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Begin New Search Topic International Trade and Finance Content Type Working Paper

81. How do Corporate Taxes affect International Trade?

Author:
Mario Holzner, Branimir Jovanovic, and Goran Vukšić
Publication Date:
11-2021
Content Type:
Working Paper
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
This paper investigates how corporate income taxes affect international trade, and identifies the underlying channel. Using data on 33 NACE sectors, for 34 EU and OECD economies, over the period 2005-2014, we find that corporate income taxes reduce exports and imports only when the stock of foreign direct investment (FDI) is high. The effect is present primarily in the service sector and in countries with low corporate taxes. We interpret these findings as evidence that multinational enterprises reduce their operations in countries that raise their corporate taxes. The effect has been found to be small on aggregate, implying that the expected increase in corporate taxes in the future, arising from the global minimum tax, is unlikely to hurt international trade.
Topic:
International Trade and Finance, Foreign Direct Investment, Tax Systems, Exports, Profit, Imports, and Corporations
Political Geography:
Global Focus

82. The Nature of Money and the Theory of International Trade: Thornton and Ricardo

Author:
Isabella Weber
Publication Date:
10-2021
Content Type:
Working Paper
Institution:
Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:
A rich recent literature reinvestigates the nature of money, but little attention has been paid to the ramifications of the ways in which we theorize money for the theory of international trade. This paper examines the logical relationship between the neutrality of money and self-balancing trade based on Henry Thornton and David Ricardo as two foundational contributions to credit and commodity money theories respectively. I show that both authors theorize trade as self-balancing whenever money is conceptualized as neutral. I distinguish two notions of the neutrality of money: ex ante and ex post neutrality. In Thornton’s Paper Credit money is not neutral ex ante: there can be temporary trade imbalances. But in the long-run money is neutral ex post and international trade boils down to self-balancing barter. In Ricardo money is neutral both ex ante and ex post and international trade is always balanced unless central bank policy undermines monetary neutrality.
Topic:
International Trade and Finance, Economy, Money, and Trade
Political Geography:
Global Focus

83. Exploring ‘Non-Tariff Measures Black Box’: Whose Regulative NTMs on Which Products Improve the Imported Quality?

Author:
Mahdi Ghodsi
Publication Date:
02-2021
Content Type:
Working Paper
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
Regulative non-tariff measures (NTMs), such as technical barriers to trade (TBTs) and sanitary and phytosanitary (SPS) measures, have frequently been imposed to regulate the quality of imported goods when the market fails to address some issues of concern regarding harmful products with low standards. The impact of NTMs on trade values and trade volumes has been extensively modelled and analysed in the literature, while their quality impact has usually been studied using the unit values of imports. In this paper a monopolistic competition framework is presented, in which firms choose both the quality and the price of their exports subject to the compliance costs of NTMs behind the border and a fixed cost of technological change. Using the solutions of this model including NTMs, the quality of products at the six-digit level of the harmonised system (HS) traded globally and bilaterally during the period 1996–2017 is estimated. Using these estimates, the impacts of TBTs and SPS measures on trade values, volume, unit value and quality are estimated. On average and across all global bilateral trade, TBTs restrict imports while improving quality significantly. SPS measures stimulate trade and improve the average imported quality. Then, by estimating the importer-specific impact of NTMs on traded value, quantity, unit value, quality, and quality-adjusted price for each product, the ‘NTM Black Box’ is opened and analysed. This provides evidence of whether the quality of traded goods to an importing country has been upgraded despite the trade restrictiveness of NTMs.
Topic:
Economics, International Political Economy, International Trade and Finance, and Non-Tariff Measures
Political Geography:
Global Focus

