In this paper I theoretically argue that people weigh specialization gains against trade costs when they decide whether to specialize and trade or self-produce all goods by themselves. Trade costs relate to institutional quality. Thus, more people participate in trade under better institutions. I also show that the better the institution of an economy’s trade partner, the more prosperous the economy is, thanks to expanded trade. Moreover, when more people trade, more people would like to fight for a better institution and may induce institutional changes. Better initial institutions or lower trade costs facilitate institutional improvements; but with very high initial institutional quality, people may lose their incentive to protest. I also provide historical evidence consistent with the theory.
{"title":"Development Spillover and Institutional Changes: A Trade Economy Political Perspective","authors":"Hao Bo","doi":"10.2139/ssrn.3001888","DOIUrl":"https://doi.org/10.2139/ssrn.3001888","url":null,"abstract":"In this paper I theoretically argue that people weigh specialization gains against trade costs when they decide whether to specialize and trade or self-produce all goods by themselves. Trade costs relate to institutional quality. Thus, more people participate in trade under better institutions. I also show that the better the institution of an economy’s trade partner, the more prosperous the economy is, thanks to expanded trade. Moreover, when more people trade, more people would like to fight for a better institution and may induce institutional changes. Better initial institutions or lower trade costs facilitate institutional improvements; but with very high initial institutional quality, people may lose their incentive to protest. I also provide historical evidence consistent with the theory.","PeriodicalId":426783,"journal":{"name":"PSN: Trade Policy (Topic)","volume":"57 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-07-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127935616","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
A standard theoretical prediction is that average exports are independent of tariff rates when the underlying distribution of firm productivities is assumed to be the widely-used Pareto distribution. Assuming that the underlying distribution has no upper bound is undoubtedly inaccurate and produces theoretical results at odds with empirical results. In contrast, we show that upper-truncation of the Pareto distribution makes average exports rise with trade liberalization. This result is derived analytically, and is supported by simulations. We extend our analysis to the cases of lognormal and Frechet distributions, which are also frequently used by trade economists. Our findings for lognormal and Frechet distributions are qualitatively similar to the findings using the truncated Pareto.
{"title":"Truncated Firm Productivity Distributions and Trade Margins","authors":"Cletus C. Coughlin, S. Bandyopadhyay","doi":"10.20955/wp.2017.018","DOIUrl":"https://doi.org/10.20955/wp.2017.018","url":null,"abstract":"A standard theoretical prediction is that average exports are independent of tariff rates when the underlying distribution of firm productivities is assumed to be the widely-used Pareto distribution. Assuming that the underlying distribution has no upper bound is undoubtedly inaccurate and produces theoretical results at odds with empirical results. In contrast, we show that upper-truncation of the Pareto distribution makes average exports rise with trade liberalization. This result is derived analytically, and is supported by simulations. We extend our analysis to the cases of lognormal and Frechet distributions, which are also frequently used by trade economists. Our findings for lognormal and Frechet distributions are qualitatively similar to the findings using the truncated Pareto.","PeriodicalId":426783,"journal":{"name":"PSN: Trade Policy (Topic)","volume":"8 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-07-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115122285","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Trade agreements present unique opportunities for negotiating partners; however, these benefits will not come without costs. The generally disappointing record of Sub‐Saharan Africa with trade agreements warrants a reexamination of the situation especially at the multilateral and regional level. Africa faces the challenge of how to determine the priorities in its trade policy among competing demands on the unilateral, regional and multilateral fronts. In many African countries, trade policy design has not been effective in addressing issues bordering on the ease of doing business and its coherence with other policies has been limited.
{"title":"Towards a Convergence between Strong Trade Agreements and Weak Trade Policies in Sub‐Saharan Africa","authors":"A. Aribidara","doi":"10.2139/ssrn.3057400","DOIUrl":"https://doi.org/10.2139/ssrn.3057400","url":null,"abstract":"Trade agreements present unique opportunities for negotiating partners; however, these benefits will not come without costs. The generally disappointing record of Sub‐Saharan Africa with trade agreements warrants a reexamination of the situation especially at the multilateral and regional level. Africa faces the challenge of how to determine the priorities in its trade policy among competing demands on the unilateral, regional and multilateral fronts. In many African countries, trade policy design has not been effective in addressing issues bordering on the ease of doing business and its coherence with other policies has been limited.","PeriodicalId":426783,"journal":{"name":"PSN: Trade Policy (Topic)","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128981211","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Offset agreements are widespread in sales of defense products. There is a steady tendency to increase their share as a percentage of world trade. Developed countries with well-established Defence Technological and Industrial Bases, use offset transactions to target activities to business organizations and countries with emerging economies use offset to gain military and commercial benefits. The following paper examines the offset as an economic operation which represents a wide range of industrial and trade practices .
