Search

The competitiveness of industries and countries is shaped more and more by technological advancement in the production and use of information and communications technology (ICT). This report considers the supply side of ICT goods and services. It studies the drivers of ICT production location and trade across countries with a focus on the relative position of the EU. The analyses clearly indicate that the EU must step up its efforts to accelerate the shift towards digital production and strengthening the ICT sector that produces the required technologies and services. In addition, from a trade policy perspective, a harmonised set of standards and regulatory framework is to be aimed at to minimise mismatches in technical specifications and requirements. This will lead to the diffusion of positive externalities and should allow for a smooth operation of the global value chains in these products.

The Eastern Partnership (EaP) is a joint policy initiative, which aims to deepen and strengthen relations between the European Union (EU) and its six Eastern neighbours. One of its four priority areas is stronger connectivity which includes the extension of the Trans European Transport Network (TEN-T) to the EaP region. On the policy front, it aims at achieving regulatory convergence across transport modes between member countries and with the EU to heighten the focus on energy efficiency and combat climate change. The EaP countries experienced a large shock to their economies following the end of the Soviet Union in 1989. At the same time, EaP countries are acutely aware of the need to converge with the EU in terms of energy efficiency, environment and climate change goals. The EU is currently formalising its European Green Deal, which is a roadmap for making the EU's economy sustainable. The objective of this study is to assist decision-makers in prioritizing strategic transport policies and infrastructure investments. It develops the evidence base and prioritisation framework for improving the transport sector of the region including improved energy efficiency and sustainability so that it is not left behind by advances in the EU. The study has also developed an online visualization tool to help policy makers explore and use the results of the modelling exercise.

International audience; Contrasting with Java, our knowledge of the history of cultural change in ancient Borneo, to this day, remains quite inadequate. The present essay tenders a tentative model to make sense, in a simple, general, coherent, and intelligible way, of the diverse processes that made the island‟s history over more than two millennia. Its focus being solely on Borneo, no attempt has been made here to broaden this model‟s scope to, or draw comparisons with, other Southeast Asian regions. It first describes what we know, from recent historical times, of human settlement and socio-economic patterns in Borneo, from costal and estuarine trading polities (political entities) to highland farming tribal communities. Since very early times, maritime trade networks brought various new goods and ideas to Borneo‟s coastal areas, while the many societies of the island‟s interior operated along their own modalities, migrating via waterways or overland footpaths, and interacting by making use of a more or less common legal and ritual traditional idiom despite their cultural differences. Two coexisting social and political systems, that of the highlands and that of the coastal and lowlands, had long had to adjust to each other along major river axes, which were important trade routes. This essay then examines criteria of settlement site selection; political strategies of control over territory, population, or trade; and the historical consequences of such adjustments, in terms of the processes of cultural, linguistic, and religious diffusion, societal change, shifts in ethno-cultural identity, and ethnogenesis.

This study explores North Korea’s trade patterns and the effectiveness of economic sanctions imposed on the hermit kingdom. Using a gravity model with a panel dataset of the country’s 92 trading countries from the period of 1999 to 2014, this paper examines North Korea’s trade patterns and compares the model-based estimated bilateral trade flows with actual trade ones. Main findings are: (1) North Korea’s trade has been excessively skewed to China as a result of economic sanctions from the United Nations and international community, largely driven by the United States; (2) The U.S. - North Korea trade would not be seriously affected by the sanctions due to their low estimated trade flows; (3) The latter finding raises further questions over the effectiveness of the current sanctions and asks for active cooperation from China.

International audience; Taiwan and the Chinese mainland face each other across the sea, and maritime transport is the most important means for the exchange of goods between the two sides of the Taiwan Straits. Affected by international politics and trade patterns, since the middle and late 19th century, the transportation links between the two sides of the Taiwan Straits have changed dramatically. Using the O-D data of vessels transiting between ports from the Lloyd's database between 1895 and 2008, we studied the changes in the transport links between ports on both sides of the Taiwan Straits at the national and global scales. The analysis concludes as follows: (1) Since before the beginning of modern times until Taiwan was ceded to Japan, Taiwan and the Chinese mainland had island- land relations, and Xiamen Port was the most important transit port to Taiwan. After the Japanese occupation, Taiwan became Japan's source of raw materials and a location in which to sell Japan's goods, and Taiwan, Japan, and the Chinese mainland were forming triangular transportation links. After the confrontation between the two sides of the strait, the United States intervened in the Taiwan Straits, and the transportation links between the ports on both sides of the Taiwan Straits were cut off. Taiwan, the United States, and Japan formed a triangular trade network. After 1979, Hong Kong Port became the most important transit port for cross-strait transport links. After direct flights across the Taiwan Straits were instituted, the port transportation links between Taiwan and the Chinese mainland continued to expand in breadth and depth. (2) Taiwan has obvious advantages in location, but because it is an island, the hinterland is narrow. Therefore, making full use of regional and geopolitical advantages, using the regional economic growth centre as its own foreland and forming a close sea transportation link is key to Taiwan's sustained economic development. Improving relations with the mainland, sharing in opportunities for the development of the mainland, and promoting the transport links between the two sides of the Taiwan Straits are opportunitiesforTaiwan.