84. Assisting Uzbekistan's parliament with specific issues pertaining to Uzbekistan's WTO accession process

Author:
Iljir Baftijari, André-Philippe Ouellet, and Ayong Lim
Publication Date:
02-2021
Content Type:
Working Paper
Institution:
Centre for Trade and Economic Integration, The Graduate Institute (IHEID)
Abstract:
This Memorandum is prepared to guide the Beneficiary through Uzbekistan’s accession process to the World Trade Organization (hereinafter WTO). Uzbekistan’s accession process began in December 1994 but remained dormant until July 2020. Now, the Uzbek government has expressed enthusiasm for pursuing accession to the WTO. The Memorandum offers a general overview of the accession process and addresses specific questions relating to Uzbekistan’s WTO accession. The findings in this Memorandum are based largely on comparative research of recent WTO accessions with a focus on the WTO members in the Eurasian region. We have reviewed the documents submitted during Eurasian WTO members’ accession process, along with the academic sources discussing such accessions. We also analysed Uzbekistan’s current trade relationships to evaluate the pros and cons of Uzbekistan’s accession to the WTO. We likewise analysed the considerations pertaining to EAEU membership by focusing on other WTO members in the region. Finally, to analyse the potential changes to two laws submitted by the Beneficiary with regards to its accession process. We thus have reviewed the two Uzbek acts against the backdrop of: WTO Covered Agreements, the WTO Checklist for accessions, and other amended legislation of members that recently acceded to the WTO accessions for consistency
Topic:
International Law, International Political Economy, International Trade and Finance, Trade, WTO, and Parliamentarism
Political Geography:
Uzbekistan

85. Assessing national laws for the implementation of CITES

Author:
Pascal Blickle, Angela Min Yi Hou, and Laura Störi
Publication Date:
03-2021
Content Type:
Working Paper
Institution:
Centre for Trade and Economic Integration, The Graduate Institute (IHEID)
Abstract:
This TradeLab project analyses the domestic legislation of 14 developing countries in implementing the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). The present memo summarises the main findings across the 14 Parties. This memo finds that most assessed Parties have implemented the CITES' core requirements, and recommendations provided in the resolutions of the Conference of the Parties (CoP). The project identifies a minority of three African countries for which the CITES Secretariat may wish to review their Category 1 status. These Parties fall short of all or several of the following elements: they failed to appropriately designate Management and Scientific Authorities by law, circumscribe the Authorities' tasks and responsibilities, or – by exclusively regulating native species – appear not to comprehensively cover species listed in the Convention's three Appendices.
Topic:
Environment, International Trade and Finance, Science and Technology, Trade, Ecology, and Biology
Political Geography:
Africa and Global Focus

86. Social clauses in trade agreements: implications and action points for the private sector in developing countries

Author:
Anna Liz Thomas, Jarrod Suda, and Gaia Grasselli
Publication Date:
02-2021
Content Type:
Working Paper
Institution:
Centre for Trade and Economic Integration, The Graduate Institute (IHEID)
Abstract:
Since the 1990s, more free trade agreements have come to include social clauses, which make reference to domestic and international labour standards. As this international legal web continues to grow, so too will the questions and concerns from employers and businesses. This Tradelab report, for the International Organisation of Employers, provides practical guidance for those employers and businesses. It does so by taking the diverse array of actors, the tensions within, and the opportunities set forth by free trade agreements and elaborating upon them using three case studies.
Topic:
International Political Economy, International Trade and Finance, Treaties and Agreements, Labor Issues, Free Trade, Trade, International Business, and Labor Market
Political Geography:
Global Focus

