships in line with the WTO agreements. This juridification makes PTAs subordinate to the international system rather than giving them room to dissolve it. Canada should therefore have no fear of pursuing PTAs within the larger framework of the effort to achieve multilateral trade liberalization.
Topic:
International Trade and Finance, Multilateralism, Trade, and Donald Trump
Political Geography:
Canada, North America, and United States of America

19. Challenges and Prospects for the CPTPP in a Changing Global Economy: Taiwanese Accession and Canada’s Role

Author:
Hugh Stephens
Publication Date:
12-2020
Content Type:
Working Paper
Institution:
Canadian Global Affairs Institute (CGAI)
Abstract:
In the past, Canada has had to deal with the matter of Taiwan very delicately. China considers Taiwan to be an integral part of the nation: a rogue province that must eventually be reunified with the mainland. Since Canada relies much more on trade with China than with Taiwan, the stakes have favoured policies that avoid engaging with Taiwan in ways that would unnecessarily irritate China. As a result, there has been little appetite here for negotiating a bilateral trade deal with Taiwan. That attitude is finally changing. One main reason is because China is already angry with Canada, and vice versa. Relations between the two countries are at an all-time low, and domestic support for accommodating China is minimal. As a result, Canada is freer than before to consider negotiating a trade agreement with Taiwan. At the same time, Taiwan is interested in joining the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), to which Canada is already a party. By supporting Taiwan’s accession to the CPTPP, Canada can achieve a free-trade agreement with Taiwan without having to negotiate one bilaterally. The ability to do so under the aegis of a multilateral agreement should serve to mitigate any remaining concerns that China might further retaliate against Canada directly. However, striking back at China is not a reason for Canada to support Taiwan’s accession to the CPTPP. We should do so because it is in the interest of Canada and the other members of the CPTPP to add to the strength of the organization by welcoming an economy that is an important global trader and a key player in global supply chains. In addition, Taiwan is a country that is clearly willing and able to accept CPTPP disciplines. Canada should move quickly and enthusiastically to support Taiwan’s accession. The benefits of having Taiwan join Canada in a free-trade agreement are obvious. The opportunity to make it a reality is finally here. The Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), which entered into force on Dec.30, 2018 for six of the 11 signatories that had completed ratification at that time (Australia, Canada, Japan, Mexico, New Zealand and Singapore),1 is a beacon of hope in a dark, protectionist landscape. Along with the Regional Comprehensive Economic Partnership (RCEP) agreement, which was signed on Nov. 15, 2020, the CPTPP advances the trade and investment liberalization agenda at a time when protectionist measures by some major trading countries are threatening to undo decades of progress. The commitments and new disciplines of the CPTPP are particularly important because of malaise infecting the World Trade Organization, where the work of the Appellate Body has now ground to a halt because of actions by the United States, and to offset the negative impact of the U.S.-China trade war now underway.
Topic:
Government, International Trade and Finance, Partnerships, and Trade
Political Geography:
China, Canada, Taiwan, North America, and United States of America

20. A Saudi-U.S.-Russia Oil Deal Is Not a Good Idea

Author:
Christof Ruhl
Publication Date:
04-2020
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
Oil markets are sending confusing signals at a time when more confusion is the last thing anyone needs. When Russia walked out on OPEC+ rather than contribute to more output cuts, Saudi Arabia turned on the crude taps. Whatever Riyadh’s intention, this “price war” was quickly made meaningless by the impact of the new coronavirus on global oil demand. The price collapse has been beyond anything anyone could have imagined. Now, storage room for crude is becoming scarce. Analysts warn darkly that plunging prices may threaten global economic stability. Equities follow the oil price news. Everyone seems to agree that prices should stop falling; and yet no one seems to argue that a very low oil price is exactly what the world’s economy needs to recover. The combination of price war and pandemic is also creating strange bedfellows. Some American shale producers are advocating that their country blocks Saudi oil imports, others want to talk to OPEC. President Donald Trump’s government has expressed an interest in cooperating on global oil supplies with Saudi Arabia and Russia; it’s nudging OPEC+ to reconvene, or an even wider group of producers to meet. Could we be witnessing the emergence of an unholy alliance of Saudi Arabia, Russia and the U.S., to “manage volatility,” and incidentally shore up the price of oil?
Topic:
Energy Policy, International Trade and Finance, Oil, and Natural Resources
Political Geography:
Russia, Europe, Middle East, Saudi Arabia, North America, and United States of America

21. Columbia Global Energy Dialogue: Natural Gas Flaring Workshop Summary

Author:
Marianne Kah
Publication Date:
04-2020
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
The rapid expansion in tight oil production with its associated natural gas has made the United States the fourth largest source of flared gas in the world. The waste, emissions, and pollution caused by this flaring threatens not only the environment and human health but, ultimately, the license to operate for oil and natural gas companies. Responding effectively to the challenge of flaring requires technically and economically sound solutions that also enjoy political credibility and support. To be most credible, solutions for flaring need to be developed through open and transparent processes that provide for candid and constructive engagement by a diverse group of stakeholders. In January 2020, Columbia University’s Center on Global Energy Policy and the Energy Institute of the University of Texas at Austin gathered senior executives from the US oil and natural gas industry; current and former state government regulators; technical, market, and academic experts; and non-governmental organization (NGO) representatives with expertise in this topic for a workshop under the Chatham House Rule to discuss challenges and potential solutions to gas flaring, primarily in the Permian Basin. The gas flaring workshop focused on trends in gas flaring and greenhouse gas emissions in the United States, flaring and public policy, the disconnect between production growth and midstream infrastructure capacity, best practices and technological solutions for minimizing flaring, and regulatory and other solutions. Participants identified challenges to tackling flaring in the Permian, including poor data quality, the disconnect between the start of associated gas production and the availability of pipelines and other takeaway capacity, and the competition gas faces in the important Texas and California markets from lower-emission energy sources, and from coal in Texas. Participants also discussed potential solutions to these and other Permian flaring challenges.
Topic:
Energy Policy, International Trade and Finance, Oil, Natural Resources, and Gas
Political Geography:
North America and United States of America

22. Shifts in Global Sanctions Policy, and What They Mean for the Future

Author:
Richard Nephew
Publication Date:
11-2020
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
The last four years have borne witness to a range of new sanctions, policies, and approaches around the world. Some of these were predicted in November 2016, as Donald Trump took to sanctions far more than his predecessors, using them to tackle virtually every foreign policy problem he encountered. In fact, Trump’s use of sanctions transcended their typical usage in both form and content, as he employed tariffs and other more traditional “trade” tools to try to manage a bevy of nontrade problems. The long-term effects of this decision have yet to be felt or properly understood. It may be that Trump was ahead of the curve in seeing the fracturing of the global liberal economic order and employed the US economy for strategic advantage while it was still ahead. It may also be that Trump undermined the US position in the global economy through his policies, if not actually hastened the demise of this system of managing global economics. Time and the evolution of policy in other global power centers will eventually tell. The shifting approach to sanctions policy by a variety of other states is a manifestation of the potential effects of Trump’s policy choices in using US economic power. From the EU to Russia to China, other countries have changed long-standing policy approaches as they relate to sanctions, either to respond to or perhaps to take advantage of the new paths forged by the United States. The actions that they have taken are not “unprecedented” per se, as each of these countries or organizations has—at times—embraced policies that are consistent with some of these current actions. But, in aggregate, they describe an overall shift in how the world treats sanctions and trade policy, particularly that as practiced by the United States.
Topic:
Diplomacy, International Cooperation, International Trade and Finance, and Sanctions
Political Geography:
China, Europe, Asia, North America, and United States of America

23. The Effects of US Sectoral Shocks through the World Input-Output Network

Author:
Minsoo Han
Publication Date:
12-2019
Content Type:
Working Paper
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
In this paper, I estimate the global effects of hypothetical 1% changes in US sectoral productivity. To do that, I formulate a multi-sector Armington trade model with import tariffs, trade in intermediate goods, sectoral heterogeneity, and input-output linkages. Because a closed form for changes in welfare is not available in the model, as opposed to Ossa (2015), I solve for equilibrium to conduct the counterfactual exercises. In particular, knowing that the gravity equations in this model are identical to Caliendo and Parro (2015) once we calibrate the trade elasticity and industry level productivity to the corresponding data, I modify their computation approach to estimate the counterfactual productivity changes. The model predicts that the primary channel through which the sectoral shocks affect welfare is terms of trade. I also find that both US productivity’s direct effect and effects through export prices are substantial for countries such as the US, Canada, Chile, and Mexico. On the other hand, changes in volume of trade are small and their directions of changes are also mixed across countries.
Topic:
International Trade and Finance, Economic Policy, and Trade
Political Geography:
North America and United States of America

24. Deeper Regional Integration and Global Value Chains

Author:
Nakgyoon Choi
Publication Date:
07-2019
Content Type:
Working Paper
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
Recently, international trade has become regional rather than global. This paper aims to test if deeper regional integration contributes to the organization of global value chains along the regional clusters including Asia, Europe, and America. We estimate the impacts of deep regional integrations on global value chains by region, investigating the implications of mega FTAs for global value chains by scenario. We use not only data on trade in value added but also global value chains participation indexes which reflect the global value chains better than domestic value added in goods and services exports. The estimation results reveal that a deep regional trade agreement has heterogeneous effects on global value chains depending on the regional clusters. In particular, Asia turns out to import more intermediate goods than Europe and America while RTA member countries tend to import more intermediate goods from Europe than Asia and America.
Topic:
International Trade and Finance, Regional Integration, Economic Policy, and Exports
Political Geography:
Europe, Asia, Global Focus, and North America

25. Developing a More Inclusive US Trade Policy at Home and Abroad

Author:
Kimberly Ann Elliott
Publication Date:
06-2019
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
American policymakers have failed to adequately respond to concerns about globalization’s effects and the resulting backlash has taken an ugly turn in recent years. While globalization is only one of many factors contributing to economic dislocation, sluggish wage growth and inequality in the United States, foreigners, and developing countries in particular, are frequently the target of those who are frustrated at being left behind. Yet few realize that US trade policy effectively discriminates against poorer countries. In addition, provisions in trade agreements that tilt the playing field in favor of business interests over those of American consumers and workers also often undermine development priorities in partner countries. American policymakers should rethink the substance and process of trade policy and negotiations to spread the benefits more broadly, at home and abroad.
Topic:
Globalization, International Trade and Finance, Inequality, and Domestic Policy
Political Geography:
United States and North America

26. U.S. Trade Policy in North America, China, and Beyond

Author:
Andy Green and Daniella Zessoules
Publication Date:
02-2019
Content Type:
Working Paper
Institution:
Center for American Progress - CAP
Abstract:
In recent decades, economic, political, and technological barriers to international trade and investment have collapsed around the world. This rapid globalization of commerce has lifted many out of poverty in developing countries, but due in part to a lack of meaningful labor and environmental standards and enforcement, it has also resulted in an outsourcing of production and jobs as well as downward pressure on workers’ real wages in developed countries such as the United States.1 The key trade agreements and international institutions put in place to manage globalization, such as the North American Free Trade Agreement (NAFTA) and China’s entry into the World Trade Organization (WTO), have failed to rebalance the rules to enable globalization to work on behalf of all workers—not just in the United States, but in Mexico, China, and more broadly. And in many cases, the trade rules have exacerbated economic pressures on many U.S. workers.2 For years, progressive voices in the United States have called for efforts to make globalization work better for working families, communities, and the environment.3 Now, the Trump administration has sought claim to the trade reform mantle. Those claims, however, should be met with skepticism. The 2017 congressional Republican tax law slashed taxes for corporations and the wealthy on the false promise of raising wages for workers.4 Corporate profits, share buybacks, and mergers and acquisitions have all boomed, but working-class wages have barely budged.5 The international provisions of the 2017 tax law further incentivize offshoring operations at the expense of domestic investments and sourcing.6 The Trump administration’s domestic economic agenda of financial deregulation, budget cuts, and attacks on workplace safety and labor rights protections will simply make matters worse for working families. The administration’s record on trade policy has been mixed and largely incoherent. The president railed against NAFTA and other trade agreements for harming workers and U.S. jobs yet renegotiated a new NAFTA deal that fails to make labor and environmental standards meaningfully enforceable.7 His administration has slapped tariffs on adversaries and allies alike with little strategy—often in the name of national security and without addressing the root causes of the problem. Threatening further tariffs, the administration now is engaged in negotiations with China over intellectual property theft, market access for foreign multinationals, and a state-led industrial strategy.8 The president announced a delay in the additional tariffs, suggesting a deal with China is coming together, but concerns have long existed that the administration may settle for high-profile spot sales of U.S. commodities while effectively letting structural impediments and China’s industrial policies continue.9 The cost of what may be President Donald Trump’s high-profile deal with China could be real concessions for the United States, including in the technology and national security space, without providing lasting, solidly enforceable benefits more broadly.10 As U.S. Trade Representative Robert Lighthizer makes his first appearance this week before the new U.S. House of Representatives, the Trump administration will finally have to answer for its approach. Here are several questions that Congress should ask in order to hold the administration accountable to the American people.
Topic:
Security, International Cooperation, International Trade and Finance, and Science and Technology
Political Geography:
China, Asia, North America, and United States of America

