Search Results

Rules of Origin as tools of development? Some lessons from SADC

Olivier Cadot, Antoni Estevadeordal, Akiko Suwa-Eisenmann, and Thierry Verdier

in The Origin of Goods: Rules of Origin in Regional Trade Agreements

Firm level interviews are used to assess the economic implications of the rules of origin (ROO) applied for trade to qualify under the Southern African Development Community (SADC) Trade Protocol. ... More

Firm level interviews are used to assess the economic implications of the rules of origin (ROO) applied for trade to qualify under the Southern African Development Community (SADC) Trade Protocol. Approaches to ROO reflect the tension between regional integration as a platform for improving competitiveness in international markets, and using it as a ‘policy tool for development’ to obtain privileged access to a larger protected market. The analysis of selected SADC ROO in agriculture and manufacturing shows that these will prevent efficiency gains from being realized by the Free Trade Area by maintaining the pre-Trade Protocol protection and trade patterns. ROO that seek to influence the sourcing of inputs through fiat will encourage trade diversion and reduce international competitiveness.Less

Understanding Rules of Origin

Olivier Cadot, Antoni Estevadeordal, Akiko Suwa-Eisenmann, and Thierry Verdier

in The Origin of Goods: Rules of Origin in Regional Trade Agreements

This chapter surveys recent work on the economic effects, both theoretical and empirical, of Rules of Origin (ROO) in a Free Trade Area (FTA).

The Mainstream from Viner to the JCM Proposition

Richard Pomfret

in The Economics of Regional Trading Arrangements

Deals with mainstream customs union theory, starting with the Vinerian concepts of trade creation and trade diversion (Sects. 1–3). Section 4 analyses differences between customs unions and free ... More

Deals with mainstream customs union theory, starting with the Vinerian concepts of trade creation and trade diversion (Sects. 1–3). Section 4 analyses differences between customs unions and free trade areas, and the phenomenon of trade deflection. Section 5 provides a general equilibrium framework, pioneered by Vanek and Kemp.Less

North America

Richard Pomfret

in The Economics of Regional Trading Arrangements

Deals with empirical work on North American regional trading arrangements. Section 1 reports estimates of the impact of a free trade area between the USA and Canada. This literature was innovative in ... More

Deals with empirical work on North American regional trading arrangements. Section 1 reports estimates of the impact of a free trade area between the USA and Canada. This literature was innovative in trying to account for scale economies and general equilibrium effects of an RTA. The remainder of the chapter deals with the effects of the North American Free Trade Agreement (NAFTA) on the three signatories (Sect. 2) and on non‐member countries (Sect. 3). Section 4 draws conclusions.Less

Mandatory Abolition of Anti-dumping, Countervailing Duties and Safeguards in Customs Unions and Free Trade Areas Constituted between WTO Members: Revisiting a Long-standing Discussion in Light of the Appellate Body’s Turkey—Textiles Ruling

Angela T. Gobbi Estrella and Gary N. Horlick

in Regional Trade Agreements and the WTO Legal System

This chapter discusses the ruling of the World Trade Organization (WTO) Appellate Body on the Turkey-Textiles case concerning import restrictions on imports textile and clothing products. It suggests ... More

This chapter discusses the ruling of the World Trade Organization (WTO) Appellate Body on the Turkey-Textiles case concerning import restrictions on imports textile and clothing products. It suggests that this represents the Appellate Body's first foray into the controversial interpretative issues involving the provisions governing customs unions and free trade areas (FTA) in Article XXIV of the General Agreement on Tariffs and Trade (GATT). The ruling on the case provide meaningful guidance on whether section 8 of Article XXIV should be interpreted as mandating or allowing elimination of trade remedies in RTA.Less

Other Free Trade Areas and Customs Unions

Richard Pomfret

in The Economics of Regional Trading Arrangements

Other free trade areas and customs unions have been less intensively studied than the EU or NAFTA. RTAs among developing countries have not had a great impact, often because paper agreements were not ... More

Other free trade areas and customs unions have been less intensively studied than the EU or NAFTA. RTAs among developing countries have not had a great impact, often because paper agreements were not fully implemented, or where they have had an impact they have not survived, sometimes because they involved trade diversion that turned out to be costly for some members. Section 2 deals with RTAs among centrally planned economies.Less

The North American Integration Regime and its Implications for the World Trading System

FREDERICK M. ABBOTT

in The EU, the WTO, and the NAFTA: Towards a Common Law of International Trade?

