The 2002 Association Agreement between the European Union (EU) and Chile was the most extensive trade agreement in the world at that time. With negotiations underway for a modernisation of the Agreement, this paper examines the possible additional trade opportunities in agricultural and food products between Chile and the EU. Using trade statistics and key interviews, we trace the development of trade in agri-food products between Chile and the EU since the entry into force of the EU-Chile Association Agreement in 2003, both in absolute and relative terms. Focusing on the main drivers in this trade development, we identify new trade opportunities that could plausibly accompany the modernisation of the EU-Chile Association Agreement.
In der Debatte um die unter Trump eingeführten Importzölle auf chinesische Produkte wird oft vernachlässigt, dass eine optimale Zollstrategie für das importierende Land sehr wohl vorteilhafte Auswirkungen haben kann. Diese können dazu führen, dass in den USA sowohl die Zolleinnahmen ansteigen, als auch Wohlfahrtsgewinne erzeugt werden – finanziert von chinesischen Exporteuren. Seit dem 24. September 2018 erheben die USA Zölle auf chinesische Produkte mit einem Importvolumen von ungefähr 250 Mrd. US-Dollar; das sind 50% der Importe aus China. In der Debatte wird oft davon ausgegangen, dass diese Zölle der amerikanischen Volkswirtschaft direkt schaden. Dabei wird aber nicht berücksichtigt, dass die US Regierung Zölle strategisch setzen kann und damit eine optimale Zollstrategie verfolgt, siehe Irwin (1996) für einen ausführlichen Überblick. Dies kann dazu führen, dass in den USA sowohl die Zolleinnahmen ansteigen, als auch Wohlfahrtsgewinne erzeugt werden – die von chinesischen Exporteuren finanziert werden. Zwar gefährden chinesische Gegenmaßnahmen diese Wohlfahrtsvorteile, die amerikanischen Importe aus den USA übersteigen die chinesischen Importe aus den USA jedoch um mehr als das Vierfache, so dass dieser Befund relativ robust sein dürfte. Dies gilt jedenfalls solange China nicht auf sogenannte asymmetrische Vergeltungsmaßnahmen – beispielsweise durch Währungspolitik, Diskriminierung amerikanischer Unternehmen in China usw. – übergeht.
On September 24th 2018, the United States introduced import tariffs on a wide range of Chinese products. The tariffs will affect US imports from China with a value that exceeds USD 250 billion -around 50% of all imports. In this analysis we show that, contrary to public opinion, the greatest share of the tariff burden falls not on American consumers or firms, but on Chinese exporters. We calibrate a simple economic model and find that a 25 percentage point increase in tariffs raises US consumer prices on all affected Chinese products by only 4.5% on average, while the producer price of Chinese firms declines by 20.5%. The US government has strategically levied import duties on goods with high import elasticities, which transfers a great share of the tariff burden on to Chinese exporters. Chinese firms pay approximately 75% of the tariff burden and the tariffs decrease Chinese exports of affected goods to the United States by around 37%. This implies that the bilateral trade deficit between the US and China drops by 17%. The additional tariffs generate revenues of around USD 22.5 billion, which could subsequently be redistributed in the US. Although the tariffs introduce a distortion to US consumption decisions, the economic costs are shifted to Chinese exporting firms and the US government is able to extract a net welfare gain of USD 18.4 billion. Autor, Dorn and Hanson (2013, 2016) show that Chinese import competition can have dramatic negative effects on the US labour market. On the other hand, most economists agree that international trade has positive effects for the economy as a whole. The overall gains from trade are high enough to compensate those groups that lose out. These opposing views also characterise general public opinion in the US. Stokes (2018) shows that most Americans believe that international trade is good for the economy, but that they personally do not gain from it, particularly in the labour market. Trade in general, and the US trade deficit with China in particular, has a bad reputation.
The degree of integration of an individual EU country in the European Union can be measured comprehensively and in a given time period with the EU index proposed by König and Ohr. A modified EU index of 21 instead of originally 25 indicators allows examining the economic integration of non-EU member countries within the EU. For the first time, this is applied here to Norway, Turkey and the US and compared with the integration degree of the EU-25 countries and Switzerland. Except for Switzerland – showing a higher degree of integration than the EU average – the index values of the non-EU members are markedly below the EU average. In 2012 they can be often found at the last ranks of all 28 considered countries. Whilst the integration degree of Norway slightly fell from 2004 to 2012, the degree rose for the three other non-EU countries during this time period, least in Switzerland and most in Turkey. The cluster analysis confirms that the four non-EU countries are much more heterogeneous than the EU-25 members. Since 2004 this divergence increased for all non-EU member countries except for Turkey.