27. The Future of North America’s Economic Relationship: From NAFTA to the New Canada-United States-Mexico Agreement and Beyond

Author:
Meredith Lily, Hugo Perezcano, and Christine McDaniel
Publication Date:
02-2019
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
The Canada-United States-Mexico Agreement (CUSMA) — known in the United States as the United States-Mexico-Canada Agreement (USMCA) — was reached on September 30, 2018, and will replace its predecessor if successfully ratified by legislatures in all three countries. Several weeks later, on October 14–16, 2018, thought leaders from Mexico, the United States and Canada gathered for the fourteenth annual North American Forum in Ottawa, Ontario. In light of these events, CIGI initiated a trilateral project to anticipate and predict how North American trade and economic relations would unfold in the near term and further into the future. Three authors, Christine McDaniel, Hugo Perezcano Díaz and Meredith Lilly, each from one of the North American countries, explain the importance of the new CUSMA to their respective countries and how economic relations could be reshaped in the coming months and years. Earlier versions of these papers were presented in a panel discussion at the North American Forum.
Topic:
International Trade and Finance, Regional Cooperation, NAFTA, and USMCA
Political Geography:
United States, Canada, North America, and Mexico

28. Does Canada’s Foreign Trade Policy Give Innovating Canadian Firms a Competitive Edge Internationally?

Author:
Olena Ivus and Marta Paczos
Publication Date:
05-2019
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
In recent years, Canada has adopted the Comprehensive Economic and Trade Agreement (CETA), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Canada-United States-Mexico Agreement (CUSMA). Like other modern international trade agreements, CETA, the CPTPP and the CUSMA include protections for innovators’ profits and technologies in the form of intellectual property rights (IPRs) regulations. These trade agreements will have a first-order impact on the volume and composition of trade in goods and innovation with sensitive intellectual property (IP) in Canada, as well as having an impact on global welfare distribution. But is Canada’s membership in these agreements good for Canadian firms looking to compete globally? This paper begins with a review of the IP protections instituted through recent trade deals involving Canada. It discusses the nature and scope of Canada’s IP obligations under CETA, the CPTPP and the CUSMA and explains how these obligations fit within the current Canadian legal framework. The changes in the standards of IPRs under these agreements will have a first-order impact on the volume and composition of trade in IP-sensitive goods, innovation and global welfare distribution and so deserve thorough debate. The paper then proceeds with a broader discussion of the reasons to include IP provisions in international trade agreements and the rationale for international coordination of the IPRs policy. Next, the paper discusses how IP provisions in trade agreements limit the freedom to use IP policy to promote national interests, while acknowledging that the various IP obligations are counterbalanced by several flexibilities, including the right to establish local exhaustion policies. The paper concludes with policy recommendations.
Topic:
International Trade and Finance, NAFTA, Trans-Pacific Partnership, Innovation, and USMCA
Political Geography:
United States, China, Canada, Asia, North America, and Mexico

29. Trump Trade Policy, Exchange Rate Surveillance and the IMF: Back to the Future?

Author:
James A. Haley
Publication Date:
07-2019
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
This paper discusses the nexus between the Donald Trump administration’s trade policy and International Monetary Fund (IMF) exchange rate surveillance. It reviews the evolution of IMF surveillance and the possible implications of incorporating currency manipulation clauses into bilateral trade agreements. Such clauses constitute a key US trade negotiation objective. While they may reflect genuine concern over practices to thwart international adjustment, they could erode the effectiveness of the IMF at a time of transition and resulting tension in the global economy. Managing this tension calls for a cooperative approach to the issue of adjustment, one consistent with the fundamental mandate of the IMF. An approach based on indicators of reserve adequacy is proposed. Such a framework was briefly considered and dismissed almost 50 years ago, which was likewise a period of tension in trade and global monetary affairs. Prospects for success today are equally dim because cooperative measures to assuage adjustment challenges would require repudiation of the view that exchange rate surveillance is about bilateral trade balances and abandonment of the zero-sum game approach to international arrangements on which Trump administration trade actions are based.
Topic:
International Cooperation, International Trade and Finance, Exchange Rate Policy, and IMF
Political Geography:
United States and North America

30. The Way Forward for WTO Dispute Settlement after the Eleventh Ministerial Conference

Author:
Centre for International Governance Innovation
Publication Date:
10-2019
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
In December 2017, trade ministers met in Buenos Aires, Argentina, for the Eleventh Ministerial Conference of the World Trade Organization (WTO), against the backdrop of crisis in the WTO dispute settlement system. After the meeting achieved only modest outcomes, and none related to dispute settlement, the Centre for International Governance Innovation convened a group of experts in Ottawa for a round table discussion of the way forward to restoring and improving the dispute settlement system. The round table discussion addressed three issues: ideas for reforming the operation of the WTO dispute settlement system; US concerns over the operation of the WTO dispute settlement system and the US decision to block appointments to the Appellate Body; and solutions to break the deadlock on WTO Appellate Body appointments and what to do if members are unable to reach an agreement. There was broad agreement that, while the WTO dispute settlement system has made an important contribution to maintaining the security and predictability of the rules-based trading system, there is still room for improvement in its operation. Participants discussed a number of procedural, systemic and substantive issues that could be addressed through reform, some of which might be easily agreed on and implemented, whereas others would require further consideration. It was agreed that the most pressing challenge to the system is the refusal of the United States to allow new appointments to the Appellate Body. While there was sympathy for some of the concerns raised by the United States, participants agreed that the ultimate objectives of the United States remain unclear, and, therefore, participants cautioned against making hasty concessions that might undermine the integrity and independence of the dispute settlement system.
Topic:
International Trade and Finance, World Trade Organization, and Settlements
Political Geography:
United States, Canada, and North America

31. Digital Trade at the WTO: The CPTPP and CUSMA Pose Challenges to Canadian Data Regulation

Author:
Patrick Leblond
Publication Date:
10-2019
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
On the margins of the Group of Twenty leaders’ meeting in Osaka, Japan on June 28-29, 2019, Canada and 23 others signed the Osaka Declaration on the Digital Economy. This declaration launched the “Osaka Track,” which reinforces the signatories’ commitment to the World Trade Organization (WTO) negotiations on “trade-related aspects of electronic commerce.” In this context, unlike its main economic partners (China, the European Union and the United States), Canada has yet to decide its position. The purpose of this paper is thus to help Canada define its position in those negotiations. To do so, it offers a detailed analysis of the e-commerce/digital trade chapters found in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Canada-United States-Mexico Agreement (CUSMA), the North American Free Trade Agreement’s replacement, in order to identify the potential constraints that these agreements could impose on the federal government’s ability to regulate data nationally as it seeks to establish a trusting digital environment for consumers and businesses. The analysis leads to the conclusion that Canada’s CPTPP and CUSMA commitments could ultimately negate the effectiveness of future data protection policies that the federal government might want to adopt to create trust in the data-driven economy. As a result, Canada should not follow the United States’ position in the WTO negotiations. Instead, the best thing that Canada could do is to push for a distinct international regime (i.e., separate from the WTO) to govern data and its cross-border flows.
Topic:
International Cooperation, International Trade and Finance, World Trade Organization, European Union, and Digital Economy
Political Geography:
United States, China, Europe, Canada, Asia, and North America

32. The Global Interplay between Trade, Geopolitical and Commodity Shocks

Author:
Idris Ademuyiwa and Pierre Siklos
Publication Date:
10-2019
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
Recent events have the potential to reverse the positive macroeconomic performance of the global economy and trigger a slowdown in both global growth and international trade. In particular, the implications of ongoing trade disputes that have undermined trust in the existing multilateral cooperation system and the incentive for countries to align with ongoing global policy coordination efforts. A compelling case for a mutually beneficial resolution of these tensions can be made by emphasizing the interdependence of the Group of Twenty (G20) economies — the G20 being the premier repository of international cooperation in economic and political matters. This study also considers the state of trade globalization, with an emphasis on the performance of the G20. The emergence of geopolitical risks (GPRs), that is, events that heighten tensions between countries and therefore threaten global economic performance, is an attempt to quantify the potential economic impact of the nexus between politics and economics. In the presence of heightened political risks, negative economic effects become more likely. Nevertheless, there is no empirical evidence investigating the links between the real economy, trade, the state of the financial sector, commodity prices and GPRs. Moreover, there is no evidence on these links that has a sample of countries that make up the G20. This paper begins to fill this gap. Relying on descriptive and statistical evidence, the conclusion is drawn that GPRs represent a significant factor that threatens global economic growth and economic performance, in the G20 countries in particular. Ultimately, however, GPRs reflect other factors, including threats stemming from trade tensions and large swings in commodity prices.
Topic:
International Cooperation, International Trade and Finance, Economic Growth, and Multilateralism
Political Geography:
Europe, Asia, South America, North America, and Global Focus

33. Emerging Countries in Global Financial Standard Setting: Explaining Relative Resilience and Its Implications

Author:
Andrew Walter
Publication Date:
11-2019
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
This special report explores the role of emerging-country members in the Basel process, a key aspect of global financial standard setting. It argues that this process has been significantly more politically resilient than adjacent aspects of global economic governance, in part because major emerging countries have perceived continuing “intra-club” benefits from participation within it. Most important among these are learning benefits for key actors within these countries, including incumbent political leaders. Although some emerging countries perceive growing influence over the international financial standard-setting process, many implicitly accept limited influence in return for learning benefits, which are valuable because of the complexity of contemporary financial systems and the sustained policy challenges it creates for advanced and emerging countries alike. The importance of learning benefits also differentiates the Basel process from other international economic organizations in which agenda control and influence over outcomes are more important for emerging-country governments. This helps to explain the relative resilience of the Basel process in the context of continued influence asymmetries and the wider fragmentation of global economic governance. The report also considers some reforms that could further improve the position of emerging countries in the process and bolster its perceived legitimacy among them.
Topic:
International Trade and Finance, Financial Markets, Global Political Economy, and Emerging States
Political Geography:
Africa, Europe, Asia, South America, Australia, North America, and Global Focus

34. Global Dimensions of US Monetary Policy

Author:
Maurice Obstfeld
Publication Date:
10-2019
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
This paper is a partial exploration of mechanisms through which global factors influence the tradeoffs that US monetary policy faces. It considers three main channels. The first is the determination of domestic inflation in a context where international prices and global competition play a role, alongside domestic slack and inflation expectations. The second channel is the determination of asset returns (including the natural real safe rate of interest) and financial conditions, given integration with global financial markets. The third channel, which is particular to the United States, is the potential spillback onto the US economy from the disproportionate impact of US monetary policy on the outside world. In themselves, global factors need not undermine a central bank’s ability to control the price level over the long term—after all, it is the monopoly issuer of the numeraire in which domestic prices are measured. Over shorter horizons, however, global factors do change the tradeoff between price-level control and other goals such as low unemployment and financial stability, thereby affecting the policy cost of attaining a given price path.
Topic:
Economics, Government, International Trade and Finance, and Monetary Policy
Political Geography:
North America and United States of America

