Top PDF International Trade: Theory and Policy

International Trade: Theory and Policy

International Trade: Theory and Policy

1. Consultations. The DSB first demands that the appropriate government representatives from the complainant country and the defendant country meet to discuss the dispute. They must do this within a strict timetable (less than sixty days) and hopefully will be able to resolve the dispute without external intervention. 2. Panel formation. If the countries return to the DSB at a later session and report that the consultations failed, then the complainant may ask the DSB to form a panel. A panel consists of three to five independent trade law experts who are hired expressly to make a judgment about the particular dispute. The DSB chooses the panelists in consultation with the disputing countries, or the panelists are chosen by the director-general if the countries cannot agree. The panel is generally given about six months to decide whether the defendant violated some of its promises, whereupon it reports its decision to the DSB. Since a panel report can only be rejected by consensus, no country has veto power over DSB adoption of a report. Thus all panel reports become official decisions. But the process doesn’t yet end.
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Environmental Legislation and International Trade: Theory, Policy and Indian experience

Environmental Legislation and International Trade: Theory, Policy and Indian experience

2 Environmental Legislation and International Trade: Theory, Policy and Indian experience Abstract: This paper considers some contemporary environmental problems like carbon emission, deforestation etc, faced by mainly the developing nations of the world. In this context I have considered some facts and figures of Indian Tannery industry for realization of above mentioned issue. In this paper an attempt has been made to analyze theoretically, the effect of environmental pollution on the output of different sectors in a small open economy. Here, I have presented a theoretical model based on the general equilibrium framework, which mainly highlights on a paradoxical result. The paradox exists in the sense that, with strict environmental control, the formal sector subcontracts their production to the informal sector, thereby accentuating the total level of pollution faced by the society.
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Fairness in international trade policy: equality and differential treatment in theory and practice (working paper)

Fairness in international trade policy: equality and differential treatment in theory and practice (working paper)

accession clause would allow the determination and definition of differentiated accession requirements in order to enable equal participation. It is precisely these concerns that are addressed by my expanded version of James ’ s theory of fairness and the principle of Equal Participation. Given the international, interdependent and unequal nature of the global economy, a practice-dependent account of fairness in international trade must engage in multidimensional aspects and factors of participation. This means that fairness entails not only obligations not to harm by trade nor to worsen the life prospects of the already worst-off in the world, but also correspondingly encompasses duties to make each affected country an equal member of the practice of international trade, that is of international trade agreements. Equal participation might, in return, reduce the probability of harm and other detriments. Along these lines, the advocacy of measures of differential treatment is required to do justice to the normative foundation of structural equity and the according egalitarian fairness principles. Therefore, as in the case of TTIP, CETA, and other mega-regional trade agreements, the regionalisation of trade policy through bilateral or regional agreements must not only respect multilateral agreements and policies as provided by and within the WTO, they must also take into account potential consequences for third parties such as poor and developing countries. 11 While the United States and the European Union intend to counterbalance increasing economic influence of other world regions, not least of China, through the TTIP, this competition must not be carried out at the expense of the poor, developing, or marginalised countries of the world community. Moreover, as bilateral agreements must go beyond existing multilateral commitments in order to comply with current WTO rules
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Three essays in international trade theory and policy

Three essays in international trade theory and policy

Emran and Stiglitz (2005) report that the number of developing countries introducing VAT has increased dramatically over the decade of 1990s, and as of 2001, 123 countries already had some form of VAT (p. 600). Since VAT type taxes apply to both imports as well as domestic consumption, and thus have broader base than trade taxes which apply only to exports and imports, a majority of revenue-neutral tax reforms propose that tariff cuts be combined with smaller than one-to-one increases in consumption type taxes. 5 Unfortunately, empirical studies provide conflicting results regarding whether low income or developing countries were able to fully recover their trade tax revenue losses because of tariff reforms. For instance, Baunsgaard and Keen (2005) use data for 125 countries over the period 1975-2005 and report that high and middle income countries were able to offset reductions in trade tax revenues by increasing their domestic tax revenues, while low-income countries have only to a minor part recovered the loss of trade taxes (no more than around 30 cents of each lost dollar). Unlike Baunsgaard and Keen’s (2005) results, Buettner et al. (2006) find that developing and transition countries have been able to increase VAT revenues enough to compensate for declining tariff revenue in a sample of 20 developing and transition countries in the time period between 1990 - 2004.
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COURSE TITLE: INTERNATIONAL TRADE THEORY AND POLICY

COURSE TITLE: INTERNATIONAL TRADE THEORY AND POLICY

International Trade is a course that will allow you to get a better understanding of issues of integration, globalization and how they relate to economic development of small open economies like those of CARICOM. This course is going to be very interactive and it will be to your benefit to participate during lectures as your questions is what will guide the sessions and make the class more interesting.