The importance of innovation is reflected in the policy strategies that have been adopted by countries that have gained competitive advantage over the last two decades. In today's competitive global economy, Ireland has been acknowledged for its governmental policies and policy dynamics that have created a competitive market site for FDI. These policies have been based on continual policy innovation. The purpose of this paper is to analyse the governmental policies and policy dynamics within the Irish context of internationalisation. From this analysis a model of government influence on FDI in Ireland is developed. The main conclusions are that the success of the Irish model of internationalisation can be attributed to its innovative character. If Ireland's success is to extend into the future, it will have to continue to pursue innovation in the approach it adopts to internationalisation.
The world faces a new political reality in the post-global financial crisis landscape, namely, the ascendance of populism and the breakdown of standard liberal democratic approaches to economic policymaking. The ability of populist leaders and parties to tap into disaffection with globalization, multinational businesses, and macroeconomic policy have manifest itself as a "populist moment" in many developed and developing countries around the world. This chapter introduces the effects of this populist moment on business in the future, with a focus on three specific areas: (1) how populism creates uncertainty on macroeconomic policies, affecting firm investment and financing decisions; (2) how the effects of populism on political institutions change the abilities which firms need to cultivate; and (3) how populist policies affect value chains, sourcing, and talent acquisition. The main conclusion of this analysis is that the political forces underpinning populism require firms to devote resources to new abilities and abilities unlike those used before, while at the same time seeing productive investments reduced in an environment of uncertainty. The watchword for business globally will be the flexibility to deal with an increasingly complex and uncertain world.
Mit dem Abschluss des weltweit grössten Handelspaktes RCEP ist eine handelspolitische Initiative aus Asien in den Fokus gerückt. Während RCEP voraussichtlich 2021 in Kraft tritt, ist die zweite grosse asien-pazifische Handelsinitiative CPTPP bereits seit zwei Jahren Realität und wird nun auch für die Schweizer Aussenhandelspolitik bedeutsam.
China's involvement in Africa has steadily increased after its economic reform in 1978. However, since the year 2000, Sino-African trade volumes and Chinese loans to Africa began to rise rapidly. This was further bolstered by the establishment of the Belt and Road Initiative (BRI). This thesis aimed to investigate the implications of the Sino-African relationship. Research was divided into five objectives in order answer the final question of whether the presence of China contributes to sustainable development in Africa. Secondary data was collected with key observations from the findings being discussed with relevant theories in order to examine China's contribution to the three development levels, namely, economic, human and environmental stewardship. The first section of the findings presented a performance review of Africa against the UN SDGs. This review revealed a dire situation of poverty and unemployment in Africa as well as the prevalence of deeply entrenched corruption. The second section of the findings displayed the performance of China's businesses against the UN Global Compact's principles for responsible businesses. The results from this were mixed. While Chinese companies performed well with workforce localization and skills training, they did not score well on corruption and pollution. The third and final findings section aimed to find out what the BRI brings for Africa. It was found that Africa gains from the relationship through the construction of much needed infrastructure. However, considering that the BRI is labeled as a development strategy, China's impact on job creation in Africa has not yet reached its potential. China on the other hand benefits handsomely from Africa's participation in the project, as it gains access to raw materials and markets to sustain domestic economic growth. The key observations were then contextualized with relevant theories to gain a better understanding of the phenomenon's observed. Concerning economic development, findings showed that the case for Africa as the next flying geese was weak, with some notable exceptions in East Africa due to a stable political system. In the case for human development, the extractive institutions theory showed that China needs to assist in anti-corruption measures. In the context of the world systems theory, it was decided that there is a case for exploitation, however, Africa has overall benefitted from the relationship and therefore caution is taken with labeling the relationship as such. From an environmental perspective, the thesis found evidence of China relocating factories that do not meet their own environmental standards. China has since, with pressure from foreign powers, implemented a more environmentally friendly approach to its BRI projects. Limitations of this thesis revolve around the lack of readily and reliable information. China has in the past been accused of underreporting trade and loan data, whereas Africa lacked statistical capacity to gather information. Having said this, continuous workings from the China Africa Research Initiative as well as the largest field study on Chinese companies by McKinsey & Company allowed this thesis to carry out a holistic study. Recommendations for further research suggest focusing on an in-depth analysis on single countries or regions in Africa, as a contrast to analyzing Africa as a single entity.