35. The 2018 US-China Trade Conflict after 40 Years of Special Protection

Author:
Chad P. Bown
Publication Date:
04-2019
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
In 2018, the United States suddenly increased tariffs on nearly 50 percent of its imports from China. China immediately retaliated with tariffs on more than 70 percent of imports from the United States. This paper assesses what happened in 2018 and attempts to explain why. It first constructs a new measure of special tariff protection to put the sheer scope and coverage of the 2018 actions into historical context. It then uses the lens provided by the 2018 special tariffs to explain the key sources of economic and policy friction between the two countries. This includes whether China’s state-owned enterprises and industrial subsidies, as well as China’s development strategy and system of forcibly acquiring foreign technology, were imposing increasingly large costs on trading partners. Finally, it also examines whether the US strategy to provoke a crisis—which may result in a severely weakened World Trade Organization—was deliberate and out of frustration with the institution itself.
Topic:
Economics, International Trade and Finance, World Trade Organization, Bilateral Relations, Trade Wars, Donald Trump, and Imports
Political Geography:
China, Asia, North America, and United States of America

36. Trade Policy on the 2020 Trail: The First Debate

Author:
William Alan Reinsch, Jack Caporal, Beverly Lobo, and Catherine Tassin de Montaigu
Publication Date:
06-2019
Content Type:
Working Paper
Institution:
Center for Strategic and International Studies
Abstract:
Trade policy is a signature issue for the Trump administration. With the 2020 election campaign shifting into high gear, candidates are being forced to talk about trade whether they want to or not. The president’s frequent comments about trade, along with his imposition of tariffs, are driving the American public to think more deeply about trade and raise their level of understanding of trade policy. For trade wonks, this is a good thing—more people talking and thinking about their favorite subject. For presidential candidates, however, it creates a dilemma: how to criticize the president without alienating the voters who seem to like his trade policy.
Topic:
International Trade and Finance, Elections, Trade Policy, and Domestic Policy
Political Geography:
North America and United States of America

37. Home and Abroad: Building U.S. Global Economic Leadership on Strong Domestic Foundations

Author:
Matthew P. Goodman
Publication Date:
07-2019
Content Type:
Working Paper
Institution:
Center for Strategic and International Studies
Abstract:
The liberal international order set up under U.S. leadership at the end of World War II has produced enormous economic benefits for both the United States and the rest of the world. But recently, the order has been under severe strain, the result of shifting economic forces at home and challenges from new powers abroad. U.S. leadership remains critical to an international order that delivers broad-based prosperity for Americans and stability abroad. In a new essay collection, CSIS experts on economics, trade, energy, technology, and development share their thoughts on how the United States can reaffirm its leadership through smart policies both at home and abroad.
Topic:
International Cooperation, International Trade and Finance, Economic Cooperation, and Domestic Policy
Political Geography:
North America and United States of America

38. Trade Policy on the 2020 Trail: The Second Debate

Author:
William Alan Reinsch, Jack Caporal, Jonathan Robison, Beverly Lobo, and Catherine Tassin de Montaigu
Publication Date:
08-2019
Content Type:
Working Paper
Institution:
Center for Strategic and International Studies
Abstract:
As the race to be the Democratic nominee for president heats up, the second round of debates between the 20 candidates offered the American public a glimpse of the different candidate’s trade policies and their values around the issue. Already we are seeing some trends emerge and divisions widen within the group on trade, which remains in the background compared to hot button policy issues like health care or immigration. Nonetheless, as President Trump continues his trade wars, trade will certainly be a topic of further debate and discussion for the election.
Topic:
International Trade and Finance, Elections, Trade Policy, and Domestic Policy
Political Geography:
North America and United States of America

39. Does the United States Renegotiate Its Trade Agreements after They Are Signed?

Author:
William Alan Reinsch and Catherine Tassin de Montaigu
Publication Date:
09-2019
Content Type:
Working Paper
Institution:
Center for Strategic and International Studies
Abstract:
With House members pushing for changes to the United States-Mexico-Canada Agreement’s (USMCA) legal text and Speaker Nancy Pelosi’s (D-CA) directing working groups of Democratic members to work with U.S. Trade Representative (USTR) Robert Lighthizer on changes to address their concerns, the question of whether a trade agreement can be reopened and renegotiated after signing has been raised. In an effort to inform that debate with some facts, CSIS reviewed trade agreements the United States entered into after the North American Free Trade Agreement (NAFTA) and examined whether any of them were modified after signing. In brief, we concluded that of the 12 agreements reviewed, six were subject to subsequent modification. In all six cases, new side letters were signed after the agreement was signed. In three cases, the text of the agreement itself was reopened. Below are the details of our conclusions. Agreements post-NAFTA are set out in the order by which they entered into force. The “days in between” calculation refers to the number of days between the agreement’s signing and its entry into force, which in most cases was well after the date of final congressional approval. In addition, links are provided to the text of each agreement and any side letters that were added.
Topic:
Diplomacy, International Trade and Finance, and Trade Policy
Political Geography:
North America and United States of America

40. CSIS Brief: Beyond the Brink: Escalation and Conflict in U.S.-China Economic Relations

Author:
Matthew P. Goodman, Dylan Gerstel, and Pearl Risberg
Publication Date:
09-2019
Content Type:
Working Paper
Institution:
Center for Strategic and International Studies
Abstract:
As the United States and China mark their 40th anniversary of formal diplomatic relations in 2019, the world’s most important bilateral relationship is increasingly defined by mistrust, competition, and uncertainty. After four decades of deepening economic integration, the talk in Washington today is about the extent to which the two economies will “decouple” over the years ahead. In a recent study, the CSIS Simon Chair drew on several different academic disciplines to model how an economic conflict between the United States and China could escalate and eventually de-escalate. Our findings suggest that economic conflict is likely to be an enduring feature of the U.S.-China relationship for many years to come. Until perceptions of relative costs in the two countries shift, Washington and Beijing seem set on a path of continued escalation, no substantial trade deal, and at least partial decoupling of their economies.
Topic:
International Trade and Finance, Conflict, Trade Policy, and Economic Cooperation
Political Geography:
China, Asia, North America, and United States of America

41. Cross-Border Trade and Corruption along the Haiti-Dominican Republic Border

Author:
Mary Speck
Publication Date:
03-2019
Content Type:
Working Paper
Institution:
Center for Strategic and International Studies
Abstract:
Illegal trade across the Haiti/Dominican Republic border has serious financial and security implications. Contraband undermines legitimate business on both sides of the border and deprives the public sector—especially the cash-strapped government of Haiti—of much-needed revenues. It also undermines rule of law and public security by fueling corruption and strengthening criminal organizations. After two research trips to both Haiti and the Dominican Republic, CSIS Americas has produced a summary report of the issue of illicit border trade between Haiti and the Dominican Republic, incorporating several case studies and policy recommendations for preventing further cross-border illicit trade and revenue loss.
Topic:
International Trade and Finance, Regional Cooperation, Border Control, and Illegal Trade
Political Geography:
Caribbean, Haiti, Dominican Republic, and North America

42. U.S. Foreign Exchange Policy—Currency Provisions and Trade Deals

Author:
Mark Sobel
Publication Date:
04-2019
Content Type:
Working Paper
Institution:
Center for Strategic and International Studies
Abstract:
The Barack Obama administration’s efforts to secure Trade Promotion Authority (TPA), in conjunction with advancing the Trans-Pacific Partnership (TPP), brought into focus a congressional push to associate currency provisions with U.S. trade agreements. Since that time, discussions on the association of currency provisions with trade deals have gained momentum and become a feature of U.S. foreign exchange policy, especially under the Donald Trump administration. What is the historical context for including currency provisions alongside or as part of trade deals in U.S. exchange rate policy? What has actually been done? Is including currency provisions alongside or in trade deals a good idea? How should this be best managed?
Topic:
Foreign Policy, International Cooperation, International Trade and Finance, Exchange Rate Policy, and Trans-Pacific Partnership
Political Geography:
North America and United States of America

43. The Impact of Rules of Origin on Supply Chains: USMCA’s Auto Rules as a Case Study

Author:
William Alan Reinsch, Jack Capotal, Madeleine Waddoups, and Nadir Takarli
Publication Date:
04-2019
Content Type:
Working Paper
Institution:
Center for Strategic and International Studies
Abstract:
In recent decades, supply chains have become more global while bilateral and regional free trade agreements (FTA) have continued to grow in popularity. For free trade agreements to operate as intended— that is, to provide benefits to the member countries—it must be possible for goods to be identified as products of an FTA member and therefore be eligible for preferential treatment. Free trade agreements also are expected to encourage manufacturers outside the agreement’s boundaries to locate production facilities within the countries party to the agreement to take advantage of the preferential treatment for goods produced there. Rules of origin codified in trade agreements play a crucial role in shaping global supply chains by setting out rules to ascertain the origin of a good. The newly negotiated U.S.-Mexico-Canada Agreement (USMCA) demonstrates the power of rules of origin to force the many businesses that depend on the current trade agreement to alter their supply chains and business models. Analyzing the new rules, the Scholl Chair in International Business finds that the USMCA will bring new costs to both parts and auto manufacturers and consumers and may provide a boon to North American steel and aluminum manufacturers.
Topic:
International Cooperation, International Trade and Finance, NAFTA, Free Trade, USMCA, and Supply Chains
Political Geography:
Canada, North America, Mexico, and United States of America

44. Delivering Prosperity in the Indo-Pacific: An Agenda for Australia and the United States

Author:
Matthew P. Goodman, Gordon de Brouwer, Shiro Armstrong, and Adam Triggs
Publication Date:
04-2019
Content Type:
Working Paper
Institution:
Center for Strategic and International Studies
Abstract:
The ongoing shift in global economic weight to the Indo-Pacific1 presents tremendous opportunities for the United States and Australia, along with risks and significant challenges. Both countries share a deep strategic interest in working together to keep Asian markets open, contestable, and rules-based. In doing so, Washington and Canberra can help maximize the prosperity and security of the American and Australian people, as well as those in the region. It is an opportunity too great to miss.
Topic:
International Cooperation, International Trade and Finance, and Economic Cooperation
Political Geography:
Asia, Australia, North America, and United States of America

45. U.S. Economic Engagement in Africa: Making Prosper Africa a Reality

Author:
Daniel F. Runde and Romina Bandura
Publication Date:
04-2019
Content Type:
Working Paper
Institution:
Center for Strategic and International Studies
Abstract:
While other countries have ramped up their economic engagement with Africa via trade, investments, and private sector financing, the United States has remained, for the most part, disengaged. Though decades-long U.S. government initiatives in Africa are indicative of longstanding relations, the reality is that these initiatives have not been enough for the United States to compete in the changing development landscape. On December 13, 2018, the Trump administration launched the Prosper Africa initiative, which seeks to open markets for American businesses, grow Africa’s middle class, promote youth employment opportunities, improve the business climate, and enable the United States to compete with China and other nations who have business interests in Africa. This short report discusses some of the challenges and opportunities for U.S. engagement with the continent and presents a series of recommendations for the policymakers driving the Prosper Africa initiative forward.
Topic:
International Cooperation, International Trade and Finance, Hegemony, and Economic Cooperation
Political Geography:
Africa, North America, and United States of America

46. Europe and Iran: The Economic and Commercial Dimensions of a Strained Relationship

Author:
Cornelius Adebahr
Publication Date:
12-2018
Content Type:
Working Paper
Institution:
Istituto Affari Internazionali
Abstract:
Europe and Iran had begun to invest in a closer commercial relationship just when the United States withdrew from the nuclear deal in May 2018. Since then, Washington has re-imposed its stringent economic sanctions, targeting Iran’s oil exports as a major source of government revenue but also banning financial transactions with the country. This poses an enormous challenge for the EU, which had intended to use the 2015 agreement as a stepping stone to promote regional cooperation and, ultimately, a more comprehensive relationship with Iran. Paper produced in the framework of the IAI-FEPS project entitled “Europe and Iran in a fast-changing Middle East: Confidence-building measures, security dialogue and regional cooperation”, December 2018.
Topic:
Foreign Policy, International Trade and Finance, Bilateral Relations, Sanctions, and Transatlantic Relations
Political Geography:
Europe, Iran, Middle East, North America, United States of America, and European Union

