Asian Economic Policy Review最新文献

This article contests the idea that the world has entered a post-globalization era. It argues that rapid globalization has evolved rather than ended. Even though the global goods trade-to-GDP ratio reached its zenith 15 years ago, the rapid rise of services trade has persisted and now accounts for one-fifth of international commerce. The paper makes a statistical and logical case that the future of trade lies in services trade—especially trade in intermediate services.

Arimura and Sugino (2024) highlight the shock to fossil fuel markets caused by Russia's expanded invasion of Ukraine in 2022 and the Western-led international response. While fossil fuel prices generally soared, some countries including China and India benefited from relatively cheap Russian fuels.

What happened in 2022 is certainly interesting. Data from the Energy Institute (2023) and BP (2022) suggest that Russian exports of oil, coal, and piped natural gas to the Asia-Pacific increased relative to the prior year, although exports of liquefied natural gas (LNG) fell. Nevertheless, Russia continued to play a relatively modest role in supplying the Asia-Pacific's energy needs, especially for non-oil products. In 2022, Russian exports supplied about 10% of the oil consumed in the Asia-Pacific, 3% of the region's coal use, and 2% of its natural gas use (via a pipeline to China). Russia was only the fifth-largest supplier of LNG to the region, after Australia, Qatar, Malaysia, and the United States (US).

Russia appears set to increasingly look East for its energy exports, with a new gas pipeline to China as part of the potential mix. Yet most Asia-Pacific countries are unlikely to wish to become overly dependent on Russian energy. The competitive nature of global energy markets, the economic and political benefits of diversification, and constraints on rapid ramp-up of Russian supply are instead likely to mean that Russia remains only one of a number of suppliers to the region. In 2023, fossil fuel prices were also already down from their 2022 levels, reducing the size of the price discounts available from Russia.

Arimura and Sugino (2024) highlight a division in emission reduction ambition between developed and developing countries. Fortunately, this is one that has generally declined over time, with the Kyoto-era distinction between Annex B countries and others now behind us. One of the major achievements of the Paris Agreement era has been the net zero emission commitments announced by countries from Vietnam (by 2050) to India (2070).

While energy security concerns spiked in 2022, climate ambition was not cast to the wayside. Indeed, the G20 declarations of 2022 and 2023 included strong climate statements. There has also been ongoing policy momentum, with Singapore announcing it will increase its carbon tax rate from 2024, for example.

Taking the long view, the energy sector has generally been globalizing over time, with the ratio of energy trade (imports plus exports) to energy use rising for both the world and the Asia-Pacific (IEA, 2023). This has been aided by improvements in transport for products such as natural gas, among other factors. In recent developments, there have also been some moves toward cross-border integration. In 2023, China removed its restrictions on Australian coal, for example, while Singapore signed memoranda of understandi

Evenett (2024) makes a well-evidenced argument on the capacity of the World Trade Organization (WTO) rules to contain deglobalization. His argument is straightforward. He argues that the WTO rules offer little constraint on state-led deglobalization. He justifies this argument with three sets of evidence. First is the set of evidence from recent high-profile commercial policy episodes such as the US–China trade war, the “weaponization” of medical goods and food exports under the outbreak of the COVID-19 pandemic, and the discriminatory tariff hike invoking national security by the US Trump administration. These episodes show us that governments violated WTO rules without hesitation either overtly in the case of the US–China trade war, or less overtly in the case of export restrictions on medical goods and foods.

The weakness of the WTO rules is, however, not a recent phenomenon. The second set of evidence that Evenett (2024) presents is on commercial policy choices since the Global Financial Crisis of 2008. According to the Global Trade Alert, created by Evenett and his team, commercial policy interventions implemented by about 200 customs territories since 1 November 2008 are traced. The result is striking. The share of world goods trade covered by discriminatory unilateral commercial policy grew over time, and now it is about 80% (Evenett's figure 4).

The third set of evidence is from the WTO tariff schedules of the G20 members. It shows that eight G20 members can legally raise tariff rates by more than 7%, that is, the Smoot Hawley tariff rate, due to the difference between applied tariff rates and bound tariff rates (Evenett's tables 1 and 2). This means that the WTO tariff bindings do not constrain the capacity of these governments to substantively raise tariffs.

The argument of Evenett (2024) aims at demystifying the capacity of WTO rules in controlling member states' commercial policy. If we look at only the recent episodes of deglobalization such as the US–China trade war, we may still expect that the WTO rules will regain their capacity soon after the end of these episodes. However, Evenett (2024) does not allow us to embrace such an illusion, because discriminatory unilateral commercial policy has been growing at least since the Global Financial Crisis of 2008.