Trade liberalization is famously known for both creating winners and losers via processes of dislocation, sectoral reallocation, and specialization. This paper studies the conditions under which excess "losers" are generated during the process of liberalization with a focus on the role of institutions in economic transition. I contend that poor institutions, in particular property rights and democracy, can create unnecessary hardship in the transition to greater openness, generating a much higher burden on compensatory policies and making it more difficult to sustain open trade policies. Using a new dataset of trade openness, economic inequality, and institutions, and using 3SLS estimation to account for endogeneity, the analysis finds that this is indeed the case: high property rights and more democracy appear to help to mitigate trade-related inequality. Moreover, poor institutions create a downward spiral, with greater inequality leading to lower trade openness. These results imply that basic institutions can help to minimize losses sparked by globalization, while other well-meaning policies can actually increase disruptions.
Brazil, home to one of the planet's last great forests, is currently in trade negotiations with its second largest trading partner, the European Union (EU). We urge the EU to seize this critical opportunity to ensure that Brazil protects human rights and the environment.
Developing and Eastern European countries recently started opening their economies. We analyze how the opening to international trade can be accompanied by strategic trade policy if the resulting market structure is oligopolistic. We find that for reasonable parameter values, a tariff is the optimal policy tool. Furthermore, tariffs and quotas are not welfare equivalent in our model.
The main goal of this article is to identify which aspect of trade drives positive attitudes towards the trading partner country. Whereas research has shown a positive influence of trade already, it is not clear whether total trade, trade balance, exports or imports is the best variable to predict attitudes. Furthermore, we investigate whether different sorts of the traded good do impact attitudes differently. As attitudes are formed on an individual level, we estimate that goods whose origins are visible to the individual customer do have greater impact than goods with no visible origins. In our analysis we use data from the Global Attitudes Survey from the Pew Research Center to measure attitudes towards the European Union (EU) and data from UN Comtrade to measure trade with the EU. Our results show that imports from and total trade with correlate significantly with attitude towards the EU, whereas exports to the EU and the bilateral trade balance do not. Given that imports are a part of total trade, we argue that imports are the best variable to predict attitudes. Additionally, we found that it is the import of differentiated goods that impacts attitudes whereas the import of homogeneous goods does not. We argue therefore that positive attitudes towards a trading partner are driven by individual experiences of consumers with products from the respective countries.
In der Schweiz zahlte der Verbraucher im Jahr 2015 für einen identisch gewichteten Warenkorb an Food-Produkten im Durchschnitt 45 Prozent mehr als in den vier Nachbarländern. Der grösste Preisunterschied existiert bei Fleischprodukten (+85%). Für den gesamten Konsumgüterwarenkorb ergibt sich ein Preisaufschlag von 29 Prozent. Nahrungs- und Genussmittel sind in der Schweiz also im Vergleich zu anderen Konsumgütern überproportional teuer. Im Vergleich mit Dienstleistungen (die in der Schweiz 72% teurer sind als in den Nachbarländern) gilt das Gegenteil. In der Agrarpolitik stellt sich vor dem Hintergrund der hohen Nahrungsmittelpreise die Frage, ob die preisliche Wettbewerbsfähigkeit der Schweizer Agrarmärkte verbessert werden kann. Die vorliegende Studie geht dieser Frage mit einer Analyse der inländischen Food-Wertschöpfungskette nach. Das Forschungsdesign wurde mit dem Ziel entwickelt, die Funktionsweise und Handelspraktiken von Schweizer Agrarmärkten hinsichtlich Marktkonzentrationen und -asymmetrien zu evaluieren und mögliche Zusammenhänge zwischen Marktstruktur und Marktergebnis (Konsumentenpreise) empirisch zu untersuchen.
Political risk assessment, together with portfolio analysis, has become an important part of international business investment decision making. In this paper, by using different knowledge discovery techniques, we attempt to assess the relevance and actionability of 'good governance' indicators in political risk assessment. For that purpose, we have integrated good governance indicators data with political instability classification from the Political Instability Task Force (PITF) research. From this study, two models that capture the intuitive reasoning of investors have been developed. The usefulness of the models has been evaluated by comparison with factual investment data. Our findings suggest that quantitative indicators of good governance may provide the basis for accurate and meaningful models for the assessment and prediction of political risk.