47. The Rise of Mega-Regionalism: Revealing Canada’s Blind Spots

Author:
Jeremy de Beer
Publication Date:
10-2018
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
The era of global multilateralism in international trade is coming to an end. The World Trade Organization’s (WTO’s) Doha Round, which sought to reduce multilateral trade barriers, has been declared “dead and buried” according to certain scholars. New WTO reform efforts may be rekindled; however, the world has shifted toward international economic regionalism. The WTO defines regional trade agreements as reciprocal preferential trade agreements between two or more partners (whether or not from the same region), of which almost 300 are in force. While these agreements can be called bilateral, free, regional or preferential trade agreements, there is a more important issue than naming.
Topic:
International Trade and Finance, Regional Cooperation, World Trade Organization, and Multilateralism
Political Geography:
United States, Canada, and North America

48. Crisis in the WTO: Restoring the Dispute Settlement Function

Author:
Robert McDougall
Publication Date:
11-2018
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
The impasse in the World Trade Organization (WTO) over the appointment of new members of the Appellate Body is just one symptom of crisis in cooperation on trade. Driven by skepticism about multilateralism and binding dispute settlement, and by a growing strategic and economic rivalry with China, the current US administration has elevated longstanding US concerns about WTO dispute settlement to new heights. The inability of WTO members to exercise their collective authority to interpret the meaning of their WTO commitments has meant that the Appellate Body is effectively not subject to any checks and balances. As other WTO members blocked US efforts to negotiate more member control, the United States increasingly turned to unpopular unilateral mechanisms, culminating in the current block on new appointments as part of its more disruptive trade policy. Assuming the United States will eventually return to rules-based trade, restoring the WTO dispute settlement system to full capacity and enhancing its legitimacy will likely require some changes. This might include improving mechanisms for political oversight, diverting sensitive issues from adjudication, narrowing the scope of adjudication, improving institutional support and providing members more say over certain procedures. Preserving compulsory, impartial and enforceable dispute settlement in the WTO will require an accommodation of different perspectives on how the system should function. Achieving this, in whatever form, will contribute to maintaining and even strengthening multilateral cooperation on trade.
Topic:
International Trade and Finance, World Trade Organization, Global Political Economy, and Multilateralism
Political Geography:
United States, China, Asia, and North America

49. Who Can Win the Possible China-US Trade War?

Author:
Li Chunding
Publication Date:
06-2018
Content Type:
Working Paper
Abstract:
This paper uses a multi-country global general equilibrium (GE) model to numerically simulate the effects of possible China-US trade wars. We introduce an endogenous trade imbalance structure with trade cost into the model which helps to explore both tariff and non-tariff trade war effects. Our simulation results show that China will be significantly hurt by the China-US trade war, but negative impacts are affordable. The US can gain under unilateral sanction measures to China, but will lose if China takes retaliation measures. Comparing the effects under mutual trade war, China will lose more than the US. Introducing non-tariff barrier trade wars will intensify the negative effects, and comparatively negative effects to China are larger than to the US. Mexico’s involvement in trade war with the US will strengthen the negative effects and comparatively hurt the US more. Under non-cooperative and cooperative Nash bargaining equilibrium, the US can gain more than China in trade war negotiation, which means the US has stronger bargaining power than China. Additionally, trade wars between China and the US will hurt most countries and the world especially in GDP and manufacturing employment, but benefit their welfare and trade.
Topic:
Economics, International Trade and Finance, Tariffs, and Trade Wars
Political Geography:
China, Asia, North America, and United States of America

50. Managing Global Disorder: Prospects for U.S.-China Cooperation

Author:
Council on Foreign Relations
Publication Date:
04-2018
Content Type:
Working Paper
Institution:
Council on Foreign Relations
Abstract:
Emerging challenges to international order require cooperation between the United States and China, two countries that share a common interest in preventing the world from becoming more dangerous and disorderly. U.S.-China relations are becoming more strained and antagonistic, however, and the prospects for cooperation appear to be receding. To explore whether there are still grounds for cooperation on issues of common concern between the two countries, in March 2018 the Center for Preventive Action (CPA) at the Council on Foreign Relations convened a group of fifteen experts from the United States and China for the workshop “Managing Global Disorder: Prospects for U.S.-China Cooperation.” CPA partnered with Peking University’s School of International Studies in Beijing for the workshop and also met with experts at the China Institutes of Contemporary International Relations in Beijing and the Shanghai Institutes for International Studies in Shanghai. During the workshop, President Donald J. Trump announced plans to impose about $60 billion in new tariffs on Chinese imports. While trade was a major topic of discussion, it was by no means the only area discussed. Workshop participants assessed conflicting views of the sources of global disorder and examined areas of global governance such as international trade, development, the environment, and the future of various multilateral institutions. They also discussed the most pressing security challenges in East and Southwest Asia. Participants highlighted the need for a greater understanding between the United States and China on the evolving international order. No major transnational problems will be solved without some cooperation between the two powers. It is therefore imperative that the two countries avoid a further deterioration of the relationship and instead identify areas of potential cooperation.
Topic:
International Cooperation, International Trade and Finance, Tariffs, and Social Order
Political Geography:
United States, China, Asia, and North America

51. The Sino-Russian and US-Russian relationships: Current developments and future trends

Author:
Marcin Kaczmarski, Mark Katz, and Teija Tiilikainen
Publication Date:
12-2018
Content Type:
Working Paper
Institution:
Finnish Institute of International Affairs
Abstract:
The great-power system has been in constant change since the end of the Cold War. The US became the hegemonic power, and under its shelter, the European Union was able to transform into a European-wide political body. Soon, a group of leading regional powers started to question the universalist aspirations of the Western-led international order. Two members of this club in particular were not satisfied with the role of a regional hegemon and had more global ambitions. China has already become the largest trading nation globally, and Chinese foreign policy has assumed an assertive tone. China has both the potential to challenge US hegemony, as well as the political will to use it. Russia’s project to achieve a global great-power status, on the other hand, is inspired by its historical identity and its alleged humiliation by the West after the collapse of the Soviet Union. Russia longs for recognition of its great-power status in particular from the US. This report focuses on relations between China and Russia on the one hand and the US and Russia on the other. It analyses the current developments and future trends in these relationships, as well as their implications for the EU.
Topic:
Foreign Policy, International Cooperation, International Trade and Finance, and Hegemony
Political Geography:
Russia, United States, China, Europe, Asia, and North America

52. The EU and China: Modest Signs of Convergence?

Author:
Gustaaf Geeraets
Publication Date:
12-2018
Content Type:
Working Paper
Institution:
EGMONT - The Royal Institute for International Relations
Abstract:
Against a background in which the United States is increasingly drawing into question its commitments to free trade and the global commons, the challenge for the EU and China is to deal with a global governance system that is evolving from a multilateral system centred around the US into a more diffuse system resting on the three strong trading poles: China, the EU and the US.
Topic:
International Trade and Finance, Governance, European Union, and Multilateralism
Political Geography:
United States, China, Europe, Asia, and North America

53. Renewing U.S. Economic Engagement with the Developing World

Author:
Daniel F. Runde
Publication Date:
11-2018
Content Type:
Working Paper
Institution:
Center for Strategic and International Studies
Abstract:
This report describes how the development landscape has changed in recent decades and how the United States has responded to this new environment. It presents some initial recommendations on the next steps that the United States needs to take to better engage in trade and investment with developing countries. This report complements and builds upon prior CSIS publications on the topic. The development landscape has dramatically changed over the past 25 years. A set of countries once considered “poor” or “third world” have become more prosperous, freer, and healthier. These countries seek international economic engagement in the form of infrastructure investments, increased trade, and exchanges in science, technology, and innovation. As countries move up the prosperity ladder, they will need less foreign aid (i.e., official development assistance—ODA) and demand more participation as equal partners in a diversified global economy. The United States has a foreign assistance approach and toolbox that is outdated and has been reactive at best to the changes in the developing world. The United States must think more strategically about how to best engage the developing world, use foreign aid as a catalyst to attract private capital to these countries, and help level the playing field with other foreign players through anti-corruption efforts, procurement training, and trade facilitation. The United States needs an international economic strategy to engage with prospering developing countries as true economic partners. The United States needs to regain its economic leadership in the world. For those countries moving up the development ladder, the “donor-recipient” relationship must transition to a “partnership” approach. The United States needs a new way of engaging the developing world centered on the fundamental question of “what can developing countries and the United States do together?”
Topic:
Development, International Trade and Finance, Developing World, and Economic Cooperation
Political Geography:
North America and United States of America

54. The Article II Mandate: Forging a Stronger Economic Alliance between the United States and Japan

Author:
Matthew P. Goodman, Ann Listerud, and Daniel Remler
Publication Date:
12-2018
Content Type:
Working Paper
Institution:
Center for Strategic and International Studies
Abstract:
The alliance between the United States and Japan has been a force for peace and prosperity around the world for nearly 60 years. Economics has been at the heart of the U.S.–Japan alliance from the outset: Article II of the Treaty of Mutual Cooperation and Security mandates that the two allies “seek to eliminate conflict in their international economic policies and … encourage economic collaboration between them.” Nowhere are U.S. and Japanese strategic interests more closely aligned than in the Indo-Pacific region. Both Washington and Tokyo seek to ensure regional security and stability, expand trade and other economic opportunities, and support universal democratic norms. The two countries have worked constructively together for many decades to shape regional economic rules and norms through institutions such as the Asian Development Bank and the Asia-Pacific Economic Cooperation (APEC) forum.
Topic:
International Cooperation, International Trade and Finance, Regionalism, and Economic Cooperation
Political Geography:
Japan, China, Asia, North America, and United States of America

55. The Transition to a Low-Carbon Economy

Author:
Munk School of Global Affairs
Publication Date:
05-2017
Content Type:
Working Paper
Institution:
Munk School of Global Affairs at the University of Toronto
Abstract:
This report highlights the summary of discussions and key policy recommendations from the 2016 Canada-UK Colloquium Report (CUKC) in Edmonton last November 2016, chaired by the Hon. Jean Charest, which brought together fifty high-level policymakers, academics, industry leaders and young scholars.
Topic:
Climate Change, Environment, International Trade and Finance, and Regional Cooperation
Political Geography:
United States, Canada, and North America

56. What the Trump Administration’s NAFTA Priorities Get Right (and Wrong) About Digital Trade

Author:
Anupam Chander
Publication Date:
09-2017
Content Type:
Working Paper
Institution:
Council on Foreign Relations
Abstract:
Digital commerce and trade are increasingly important to the global economy. Seven of the ten most valuable firms today are technology companies (Apple, Alphabet, Microsoft, Amazon, Facebook, Alibaba, and Tencent). Data, according to some analysts, is the new oil. A major study concluded that the internet has powered some one-fifth of recent economic growth within the leading economies. Jobs are increasingly dependent on digitization; digital skills are needed for all but two job categories [PDF] in the United States: dishwashing and food cooking. Just as national economies are becoming more digitized, barriers to digital trade are being erected. These barriers limit opportunities for consumers to access global providers and for small- and medium-sized enterprises to reach new customers. It is not only technology firms that suffer; all enterprises with international operations need cross-border data flows to process, analyze, and transfer data about employees, customers, and operations. Global supply chains depend on the flow of goods, data, and services across borders. Moreover, commitment to the free flow of information across borders is essential to freedom of expression. Digital trade is about more than access to markets; it is about access to information. The renegotiation of the North American Free Trade Agreement (NAFTA) is an excellent opportunity to set the gold standard for digital free trade. Despite public pronouncements about the harm free trade causes to the steel and automobile industries, the Donald J. Trump administration, to its credit, recognizes the importance of removing digital trade barriers in its stated objectives for the NAFTA renegotiation [PDF]. In its negotiations with Canada and Mexico, the Trump administration should seek rules limiting data localization, promote a balanced approach to intellectual property protections, support cross-border privacy rules, and remove barriers that hinder the trade of services.
Topic:
International Cooperation, International Trade and Finance, Digital Economy, and NAFTA
Political Geography:
United States, Canada, North America, and Mexico