Still, we can argue that many governments observe the WTO rules, notably the most favored nation (MFN) principle and tariff binding. For instance, even though governments have cumulated discriminatory unilateral commercial policy since the Global Financial Crisis, they have depended more on non-tariff measures than tariff measures. The fact that eight G20 members can legally raise tariff rates by more than the Smoot Hauley tariff rate does not mean that they actually did so. The fact is that these countries unilaterally lowered the applied tariff rates substantively below the bound tariff rates, while

Whether existing multilateral trade commitments really deter larger trading nations from taking steps that further weaken cross-border commercial ties is assessed here. Evidence from salient commercial policy episodes of recent years is combined with information on the actual leeway available to G-20 members under extant World Trade Organization rules. The upshot is a bleak assessment of the capacity of the existing multilateral trade rule book to rein in any attempt by larger trading nations to “deglobalize” the world economy.

The degree of globalization is often assessed using a conventional measure of global trade openness, namely the ratio of world trade in goods to world gross domestic product (GDP). This conventional measure of globalization peaked in 2008 at the onset of the Great Trade Collapse, which is treated by some commenters as a sign that the world has entered an era of delocalization. However, looking only at trade in goods might overlook an important fact that the nature of globalized economic activities is evolving. Baldwin et al. (2024) highlight the contrasting trend that world trade in goods has peaked, or at least plateaued, in 2008 whereas world trade in services has continued to grow rapidly from 1990 to 2019.

The history of globalization is inextricably linked to technological advances, and so will its future. Advances in information and communications technologies (ICT) enable the digitalization of services, leading to increased trade in digitally deliverable services. Also, new data networks, digital tools and platforms enable suppliers to expand their customer base beyond the national boundary and give consumers better access to a wider variety of good quality services at competitive prices. More importantly, ICT facilitates offshoring of intermediate services, which are purchased and used as inputs throughout the economy, including the production of manufactured goods. Interested in such a rising role of services trade, Baldwin et al. (2024) examine trade data on Other Commercial Services (OCS) and the cross-border flows of intermediate services. Based on simple statistics and economic logic, Baldwin et al. develop compelling arguments that services trade will continue to grow faster than goods trade and the future of world trade will lie in services, especially in intermediate services.

Although left aside in the data analysis and discussions of Baldwin et al. (2024), I have some comments regarding the data used in Baldwin et al. and the enabling condition for the expected growth of services trade, both of which should ideally be addressed in future research. First, for the purpose of comparison with goods trade, Baldwin et al. focus on examining services trade of the traditional made-here-and-sold-there type, which falls under Mode 1 of the World Trade Organization (WTO) services trade nomenclature. However, finance, engineering, and other business services supplied through foreign affiliates, which correspond to Mode 3, appear to be increasingly important. According to US Bureau of Economic Analysis,¹ for instance, about 70% of services supplied by US-based firms to foreign persons in 2019 are accounted for by those through the majority-owned foreign affiliates of US multinationals, that is, Mode 3. To better assess the rising role of services in globalized economic activities in general, it would be called for to analyze services tr

The paper by Baldwin et al. (2024) aims to demonstrate that the future of economic globalization lies in services trade as the expansion of merchandise trade has already begun to run out of steam.

Baldwin et al. begin with a narrative of growth of world merchandise trade relative to world income (gross domestic product [GDP]), both in aggregate and by major trading nations and the three main sectors, manufacturing, mining and fuel, and agriculture. The data suggest that the trade-to-GDP ratio peeked around 2008, even though the peak was not equally present in all major nations and all sectors. However, Baldwin et al. have stopped short of probing the underlying drivers of the observed structural change. If the “hyper globalization” during 1985–2008 had been largely driven by cyclical rather than structural factors, it is hazardous to treat the subsequent slowdown as a structural phenomenon. Moreover, the observed trends in the trade to GDP ratio need to be treated with caution because the well-known structural shift in the composition of GDP from tradable production and toward services. Given this structural change, the measured trade-to-GDP ratio is likely to face downward pressure, thus confirming the fear of deglobalization.

My major concern with the inference of trade slowdown is that it has overlooked possible changes in the price structure of global manufacturing trade associated with production fragmentation (vertical specialization). Production fragmentation essentially means restructuring of the production process of a given product among firms located in different regions and countries. In this process, as Young (1928) postulates, increasing returns take place throughout the industry rather than at the individual firm level, generating cumulative, rather than firm-specific, gains from scale economies. Therefore, goods traded within global manufacturing value chain (GMVCs) could experience slower price increases (and hence faster volume growth) compared to the other traded goods.

There is evidence of significant decline, rooted in developments in semiconductor technology, of prices of information technology (IT) products (computers, and data storage and communicating equipment), automobiles and a wide range of other related GMVC products from about the early 1990s (Jorgenson, 2001; Byrne et al., 2016). The relative stability of the real trade-to-GDP ratio after 2008, compared to the sharp decline in the two nominal ratios in Baldwin et al.'s figure 1, is perhaps indicative of this price effect. However, I suspect that, the price index used to deflate the nominal exports does not fully capture the price lowering effect of global production sharing. An analysis using a new dataset, which is carefully constructed to better capture the price effects of GMVC trade, yields the inference that merchandise trade to GDP ratio has not yet pee