Economic research and trade policy analysis
Partial equilibrium trade policy analysis with structural gravity
Despite solid theoretical foundations and remarkable empirical success the empirical gravity equation is still often applied a-theoretically and without account for important estimation challenges that may lead to biased and even inconsistent gravity estimates. The objective of this chapter is to serve as a practical guide for estimating the effects of trade policies (and other determinants of bilateral trade) with the structural gravity model.
Introduction
A comprehensive review of the literature on global value chains (GVCs) is an ambitious undertaking for at least three reasons. First the literature is voluminous and the risk of omitting key references is high. Second the proper study of GVCs requires a multidisciplinary approach with literature originating from a wide variety of disciplines. This requires an understanding of different intellectual and conceptual approaches. Third with such a high level of interest in GVCs the field is a moving target and new work in the next months and years will warrant an update.
Recent trends in international trade
The world economy grew at 4 per cent in 2004 the strongest annual growth rate in more than a decade. Global GDP last year was also more broadly based regionally than in the three preceding years providing a solid basis for an acceleration in world trade growth. World merchandise trade rose by 9 per cent in real terms in 2004 the best annual performance since 2000 and more than twice as fast as world output (GDP measured at market rates) in 2004. Trade growth in 2004 also significantly exceeded average trade growth recorded over the last decade.
Introduction
Gone are the days when trade policy decisions were settled by one or two government ministries and conveyed with little ceremony to parliament and the public. Evolving views and practices on participatory decision-making along with a policy-making environment that continues to grow in complexity have changed the manner in which national trade policy is formulated. The number of governmental authorities and agencies implicated in national trade policy dialogues has multiplied and so too has the number and diversity of non-state actors (NSAs) laying claim to a say in policy deliberations.1 This array of parties including both business and civil society organizations (CSOs) will frequently be pulling governments in different directions. They will also make greater efforts in some policy contexts than others.
The Doha Development Agenda
An underlying objective of the WTO is to promote economic development through effective participation in world trade. Three aspects of the WTO’s structure and rules are relevant to the question of how developing countries can derive greater benefits from participation in the trading system. First the rules themselves together with permitted exceptions and interpretations are the foundation of the system and play a key part in determining the conditions and opportunities of trade. Second there is the question of the coverage of the system. No examples exist of topics that the WTO has taken up and then discarded so this is about the inclusion of new areas. Third the pattern of protection facing a country’s exports also goes a long way in defining trading conditions and opportunities. In short the nature of WTO rules the reach of these rules and conditions of market access are the three major areas that determine the quality and utility of the WTO for its Members. Not surprisingly each of these three elements features prominently in the Doha Development Agenda.
Foreword
Any discussion today of international trade and investment policy that fails to acknowledge the centrality of global value chains (GVCs) would be considered outmoded and of questionable relevance. The idiom might vary – referring to trade in value-added production sharing supply chains outsourcing offshoring vertical integration or fragmented production instead of GVCs – but the core notion of internationally joined-up production is the same. Every international agency dealing with economic affairs as well as many governments are working on various aspects of GVCs in order to understand better their various dimensions. The central concern from this quarter of course is what GVCs mean for trade policy and for international cooperation in trade-related matters.
The role of international cooperation in building economic resilience
As responses to the 2008-09 global financial crisis and the COVID-19 pandemic have shown lack of cooperation among governments can create significant tensions and lead to suboptimal outcomes. In contrast governments benefit from acting cooperatively to enhance their resilience whether they are preparing for future disruptions coping with shocks or stimulating the recovery. International cooperation in the trade area can play an important role in building economic resilience to shocks by leveraging synergies and supporting a more open diversified inclusive and predictable trade environment.
Labour Market Policy Responses Amid Globalization: The Case of South Africa
The South African economy is one mired in a long-run low-level growth trap which has entrenched high levels of structural unemployment. Further and as is the case with many middle-income economies it has struggled with the domestic consequences emanating from a variety of exogenous economic shocks. Nowhere is this more apparent than in the case of contagion effects from the 2008 global crisis and trade-induced shocks – within a world economy that is increasingly defined by its interconnectedness. For South Africa the real economic impact has been most powerfully felt in the labour market with current and future employment threatened through these shocks. Thus the combination of high levels of structural unemployment and the adverse labour market effects associated with exposure to global shocks has necessitated the design of appropriate and effective labour market responses.
Remerciements
Le Rapport sur le commerce mondial 2008 a été rédigé sous la supervision d’Alejandro Jara Directeur général adjoint. Patrick Low Directeur de la Division de la recherche économique et des statistiques a dirigé l’équipe chargée de la rédaction. Les principaux auteurs du rapport sont Marc Bacchetta Chad Bown K. Michael Finger Marion Jansen Alexander Keck Roberta Piermartini Michele Ruta et Robert Teh. Les statistiques commerciales ont été fournies par les statisticiens de la Division de la recherche économique et des statistiques dont les travaux ont été coordonnés par Hubert Escaith Julia de Verteuil Andreas Maurer et Jürgen Richtering.
How have production networks changed development strategies in East Asia?
Production networks in East Asia a result of “the second unbundling” are currently the most advanced in the world particularly in machinery industries A new type of international division of labour has fundamentally changed the development strategies of less developed countries (LDCs) as well as developed countries’ (DCs) approach to LDCs.