57. Writing New Rules for the U.S.-China Investment Relationship

Author:
Jennifer M. Harris
Publication Date:
12-2017
Content Type:
Working Paper
Institution:
Council on Foreign Relations
Abstract:
Chinese outbound investment is on the rise, and much of it is finding its way into the United States. Be- tween 2010 and 2015, China’s foreign direct investment (FDI) inflows to the United States grew by an average of 32 percent annually.1 Within the past two years alone, Chinese foreign investment inflows to the United States increased four-fold, and available data suggests 2017 will see the second highest annual investment on record, after 2016.2 This is not a two-way street: the United States and other foreign investors do not enjoy similar open market access in China. China maintains a dizzying assortment of formal and informal barriers to for- eign investment—from outright restrictions and quotas to mandatory joint ventures, forced localization measures, and domestic licensing regimes. Despite years of negotiations, these barriers are, if anything, growing more cumbersome in many sectors. U.S. firms paint a darkening picture of the business climate they face in China. U.S. FDI in China has slowed considerably in recent years: after growing roughly 180 percent from 2002 to 2007 (albeit from a low baseline), U.S. FDI flows into China have declined since 2012.3 The one-way surge of Chinese investment into the United States comes against a backdrop of strategic mistrust between Washington and Beijing. Ongoing accusations of state-sponsored cyber predation of U.S. firms, Beijing’s increasing aggressiveness over territorial disputes, its systematic efforts to under- mine the U.S. alliance system in Asia, and mounting tensions over North Korea all contribute to a dark- ening mood in the U.S.-China relationship. And, like so much involving China, this investment is simply different. Rarely, if ever, has the United States seen an increase in investment of this magnitude—espe- cially from a non-ally and especially from one where the lines between state ownership and private own- ership are so inherently blurred. For all the concern surrounding Japanese investment in the United States in the 1980s—coming as it did amid fierce economic competition—those debates ultimately re- mained under the umbrella of the U.S.-Japan military alliance. All of this raises questions about whether the United States needs to tighten its stance on Chinese in- bound investment; proposals to that effect have bipartisan support in the Congress. The Donald J. Trump administration has signaled its desire for a tougher approach in its economic dealings with China, which U.S. businesses seem to welcome. One foundation for such an approach is the principle of reciprocity. Roughly two dozen sectors in China—construction, mining, banking, insurance, and so on—remain effectively off-limits to American investment, because the Chinese government protects its domestic companies through regulations and financial subsidies. Even in sectors that technically allow foreign investment, discriminatory industrial policies tilt the playing field in favor of Chinese firms. Until this changes, Washington would be justi- fied—even obligated—to limit Chinese investment in the U.S. market. However, U.S. policymakers do not have a consensus on what a policy of reciprocity would entail, and different policy interpretations could spell quite different economic and foreign policy consequences for the United States. The United States should aim for a version of reciprocity that allows it the flexibility to maximize pressure on the broad range of Chinese industrial policy concerns while leaving a clear route to negotiations. The United States should also encourage European and other Western countries, many of which are seeing similar increases in Chinese investment, to adopt this new approach.
Topic:
Diplomacy, International Cooperation, International Trade and Finance, and Foreign Direct Investment
Political Geography:
United States, China, Asia, and North America

58. Safety of Crude Oil by Rail

Author:
David Pumphrey, Lisa Hyland, and Michelle Melton
Publication Date:
03-2014
Content Type:
Working Paper
Institution:
Center for Strategic and International Studies
Abstract:
In the last several years, rail has come to play an important role in the transportation of growing U.S. crude oil production. Over the last seven months, a number of serious accidents have resulted in intense review of the safety of shipping large quantities of oil by rail. The focus has been on classification of the oil, the integrity of tank cars, and rail operations. Regulatory processes have been initiated to attempt to deal with these issues in a timely manner. This analysis provides facts that illuminate the players, concerns, current status of regulatory action, as well as the potential issues going forward.
Topic:
Climate Change, Energy Policy, International Trade and Finance, Markets, National Security, and Oil
Political Geography:
United States, Canada, and North America

59. Governance Transfer in the North American Free Trade Agreement (NAFTA)

Author:
Francesco Duina
Publication Date:
02-2014
Content Type:
Working Paper
Institution:
Collaborative Research Center (SFB) 700
Abstract:
While NAFTA itself does not contain any provisions for governance transfer, its two side agreements (NAALC, NAAEC) prescribe standards in the realm of human rights (labor, environment), the rule of law, and good governance and create a number of instruments for their (indirect) promotion. Through technical assistance, fora for dialogue and exchange, monitoring, and complaints procedures that can result in monetary sanctions, the side agreements aim at promoting the effective enforcement of national law rather than regional standards. These provisions reflect the same concerns in the United States and Canada that lead to the conclusion of the two side agreements in the first place: creating conditions for fair competition in light of Mexico's failure to effectively enforce national laws, resulting in de facto lower labor and environmental standards and thus lower costs compared to the northern neighbours. Beyond formal governance transfer, NAFTA has had an impact on domestic governance reforms in Mexico since the early 1990s as it was used as leverage in both international negotiations and Mexican domestic politics.
Topic:
Economics, International Trade and Finance, and Treaties and Agreements
Political Geography:
United States, America, Canada, North America, and Mexico

60. Crying over Spilt Milk: The History of Dairy Supply Management and Its Role in Recent Trade Negotiations

Author:
Bruce Muirhead
Publication Date:
04-2014
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
Canada's system of dairy supply management, where domestic supply is matched with domestic demand, has come under fire in recent years, criticized for being a regulated model in an increasingly deregulated world. This background paper explores the historical evolution of dairy in Canada, and why supply management was eventually implemented in the 1960s, bringing rationality and organization to an industry where none had existed before. It also examines the role of international trade negotiations, largely sponsored by the General Agreement on Tariffs and Trade (GATT) and, after 1995, by the World Trade Organization (WTO), in addressing issues of agricultural protectionism and exceptionalism. It was not until the Uruguay Round (1986–1993), however, that agriculture was included in these negotiations, as neither the European Union (and its antecedents) nor the United States demonstrated any interest. While Uruguay was a tentative beginning, the subsequent Doha Round has dissolved over agricultural problems. In all these venues, supply management has been protected by Canadian governments, but rising international pressure has led Canada to begin to reconsider its support, especially as bilateral trade negotiations and partners are unequivocally opposed to dairy supply management.
Topic:
Agriculture, Economics, International Trade and Finance, World Trade Organization, and Bilateral Relations
Political Geography:
Canada and North America

61. The Hyperglobalization of Trade and Its Future

Author:
Arvind Subramanian and Martin Kessler
Publication Date:
07-2013
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
This paper describes seven salient features of trade integration in the 21st century: Trade integration has been more rapid than ever (hyperglobalization); it is dematerialized, with the growing importance of services trade; it is democratic, because openness has been embraced widely; it is criss-crossing because similar goods and investment flows now go from South to North as well as the reverse; it has witnessed the emergence of a mega-trader (China), the first since Imperial Britain; it has involved the proliferation of regional and preferential trade agreements and is on the cusp of mega-regionalism as the world's largest traders pursue such agreements with each other; and it is impeded by the continued existence of high barriers to trade in services. Going forward, the trading system will have to tackle three fundamental challenges: In developed countries, the domestic support for globalization needs to be sustained in the face of economic weakness and the reduced ability to maintain social insurance mechanisms. Second, China has become the world's largest trader and a major beneficiary of the current rules of the game. It will be called upon to shoulder more of the responsibilities of maintaining an open system. The third challenge will be to prevent the rise of mega-regionalism from leading to discrimination and becoming a source of trade conflicts. We suggest a way forward—including new areas of cooperation such as taxes—to maintain the open multilateral trading system and ensure that it benefits all countries.
Topic:
Economics, Emerging Markets, Globalization, and International Trade and Finance
Political Geography:
Europe, Asia, and North America

62. Inward FDI in the United States and its policy context

Author:
Lucyna Kornecki
Publication Date:
02-2013
Content Type:
Working Paper
Institution:
Columbia Center on Sustainable Investment
Abstract:
Inward foreign direct investment (IFDI) represents an integral part of the United States (U.S.) economy, with its stock growing from US$ 83 billion in 1980 to US$ 3.5 trillion in 2011. The United States, which had earlier been primarily a home for multinational enterprises (MNEs) rather than a host for affiliates of foreign MNEs, has become a preferred host country for FDI since the 1980s. Foreign MNEs have contributed robust flows of FDI into diverse industries of the U.S. economy, and total FDI inflows reached US$227 billion in 2011, equivalent to 15% of global inflows, the single largest share of any economy. Inflows of FDI, with a peak of US$ 314 billion in 2000 and another of US$ 306 billion in 2008, have been an important factor contributing to sustained economic growth in the United States. The recent financial and economic crises negatively impacted FDI flows to the United States and opened a period of major uncertainty. The effectiveness of government policy responses at both the national and international levels in addressing the financial crisis and its economic consequences will play a crucial role for creating favorable conditions for a rebound in FDI inflows.
Topic:
Economics, Human Rights, International Trade and Finance, Foreign Direct Investment, and Governance
Political Geography:
United States and North America

63. North American Competitiveness: The San Diego Agenda

Author:
Christopher Sands, Duncan Wood, and Laura Dawson
Publication Date:
11-2013
Content Type:
Working Paper
Institution:
Hudson Institute
Abstract:
The 1994 North American Free Trade Agreement (NAFTA) among Canada, Mexico, and the United States was a bold experiment in economic integration and regional cooperation. To be successful, the initiative demanded political leadership and a commitment to regionalism. It required a vision that extended beyond short-term national interest and it demanded creative thinking about how three large countries could integrate their markets in a meaningful way.
Topic:
Economics, International Trade and Finance, and Treaties and Agreements
Political Geography:
United States, Canada, North America, and Mexico

64. Institutional Choices for Regulating Oil and Gas Wells

Author:
Lee Lane
Publication Date:
02-2013
Content Type:
Working Paper
Institution:
Hudson Institute
Abstract:
Hydraulic fracturing (HF) is one of the technologies that have enabled large increases both in the current production of natural gas and in estimates of recoverable reserves. However, as new technology has triggered a boom in onshore U.S. gas exploration and production (E), environmental concerns have multiplied. Much of the concern centers on use of HF. As public concern has risen, so have calls for federal regulatory control. The Interior Department has adopted tighter controls on the use of HF on public lands. Also, two former Obama White House aides, Carol Browner and Jody Freeman, have argued for more EPA regulation of all use of HF in oil and gas drilling. To achieve this control, they propose to repeal the partial oil and gas exemption under the Safe Drinking Water Act (SDWA). Bills to this effect, dubbed the FRAC Act, were proposed in the last two Congresses, but they were not adopted.
Topic:
Economics, Environment, International Trade and Finance, and Natural Resources
Political Geography:
United States and North America