87. How to rein in fossil fuel subsidies ? Towards a New WTO Regime

Author:
Simon Happersberger, Eleanor Mateo, and Selcukhan Ünekbas
Publication Date:
08-2021
Content Type:
Working Paper
Institution:
Centre for Trade and Economic Integration, The Graduate Institute (IHEID)
Abstract:
Fossil fuel subsidies have negative consequences on the climate change, public budgets and and the transition to an environmentally friendly economy. Nevertheless, governments do not keep up with their commitments to phase out fossil fuel subsidies but misallocate again COVID-19 recovery funds in fossil fuel subsidies. This article provides an analysis of the current obstacles for phasing out fossil fuel subsidies and the potential of the WTO to advance a reform on fossil fuel subsidies. It argues that the WTO can contribute to a fossil fuel subsidies reform by its technical expertise in regulating subsidies, by its broad membership and by its institutional setting. Under the current framework of the ASCM, WTO member can use existing mechanisms, such as the TPRM, to increase transparency in the short term and facilitate discussions on the scope of subsidies while mitigating impacts on vulnerable groups or sectors. This would provide the ground for governments to work towards a new and ambitious agreement to stop producer fossil fuels subsidies and phase out consumer fossil fuels subsidies in the mid-to-long-term. However, the phase out of consumer subsidies needs to be carefully designed and embedded, to avoid unintended consequences on energy access and vulnerable households.
Topic:
Climate Change, Environment, International Trade and Finance, Natural Resources, Trade, Fossil Fuels, COVID-19, WTO, and Ecology
Political Geography:
Global Focus

88. TRIPS-Past to TRIPS-Plus: Upholding the Balance between Exclusivity and Access

Author:
James Bacchus
Publication Date:
06-2021
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
A deadly global pandemic and other unique circumstances have combined to present the World Trade Organization (WTO) with an opportunity to modernize its rules for the trade-related aspects of intellectual property (IP) rights. The best place to begin is with a full realization of the negotiated balance between exclusivity and access in the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement). There is the need to turn the “TRIPS-past” of WTO IP rules agreed in 1995 into the “TRIPS-plus” of improved rules more fit to purpose for the twenty-first century. New rules are needed to help spark new innovations of all kinds and the rapid spread of those innovations worldwide, including rules relating to intangible assets and especially to digital expressions of IP. Continuing questions over the extent to which the TRIPS Agreement protects the exclusivity of IP rights in COVID-19 vaccines underscore how much uncertainty remains about where the line of this balance is in this multilateral trade agreement, and also how much doubt still exists about whether that line is in the right place.
Topic:
International Cooperation, International Trade and Finance, Intellectual Property/Copyright, Multilateralism, Pandemic, COVID-19, and WTO
Political Geography:
Global Focus

89. Could Trade Agreements Help Address the Wicked Problem of Cross-Border Disinformation?

Author:
Susan Ariel Aaronson
Publication Date:
07-2021
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
Whether produced domestically or internationally, disinformation is a “wicked” problem that has global impacts. Although trade agreements contain measures that address cross-border disinformation, domestically created disinformation remains out of their reach. This paper looks at how policy makers can use trade agreements to mitigate disinformation and spam while implementing financial and trade sanctions against entities and countries that engage in disseminating cross-border disinformation. Developed and developing countries will need to work together to solve this global problem.
Topic:
International Cooperation, International Trade and Finance, Borders, and Disinformation
Political Geography:
Global Focus

90. Estimating the Arms Sales of Chinese Companies

Author:
Nan Tian and Fei Su
Publication Date:
01-2020
Content Type:
Working Paper
Institution:
Stockholm International Peace Research Institute
Abstract:
Quantitative research on the finances of the Chinese arms industry has been limited by the scarcity of available data. A scoping study to estimate the financial value of the arms sales of companies in the Chinese arms industry—using a new methodology—found information on four companies: the Aviation Industry Corporation of China (AVIC), the China Electronics Technology Group Corporation (CETC), the China South Industries Group Corporation (CSGC) and the China North Industries Group Corporation (NORINCO). These four companies cover three main sectors of conventional arms production: aircraft, electronics and land systems. The estimates suggest that China is the second-largest arms producer in the world, behind the United States and ahead of Russia. All four of the profiled companies would be ranked among the 20 largest arms-producing and military services companies globally in 2017, with three—AVIC, NORINCO and CETC—in the top 10. The new methodology improves the understanding of the structure, size and evolution of the global arms industry.
Topic:
International Trade and Finance, Weapons, Arms Trade, and Military Spending
Political Geography:
China and Asia