{"title":"Offset as an Economic Operation and a Trade Practice","authors":"V. Terziev, Veselin Madanski, M. Georgiev","doi":"10.18769/IJASOS.373041","DOIUrl":"https://doi.org/10.18769/IJASOS.373041","url":null,"abstract":"Offset agreements are widespread in sales of defense products. There is a steady tendency to increase their share as a percentage of world trade. Developed countries with well-established Defence Technological and Industrial Bases, use offset transactions to target activities to business organizations and countries with emerging economies use offset to gain military and commercial benefits. The following paper examines the offset as an economic operation which represents a wide range of industrial and trade practices .","PeriodicalId":426783,"journal":{"name":"PSN: Trade Policy (Topic)","volume":"160 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114911965","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This study investigates the effects of free trade agreements (FTAs) on trade in transport services using OECD data from 2003 to 2006. Our analysis found that FTAs had a positive overall impact on transport services for multiple countries (i.e., 26 home and 56 partner countries). The resulting positive overall impact assures that, even with the challenges associated with different layers of services and the obstacles formed by generally low trade openness in the sector, the provisions in FTAs (e.g., national treatment and market access for goods and services) promote transport service trades. Our findings suggest that the provisions in FTAs encourage economic agents to increase engagement in transport services because of expanded openness of the physical movement of goods across international borders.
{"title":"Free Trade Agreement and Transport Service Trade","authors":"Jai-min Lee, Seong‐Hoon Cho","doi":"10.1111/twec.12501","DOIUrl":"https://doi.org/10.1111/twec.12501","url":null,"abstract":"This study investigates the effects of free trade agreements (FTAs) on trade in transport services using OECD data from 2003 to 2006. Our analysis found that FTAs had a positive overall impact on transport services for multiple countries (i.e., 26 home and 56 partner countries). The resulting positive overall impact assures that, even with the challenges associated with different layers of services and the obstacles formed by generally low trade openness in the sector, the provisions in FTAs (e.g., national treatment and market access for goods and services) promote transport service trades. Our findings suggest that the provisions in FTAs encourage economic agents to increase engagement in transport services because of expanded openness of the physical movement of goods across international borders.","PeriodicalId":426783,"journal":{"name":"PSN: Trade Policy (Topic)","volume":"21 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131400602","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The literature on the impact of bilateral investment treaties (BITs) on foreign direct investment (FDI) has had difficulty establishing a robust effect of BITs on FDI flows. This conclusion extends to FDI chapters in free trade agreements (FTAs), which feature the same substantive content as BITs. The lack of an empirically identifiable effect may reflect econometric difficulties, a minimal role of BITs/FTAs in corporate FDI decisions, or the lack of liberalizing content in the treaties. We consider the latter issue by mapping the legal commitments in FTAs onto the OECD’s Foreign Direct Investment Restrictiveness (FDIR) Index, while drawing on the Mode 3 component of the OECD’s Services Trade Restrictiveness Index (STRI) to enable greater granularity of treatment of the measures in FTAs. The modified index, which we label the FDI-RI to distinguish it from the FDIR, has the same broad policy areas and the same weighting scheme as the FDIR but the measures under each horizontal policy area (i.e., policies that apply to FDI in general without distinguishing sectors) that are covered in more detail by the STRI have been disaggregated into measures that correspond to those in the STRI. The FDI-RI thus covers both goods and services on a consistent basis, but with greater detail for goods sectors than available under the FDIR. Importantly, we take into account the impact of FTA measures in improving upon each party’s bindings under the General Agreement on Trade in Services (GATS). In principle, empirically quantified NTBs reflect both applied restrictions and uncertainty. We identify uncertainty with “water” in the bound commitments and construct a composite NTB that reflects applied measures and water. This approach allows a determination of whether and how much FTAs liberalize investment by either reducing applied barriers, decreasing uncertainty, or both. Given measures of tax equivalents for non-tariff measures affecting investment, this approach also allows the calculation of a tax equivalent shock for use in quantitative models. We comment on the impact of FDI liberalization in the Trans-Pacific Partnership (TPP) Agreement using this approach.