65. Crisis and Calm: Demand for U.S. Currency at Home and Abroad From the Fall of the Berlin Wall to 2011

Author:
Ruth Judson
Publication Date:
11-2013
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
U.S. currency has long been a desirable store of value and medium of exchange in times and places where local currency or bank deposits are inferior in one or more respects. Indeed, as noted in earlier work, a substantial share of U.S. currency circulates outside the United States. Although precise measurements of stocks and flows of U.S. currency outside the United States are not available, a variety of data sources and methods have been developed to provide estimates. This paper reviews the raw data available for measuring international banknote flows and presents updates on indirect methods of estimating the stock of currency held abroad: the seasonal method and the biometric method. These methods require some adjustments, but they continue to indicate that a large share of U.S. currency is held abroad, especially in the $100 denomination. In addition to these existing indirect methods, I develop a framework and basic variants of a new method to estimate the share of U.S. currency held abroad. Although the methods and estimates are disparate, they provide support for several hypotheses regarding cross-border dollar stocks and flows. First, once a country or region begins using dollars, subsequent crises result in additional inflows: the dominant sources of international demand over the past decade and a half are the countries and regions that were known to be heavy dollar users in the early to mid-1990s. Second, economic stabilization and modernization appear to result in reversal of these inflows. Specifically, demand for U.S. currency was extremely strong through the 1990s, a period of turmoil for the former Soviet Union and for Argentina, two of the largest overseas users of U.S. currency. Demand eased in the early 2000s as conditions gradually stabilized and as financial institutions developed. However, this trend reversed sharply with the onset of the financial crisis in late 2008 and has continued since then.
Topic:
International Trade and Finance, Currency, Banking, and Economic Stability
Political Geography:
North America and United States of America

66. Trade Reforms, Foreign Competition, and Labor Market Adjustments in the U.S.

Author:
Illenin O. Kondo
Publication Date:
12-2013
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
Using data on trade-induced displacements, this paper documents that locations facing more foreign competition in the U.S. have: higher job destruction rates, lower job creation rates, and thereby lower employment rates. In contrast to standard trade theory, a model with variable markups and heterogeneous segmented labor markets is consistent with these facts. Foreign competition has a correlated effect on job destruction and job creation precisely because the most vulnerable locations also have lower productivity. Following an unexpected trade liberalization with limited mobility, employment sharply falls in the worse hit locations while welfare and employment increase in the aggregate.
Topic:
Foreign Exchange, International Trade and Finance, Reform, and Labor Market
Political Geography:
North America and United States of America

67. Independence day: A special report on North America's oil and gas boom

Author:
Martin Adams
Publication Date:
10-2012
Content Type:
Working Paper
Institution:
Economist Intelligence Unit
Abstract:
The bulk of the world's proven oil reserves are concentrated in places that are hostile to the West, unstable or a combination of the two. Since the US is the world's largest importer of oil, concerns about energy security have long simmered in Washington. On top of this, global oil prices have hit new highs in recent years and remained persistently strong. This adds to anxieties about the security of energy supplies and places a burden on the US economy. Partly as a result of elevated prices, however, something new—and, arguably, revolutionary—has happened.
Topic:
Climate Change, Economics, Energy Policy, International Trade and Finance, Oil, and Natural Resources
Political Geography:
United States and North America

68. Forging a New Strategic Partnership between Canada and Mexico

Author:
Perrin Beatty and Andrés Rozental
Publication Date:
11-2012
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
Both Canada and Mexico are recovering well from the global economic recession of 2008-2009, but must work harder to make their bilateral relationship work to their mutual benefit. Bilateral trade and investment have grown steadily from very low pre-North American Free Trade Agreement (NAFTA) levels, but there remains enormous, untapped potential, particularly in Mexico. Student, tourist, investor and temporary worker exchanges are enhancing familiarity with each other, but unhelpful stereotypes remain common. New investment and trade opportunities should flow from the new Mexican administration's commitment to open up the energy sector to foreign participation. The assessment and recommendations contained in this special report point to the benefit of efforts that will intensify bilateral partnerships, not only in their own right, but also in strengthening the two countries' ability to deal more effectively with the United States in pursuing matters of mutual concern.
Topic:
Economics, International Trade and Finance, Markets, and Bilateral Relations
Political Geography:
United States, Canada, Latin America, North America, and Mexico

69. Tankers on the horizon: Australia's coming LNG boom

Publication Date:
08-2012
Content Type:
Working Paper
Institution:
Economist Intelligence Unit
Abstract:
The International Energy Agency speculates that we could be entering a “golden age of gas.” If that is the case Australia is set to be a key contributor to it. While much attention has been paid to the shale gas boom in North America and prospects for the spread of the “shale gas revolution” elsewhere, Australia has been positioning itself to emerge as a leading player in the global liquefied natural gas (LNG) market by the end of this decade.
Topic:
Climate Change, Energy Policy, International Trade and Finance, and Natural Resources
Political Geography:
Australia, Australia/Pacific, and North America

70. Korea-U.S. Free Trade Agreement: Analysis of Public Opinion Surveys on Ratification

Author:
Wonchil Chung
Publication Date:
10-2011
Content Type:
Working Paper
Institution:
East Asia Institute (EAI)
Abstract:
There was a lot at stake for the Korean Congress in August 2011, and one of them was the Korea-U.S. Free Trade Agreement (KORUS FTA). Regarding this bill, the two main parties have been pitted against one another. The Grand National Party (GNP) asserts that the FTA bill has at least to be submitted to the Standing Committee; while the Democratic Party (DP) suggests the 10+2 renegotiation proposal (see Appendix 1) for the KORUS FTA that impose restrictions on the arrangement. If the DP's proposal is agreed upon by the National Congress, ratification becomes impossible, since the proposal will allow the negotiation of the FTA, in progress for more than four years (2006 to February 2011), to be taken back to square one. It is true that the KORUS FTA has a lot to offer when it comes to economic aspects, as the Ministry of Strategy and Finance (MOSF) pointed out in its analysis (see Appendix 2). With that in mind, the GNP risks its political position, as public opinion displays distrust and dissatisfaction over the imbalance between Korea and the United States shown during the progress of the negotiation (see Appendix 3).
Topic:
International Cooperation, International Trade and Finance, and Economic Cooperation
Political Geography:
Asia, South Korea, North America, and United States of America

71. Nonlinearities in the Oil Price-Output Relationship

Author:
Lutz Kilian and Robert J. Vigfusson
Publication Date:
01-2011
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
It is customary to suggest that the asymmetry in the transmission of oil price shocks to real output is well established. Much of the empirical work cited as being in support of asymmetries, however, has not directly tested the hypothesis of an asymmetric transmission of oil price innovations. Moreover, many of the papers quantifying these asymmetric responses are based on censored oil price VAR models which recently have been shown to be invalid. Other studies are based on dynamic correlations in the data that do not shed light on the central question of whether the structural responses of real output triggered by positive and negative oil price innovations are asymmetric. Recently, a number of new methodologies have been introduced and applied to the problem of testing and quantifying asymmetric responses of U.S. real economic activity to positive and negative oil price innovations. Our objective is to put this literature in perspective, to contrast it with more traditional approaches, to highlight directions for further research, and to reconcile some seemingly conflicting results reported in the literature.
Topic:
Economics, Energy Policy, International Trade and Finance, Oil, and Natural Resources
Political Geography:
North America and United States of America

72. Where are Global and U.S. Trade Heading in the Aftermath of the Trade Collapse: Issues and Alternative Scenarios

Author:
Joseph W. Gruber, Flippo di Mauro, Bernd Schnatz, and Nico Zorell
Publication Date:
03-2011
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
Global and U.S. trade declined dramatically in the wake of the global financial crisis in late 2008 and early 2009. The subsequent recovery in trade, while vigorous at first, gradually lost momentum in 2010. Against this backdrop, this paper explores the prospects for global and U.S. trade in the medium term. We develop a unified empirical framework – an error correction model – that exploits the cointegrating relationship between trade and economic activity. The model allows us to juxtapose several scenarios with different assumptions about the strength of GDP growth going forward and the relationship between trade and economic activity. Our analysis suggests that during the crisis both world trade and U.S. exports declined significantly more than would have been expected on the basis of historical relationships with economic activity. Moreover, this gap between actual and equilibrium trade is closing only slowly and could persist for some time to come.
Topic:
Economics, International Cooperation, International Trade and Finance, and Financial Crisis
Political Geography:
North America and United States of America

73. Forecasting the Price of Oil

Author:
Ron Alquist, Lutz Kilian, and Robert J. Vigfusson
Publication Date:
07-2011
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
We address some of the key questions that arise in forecasting the price of crude oil. What do applied forecasters need to know about the choice of sample period and about the tradeoffs between alternative oil price series and model specifications? Are real or nominal oil prices predictable based on macroeconomic aggregates? Does this predictability translate into gains in out-of-sample forecast accuracy compared with conventional no-change forecasts? How useful are oil futures markets in forecasting the price of oil? How useful are survey forecasts? How does one evaluate the sensitivity of a baseline oil price forecast to alternative assumptions about future demand and supply conditions? How does one quantify risks associated with oil price forecasts? Can joint forecasts of the price of oil and of U.S. real GDP growth be improved upon by allowing for asymmetries?
Topic:
Energy Policy, International Trade and Finance, Oil, and Natural Resources
Political Geography:
North America and United States of America

74. The Revealed Competitiveness of U.S. Exports

Author:
Massimo Del Gatto, Flippo de Mauro, Joseph W. Gruber, and Benjamin R. Mandel
Publication Date:
08-2011
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
The U.S. share of world merchandise exports has declined sharply over the last decade. Using data at the level of detailed industries, this paper analyzes the decline in U.S. share against the backdrop of alternative measures of the competitiveness of the U.S. economy. We document the following facts: (i) only a few industries contributed to the decline in any meaningful way, (ii) a large part of the drop was driven by the changing size of U.S. export industries and not the size of U.S. sales within those industries, (iii) in a gravity framework, the majority of the decline in the U.S. export share within industries was due to the declining U.S. share of world income, and (iv) in a computed structural measure of firm productivity, average U.S. export productivity has generally maintained its high level versus other countries over time. Overall, our analysis suggests that the dismal performance of the U.S. market share is not a sufficient statistic for competitiveness.
Topic:
Economics, International Trade and Finance, Hegemony, Finance, and Exports
Political Geography:
North America and United States of America

75. Oil Efficiency, Demand, and Prices: A Tale of Ups and Downs

Author:
Martin Bodenstein and Luca Guerrieri
Publication Date:
10-2011
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
The macroeconomic implications of oil price fluctuations vary according to their sources. Our estimated two-country DSGE model distinguishes between country-specific oil supply shocks, various domestic and foreign activity shocks, and oil efficiency shocks. Changes in foreign oil efficiency, modeled as factor-augmenting technology, were the key driver of fluctuations in oil prices between 1984 and 2008, but have modest effects on U.S. activity. A pickup in foreign activity played an important role in the 2003-2008 oil price runup. Beyond quantifying the responses of oil prices and economic activity, our model informs about the propagation mechanisms. We find evidence that nonoil trade linkages are an important transmission channel for shocks that affect oil prices. Conversely, nominal rigidities and monetary policy are not.
Topic:
Energy Policy, International Trade and Finance, Oil, and Natural Resources
Political Geography:
North America and United States of America

76. U.S.-Mexico Homeland Defense: A Compatible Interface

Author:
Victor E. Renuart, Jr. and Biff Baker
Publication Date:
02-2010
Content Type:
Working Paper
Abstract:
The United States and Mexico share a common history shaped by military incursions during the 19th and early 20th centuries. The bond between the American and Mexican people, however, has continued to grow closer over time despite occasional negative rhetoric from politicians in Washington, DC, and Mexico City. At local and state levels, relations solidified through the closely knit fabric of our border towns, intermarriage between families on each side of the border, and the development of infrastructure (to include water, wastewater, and gas and electricity utilities) that serves communities to the north and south. At the national level, our relationship became closer due to economic growth resulting from the North American Free Trade Agreement (NAFTA), which now accounts for almost $1 billion (U.S. dollars) in trade per day between the two countries.
Topic:
Security, International Trade and Finance, and Treaties and Agreements
Political Geography:
United States, America, Washington, Latin America, North America, and Mexico

77. Global Outlook 2010: What lies ahead for the global economy

Publication Date:
11-2009
Content Type:
Working Paper
Institution:
Economist Intelligence Unit
Abstract:
Leo Abruzzese, Editorial Director for North America, discusses the latest EIU forecast for the world. Forward-looking economic indicators have continued to improve in many countries in recent months, suggesting that the worst of the contraction in global GDP is over. The improvement has triggered hopes of an imminent and sustained global economic recovery. But does this signal the start of a genuine strong recovery, or is it a false dawn, to be followed by months—or even years—of anemic growth? What is the outlook for the US, Canada, and Asia, as well as the major emerging markets, over the next couple of years? And what are the downside risks to this outlook?
Topic:
Economics, International Trade and Finance, Markets, and Financial Crisis
Political Geography:
United States, Canada, Asia, and North America

