Narrow Results

This study examines how environmental non-tariff measures (NTMs) affect trade in Asia-Pacific Economic Cooperation (APEC) member economies. Using product-level panel data spanning 2009–2020, we find that stringent environmental NTMs reduce trade in APEC member economies, whereas no significant effect exists when exporting is destined to non-APEC economies. The trade-impeding effect of NTMs is prominent in exports of dirty goods from economies with high-intensity greenhouse gas emissions through additional adaptation costs to meet environmental standards set by high-income importing countries with the high-intensity imposition of the measure. Results imply that APEC economies need to enhance effective environmental regulations by taking the heterogeneous effects of NTMs on trade across industries and types of measures into account.

Amid global economic integration and changes in international patterns, strategic emerging industries have become the core driving force for high-quality economic development and industrial structure upgrading. Studying the structural evolution of the global trade network of strategic environmental products and its influence mechanism can help reveal the changes in the industrial division of labour and guide the formulation of green trade policies. Based on this, this paper analyses the evolution of trade networks of products in the fields including energy-saving technologies, new materials, renewable energy, etc., using social network analysis and an exponential random graph model with 50 countries around the world as the research object from 2010 to 2022. It is found that the global trade network of strategic environmental products has been affected by the decoupling of the international situation, and trade links have been reduced, forming three major independent groups, with a stable core-edge structure, and the United States, Germany, and China playing an important pivotal role. Factors such as economic fundamentals, R&D expenditures, and trade openness have a positive impact on network formation, while external factors and internal structural features of the network also influence network evolution.

A study of the distribution of the value of traded goods under the Harmonized System is presented. The ramifications of this classification system are found to exhibit an approximate power law decay, indicating complexity and self-organization in the nomenclature of traded merchandises. For almost all countries with available data, log-values of annually imported and exported goods are well described by three-parameter Weibull distributions. This distribution commonly appears in particles size distributions, suggesting a connection between random fragmentation processes and the mechanisms behind the international trade of merchandises. Analysis of the resulting values for the fitting parameters from 1995 to 2018 shows a nearly constant linear relationship between the parameters of the Weibull distributions, so that, for each country, the distribution of log-values can be approximately characterized by a single shape parameter $\beta$. The empirical findings of this paper suggest that specialization on trading a constant set of goods prevents the values of all traded merchandises from growing/decreasing simultaneously.

Panax ginseng, as a kind of rare and valuable Chinese materia medica with the largest global trade volume, has been widely applied in many fields, such as medicine, food, health care, and production of daily chemical products. It is widely used in Asia, Europe, and America. However, its global trade and standardization present different features and an uneven development in different countries or regions. As the main country for its production and consumption, Panax ginseng in China is characterized by its large cultivation area and high total yield and is mainly sold as a raw material or primary processed product. By contrast, Panax ginseng produced in South Korea is mainly sold in manufactured products. Besides, European countries, as another consumption market of Panax ginseng, pay more attention to the research and development of its products. Although Panax ginseng has been widely recorded in various national pharmacopoeias and regional standards, the current standards of Panax ginseng differ in quantity, composition, and distribution, and the existing standards cannot be enough to meet the demands of its global trade. Based on the above issues, we systemically summarized and analyzed the status and features of Panax ginseng standardization and put forward suggestions on the development needs of international standardization of Panax ginseng to guarantee its quality and safety, regulate the order of its global trade, and resolve trade disputes, thereby promoting the high-quality development of the Panax ginseng industry.

International supply chains in the food industry have lengthened in recent years and new sources of risk have arisen. With increased consumers' incomes, perceptions about food safety have become sharper and food safety has become an important issue in public policy both domestically and internationally. The safety of food is a credence characteristic which gives rise to a particular form of market failure involving either asymmetric information and moral hazard or symmetric imperfect information. An example from a recent experience in the UK was used to illustrate the issue of moral hazard, as well as the possible responses to it. A partial equilibrium model of an open economy was developed to investigate how the moral hazard problem that is caused for importing firms by the actions of exporting firms could be solved by the market rather than by government intervention.

Although Malaysia has been an integral part of the international production fragmentation network since 1970, empirical investigations on the factors that determine the expansion of these networks are sparse. The paper examines the aforementioned empirical gap in the case of the Malaysian information, communications and telecommunications (ICT) sector using trade patterns in parts and components (PNC). Panel-data estimation from 1990 to 2008 suggests that mobile factors such as relative labor costs and productivity, foreign capital, agglomeration effect, infrastructure development and industrial policies are important in facilitating the international production fragmentation development. Income and domestic prices effect however, are conditional to trade flows.