{"title":"Evaluating the Impact of FTAs on FDI: A Text-Based Approach","authors":"A. Dadkhah, Dan Ciuriak","doi":"10.2139/ssrn.2987666","DOIUrl":"https://doi.org/10.2139/ssrn.2987666","url":null,"abstract":"The literature on the impact of bilateral investment treaties (BITs) on foreign direct investment (FDI) has had difficulty establishing a robust effect of BITs on FDI flows. This conclusion extends to FDI chapters in free trade agreements (FTAs), which feature the same substantive content as BITs. The lack of an empirically identifiable effect may reflect econometric difficulties, a minimal role of BITs/FTAs in corporate FDI decisions, or the lack of liberalizing content in the treaties. We consider the latter issue by mapping the legal commitments in FTAs onto the OECD’s Foreign Direct Investment Restrictiveness (FDIR) Index, while drawing on the Mode 3 component of the OECD’s Services Trade Restrictiveness Index (STRI) to enable greater granularity of treatment of the measures in FTAs. The modified index, which we label the FDI-RI to distinguish it from the FDIR, has the same broad policy areas and the same weighting scheme as the FDIR but the measures under each horizontal policy area (i.e., policies that apply to FDI in general without distinguishing sectors) that are covered in more detail by the STRI have been disaggregated into measures that correspond to those in the STRI. The FDI-RI thus covers both goods and services on a consistent basis, but with greater detail for goods sectors than available under the FDIR. Importantly, we take into account the impact of FTA measures in improving upon each party’s bindings under the General Agreement on Trade in Services (GATS). In principle, empirically quantified NTBs reflect both applied restrictions and uncertainty. We identify uncertainty with “water” in the bound commitments and construct a composite NTB that reflects applied measures and water. This approach allows a determination of whether and how much FTAs liberalize investment by either reducing applied barriers, decreasing uncertainty, or both. Given measures of tax equivalents for non-tariff measures affecting investment, this approach also allows the calculation of a tax equivalent shock for use in quantitative models. We comment on the impact of FDI liberalization in the Trans-Pacific Partnership (TPP) Agreement using this approach.","PeriodicalId":426783,"journal":{"name":"PSN: Trade Policy (Topic)","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-06-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130805931","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The Regional Comprehensive Economic Partnership (RCEP) is an ongoing free trade agreement involving ASEAN member states (AMSs) and six trading partners: Australia, China, India, Japan, South Korea and New Zealand. RCEP negotiations were launched in November 2012, and 18 rounds of negotiation have been held, along with six ministerial meetings and three intersessional meetings. Two chapters, namely "Economic and Technical Cooperation" and "Small and Medium-sized Enterprises," have been concluded, and other chapters are still in progress with some of them nearing conclusion. To date, progress in the RCEP negotiations has been sluggish due to disagreement over the modality of tariff reduction on trade in goods, liberalization of services, and investment framework. In regard to trade in goods, it is known that the proportion of products committed to eliminate tariffs has not been finalized yet. It is hard to balance the interests of RCEP participating countries (RPCs) due to the different industrial structures and levels of development among participating countries. It seems unrealistic to expect conclusion of the RCEP by the end of this year, but it is likely that considerable progress will be made during ASEAN's 50th anniversary. With the global trade slowdown, the importance of the RCEP to keep markets open and deepen integration is increasing. RPCs should continue their efforts to reach high-standard and economically meaningful outcomes. The agreed outcome should be able to reduce intra-regional transaction costs through simplification and harmonization of rules of origin, customs procedures and standards. Since RPCs have already established over-lapping FTAs with member countries, it needs significant improvements over the existing ASEAN+1 FTAs to induce economically meaningful gains from the RCEP.