91. The Geopolitics of Food Security: Barriers to the Sustainable Development Goal of Zero Hunger

Author:
Jiayi Zhou, Lisa Marie Dellmuth, Kevin M. Adams, Tina-Simone Neset, and Nina von Uexkull
Publication Date:
11-2020
Content Type:
Working Paper
Institution:
Stockholm International Peace Research Institute
Abstract:
Assessing the prospects for Zero Hunger—Sustainable Development Goal 2—requires an understanding of food security that goes beyond developmental or humanitarian issues, to include linkages with geopolitics. Geopolitical challenges cut across areas such as natural resources, trade, armed conflict and climate change where unilateralism and zero-sum approaches to security directly hamper efforts to eradicate hunger and undermine the frameworks that govern those efforts. The report provides an overview of how geopolitics interacts with these areas. Competition for agricultural resources can be both a cause and a consequence of geopolitical rivalry. International trade, while essential for food security, also creates vulnerabilities through supply disruptions—sometimes politically motivated. Armed conflict is a driver of food insecurity, which can itself feed into social unrest and violence. Climate change interacts with all three phenomena, reshaping both the physical landscape and political calculus. These overlapping linkages require further integrated policy engagement and analysis.
Topic:
Climate Change, Development, International Trade and Finance, Governance, Food Security, Geopolitics, and Peace
Political Geography:
Global Focus

92. Input Allocation Behaviour on Tariff Changes: The Case of Indonesia’s Manufacturing Industries

Author:
Samuel Nursamsu, Dionisius Narjoko, and Titik Anas
Publication Date:
02-2020
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
Can firms reallocate their imported inputs to domestic sources when faced with import tariffs? To answer this question, we analyse the input allocation behaviour of Indonesian medium and large-sized manufacturing firms in responding to the movement of import tariffs from 2000 to 2013 by utilising plant-level input data of Indonesian manufacturing. We find that an increase in tariffs only creates a weak substitution effect. Our findings indicate that firms reallocate their inputs towards domestic sources, although this is accompanied by a decrease in the firms’ value added. This implies that domestic inputs are worse substitutes for imported inputs and that firms’ capacity to switch over to domestic products is limited, suggesting that firms will immediately switch back to importing when the tariff is removed. We find no evidence that firms make any adjustment towards more domestic-oriented input composition over time; and heterogeneity exists within the result, as industries with a strong basis in the domestic market are more capable of adjusting.
Topic:
Industrial Policy, International Trade and Finance, Tariffs, and Manufacturing
Political Geography:
Indonesia and Asia

93. Learning-to-Export Effect as a Response to Export Opportunities: Micro-Evidence from Korean Manufacturing

Author:
Chin Hee Hahn and Yong-Seok Choi
Publication Date:
02-2020
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This paper aims to investigate whether empirical evidence supports the learning-to-export hypothesis, which has received little attention in the previous literature. By taking full advantage of plant–product level data from the Republic of Korea during 1990–1998, we find some evidence for the learning-to-export effect, especially for innovated product varieties with delayed exporters: their productivity, together with research and development and investment activity, was superior to their matched sample. On the other hand, this learning-to-export effect was not significantly pronounced for the industries protected by import tariffs. Thus, our empirical findings suggest that it would be desirable to implement some policy tools to promote the learning-to-export effect, while tariff protection cannot be justifiable for that purpose.
Topic:
Industrial Policy, International Trade and Finance, Tariffs, Manufacturing, and Productivity
Political Geography:
Asia and South Korea

