Jayant Menon 01 July 2014
The Trans-Pacific Partnership (TPP) is taking a long time to conclude. This column argues that the TPP agenda, unlike the Doha round, is more ambitious and controversial. Many see it as skewed in favour of one country – the US. There are fears that even the US may lose interest in the Partnership without the fast-track authority given by the current Congress. The only useful way forward is for countries to take matters in their own hands.
US, trade agreements, TPP
The problem with TTIP
L Alan Winters 22 May 2014
Most economists cheer the Trans-Atlantic Trade and Investment Partnership that the EU is currently negotiating with the US. This column argues it is a pity that TTIP and other mega-regional agreements have emerged. It sees the exclusion of China in particular as an existential threat to the world trading system. It urges policymakers in the EU to focus instead on the world trading system or even consider an agreement with China.
Much attention has been focused on the Trans-Atlantic Trade and Investment Partnership (TTIP) that the EU is currently negotiating with the US. Most economists cheer this development, but I regret it – it is a pity that it has emerged.
US, EU, trade agreements, TPP, TTIP
Economic integration agreements and the location of vertical FDI
Juan Blyde, Alejandro Graziano, Christian Volpe Martincus 13 May 2014
Joining international production networks has been the successful path to industrialisation taken by some Asian and eastern European countries in the last decades. This column argues economic integration agreements are a major force behind the formation of these international linkages. Using a global dataset of establishments to measure global value chains, it shows that countries with integration agreements have 8% more linked subsidiaries.
Production processes are becoming increasingly fragmented. Many goods that were manufactured in single countries are now sliced in different bundles assigned to plants around the globe, giving rise to what is commonly known as global value chains (GVCs). The emergence of GVCs is allowing nations to industrialise much more rapidly by joining international production networks rather than by building entire supply chains at home. This has been the path to industrialisation taken by some Asian countries and, more recently, by some eastern European countries as well (Baldwin 2012).
trade agreements, vertical FDI, global value chains
The relaunching of negotiations on environmental goods: Any breakthrough in sight?
Jaime de Melo, Mariana Vijil 01 April 2014
The Bali agreement last December has given new hope that the WTO is not dead. The recent announcement that negotiations on the reductions of tariffs on environmental goods are to resume gives hope that the triple-win outcome of the Doha round – for trade, for development and for the environment – might materialise, at least partly. Or does it? This column argues that unless the field of negotiations is widened, the initiative will not help much.
The decade-long negotiations on reducing barriers to trade in environmental goods and environmental services at the WTO failed to make any progress (Frankel 2013, Balineau and Melo 2013). Against this stalemate at the WTO, in September 2012, 20 APEC members submitted a list of 54 products for which they would lower applied tariff rates to 5% or less by the end of 2015.
Environment International trade
trade agreements, environmental goods, environmental services
Trade effects when formation of trade agreements is endogenous
Wolfgang Keller, Carol H Shiue 19 December 2013
Estimating the trade effect of trade agreements is no easy task. Agreements with higher trade returns may be formed before agreements with lower returns, and comparing these naïvely could bias our estimates of the true effects. This column studies the case of the German Zollverein of 1834 to show that it is important to examine the sequence of membership to estimate the effects of trade agreements.
In the summer of 2013, the EU began negotiations with the US for a preferential trade agreement. Negotiations with Canada are ongoing since 2009 and now in their final leg. The EU has preferential trade agreements with more than 40 countries, some formed in the early 1970s (e.g. with Switzerland since 1973) and others only very recently (e.g. with South Korea since 2011). It is fairly typical to observe early joiners and late joiners to trade agreements. What will these trade agreements do to volume traded and the integration of markets?
trade agreements, FTAs, Zollverein
Trade agreements and 21st century trade: A new Policy Insight
Nadia Rocha, Gianluca Orefice 25 November 2011
What is the relationship between deep preferential trade agreements and international production-sharing? This column introduces a new CEPR Policy Insight providing new evidence on the effects of deep integration on production networks trade and on the impact that production networks trade has on the likelihood of signing deeper agreements.
Twenty-first century trade, as defined by Baldwin (2011), is a much more complex phenomenon than trade prior to the early 1980s. This complexity is the result of the increased role of international production networks in the global economy, which are characterised by the unbundling of stages of production across borders.
trade agreements, Deep integration, production-sharing
Deep integration and production networks
Nadia Rocha, Gianluca Orefice,
Do deep preferential trade agreements enhance the development of cross-border production networks? CEPR Policy Insight No. 60 examines new evidence on this relationship and finds that the link runs both ways: deep integration often leads to production-sharing, and the formation of production networks often lays bare the ‘gaps’ in governance and institutions that deep integration can address.
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, Deep integration
, production sharing
Rethinking the (European) foundations of sub-Saharan African regional economic integration
Peter Draper 01 March 2011
Regional integration in Africa is seen as a priority by many of the continent’s policymakers. This column argues against a formal EU-like structure and instead proposes an African model that is responsive to the economic and political reality of the region. It says that the model should be underpinned by a security regime and should prioritise trade and regulatory cooperation.
Support for regional economic integration in Africa runs high among the continent’s international development partners and African elites. This is most loftily expressed in the African Union’s stated goal of achieving a continental economic integration scheme, the African Economic Community, by 2028.
As is often, however, the rhetoric does not match the reality. African economic integration suffers from a litany of problems, ranging from overlapping memberships, through unfulfilled commitments, to unrealistic goals (Dinka and Kennes 2007, Draper et al. 2007, UNECA 2006 and 2008).
Development International trade
Africa, trade agreements, regional cooperation
Multilateralising regionalism: The WTO’s next challenge
Richard Baldwin 29 February 2008
Trade liberalisation is proceeding everywhere but at the WTO: while nations drag their feet in Geneva, they sign bilateral trade agreements by the dozen. Finishing the ongoing WTO talks is important, but regionalism is the new reality. To maintain its relevance, the WTO must adapt, as regionalism is here to stay.
The world’s most important trade talks – the Doha Round – appear to be slipping into a coma while key nations play a waiting game. What are they waiting for? Some are waiting to see if Europe commits to unilaterally dismantling the EU’s massively distortionary agricultural policies during its 2008/2009 review. Others are waiting to see if the next US president is more protectionist or more accommodating. And the major developing nations see their exports growing at double-digit rates despite the stalemate, so what’s the rush?
WTO, trade liberalisation, trade, regionalism, trade agreements