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Policy Choice: Theory and Evidence from Commitment via International Trade Agreements

Policy Choice: Theory and Evidence from Commitment via International Trade Agreements

Below we discuss the different variables we employ. The data appendix provides more detailed information about their source and construction and Table 1 provides summary statistics. To place the analysis in context, we note a few basic facts about Turkey’s trade policy. Turkey moved away from an import substitution regime in the early 1980’s. It implemented a major trade liberalization that reduced tariffs and removed most of its NTBs, such as quotas. Some of the tariffs were replaced by other types of duties in the 1980’s, e.g. the mass housing fund, infrastructure tax, which were still taxes on imports. But most of these taxes on imports had also been removed by 1993 (Togan, 1995). Due to this liberalization, by 1994 only about 2% of all HS-6 lines were subject to any NTB. These consisted of some quantity restrictions but mostly authorization licenses, product standards and embargos/ prohibitions. 24 This implies that there would be little variation in NTBs to exploit in the 1994 data. But by 1997 that is no longer the case and, because of this and the fact that in 1997 we have additional information, such as advalorem equivalents that most closely match the theory predictions, we will focus on 1997. As far as we know the NTB information is not available for any other years.
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INTERNATIONAL TRADE THEORY

INTERNATIONAL TRADE THEORY

Although mercantilism is one of the oldest trade theories, it remains part of modern thinking. Countries such as Japan, China, Singapore, Taiwan, and even Germany still favor exports and discourage imports through a form of neo-mercantilism in which the countries promote a combination of protectionist policies and restrictions and domestic-industry subsidies. Nearly every country, at one point or another, has implemented some form of protectionist policy to guard key industries in its economy. While export-oriented companies usually support protectionist policies that favor their industries or firms, other companies and consumers are hurt by protectionism. Taxpayers pay for government subsidies of select exports in the form of higher taxes. Import restrictions lead to higher prices for consumers, who pay more for foreign-made goods or services. Free-trade advocates highlight how free trade benefits all members of the global community, while mercantilism’s protectionist policies only benefit select industries, at the expense of both consumers and other companies, within and outside of the industry.
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New Trade Theory And Strategic Trade Policy

New Trade Theory And Strategic Trade Policy

North american integration, a considering actions of new trade theory and strategic trade policy and economic research about the main exports of five problems that are the current cge model has not support. Although MITI had many successes, Japan has implemented restriction import, because there would be an incentive to create faster and better production methods to increase the specialization. Our usage policies, each of service production have attempted to repeal restrictions in favour of new trade theory and policy instruments of meat, the firm can be. These sectors higher taxes are strategic trade theory policy and new techniques for domestic automobile exports. These externalities are considered as alternatives to comparative advantage which directly influence international trade. United States, special offers, it is fair to say that such technological and analytical developments offer an untapped analytical potential that could leadto better informed trade policy making. The first movers in an industry may get locked in the world market that discourages subsequent entry because of their ability to gain economies of scale. Trade Theory and Economic Reform: Essays in the Honour of Bela Balassa, Industrialisation and Development, there is no guarantee that the stimulation of a producer on a market will have the desired effects. Subsidies differ in theory policy! These are the some key questions to be answered. This trade theory and new strategic policy is low rate of political realities of products. We therefore turn to consider some special cases.
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Monopolistic Competition and International Trade Theory

Monopolistic Competition and International Trade Theory

driving force in the model is not that more varieties raises consumers’ utility but rather that they increase total factor productivity. He showed that the implications which held in models with differentiated consumer goods, for intra- and inter-industry trade, and for the distributional consequences of trade policy, continued to hold. 5 More importantly, he showed that increased specialisation leads to productivity gains which depend on the world rather than the national scale of the industry. Extending Adam Smith’s vision, the division of labour is limited by the extent of the global rather than the local market: production of inputs need not be geographically concentrated. This specification provided a micro-economic rationale for a model of international returns to trade (in contrast with traditional national returns to scale) which Ethier (1979) had earlier explored. It has also proved very influential in growth theory.
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Multinational Firms and the Theory of International Trade

Multinational Firms and the Theory of International Trade

Preface 1. Discontent with Traditional Theory My training was in traditional international trade theory, which had been dominated for decades by the competitive, constant-returns general-equilibrium model. My first job out of graduate school was at the University of Western Ontario in Canada, where I found it hard to reconcile important aspects of the Canadian economy with what I had been taught and indeed with what I was teaching to students. The Canadian manufacturing sector included many large firms and was over 50% foreign owned. I discovered that, quite disjoint from international trade theory, there was another field that considered industrial-organization aspects of trade and trade policy in partial-equilibrium and descriptive analysis. Here there were discussions of how policy influenced foreign ownership and attempts to measure the scale and market power inefficiencies caused by restrictive trade policies. Rather than consider trade liberalization, successive
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Multinational Firms and the Theory of International Trade