{"title":"Regional Comprehensive Economic Partnership (RCEP): Progress and Challenges","authors":"Meeryung La","doi":"10.2139/ssrn.2990867","DOIUrl":"https://doi.org/10.2139/ssrn.2990867","url":null,"abstract":"The Regional Comprehensive Economic Partnership (RCEP) is an ongoing free trade agreement involving ASEAN member states (AMSs) and six trading partners: Australia, China, India, Japan, South Korea and New Zealand. RCEP negotiations were launched in November 2012, and 18 rounds of negotiation have been held, along with six ministerial meetings and three intersessional meetings. Two chapters, namely \"Economic and Technical Cooperation\" and \"Small and Medium-sized Enterprises,\" have been concluded, and other chapters are still in progress with some of them nearing conclusion. To date, progress in the RCEP negotiations has been sluggish due to disagreement over the modality of tariff reduction on trade in goods, liberalization of services, and investment framework. In regard to trade in goods, it is known that the proportion of products committed to eliminate tariffs has not been finalized yet. It is hard to balance the interests of RCEP participating countries (RPCs) due to the different industrial structures and levels of development among participating countries. It seems unrealistic to expect conclusion of the RCEP by the end of this year, but it is likely that considerable progress will be made during ASEAN's 50th anniversary. With the global trade slowdown, the importance of the RCEP to keep markets open and deepen integration is increasing. RPCs should continue their efforts to reach high-standard and economically meaningful outcomes. The agreed outcome should be able to reduce intra-regional transaction costs through simplification and harmonization of rules of origin, customs procedures and standards. Since RPCs have already established over-lapping FTAs with member countries, it needs significant improvements over the existing ASEAN+1 FTAs to induce economically meaningful gains from the RCEP.","PeriodicalId":426783,"journal":{"name":"PSN: Trade Policy (Topic)","volume":"86 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-06-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128316783","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper intends to analyse trade finance access for Chilean services companies, and whether it is perceived as an obstacle in their internationalization process. Through a survey we try to assess companies’ perceptions, controlling for their subsectors, size, export level, amongst other variables. The role of financial institutions and government agencies will be included in the study. The first section reviews the relevant literature on trade finance. In the second section, we present an overview of trade finance for services exports instruments available in the main world economies. The third section will present the methodological approach, results of the survey and its analysis. Finally, some conclusions and policy recommendations will be drawn.
{"title":"Trade Finance as a Barrier for Chilean Services Internationalization","authors":"Dorotea López, Felipe Muñoz","doi":"10.2139/ssrn.2990929","DOIUrl":"https://doi.org/10.2139/ssrn.2990929","url":null,"abstract":"This paper intends to analyse trade finance access for Chilean services companies, and whether it is perceived as an obstacle in their internationalization process. Through a survey we try to assess companies’ perceptions, controlling for their subsectors, size, export level, amongst other variables. The role of financial institutions and government agencies will be included in the study. The first section reviews the relevant literature on trade finance. In the second section, we present an overview of trade finance for services exports instruments available in the main world economies. The third section will present the methodological approach, results of the survey and its analysis. Finally, some conclusions and policy recommendations will be drawn.","PeriodicalId":426783,"journal":{"name":"PSN: Trade Policy (Topic)","volume":"56 7","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"120855310","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Trade in services and its positive relation with countries’ development has been a consideration in the design of public policies. In particular, since the return of democracy, it has been pointed out by Chilean authorities the intention to improve services exports to add value and diversify its basket. Since the first decade of the 2000 the State has implemented a series of programs and strategies directed to achieve these objectives. However, the matrix remains anchored in natural resources, particularly copper. Although trade in services has increased, it has not done so as expected. In order to understand the reasons why public policies intend to promote the service sector have failed achieving their objective, this work has interviewed experts from the public, private and academic sector, international organizations and NGOs to collect their perception on policies to promote services exports implemented in the period 1990 – 2014. For a better understanding of the results, three overlapping levels are distinguished, in a logical hierarchy from greater to lesser extent: Level I: Considerations on economic doctrines and corporate cultures. Level II: Considerations on the specificity of service industry and economic considerations. Level III: Considerations on specific policies and instruments. Some conclusions and recommendations are presented at the end.
{"title":"Trade in Services and Development: The Case of Perception in Chile","authors":"Dorotea López, Camila García Pérez, Felipe Muñoz","doi":"10.2139/ssrn.2990925","DOIUrl":"https://doi.org/10.2139/ssrn.2990925","url":null,"abstract":"Trade in services and its positive relation with countries’ development has been a consideration in the design of public policies. In particular, since the return of democracy, it has been pointed out by Chilean authorities the intention to improve services exports to add value and diversify its basket. Since the first decade of the 2000 the State has implemented a series of programs and strategies directed to achieve these objectives. However, the matrix remains anchored in natural resources, particularly copper. Although trade in services has increased, it has not done so as expected. In order to understand the reasons why public policies intend to promote the service sector have failed achieving their objective, this work has interviewed experts from the public, private and academic sector, international organizations and NGOs to collect their perception on policies to promote services exports implemented in the period 1990 – 2014. For a better understanding of the results, three overlapping levels are distinguished, in a logical hierarchy from greater to lesser extent: Level I: Considerations on economic