The trade situation in 2008-09
Signs of a sharp deterioration in the global economy were evident in the second half of 2008 and the first few months of 2009 as world trade flows sagged and production slumped first in developed economies and then in developing countries. Although world trade grew by 2 per cent in volume terms over the course of 2008 it tapered off in the last six months of the year and was well down on the 6 per cent volume increase posted in 2007. World output measured by real gross domestic product (GDP) also slowed appreciably falling to 1.7 per cent in 2008 from 3.5 per cent a year earlier.
Définir les politiques publiques axées sur linnovation et leur évolution à lère du numérique
Depuis la crise financière de 2008-2009 lemploi industriel dans certaines économies a diminué et la concurrence internationale dans les secteurs industriels matures sest resserrée ; lévolution de la productivité et des salaires a ralenti et une nouvelle économie reposant sur les technologies numériques est apparue. Dans ce contexte les politiques industrielles et les politiques en matière dinnovation ont fait lobjet dun renouveau et ces « nouvelles politiques industrielles » témoignent dune dualité inhérente à toutes les phases de la politique publique dans la mesure où elles visent à accompagner la difficile modernisation des industries traditionnelles tout en permettant aux économies de sadapter à la numérisation.
Foreword
The World Trade Report 2006 is the fourth in a series launched in 2002. As in previous years the present Report has taken up a current issue in trade policy. This year we have looked at subsidies. The contribution we hope to make with these Reports is to aid understanding of complex trade policy issues facing governments. This is not intended primarily as a prescriptive Report but rather as an invitation to deeper reflection and it is aimed not just at policy-makers but also the public they represent and the individuals and organizations that actively seek to influence government policies. In addition to the core topic the Report also takes a brief look at recent developments in trade and discusses some salient features of recent trade developments or a particular aspect of trade. This year the Report looks briefly at trade in textiles and clothing flows of international receipts and payments of royalties and license fees trends in the trade of least-developed countries and the impact of natural disasters and terrorist acts on international trade flows.
Acknowledgements
This volume has been produced under the WTO Chairs Programme (WCP) a WTO capacity-building programme launched upon the initiative of Hakim Ben Hammouda and Patrick Low in 2010. The WCP is jointly managed by the WTO’s Institute for Training and Technical Cooperation and Economic Research and Statistics Division under the direction of Bridget Chilala and Robert Teh respectively. The editors thank Fatima Chaudhri and Gerardo Thielen for their contribution to the initial stages of this book project and Clémence Gros for editorial assistance. Anthony Martin and Helen Swain are thanked for managing the production process of the volume.
Gender Welfare Effects of Regional Trade Integration on Households in Ghana
Over the past two to three decades a number of developing countries have pursued regional economic integration to harmonize trade policies and increase their weight in global trade. Economic integration particularly in Africa has also been seen as a way to diversify the structure of African economies boost intra-African trade and investment build supply capacity and sustainably reduce poverty (Osakwe 2015). These integration efforts have resulted in the creation of regional blocs such as the Economic Community of West African States (ECOWAS) West African Economic and Monetary Union (WAEMU) Common Market for East and Southern Africa (COMESA) Economic Community of Central African States (ECCAS) Central African Economic and Monetary Community (CEMAC) Southern African Customs Union (SACU) and Arab Maghreb Union (AMU). The trade-related objectives of these blocs include the establishment of custom unions with a common external tariff (CET) as a major trade policy instrument.
WTO accessions: A market access perspective on growth – the approach of the European Union
A strong multilateral trading system is vital to developing countries’ longterm interests both for its rulebook and for the market access that it guarantees in all key markets. Markets are increasingly located in developing countries. Indeed for the first time in recent history South–South trade outweighs North–South trade even though barriers to South–South trade are much more significant than those to developed countries’ markets. Through their WTO accession acceding economies can reap the benefits of more and better access to most world markets – that of the European Union being among the biggest.
Avant-propos
À lère numérique un nombre croissant de gouvernements a adopté des politiques visant à stimuler la croissance grâce à linnovation et à la modernisation technologique. Les conséquences économiques intérieures liées à la pandémie de COVID-19 conduit les pays à renforcer ces politiques. Le présent rapport examine ces tendances ainsi que le rôle que peuvent jouer le commerce et lOMC. Il montre que la coopération internationale a un rôle important à jouer pour aider les pays à atteindre ces objectifs plus efficacement tout en limitant autant que possible les retombées négatives des politiques nationales.
Introduction
The world is continually changing driven by technological innovations that affect the way we live and do business. The history of the world economy is intimately linked to technological progress. The invention of the steam engine mechanized production the discovery of electricity enabled mass production and the rise of the internet made it possible to coordinate various production stages at a distance leading to a fragmentation of production that gave rise to global value chains.
The Policy to Mitigate the Effects of the 2008 Global Crisis on Textile, Clothing, Leather and Footwear Jobs in Morocco
This chapter aims to analyse the short episode of labour market adjustment policy in Morocco adopted as a response to the global crisis of 2008 by the Moroccan Government. It focuses on the rationale implementation and effects of this policy on the resilience of firms employment and workers in the textile clothing leather and footwear (TCLF) sector.