Since its launch in late 2013, the Belt and Road Initiative (BRI) has become a significant factor in shaping China’s economic and diplomatic relations with the world. China’s increasing clout presents opportunities as well as challenges, especially for the developing economies of the Association of Southeast Asian Nations (ASEAN) which constitute major sites for investment and trade alongside the BRI routes. This special issue examines whether and to what extent China’s economic ascendancy has impacted the proposed ASEAN Economic Community and the respective nations in the region. It deals with this question by grounding the analysis along three themes — institutions at a regional level, industry/sector, and particular ASEAN countries’ economic relationship with China. A total of 12 articles are presented to illuminate the state of affairs at the regional level and in specific ASEAN economies. They point to the importance of managing trade and investment flows stemming from China’s increasingly sophisticated national firms. This in turn hinges on forging ‘rules of the game’ at both the multilateral and bilateral levels, which potentially leads to mutually beneficial industrialization and long-term wealth creation. In addition to summarizing key findings of the articles in the special issue, this introductory essay examines some of the key themes confronting ASEAN in its engagement with the BRI such as institutions, global supply chains, and economic strategies. It concludes with a brief discussion on the impact of the COVID-19 pandemic on the BRI in Southeast Asia, and on ways to enhance regional integration.

The remanufacturing industry is experiencing a gradual increase in international trade. Accordingly, manufacturers are encountering a multitude of regulations in this cross-border trade of remanufactured products, such as import prohibitions/bans, environmental regulations, and tariff barriers. In this paper, we investigated the implications of exporting remanufactured products to the international market with or without trade regulations. Our analysis reveals that, although the international market for remanufacturing invariably benefits the manufacturer, trade regulations are a disadvantage to remanufactured exports. Thus, while the quality of remanufactured products increases, the adverse effect of trade regulations could be weakened. Additionally, we reveal that trade regulations may be detrimental to the environment with a higher rate of used core collection and disposal impact. Thus, policymakers should take care to regulate the international market for remanufactured goods rather than implementing a one-size-fits-all solution.

ICIO data have proven itself to be a reliable source for the analysis of economic globalization, with which sectors all over the world could be constructed into a sophisticated GVC, bringing the advantages of simultaneous study on international and domestic economies in detail as a holistic network. This paper uses OECD–WTO TiVA data to set up GIVCN-TiVA networks as the general analytical framework, depicting the transferring process of intermediate goods among sectors of various countries/regions. Secondly, the conception of brokerage roles in SNA has been adopted to redefine sector’s function while linkage exists between its upstream providers and downstream consumers, referred to as “Trade Brokerage Property”, as well as to quantify the ratio of each types of the roles. Thirdly, a set of simulations have been defined to testify the contribution that different TBPs incur to the robustness of global economic system. Finally, analyses on TBPs and NTBPs have been carried out in the levels of industry and country/region, respectively.

Avian Flu – A Never Ending Disaster?

Avian Flu and the Pandemic Threat.

The Risk of an H5N1 Pandemic in Humans is Possible but Unlikely.

This research was aimed at understanding the effects of exchange rate volatility on UAE’s international trade. To examine the effects, 10 of the top trading partners of UAE were considered for this study. Additionally, in order to determine the volatilities of UAE’s top 10 trading partners’ currencies, the GARCH (1,1) model was used. After that the Autoregressive Distributed Lag (ARDL) bound testing approach determined the long-run relationship between the volatilities of the currencies and the trade of UAE. Furthermore, the short-run relation between volatility and trade was detected using the Granger causality test. The results indicated that in the long run the volatility of the Chinese Renminbi, the Euro and the Saudi Riyal affect UAE’s exports, while UAE’s imports in the long run are affected by the volatility of the Iranian Rial and the Euro as well. On the other hand, the volatilities of the Indian Rupee and the Omani Riyal tend to affect UAE’s exports in the short term, however, the imports of UAE in the short run are actually affected by the volatilities of the Euro and the Swiss Franc.

Over the past four decades, the high-performing Asian economies (HPAE) have followed a development strategy based on the exposure of their local markets to the presence of foreign competition and on outward-oriented production. In contrast, Latin American (LATAM) economies began taking steps in this direction only in the late 1980s and early 1990s, but before this period they were more focused on the implementation of import substitution policies. These divergent paths have led to sharply different growth performances in the two regions. Yet, standard trade openness indicators fall short of portraying the peculiarity of the Asian experience, and of explaining why other emerging markets with similar characteristics have been less successful over the last 25 years. We offer an alternative perspective on this issue by exploiting recently developed indicators based on weighted network analysis. We study the evolution of the core–periphery structure of the World Trade Network (WTN) and, more specifically, the evolution of the HPAE and LATAM countries within this network. Using random walk betweenness centrality, we show that the HPAE countries are more integrated into the WTN and many of them, which were on the periphery in the 1980s, are now in the core of the network. In contrast, the LATAM economies have at best maintained their position over the 1980–2005 period, and in some cases have fallen in the ranking of centrality.