Although the North American Free Trade Agreement (NAFTA) and European Union (EU) regional integration processes have shortcomings, there is also reason to conclude that these enterprises are ... More

Although the North American Free Trade Agreement (NAFTA) and European Union (EU) regional integration processes have shortcomings, there is also reason to conclude that these enterprises are generally beneficial to the world economic and political system. Evidence is mounting that close market integration coupled with effective legal institutions provides economic, social, and political benefits over more diffuse market integration and the absence of legalisation. Despite risks inherent in the regionalisation of the world economy, the success of the NAFTA and EU relative to the world economy as a whole suggests that there is more to be gained than feared from the process. This chapter discusses the implications of the NAFTA integration regime for international trade, the General Agreement on Tariffs and Trade (GATT), customs unions and free trade areas within the World Trade Organisation (WTO) System, most favoured nation principle of international trade, and impact of NAFTA on the political economy of regionalism.Less

Regionalization of World Trade and Currencies: Economics and Politics

Jeffrey A. Frankel and Shang-Jin Wei

in The Regionalization of the World Economy

Drawing on earlier econometric results, this chapter explores the effects that regional economic arrangements concerning currencies have had on bilateral trade. It considers economic welfare effects ... More

Drawing on earlier econometric results, this chapter explores the effects that regional economic arrangements concerning currencies have had on bilateral trade. It considers economic welfare effects of regional arrangements but relaxes the assumption that tariffs maintained by members of free trade areas against outsiders are exogenously set. The chapter also reviews various political economy arguments that others have made regarding how regional initiatives might either undermine movement toward more general trade liberalization, or help build political support for it. It presents a simple model that illustrates one possible beneficial effect of trade blocs as a political building block to further liberalization. It returns to the gravity model estimates to make a tentative assessment on which of the contrasting political-economy effects of trade regionalization, favorable or unfavorable, are likely to dominate. It shows that those groupings, such as the European Community and East Asia, that have increased trade disproportionately with each other, have at the same time increased trade with non-members.Less

Economic Analysis of Regional Trade Agreements

Viet D. Do and William Watson

in Regional Trade Agreements and the WTO Legal System

This chapter discusses the results of economic analyses of regional trade agreements (RTA). The recent proliferation of RTA poses a number of interesting and difficult questions for economists. These ... More

This chapter discusses the results of economic analyses of regional trade agreements (RTA). The recent proliferation of RTA poses a number of interesting and difficult questions for economists. These questions are concerned with the reasons and motivations for the increasing number of RTA and whether it is welfare-improving. The analyses reveal that RTA are often not long term, most RTA are mainly in free trade areas, and the World Trade Organization (WTO) is implicated in the growth of RTA.Less

Preferential Trade Agreements

Petros C. Mavroidis

in The Regulation of International Trade: GATT

This chapter focuses on preferential trade agreements, the second exception to the most favored nation clause. Unlike special and differential treatment, which is focused on providing benefits to ... More

This chapter focuses on preferential trade agreements, the second exception to the most favored nation clause. Unlike special and differential treatment, which is focused on providing benefits to developing countries, preferential trade agreements are designed to liberalize ‘substantially all trade’. This chapter examines the two permissible forms to qualify for the exception – a customs union or free trade areas – the pros and cons of each form and what is meant by ‘substantially all trade’. Further, the chapter discusses litigating PTAs before the WTO.Less

Under Construction: The Euro-Mediterranean Free Trade Area (EMFTA)

Francesco Seatzu

in The Global Community Yearbook of International Law and Jurisprudence 2018

Although compelled by both political and trade necessities, negotiations for the Euro-Mediterranean Free Trade Area (EMFTA) have been problematic and lengthy. This free trade area is to encompass the ... More

Although compelled by both political and trade necessities, negotiations for the Euro-Mediterranean Free Trade Area (EMFTA) have been problematic and lengthy. This free trade area is to encompass the countries around the Mediterranean, including non-EU member countries, and it was foreseen in the 1995 Barcelona Declaration as one of the key elements of the Euro Mediterranean Partnership (EMP). After over fifteen years of negotiations and the creation of closer commercial relations between EU Member States and the states of the southern side of the Mediterranean through the conclusion of several Euro-Mediterranean Association Agreements (AAs) and Deep and Comprehensive Free Trade Agreements (DCFTAs) between 1998 and 2012‏, there is a lot at stake for the EU and the MPCs in the results of these deliberations. This work aims to examine these issues, with particular reference to the most recent progress, if any, made in the decade long negotiation process of EMFTA, and seeks to identify the best way forward.Less