doctrines and corporate cultures. Level II: Considerations on the specificity of service industry and economic considerations. Level III: Considerations on specific policies and instruments. Some conclusions and recommendations are presented at the end.","PeriodicalId":426783,"journal":{"name":"PSN: Trade Policy (Topic)","volume":"22 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132310774","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Canada sits at a risky crossroads. Our economic prosperity depends on international trade and investment, but new global realities are calling into question long-standing policy goals and approaches in these critical areas. A big existential threat to the global trading system lies on our southern border, with President Trump intent on fundamentally altering US trade policy. The noisy signals of negotiating tactics may change from day-to-day, but even if the Americans’ exact position remains unclear, the broader stated objectives are known, and the ripple effects of any significant retreat from a rules-based trading system could bring considerable collateral damage for Canada. Unfortunately, but somewhat understandably at this critical time, much of the recent talk in Canada is based on short-term calculations, essentially trying to predict what Trump might do on the topic of interest that day. What Canada desperately needs now is a calm, evidence-based discussion that seeks to better understand recent developments — including the factors that are driving anti-trade sentiment — to explore potential responses, and to think hard to define our longer-term policy priorities, which as part of a global view, can help guide us through the current turmoil. The global economy is complex and changing rapidly. Productivity, innovation and growth at home depend on both exports and imports. Instead of producing goods and services within a single country, businesses collaborate in global supply chains, and use foreign affiliates to serve foreign consumers directly in their markets. Small firms and big firms face different trading opportunities and constraints, and use different channels to internationalize. Emerging markets, such as China and India, have fast become important players in the global economy, leading to a shift in global economic power that is one reason multilateral trade negotiations under the World Trade Organization have stalled. Diminished growth prospects, especially since the financial crisis of 2008-09, have led to economic anxiety in many developed countries, including Canada. This changing context calls for a renewed, deliberate approach to Canada’s global commerce policies. The broad-based weakness in our international economic performance over the past 15 years suggests that a concerted, comprehensive and long-term approach is required. To help Canadians keep their focus on these key objectives, even as they attempt to manage the risks in the short term, we propose four key areas for attention and action. First and foremost, we must develop more inclusive policies that helps more Canadians share in the benefits of globalization and technological progress. An inclusive trade agenda — as a key contributor to broader efforts to deliver more inclusive growth — is vital to maintain public support for trade and trade agreements. If Canadians believe that the benefits are too narrowly concentrated at the top, then efforts to use more open tr
{"title":"A Road Map for More Inclusive Canadian Trade Policy (Conclusion)","authors":"Stephen Tapp, Ari Van Assche, Robert Wolfe","doi":"10.2139/SSRN.2985485","DOIUrl":"https://doi.org/10.2139/SSRN.2985485","url":null,"abstract":"Canada sits at a risky crossroads. Our economic prosperity depends on international trade and investment, but new global realities are calling into question long-standing policy goals and approaches in these critical areas. A big existential threat to the global trading system lies on our southern border, with President Trump intent on fundamentally altering US trade policy. The noisy signals of negotiating tactics may change from day-to-day, but even if the Americans’ exact position remains unclear, the broader stated objectives are known, and the ripple effects of any significant retreat from a rules-based trading system could bring considerable collateral damage for Canada. Unfortunately, but somewhat understandably at this critical time, much of the recent talk in Canada is based on short-term calculations, essentially trying to predict what Trump might do on the topic of interest that day. What Canada desperately needs now is a calm, evidence-based discussion that seeks to better understand recent developments — including the factors that are driving anti-trade sentiment — to explore potential responses, and to think hard to define our longer-term policy priorities, which as part of a global view, can help guide us through the current turmoil. The global economy is complex and changing rapidly. Productivity, innovation and growth at home depend on both exports and imports. Instead of producing goods and services within a single country, businesses collaborate in global supply chains, and use foreign affiliates to serve foreign consumers directly in their markets. Small firms and big firms face different trading opportunities and constraints, and use different channels to internationalize. Emerging markets, such as China and India, have fast become important players in the global economy, leading to a shift in global economic power that is one reason multilateral trade negotiations under the World Trade Organization have stalled. Diminished growth prospects, especially since the financial crisis of 2008-09, have led to economic anxiety in many developed countries, including Canada. This changing context calls for a renewed, deliberate approach to Canada’s global commerce policies. The broad-based weakness in our international economic performance over the past 15 years suggests that a concerted, comprehensive and long-term approach is required. To help Canadians keep their focus on these key objectives, even as they attempt to manage the risks in the short term, we propose four key areas for attention and action. First and foremost, we must develop more inclusive policies that helps more Canadians share in the benefits of globalization and technological progress. An inclusive trade agenda — as a key contributor to broader efforts to deliver more inclusive growth — is vital to maintain public support for trade and trade agreements. If Canadians believe that the benefits are too narrowly concentrated at the top, then efforts to use more open tr","PeriodicalId":426783,"journal":{"name":"PSN: Trade Policy (Topic)","volume":"292 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-05-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129257453","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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