To what extent does joint membership in intergovernmental organizations (IGOs) matter for bilateral trade? How and under what conditions do the various types of IGOs — economic, socio-cultural and general purpose — influence bilateral trade between their members? How do complex interdependencies in world trade matter? Existing research tends to examine aggregate joint IGO memberships and has done little to analyze how specific types of IGO membership matter in trade. Using a detailed IGO dataset and a novel network analysis approach called the temporal exponential random graph model, I assess the importance of three main IGO types — economic, socio-cultural and general purpose — in helping members to establish major trading ties. The results provide support for general purpose and socio-cultural IGOs and point to the importance of network phenomena such as popularity, activity and transitivity effects. Moreover, joint economic IGO memberships exhibit slightly more complex relations with bilateral trade. A robustness test reveals that preferential trade agreements are significant in fostering trade, while the World Trade Organization and other economic IGOs such as development banks are not. This paper presents a nuanced way of analyzing IGOs and provides the impetus for the study of complex interdependencies in international trade.

This paper investigates the link between foreign aid and exports between the two shores of the Mediterranean. The main hypothesis is that the Euro-Mediterranean Process should promote not only trade but also stronger links between the European Union (EU) and the Middle East and North Africa (MENA). Hence, we expect development aid to have a positive impact on exports, which could also intensify the aid-trade relationship. In particular, we expect to find higher trade volumes in both directions after the process started in 1995 and intensified in the late 1990s and early 2000s, when several bilateral free trade agreements were signed. A gravity model augmented with bilateral and multilateral aid and trade regime variables is estimated for exports and imports from recipient countries to donor countries for the period 1988 to 2007 using advanced panel data techniques. Our method addresses the endogeneity bias of the trade regime/economic integration agreement (EIA) variable, assuming that decisions to form or enlarge EIAs are slow-moving relative to trade flows.

This research discusses the role of international trade in China's economic growth. It starts with a review of conceptions as well as the evolution of China's international trade regime and the policy that China has taken in favor of its trade sectors. China's international trade performance is analyzed extensively and its effects on efficiency in production evaluated. A stochastic frontier production function is applied, based on a balanced panel data of 31 provinces observed from 2002 to 2007. The production function model is estimated and province-specific determinants of inefficiency in trade are identified. The study demonstrates that increasing participation in global trade helps China reap static and dynamic benefits, stimulating rapid national economic growth. Both international trade volume and trade structure toward high-tech exports result in positive effects on regional productivity. Provinces differ by economic growth and participation in international trade. Policy implications are drawn from the empirical results accordingly.

In this paper we provide a simple model of an emerging market like China. We attempt to capture two characteristics of an emerging market: The simultaneous presence of market failures and government failures. In this model, we study the national welfare properties of four types of “governance” or “institutions”: A Benevolent Dictator, Extreme Economic Liberalism, Extreme Economic Nationalism and Factional Fighting with groups pressuring the government. We also discuss a case of the Realistic Dictator, who may switch from adopting liberal policies to nationalistic policies as the domestic market gets larger.

Air transportation is a major facilitator of international trade in terms of the value of goods and services involved, and is important to specific industries, such as tourism, that are being developed by many lower income countries. High air transportation costs can pose a major impediment to the economic growth of countries, or to regions within them. But international air transportation is also an industry in its own right that can earn profits and foreign exchange for the parenting country. The newer international trade models treat transportation as a transactions cost, reductions of which confer in most cases, a gain to trading partners. Reducing air transportation costs, if resulting from rent seeking activities in protected markets, can, however reduce income for the air transportation-providing country and may impact on its foreign exchange earnings. This can reduce the incentive for a country to participate in Open Skies type situations where international air services are offered in a competitive market. Furthermore liberal trade in air transportation services can, in some cases lead to potentially less efficient provision of these services.

This paper examines the impact of improved trade facilitation measures and institutional capacity in a set of economies in transition Europe. Our results suggest that behind-the-border barriers play an important role in determining bilateral trade flows (controlling for the effects of tariffs, development levels, distance, and regional characteristics of exporters and importers, among other factors). For European Union (EU) members that joined the Union in 2004 and less developed and candidate members raising capacity in port efficiency and information technology infrastructures halfway to the EU-15 average, trade could expand by US$49 billion and US$62 billion respectively. In the context of the economic crisis and fragile recovery, as well as efforts to strengthen Europe integration, efforts to facilitate trade with investments to raise capacity in trade facilitation should be considered as part of policy steps going forward.

This paper addresses the role of policy in the relationship between globalization and development by considering four examples: trade-related capacity building, standards for multinational enterprises, medical brain drain, and access to medicines. The paper demonstrates that, despite concerns about policy space, there is some room for improving the way that globalisation processes contribute to development and poverty alleviation. None of the policies considered constitutes a fix-all but rather can make some marginal changes that could be significant in the long run.

Global value chains (GVCs) have altered the nature of global trade and offer significant opportunities for developing countries to expand exports, access technology, and raise productivity. Recent literature has pointed to a range of underlying characteristics that may drive participation in GVCs. Using a modified factor-content methodology, this paper shows that proximity to markets, efficient logistics, and strength of institutions are among the most important capabilities. However, the paper also shows that each sector has a unique mix of capability requirements. The paper applies the methodology to Southern African Customs Union countries, and demonstrates that, by filling gaps in underlying capabilities, these countries could increase participation in certain GVC sectors.