Triumph: Economic Integration, 1955–1957

Sebastian Rosato

in Europe United: Power Politics and the Making of the European Community

This chapter is structured around four questions: Why did the Europeans not achieve economic integration in the late 1940s and early 1950s? Why did the Federal Republic of Germany welcome the Benelux ... More

This chapter is structured around four questions: Why did the Europeans not achieve economic integration in the late 1940s and early 1950s? Why did the Federal Republic of Germany welcome the Benelux proposal in 1955 and make substantial concessions to France in order to establish the European Economic Community (EEC)? Why did the French agree to create a supranational common market so soon after rejecting the defense community and then carry through on their commitment? And why did the British initially join the discussions, quickly pull out, and then propose a competing European industrial free trade area (FTA) in October 1956, before finally seeking to associate their own economic grouping with the common market? It argues that these events are best understood as the product of balance of power politics. Specifically, the global distribution of power made European cooperation possible, and the major protagonists endorsed or refused integration based on balance of power calculations.Less

Regional Arrangements: Integrating, Coordinating, and Gaining a Voice

Eleanor M. Fox and Mor Bakhoum

in Making Markets Work for Africa: Markets, Development, and Competition Law in Sub-Saharan Africa

This chapter studies regional coordination in sub-Saharan Africa. Regional arrangements occupy a significant part of African competition policy. The most integrative form of arrangement is a common ... More

This chapter studies regional coordination in sub-Saharan Africa. Regional arrangements occupy a significant part of African competition policy. The most integrative form of arrangement is a common market, wherein member states tear down trade barriers between and among them, create supranational authorities to oversee trade and competition, and even create monetary unions. The chapter then discusses selected regional groups; namely, the Common Market of Eastern and Southern Africa (COMESA), the Southern African Development Community (SADC), the East African Community (EAC), the West African Economic and Monetary Union (WAEMU), and the Economic Community of West African States (ECOWAS).Less

Continental Trading Blocs: Are They Natural or Supernatural?

Jeffrey A. Frankel, Ernesto Stein, and Shang-jin Wei

in The Regionalization of the World Economy

The world trading system seems to be moving, not just to a system of regional free trade areas (FTAs) but to a system of large continental groupings. In Europe, the European Union (formerly the ... More

The world trading system seems to be moving, not just to a system of regional free trade areas (FTAs) but to a system of large continental groupings. In Europe, the European Union (formerly the European Community) removed internal barriers in 1992 and admitted three new members in 1994, bringing the total to fifteen. In December 1994, the leaders of Western Hemisphere countries met in Miami and agreed to form an FTA for the Americas. This paper investigates three questions. According to bilateral trade data, is the world indeed breaking up into a small number of continental trade blocs? In theory, is a small number of continental blocs good or bad for world economic welfare? For actual parameter values, is the current pattern of trade regionalization welfare-promoting or welfare-reducing? The welfare implication of continental blocs depends on the values of some crucial parameters. This chapter focuses on the real-world counterparts of these key parameters, particularly the magnitude of transport costs.Less

Indonesian Visions of Regionalism: From Yudhoyono to Jokowi

Jürgen Rüland

in The Indonesian Way: ASEAN, Europeanization, and Foreign Policy Debates in a New Democracy

With the “leadership frame,” the chapter unearths a new interpretive frame of the Charter from 2009 onward, suggesting a gradual return of extant ideas of Indonesian foreign policymaking. The chapter ... More

With the “leadership frame,” the chapter unearths a new interpretive frame of the Charter from 2009 onward, suggesting a gradual return of extant ideas of Indonesian foreign policymaking. The chapter also scrutinizes the internalization of the new EU-inspired ideas of regionalism. The litmus tests were events in which the territorial and economic sovereignty of Indonesia was challenged, such as the disputes with Malaysia over maritime borders and the ASEAN-China Free Trade Area. The response to these events showed that most stakeholders except civil society threw overboard many of the liberal-cosmopolitan values associated with European regional integration. Last, the chapter examines whether this ideational reversal continued under the Jokowi government and suggests that the latter did not abruptly break with the foreign policy of his predecessor. Many of the seemingly new Jokowi policies had their roots in the second term of the Yudhoyono presidency.Less