Multinational Firms and the Theory of International Trade

result that is now very well known from strategic trade policy: The cost increase reduces the profits of firm i and increases the profits of firm j. There is nothing new here. But for values of tc j > 2.75, firm i finds it more profitable to build a branch plant in country j, but firm j sticks with one plant. Referring back to (24) and (26), firm j must be made worse off by this regime shift

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ECO 364H1F: INTERNATIONAL TRADE THEORY

ECO 364H1F: INTERNATIONAL TRADE THEORY

8 Religious accommodation As a student at the University of Toronto, you are part of a diverse community that welcomes and includes students and faculty from a wide range of backgrounds, cultural traditions, and spiritual beliefs. The course instructor will make every reasonable effort to avoid scheduling tests, examinations, or other compulsory activities on religious holy days not captured by statutory holidays. Further to University Policy, if you anticipate being absent from class or missing a major course activity due to a religious observance, please let the course instructor know as early in the course as possible, and with sufficient notice (at least two weeks), so that alternate arrangements can be made.
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A Theory of the Currency Denomination of International Trade

A Theory of the Currency Denomination of International Trade

I Introduction The key assumption in new Keynesian macroeconomics is that prices are infre- quently adjusted due to small menu costs. At the international level, however, there is an entirely different dimension to this issue. If exporting firms set prices in foreign markets, and infrequently adjust them, in what currency should they set these prices? One reason why this is an important question is revealed in Figure 1, which shows a clear negative relationship between the fraction of im- ports invoiced in the importer’s currency and the pass-through of exchange rate changes to import prices for a set of 7 industrialized countries. 1 If firms set prices in the importer’s currency, we should expect zero pass-through. If instead prices are set in the exporter’s currency, we should see full pass-through. Incomplete pass-through can explain the observed large volatility of real exchange rates and the significant correlation between nominal and real exchange rates. The extent of pass-through also has profound implications for monetary policy. The recent “new- open economy macroeconomics” literature, which has adopted the new-Keynesian assumption of rigid prices in an open economy context, has shown that assump- tions about invoicing are critical for optimal monetary policy and the choice of exchange rate system. 2
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International Trade - Commercial Policy

International Trade - Commercial Policy

support of "national champions". Similar results apply to import-competing firms: tariffs may serve to raise welfare by shifting profits from foreign to home firms. However, the profit-shifting argument turns out to be subject to many qualifications. The underlying model assumes that firms compete in the market-place by choosing their outputs, taking the output choices of their rivals as given (i.e., that firms engage in Cournot competition). This sort of behaviour is plausible when technology requires firms to commit in advance to their capacity output levels. If instead output can be varied with little change in marginal cost, then firms are more plausibly modeled as price-setters (engaging in Bertrand competition). In that case, firms behave more aggressively in the absence of intervention, and the optimal policy is an export tax rather than a subsidy. The rationale for intervention is the same in the two cases: the home government uses its superior commitment power to achieve an outcome which the domestic firm cannot achieve on its own. However, the practical relevance of the theory is reduced by the sensitivity of the actual policy prescription to assumptions about how firms behave. One slight defense of intervention comes from recent research, which suggests that the ambiguity is reduced when subsidies are given to pre- production variables such as R&D or marketing expenditures rather than directly to exports.
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International Economics: Theory and Policy

International Economics: Theory and Policy

Differences in price ratios between countries and the desire to make more profit are sufficient to generate international trade. To explain why, it is useful to incorporate some friction in the trading process and to tell a dynamic story about how a new free trade equilibrium is reached. First, note that the higher price of cheese in France means that cheese workers in the United States could get more wine for their cheese in France than in the United States. Suppose one by one over time cheese workers begin to take advantage of the opportunity for trade and begin to sell their cheese in the French market. We assume that some workers are more internationally adroit and thus move first. The motivation here is profit. Workers want to get more for the goods they are selling. As the U.S. cheese workers appear in the French market, the supply of cheese increases. This also represents exports of cheese from the United States to France. The increased supply will reduce the price of cheese in the French market, meaning that over time, the quantity of wine obtained for a pound of cheese will fall.
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Some aspects of the pure theory of international trade

Some aspects of the pure theory of international trade

propriate policy. i-------- This point is relevant to the criticism of Little and Graaf [55>70^6l,56-7] that as the elasticities of the optimum tariff formula are related functionally to the height of the tariff only the roughest of approximations would he yielded by such a formula. Hence, they argued that as too large a tariff could decrease welfare, a small tariff would he preferable. Assuming, however, that demand functions were reasonably continuous, a good approximation would he given - even in the case of a large tariff. In fact, there seems to he no reason why a few minor adjustments would not give a close approximation to the optimum position, more especially because each successive adjustment would mean smaller and smaller second order differences. It is conceded, however, that one might generally expect demand elasticity to vary inversely with price thus causing a series of oscilla
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A Theory of the Currency Denomination of International Trade 1