94. Improving Digital Connectivity For E-commerce: A Policy Framework and Empirical Note for ASEAN

Author:
Lurong Chen
Publication Date:
03-2020
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
Global cross-border e-commerce has become increasingly important in the international economy. The next Asian miracle of growth could be born out of the region's digital transformation. Digital connectivity is the cornerstone that will make change feasible and smoothen the transformation. Digital connectivity consists of not only physical connectivity that facilitates the movement of raw materials, intermediate goods, and goods, but also cyber connectivity to support free flows of data, information, and services. This paper proposes a policy framework of promoting digital connectivity to support the development of e-commerce. Policy efforts to improve data connectivity, logistics, and online payment can help the Association of Southeast Asian Nations narrow the development gaps in information and communications technology infrastructure, both cross-border and within countries. Improving institutional connectivity and service development play a significant role. Digital connectivity is essential for the digital-friendly ecosystem that will facilitate digital transformation, which will affect not only e-commerce but also countries’ overall economic performance.
Topic:
International Trade and Finance, Science and Technology, Digital Economy, and Connectivity
Political Geography:
ASEAN

95. Labour Market Impacts of Import Penetration from China and Regional Trade Agreement Partners: The Case of Japan

Author:
Kazunobu Hayakawa, Tadashi Ito, and Shujiro Urata
Publication Date:
04-2020
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
The impacts of imports on the domestic labour market have been hotly debated recently. The purpose of this paper is to empirically examine the effects of not only imports from China but also those under regional trade agreements (RTAs) on employment in Japan. As in previous studies in the literature, we found that the rise in import penetration from China significantly decreases employment in Japan. However, import penetration under RTA regimes is found to have insignificant effects on employment. The finding suggests that the increase in imports under RTA regimes might not be harmful to the domestic labour market. In addition, we did not find significant effects of import penetration via input–output linkages. This insignificant result may be because imports by Japanese manufacturing firms are mostly conducted in the form of intra-firm trade, enabling them to avoid negative impacts on employment.
Topic:
International Trade and Finance, Regional Cooperation, Labor Issues, Employment, and Manufacturing
Political Geography:
Japan, China, and Asia

96. Trade Reform and the Evolution of Agglomeration in Vietnamese Manufacturing

Author:
Đoàn Thi Thanh Ha and Hông Quỳnh Nguyen
Publication Date:
04-2020
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
It is well-documented that agglomeration contributes to productivity growth. However, concentrations of workers could also lead to increasing regional income disparities. Therefore, understanding the evolution of agglomeration is relevant for the formulation of industrial policy and inclusive growth. This study documents the extent, pattern, and determinants of agglomeration in Vietnamese manufacturing during 2002–2016, a period when substantial economic reform took place. Our major findings are three-fold. First, agglomeration, as measured by the Ellison–Glaeser index, has declined since the mid-2000s. Second, there exists significant sectoral heterogeneity in the level and trend of agglomeration. Third, we do not find a significant impact of trade and foreign direct investment on agglomeration per se. However, foreign direct investment in port districts does contribute to disagglomeration.
Topic:
International Trade and Finance, Reform, Manufacturing, and Productivity
Political Geography:
Asia and Vietnam

97. The Economic Impact of Globalisation in Indonesia

Author:
Kiki Verico and Mari Pangestu
Publication Date:
08-2020
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This paper analyses the economic impact of globalisation in Indonesia from the end of the 1960s to date. The analysis found that globalisation generated a positive impact on Indonesia’s economic growth through the trade and investment channel; reduced wage inequality and child labour participation; and increased labour absorption, including women's participation in the labour market. Through the trade channel, globalisation also contributed to Indonesia’s productivity and structural economic transformation, benefited small and medium-sized enterprises (SMEs), contributed to poverty alleviation and reduced inequality, and increased trade in services such as tourism. Through the investment channel, there is evidence of the spillover effect of technology transfer, technology progress, improvement of the role of SMEs, and contribution to poverty alleviation. The waves of open and more restrictive trade and investment policies, which Indonesia has gone through in the last few decades, reflect the political economy reality – that is, the impact of globalisation is dynamic and only felt in the medium term, whereas the cost and potential negative impact is often felt more immediately throughout trade creation. The trade creation increases imports from countries with which free trade agreements have been negotiated, decreasing the domestic producer surplus. Since globalisation will create net benefits in the long run, Indonesia should continue its process of globalisation and integration with the world economy to ensure the net benefits and to move forward in its structural transformation, while managing the costs of globalisation and its transition process.
Topic:
Globalization, International Cooperation, International Trade and Finance, and Economic Growth
Political Geography:
Indonesia, Asia, and Indo-Pacific