Introduction

Matthew Broad

in Harold Wilson, Denmark and the Making of Labour European Policy, 1958-72

This chapter argues that central to how the British Labour Party and Danish SD developed strategies towards European integration between 1958 and 1972 was a close relationship between them. To set ... More

This chapter argues that central to how the British Labour Party and Danish SD developed strategies towards European integration between 1958 and 1972 was a close relationship between them. To set the scene, it: recounts the historically strong economic, political and cultural ties between Britain and Denmark and the close Labour-SD links that emerged amid this environment; details the initially similar, rather sceptical Labour and SD views of the early European integration process; and explains why by 1956–58 both groups supported the FTA proposal as a favoured method of European cooperation. Methodologically, it critiques the current literature and subsequently: outlines the value of a comparative study of political parties from two countries unique in confronting the same demands of European unity in cognisance of each other; justifies a longue durée approach as revealing new aspects of the parties’ European strategies; and, crucially, rationalises why historians ought to think less in purely national or transnational terms when explaining European policy decisions and instead trace how these two levels interacted, complemented and competed with each other. Finally, it accounts for the book’s multiarchival and multinational source base before offering synopses of the chapters that follow.Less

The European Attempt to Topple Spain’s Industrial Protection

Fernando Guirao

in The European Rescue of the Franco Regime, 1950-1975

The 1970 Agreement was intended to regulate trade relations between the Six and Spain for six years. At the end of 1972, however, Chapter 8 shows, for the Six/Nine the question was no longer that of ... More

The 1970 Agreement was intended to regulate trade relations between the Six and Spain for six years. At the end of 1972, however, Chapter 8 shows, for the Six/Nine the question was no longer that of negotiating additional concessions for Spanish exports but of the inclusion of Spain into the pan-European Free-Trade Area, to begin by 1977. In the summer of 1975, the Spanish Council of Ministers, under the influence of the minister of commerce, refused to ratify the FTA with the EEC. The Spanish government wished to avoid a transformation into a customs union or inclusion in an FTA in which Spanish producers would face mounting competition by West-European producers. The 1970 Agreement remained in force until Spain became a full member of the three European Communities, on 1 January 1986, transforming it into a sort of pre-accession arrangement for which it was not prepared.Less

The Welfare Implications of Trading Blocs among Countries with Different Endowments

Antonio Spilimbergo and Emesto Stein

in The Regionalization of the World Economy

Over the last decade, a large number of bilateral trading arrangements have been created, strengthened, or proposed in nearly every region of the world. Empirical evidence on bilateral trade flows ... More

Over the last decade, a large number of bilateral trading arrangements have been created, strengthened, or proposed in nearly every region of the world. Empirical evidence on bilateral trade flows shows that this phenomenon has been accompanied by increased trade regionalization, at least in some regions. Therefore, the study of the economic welfare implications of trading blocs has become very relevant. This chapter examines the likely welfare effects of trade regionalization by using a two-factor model where trade is explained both by product differentiation and comparative advantage. It looks at the case of preferential trade agreements as well as that of free trade areas, the effects of transport costs, and the effects of different countries having different levels of tariffs. After setting up the model for the closed economy, the chapter allows for trade and then considers the welfare implications of different types of trade arrangements.Less

Introduction

Jeffrey A. Frankel

in The Regionalization of the World Economy

This book addresses several large questions. Why do countries adopt free trade areas (FTAs) and other regional trading arrangements? To what extent have existing regional arrangements actually ... More

This book addresses several large questions. Why do countries adopt free trade areas (FTAs) and other regional trading arrangements? To what extent have existing regional arrangements actually affected patterns of trade? What are the welfare effects of such arrangements? In most economic models, whether classical or new-fangled, economic welfare is maximized by worldwide free trade. The difficult questions arise when one assumes that this first-best solution is not attainable politically. Which is second-best: a system of most favored nation (MFN), that is, nondiscriminatory tariffs, or a system where groups of countries deviate from the MFN principle in order to form FTAs, which eliminate trade barriers internally while keeping them externally? The issue of regional currency arrangements enters tangentially into two of the chapters, by way of their effects on trade. Several of the chapters, particularly where the effects of regional trade agreements are explored econometrically, make extensive use of the gravity model of bilateral trade. The book also looks at the General Agreement on Tariffs and Trade and the North American Free Trade Agreement.Less