78. Agricultural Dumping Under NAFTA: Estimating the Costs of U.S. Agricultural Policies to Mexican Producers

Author:
Timothy A. Wise
Publication Date:
12-2009
Content Type:
Working Paper
Institution:
Global Development and Environment Institute at Tufts University
Abstract:
With the opening of the Mexican economy under the North American Free Trade Agreement (NAFTA), Mexican agriculture came under new competitive pressures from U.S. exports. It was widely recognized at the beginning of NAFTA that Mexico had geographically-based comparative advantages in supplying off-season fruits and vegetables to a hungry U.S. market. NAFTA's liberalization of agricultural trade produced the expected results, with more staple crops and meats flowing south and more seasonal fruits and vegetables flowing north. In agriculture, tariffs and quotas have now mostly been eliminated. Not so agricultural subsidies, which were left largely undisciplined by NAFTA. High U.S. farm subsidies for exported crops, which compete with Mexican products, have prompted charges that the level playing field NAFTA was supposed to create is in fact tilted heavily in favor of the United States.
Topic:
Agriculture, International Trade and Finance, and Treaties and Agreements
Political Geography:
United States and North America

79. NATO and the Economic and Financial Crisis

Author:
Keith Hartley and Binyam Solomon
Publication Date:
10-2009
Content Type:
Working Paper
Institution:
NATO Defense College
Abstract:
These is some consensus among economic forecasters and international economic organizations that the world economy is stabilizing after the worst global contraction since the end of the Second World War. While it is difficult to ascertain empirically whether the massive fiscal policy support played a role or not, the improving credit conditions and the return of demand in the housing market in North America and the UK point to some evidence that the stimulus is providing the necessary short-term boost. Nonetheless, there remain significant challenges that may constrain a quick recovery including the decline in household wealth (debt-laden consumers rebuilding their savings), persistent unemployment and deleveraging (decreasing the amount of debt a firm holds by paying it off) in the financial system together with future long-term prospects of inflation.
Topic:
Economics, International Trade and Finance, and Financial Crisis
Political Geography:
United Kingdom and North America

80. Nafta toward a Common Currency: An Economic Feasibility Study

Author:
Kelly Hugger
Publication Date:
07-2008
Content Type:
Working Paper
Institution:
Department of Economics and Business, Colorado College
Abstract:
The recent emergence of the Euro, combined with the completion of a decade of North American Free Trade Agreement (NAFTA) has sparked interest in adopting a common currency for North America. This study examines the likelihood that Canada, Mexico, and the United States will adopt a common currency under fixed exchange rate regimes. The benefits and costs of a common currency are explored using the theory of optimum currency areas (OCA). Empirical research focuses on several variables including intra-regional and intra-industry trade, trade openness, gross domestic product, inflation rates, interest rates, economic growth rates, business cycle synchronization, factor mobility, fiscal policy and monetary policy coordination. The analysis also presents a comparative analysis of NAFTA with Economic and Monetary Union (EMU) nations on different economic criteria. Finally, correlation and regression analysis further explores the likelihood that members of NAFTA will economically integrate. Though this research concludes that it is economically feasible for NAFTA members to move towards a common currency, this venture depends on the political readiness of the nations.
Topic:
International Trade and Finance, Regional Cooperation, Treaties and Agreements, and Monetary Policy
Political Geography:
United States, Canada, North America, and Mexico

81. Escape from New York: The Market Impact of SEC Rule 12h-6

Author:
Nuno Fernandes, Uger Lel, and Darius P. Miller
Publication Date:
09-2008
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
We examine the stock market impact of SEC Rule 12h-6 which eased the ability of foreign firms to deregister with the SEC and as a result terminate their U.S. disclosure obligations under the 1934 Securities Exchange Act. We document that the market reacted negatively to the ability of firms from weak disclosure and governance countries to more easily opt out of the stringent U.S. reporting and legal environment. Our findings suggest that shareholders of non-U.S firms place significant value on U.S. securities regulations, especially when the home country investor protections are weak.
Topic:
International Trade and Finance, Regulation, Legal Theory, and SEC
Political Geography:
United States and North America

82. Current Account Sustainability and Relative Reliability

Author:
Stephanie E. Curcuru and Charles P. Thomas
Publication Date:
09-2008
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
The sustainability of the large and persistent U.S. current account deficits is one of the biggest issues currently being confronted by international macroeconomists. Some very plausible theories suggest that the substantial global imbalances can continue in a benign manner, other equally plausible theories predict a disorderly resolution, and in general it is very difficult to discern between competing theories. To inform the debates, we view competing theories through the perspective of the relative reliability of the data the theories rely on. Our analysis of the dark matter theory is cursory; from a relative reliability perspective, it fails as it is built on the assumption that an item that is largely unmeasured is the most accurate component of the entire set of international accounts. Similarly, the best data currently available suggest that U.S. returns differentials are much smaller than implied by the exorbitant privilege theory. Our analysis opens up questions about potential inconsistencies in the international accounts, which we address by providing rough estimates of various holes in the accounts.
Topic:
International Trade and Finance, Markets, and Investment
Political Geography:
United States and North America

83. The Asian Economic Revolution and Canadian Trade Policy

Author:
John Whalley
Publication Date:
08-2006
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
This paper discusses the broad orientation of Canada's trade policy relative to two major historical phases of development based on a secure national market behind the National Policy from 1879 until the 1930s, and progressive integration with the United States (US) through Bilateral Agreements (1930s), the Auto Pact (1965), the Canada-US Free Trade Agreement (1987) and the North American Free Trade Agreement (NAFTA) (1994). Currently, Canada exports approximately 85% to the US, but imports from China account for 8% and are growing at over 20% a year. Sharply unbalanced (surplus) trade with the US is counterbalanced by unbalanced deficit trade with China. A scenario of elevated growth in Asia (principally China, India, and the Association of Southeast Asian Nations or ASEAN) poses challenges of relative disintegration from North America and growing global integration centered on Asia. Seemingly a series of implications follow; including positioning Canada within the emerging network of regional agreements in Asia, more resourcebased and Western Canada focused trade and infrastructure development, and responding to capital market integration with Asia. Broader issues include the potential adjustments facing Central Canada as Asian imports of manufactures displace both imported manufactures from the US and domestic production are raised.
Topic:
Economics and International Trade and Finance
Political Geography:
United States, China, Canada, Asia, and North America

84. North American Agriculture under NAFTA

Author:
Gary Clyde Hufbauer, Jeffrey J. Schott, and Yee Wong
Publication Date:
12-2004
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
The NAFTA agreement on agricultural trade consists of three bilateral agreements—between the United States and Mexico, the United States and Cana da, and Canada and Mexico. The US-Canada agreement largely carried into NAFTA the tariff and nontariff barrier rules that had been adopted in the Canada-US Free Trade Agreement (CUSFTA). Under CUSFTA, most agriculture tariffs between the United States and Canada were to be phased out by January 1998, and this schedule was adopted by NAFTA for US-Canada agricultural trade. However, Canada was allowed to maintain permanent tariff-rate-quota (TRQ) restrictions on imports of dairy, poultry, and eggs; and the United States was allowed to maintain TRQs on imports of sugar, dairy products, and peanuts from Canada (see table 1). Although a tariff snapback provision remains in effect until 2008, it has rarely been used by Canada. Agricultural trade between Mexico and Canada was limited by virtually the same restrictions. As might be expected, some agriculture trade associations favored NAFTA and others opposed. Box 1 summarizes the lineup of important trade associations.
Topic:
Agriculture, Economics, and International Trade and Finance
Political Geography:
United States, Canada, North America, and Mexico

85. The Mexican Internet after the Boom: Challenges and Opportunities

Author:
Martin Kenney, James Curry, and Oscar Contreras
Publication Date:
06-2004
Content Type:
Working Paper
Institution:
Berkeley Roundtable on the International Economy
Abstract:
The Internet will be the defining technology of the first decade of the 21st Century. It is redefining boundaries of all sorts in new and unforeseen ways. As with many previous disruptive technologies, the Internet can be a double-edged sword for developing countries such as Mexico. For example, the Internet has the potential to dramatically lower barriers to cross-border trade. This will enable international retailers to penetrate the Mexican market potentially undermining domestic retail businesses. On the other side, the Internet could provide opportunities for Mexican firms to enter the global market, particularly Spanish-speaking Latin America and the huge U.S. Hispanic market. But this is only the tip of the iceberg of change. For example, in a country such as Mexico in which information has not been readily available and public libraries are relatively few in number and poorly stocked, the free and low-cost information available on the Internet provides a powerful new distribution medium – it provides inexpensive access to global information sources.
Topic:
Industrial Policy, International Trade and Finance, and Science and Technology
Political Geography:
United States, Latin America, Central America, North America, and Mexico

86. International Trade Law in US Courts

Author:
Saadia M. Pekkanen
Publication Date:
10-2004
Content Type:
Working Paper
Institution:
Center for International Studies, University of Southern California
Abstract:
This paper seeks to assess the relationship between international trade law and national courts, a topic that remains surprisingly unexplored by legal scholars let alone other disciplines. Three interrelated questions motivate this study. First, how has international trade law been treated by national courts? Second, what might account for that treatment? Third, what possible predictions and implications can we draw from such an analysis with respect to the diffusion of international trade law in domestic societies?
Topic:
Government, International Law, and International Trade and Finance
Political Geography:
United States and North America

87. Legal Integration in North America: Domestic and Multilateral Comparisons

Author:
Imtiaz Hussain
Publication Date:
03-2003
Content Type:
Working Paper
Institution:
Centro de Investigación y Docencia Económicas
Abstract:
With so much attention riveted upon economic integration today, another form of integration, having to do with the laws, constitutional provisions, and judicial arrangements countries abide by, has received considerably less attention. To partly redress that imbalance, a case study of legal integration in North America is undertaken. Building upon the specific dispute settlement arrangements of chapters 19 and 20 of the North American Free Trade Agreement, two comparative studies are pursued—the first between the legal practices, constitutional requirements, and judicial contexts in Canada, Mexico, and the United States; the other between NAFTA, GATT, and the World Trade Organization provisions. Two broad findings undergird legal integration in North America: The recognition of the need a) for at least three forms of reciprocal relationships: between economic and legal forms of integration; regional procedures and their domestic counterparts; and regional procedures and their multilateral counterparts; and b) to keep the state an active participant in supranational efforts by leaving a veto power over such developments or the exit option with the state, and thereby accomodating domestic interests and cross-national divergences as widely as possible.
Topic:
Economics, International Trade and Finance, and Politics
Political Geography:
North America

88. Mexico and the WTO: A Regional Player in Multilateral Trade Negotiations

Author:
Antonio Ortiz Mena
Publication Date:
03-2003
Content Type:
Working Paper
Institution:
Centro de Investigación y Docencia Económicas
Abstract:
This working paper assesses the impact of the Uruguay Round Agreements of multilateral trade negotiation (MTN) on Mexico and determines the priorities of business and government for an upcoming round of MTN. It draws on secondary sources as well as interviews with business organizations representing Mexico' most important export industries and import-competing sectors. It proceeds as follows: the first section gives an overview of trade polity reforms since 1982; section two covers Mexico's regional trade agreements with special emphasis on the North American Free Trade Agreement; the third section provides and outline of Mexico's current trade policies; the fourth section consists of an assessment of the costs and benefits of Mexico's current World Trade Organization commitments' the fifth sections sets out the views of government and business on a new round of MTN; and the sixth section concludes.
Topic:
Security, Economics, and International Trade and Finance
Political Geography:
North America and Mexico