98. COVID-19: In Search of Solutions for Maritime Supply Chains

Author:
Chin Yim Leng
Publication Date:
06-2020
Content Type:
Working Paper
Institution:
Maritime Institute of Malaysia
Abstract:
The outbreak of the COVID-19 pandemic has had a remarkable impact on maritime supply chains. Since its first case in the capital of China’s Hubei province, Wuhan, Chinese seaborne trading activities were greatly affected – reports of weakening manufacturing confidence, decreasing demand for non-essential goods worldwide, and reduced workforce has surfaced since the massive transmission of COVID-19 in January 2020. Many European and Asian countries, including the United States, have responded to the pandemic in March 2020 by imposing strict containment measures. The implementation of national lockdowns or movement restrictions in pandemic-affected countries has led to rapid contractions in maritime supply chains. The wide-ranging impacts of COVID-19 on manufacturing and trading demands have created the need for different importing speeds based on essentiality, thus deteriorating the maritime supply chains. Governments and relevant authorities, as well as private entities, should take initiatives to ensure that maritime supply chains remain fully functional for national and commercial interests as the COVID-19 pandemic progresses. It could be ideal to adopt digitalisation and blockchains as these digital processes are easy to access and control in optimising the efficiency of maritime supply chains amidst the unprecedented COVID-19 pandemic.
Topic:
International Trade and Finance, Maritime, Pandemic, COVID-19, and Supply Chains
Political Geography:
China and Asia

99. Impact of US-China Trade Tensions, the Coronavirus, and the Plunge of Oil Prices on the Malaysian Maritime Transportation Industry

Author:
Ang Chin Hup
Publication Date:
06-2020
Content Type:
Working Paper
Institution:
Maritime Institute of Malaysia
Abstract:
Malaysia’s maritime transportation industry has seen growth from the benefits of the nation’s strategic location, well-developed infrastructure, and buoyant economy. Recently, this growth has lost its momentum since it became affected by the US and China trade tensions, the Coronavirus pandemic, and the plunge in oil prices. The trade tensions affected Malaysia’s ports handling exports to China. The plunge of oil prices affects demand for bunker oil due to reduced shipping activities. Meanwhile, the Coronavirus pandemic has disrupted port operations. As solutions for these impacts, this paper recommends a diversified supply chain, logistics-centric port, a comprehensive bunkering strategy, and strict compliance to IMO’s conventions.
Topic:
International Trade and Finance, Oil, Pandemic, Industry, COVID-19, and Energy
Political Geography:
Malaysia and Asia

100. Geo-Economic Impact of COVID-19 on the Maritime Sector in Malaysia

Author:
Sumathy Permal and Norsyihan Jamal
Publication Date:
04-2020
Content Type:
Working Paper
Institution:
Maritime Institute of Malaysia
Abstract:
The cascading effect of the novel coronavirus (Covid-19) that originated in Wuhan, China, is producing widespread reverberations around the globe and impacting almost every facet of life as we know it today. This article discusses the impact of Covid-19 on the geo-economics and maritime sector of Malaysia. A study by McKinsey states that the pandemic is expected to peak in the US and Europe in May 2020 and, as such, its full-fledged impact has not yet been felt. The pandemic has a corresponding effect on the global economy, which is expected to suffer major declines in consumption and production throughout the year. The global supply chain has been hard-hit with dire consequences for international trade and the shipping industry.
Topic:
Economics, International Trade and Finance, Maritime, Pandemic, COVID-19, and Supply Chains
Political Geography:
Malaysia and Asia