A Theory of the Currency Denomination of International Trade 1

I Introduction The corner stone of new Keynesian macroeconomics is the infrequent adjustment of prices due to small menu costs. At the international level, however, there is an entirely different dimension to this issue. If exporting Þrms set prices in foreign markets, and infrequently adjust them, in what currency should they set these prices? This question is not grounded in mere theoretical curiosity. It turns out that the invoicing choice, which is a microeconomic one at the level of the Þrm, has far ranging macroeconomic implications. This has been one of the main messages from the recent “new open economy macroeconomics” literature, which has introduced nominal rigidities in an open economy context. The invoicing choice affects both exchange rate volatility and the impact of the exchange rate on the economy. It has been found to play a critical role for optimal monetary policy and the choice of exchange rate regime. 1 A key channel through which the invoicing choice affects the macro-economy is its impact on the pass-through of exchange rate changes to import prices. If Þrms set prices in the importer’s currency, we should expect zero pass-through. If instead prices are set in the exporter’s currency, we should see full pass-through. Figure 1 conÞrms this relationship between invoicing choice and pass-through for a set of seven industrialized countries. 2
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Equity, International Trade and Climate Policy

Equity, International Trade and Climate Policy

The first alternative derives from the basic message of Emanuel Kant (do not to others what you do not want them to do to you) with a Rawlsian flavour (the ‘other’ being the least well-off region). The second alternative is based on the thought that, for all regions for all times, the sum of costs of emission reduction and the costs of climate change should be equal. Thus, the inequities of the no-climate-change scenario are maintained (whereas, in a no-policy-scenario, inequities would deteriorate). Such relative no-envy solutions often prove a pragmatic way out in everyday policy making. The other alternatives have more similarity to conventional economic theory. We first do a sensitivity analysis around the discount rate and risk aversion. In a fourth alternative, a global welfare function is maximised that explicitly includes distaste for inequity. This alternative has roots in neo-classical economics, but cannot distinguish between inequities of climate change, inequities of emission reduction, and inequities of other causes. A further alternative introduces altruism. Again, altruism does not distinguish between sources of inequity. A final alternative is again deeply rooted in neo-classical economics. The polluter pays principle is rigorously implemented.
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Journal of International Law and Trade Policy

Journal of International Law and Trade Policy

Indeed, the WTO has always struggled for legitimacy, as it is widely seen as an icon of corporate globalization. The WTO’s legitimacy deficit, which is its primary political and operational handicap, I would argue, runs deep into its design. The recent wave of populism, nationalism and concomitant protectionism stem in part from the malaise in neoliberal trade policy. With the adoption of the Marrakesh Agreement in 1994, the scope of the multilateral trade regime expanded by leaps and bounds. 6 That in turn has fueled popular discontents at least in two ways. First, not only the effects of trade, but also the rules of international trade now cut across traditionally nontrade spheres. 7 That means WTO rules influence domestic policy more than ever before, among other things, further resonating longstanding legitimacy and sovereignty concerns. Such expansion was, however, pointedly selective. While business and corporate interests were protected through the incorporation of traditionally nontrade subjects, such as intellectual property and investment into the WTO at the Uruguay Round, labour and development issues remain sidelined. That broke with the original comprehensive postwar policy of embedded liberalism. With the creation of the WTO (which occurred and at the height of the era of market triumphalism), social and development issues have effectively been displaced with corporate interests. That is despite the hallow declaration under the first substantive paragraph of the WTO Agreement that the organization was set up for the purpose of, inter alia, raising standards of living and ensuring full employment around the world. Such selective expansion of the rules of international trade was justified by the classic theory of comparative advantage.
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Equity, International Trade and Climate Policy

Equity, International Trade and Climate Policy

tion and the costs of climate change should be equal. Thus, the inequities of the no-climate-change scenario are maintained (whereas, in a no-policy-scenario, inequities would deteriorate). Such relative no-envy solutions often prove a prag- matic way out in everyday policy making. The other alternatives have more similarity to conventional economic theory. We first do a sensitivity analysis around the discount rate and risk aversion. In a fourth alternative, a global welfare function is maximised that explicitly includes distaste for inequity. This alternative has roots in neo-classical economics, but cannot distinguish between inequities of climate change, inequities of emission reduction, and inequities of other causes. A further alternative introduces altruism. Again, altruism does not distinguish between sources of inequity. A final alternative is again deeply rooted in neo-classical economics. The polluter pays principle is rigorously implemented.
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