89. Bankers into Brokers: The Structural Transformation and Opening of Mexico's Financial Markets

Author:
Susan Minushkin
Publication Date:
03-2003
Content Type:
Working Paper
Institution:
Centro de Investigación y Docencia Económicas
Abstract:
Mexico's financial market opening demonstrates how this domestic logic interacts with international condition. The following case study of Mexican financial opening makes the following contentions. First, financial market opening in Mexico did not begin in the 1980s, as commonly believed. Rather the process has its roots in a conflict among sub-sectors of the financial services industry, between powerful oligarchic bankers (banqueros) and financial entrepreneurs based on the bolsa (bolseros). The conflict, dating from the 1960s, was a purely domestic affair and was not the result of increased international capital mobility and financial marked opening in OECD countries. Nevertheless, this conflict led to a structural change in the financial service industry congruent with changes in the international financial system from bank-based financing to increasing securities market-based financing.
Topic:
Economics, Emerging Markets, and International Trade and Finance
Political Geography:
North America and Mexico

90. Economic Conditions, Democracy and the IMF

Author:
Susan Minushkin
Publication Date:
03-2003
Content Type:
Working Paper
Institution:
Centro de Investigación y Docencia Económicas
Abstract:
This study seeks to test the hypotheses that different styles of financial market opening can be explained, in part, by general economic conditions and the need to attract external capital. It seeks, as well, to test the some for the more general arguments advanced in the financial market opening literature that financial market opening is a result of a country's increased participation in the international financial system and increased international trade integration. Two specifically political arguments also are tested. The first is that emerging markets opened their markets in response to pressure from the IMF. The second is that there is an association between political freedom and open markets. I test these hypotheses using regression analyses of panel data from a sample of emerging market countries.
Topic:
Economics, Emerging Markets, and International Trade and Finance
Political Geography:
Europe and North America

91. The Institutional Setting of the NAFTA Debate in the United States

Author:
Miguel Ángel Valverde
Publication Date:
02-2003
Content Type:
Working Paper
Institution:
Centro de Investigación y Docencia Económicas
Abstract:
The objective of this paper is to analyze the institutional setting of the NAFTA debate in the United States, focusing on the interaction between the Presidency and Congress, in the formulation of foreign commercial policy. A series of arrangements have tamed confrontation between the Executive and Legislative powers, reconciling their institutional biases. THese arrangements channel and contain domestic demands for protectionism, favoring international trade liberalization negotiations.
Topic:
Economics, International Trade and Finance, and Treaties and Agreements
Political Geography:
Africa, United States, Asia, and North America

92. Foreign Policy Strategies in a Globalized World: The Case of Mexico

Author:
Guadalupe González
Publication Date:
02-2003
Content Type:
Working Paper
Institution:
Centro de Investigación y Docencia Económicas
Abstract:
This document analyses the impact of the end of the Cold-War, and the processes of economic and political liberalization on Mexico's foreign policy. The first section identifies the consequences for the so-called intermediate countries of the three most important post-Cold War trends: the emergence of hybrid structure of global power, the wave of globalization, and the growing importance of international institutions. The second section evaluates the explanatory value of three systemic approaches to the study of the foreign policy of intermediate states: systemic-structuralism, middle powers, and pivotal states. In the third section, I evaluate Kahler's alternative approach centered on the interaction between systemic and domestic variables, in particular on the foreign policy consequences of economic liberalization and democratization such as the adoption of external cooperative strategies and the deepening to engagement with international institution. The fourth section describes the main changes that have taken place in Mexico's foreign policy during the 1990s: pragmatism, primacy of economics, closer alignment with the United States, segmented multilateralism, fragmentation of the decision-making process, and new instruments. There are two arguments in this document. First, in contrast to other intermediate liberalizing countries, Mexico's efforts to adapt to the new post-Cold War international system, followed an uneven and partial pattern. While Mexican political leaders pursued the full integration of the country to the international economy, in the security realm they maintain a less than open policy based on the defense of the traditional notion of sovereignty. Mexico's partial adaptation is explained by the different pace of the raid economic reform on the one hand, and the gradual and slow opening of the post-revolutionary political regime, on the other. Second, as Kahler's model predicted, Mexico adopted strategies of cooperation and institutional engagement in order to solve credibility roblems. The need to enhance the credibility of the programs of economic reform pushed the Mexican government to engage actively with economic international institutions.
Topic:
International Relations, Economics, and International Trade and Finance
Political Geography:
Africa, United States, Middle East, North America, and Mexico

93. The New Federalism, Internationalization and Political Change in Mexico: A Theoretical Analysis of the Metalclad Case

Author:
Arturo Borja
Publication Date:
02-2003
Content Type:
Working Paper
Institution:
Centro de Investigación y Docencia Económicas
Abstract:
In this working paper the reader will find a study of the case that led, within the North America Free Trade Agreement, to the first formal dispute between an American firm and the Mexican Government. The firm, Metalclad, invested $22 million in the municipality of Guadalcazar, in the state of San Luis Potosi, to build a plant to process and store industrial waste. The proper disposal and storage of industrial waste represents one of the toughest environmental challenges faced by Mexico. Thus, the federal government, in the 1990s, has made efforts to attract foreign investment to this area. Metalclad, however, got into a dispute with the municipal and state governments. Finally, in December 1995, the former officially denied Metalclad a construction permit for the plant. This action meant, in practice, the end of the investment project.
Topic:
Economics, Industrial Policy, and International Trade and Finance
Political Geography:
America, North America, and Mexico

94. International Trade and Air Pollution: The Economic Costs of Air Emissions from Waterborne Commercial Vessels in the United States

Author:
Kevin Gallagher and Robin Taylor
Publication Date:
09-2003
Content Type:
Working Paper
Institution:
Global Development and Environment Institute at Tufts University
Abstract:
Although there is a burgeoning literature on the effects of international trade on the environment, relatively little work has been done on where trade most directly effects the environment: the transportation sector. This article shows how international trade is affecting criteria air pollution emissions in the United States' shipping sector. Recent work has shown that cargo ships have been long overlooked regarding their contribution to air pollution. Indeed, ship emissions have recently been deemed "the last unregulated source of traditional air pollutants."Air pollution from ships has a number of significant local, national, and global environmental effects. Building on past studies, we examine the economic costs of this increasing and unregulated form of environmental damage. We find that total emissions from ships are largely increasing due to the increase in foreign commerce (or international trade). We analyze the period 1993 to 2001 and find that the economic costs of SO2 pollution during the period are estimated to be $1.1 billion or $126 million per year. For NOx emissions the costs are $3.7 billion over the entire period or $412 million per year. Because foreign trade is driving the growth in U.S. shipping, we also estimate the effect of the Uruguay Round on emissions. Separating out the effects of global trade agreements reveals that the trade agreement- led emissions amount to $460 million for SO2 between 1993 and 2001, or $51 million per year. For NOx they are $1.2 billion for the whole period or $144 million per year. Without adequate policy responses, we predict that these trends and costs will continue to rise with trade flows into the future
Topic:
Economics, Environment, and International Trade and Finance
Political Geography:
North America

95. Economic Reform, Energy, and Development: The Case of Mexican Manufacturing

Author:
Kevin Gallagher and Francisco Aguayo
Publication Date:
07-2003
Content Type:
Working Paper
Institution:
Global Development and Environment Institute at Tufts University
Abstract:
Given increasing concern over global climate change and national security there is a burgeoning interest in examining the relationship between economic growth and energy use in developed and developing countries. More specifically, delinking energy use per unit of gross domestic product (GDP) has fast come to be seen as in the interests of national economies and the world as a whole. Recent attention has been paid to the dramatic decreases in the energy intensity of the Chinese economy, which fell by 55 percent between 1975 and 1995 (Sinton and Fridley, 2000). Do other developing economies follow similar trajectories?
Topic:
Economics, Environment, and International Trade and Finance
Political Geography:
North America

96. Free Trade, Corn, and the Environment: Environmental Impacts of US - Mexico Corn Trade Under NAFTA

Author:
Frank Ackerman, Kevin Gallagher, Timothy Wise, Luke Ney, and Regina Flores
Publication Date:
06-2003
Content Type:
Working Paper
Institution:
Global Development and Environment Institute at Tufts University
Abstract:
The North American Free Trade Agreement (NAFTA) had a profound impact on corn trade between the United States and Mexico. Negotiated tariff reductions and the Mexican government's decision not to charge some tariffs to which it was entitled resulted in a doubling of US corn exports to Mexico. This paper examines the environmental implications of this change on both sides of the border.
Topic:
Economics, Environment, and International Trade and Finance
Political Geography:
North America and Mexico

97. ¿Crisis en el Sindicalismo en América Latina?

Author:
Francisco Zapata
Publication Date:
01-2003
Content Type:
Working Paper
Institution:
Kellogg Institute for International Studies
Abstract:
Economic adjustment policies, trade liberalization, privatization of State enterprise and transformation of labor markets and labor market institutions relate to a process of transition between a model of import substitution industrialization and a "new economic model" characterized by the transnationalization of Latin American internal markets. All these elements contribute to change the premises of the organization of unions and to weaken their role in the negotiation of salaries and working conditions, their intervention in the regulation of employment and their participation in the administration of social security and health benefits. On the basis of the cases of Brazil, Chile and Mexico, the presentation will provide a context in which to pose the question of the crisis of Latin American labor and examine some of the alternatives that are available for trade unions in the new economic conditions.
Topic:
Industrial Policy and International Trade and Finance
Political Geography:
Brazil, South America, Central America, North America, Mexico, and Chile

98. Breaks in the Variability and Co-Movement of G-7 Economic Growth

Author:
Jon Faust and Brian M. Doyle
Publication Date:
12-2003
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
This paper investigates breaks in the variability and co-movement of output, consumption, and investment in the G-7 economies. In contrast with most other papers on co-movement, we test for changes in co-movement allowing for breaks in mean and variance. Despite claims that rising integration among these economies has increased output correlations among them, we find no clear evidence of an increase in correlation of growth rates of output, consumption, or investment. This finding is true even for the United States and Canada, which have seen a tremendous increase in bilateral trade shares, and for the members of the euro area in the G-7.
Topic:
International Relations, Economics, and International Trade and Finance
Political Geography:
United States, Canada, and North America

99. Revisiting the Border: An Assessment of the Law of One Price Using Very Disaggregated Consumer Price Data

Author:
John H. Rogers, Shing-Yi B. Wang, and Charles M. Engels
Publication Date:
09-2003
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
We reexamine the evidence for border effects in deviations from the law of one price, using data for consumer prices from Canadian and U.S. cities. The study parallels Engel and Rogers (1996), except that this study uses actual price data rather than price index data. We find evidence of border effects both in the levels of prices and the percentage change in prices. Even accounting for distance between cities and relative population sizes, we find that the absolute difference between prices in the U.S. and Canada in our data (annual from 1990 to 2002) is greater than seven percent. This difference exists among tradables and nontradables, though for some categories of tradables (clothing and durables) the difference is smaller. The findings are similar for annual changes, though the magnitude is smaller: the border accounts for a difference in 1.5 percent in annual (log) price changes. Relative population sizes and distance are helpful in explaining price level differences (between Canadian and U.S. cities) for traded goods, but are less helpful in explaining price level differences for nontraded goods or for accounting for differences in price changes for either traded or nontraded goods.
Topic:
International Relations, Economics, and International Trade and Finance
Political Geography:
Canada and North America

100. How do Canadian Hours Worked Respond to a Technology Shock?

Author:
Robert J. Vigfusson, Lawrence J. Christiano, and Martin Eichenbaum
Publication Date:
09-2003
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
This paper investigates the response of hours worked to a permanent technology shock. Based on annual data from Canada, we argue that hours worked rise after a positive technology shock. We obtain a similar result using annual data from the United States. These results contradict a large literature that claims that a positive technology shock causes hours worked to fall. We find that the different results are due to the literature making a specification error in the statistical model of per capital hours worked. Finally, we present results that Canadian monetary policy has accommodated technology shocks.
Topic:
Economics, International Trade and Finance, and Science and Technology
Political Geography:
Canada and North America