Migration and trade are often linked through ethnic networks boosting bilateral trade. This study uses migration to quantify the importance of Ricardian technology differences for international trade. The framework provides the first panel estimates connecting country-industry productivity and exports, and the study exploits heterogeneous technology diffusion from immigrant communities in the United States for identification. The latter instruments are developed by combining panel variation on the development of new technologies across US cities with historical settlement patterns for migrants from countries. The instrumented elasticity of export growth on the intensive margin with respect to the exporter's productivity growth is between 1.6 and 2.4, depending upon weighting. This provides an important contribution to the trade literature of Ricardian advantages, and it establishes a connection of migration to home country exports beyond bilateral networks.

Two separate processes have recently influenced the trade relationship between European Union and countries in the Western Balkan region – different speeds of integration and consequences of global economic crisis. The ease of international trade is both the objective and consequence of economic integration process. Increase in international trade between partners within the union is expected to create through competitiveness mechanism positive preconditions for the overall Union. However, these effects are expected on average and neither for every country or every economic activity. Since the effects of the crises have been asymmetrically spread across the European Union, we focus on the bilateral trade patterns evolvement. Specifically, we analyse trade patterns with Eurozone members in order to avoid additional discussion on the effects of exchange rate policies within the economic union. By using the intra-industry trade indicators we compare the outcomes for the three countries in the region – Bosnia and Herzegovina, Croatia and Serbia. We analyse indicators of overall intra-industry trade, vertical intra-industry trade and horizontal intra-industry trade on the 2-digit level of NACE classification in order to identify economic activities in which each of the country has established higher degree of integration. Revealing the trade patterns on the level of economic activities is important in order to enhance the discussion of competitiveness, related to the underlying smooth transition hypothesis. The hypothesis states that if intra-industry trade (i.e. the simultaneous exports and imports of similar products) has higher share in the overall trade between the countries, the integration associated adjustment costs will be less severe than in cases when the share of inter-industry trade is relatively higher. By comparing the results before and after (during) the crisis we seek to indirectly identify economic sectors dubbed as winners or losers in the analysed period. The underlying assumption is that if the economic sector has increased the share of intra-industry trade in the bilateral trade, this economic sector has managed to withstand both increased competition pressures related to integration process and suppressed demand due to the economic crisis. Results show that most industries in analysed countries recorded low share of intra-industry trade, not many industries exhibit strong positive trends. The industries that seem to have higher degree of intra-industry trade are mostly labour-intensive. Furthermore, high share of vertical intra-industry trade indicates that in most cases the trade relationship resembles trade between economically unequal partners.

This report assesses the future impact of two dynamically transforming economies – China and India – on Russia’s economy. China is slowing down and rebalancing its economy whereas India is rapidly expanding. What does this hold for Russia? The report begins with a snapshot of findings, followed by eight chapters. Chapter one motivates the topic and identifies analytical and empirical gaps that this report fills. Chapter two examines the current pattern of trade between Russia and the two countries, and it discusses how important – or not – China and India’s economies are for Russia. Chapter three follows by summarizing the results of three complementary approaches for measuring Russia’s trade potential with China and India (and also the rest of the world). Chapter fourth intuitively describes the customized methodology developed for this report; its major caveats and assumptions, and its possible extensions (technical details, for those interested, are in the annexes). Chapter fifth outlines four plausible scenarios of the potential impact on Russia of changes in China and India, and chapter sixth presents the results. Chapter seventh explores the sensitivity of results to changes key in assumptions. Finally, chapter eighth concludes with emerging policy implications for Russia.

This paper aims to examine the export competiveness of the Portuguese processed tomato sector through a set of indicators used to measure international competitiveness from 1981 to 2013. During the 2011-13 period, we observe a slight improvement in competitiveness indicators. The world price is an important variable for Portuguese tomato paste exports. For tomato paste, we observe inter-industry trade and for other tomato products, a horizontal intra-industry trade is observable. The anchoring of industrial development to agricultural growth will be a predominant factor for the strategy of reducing costs in processed tomato production.

This paper investigates trade patterns and the gains from trade in a Chamberlinian-Ricardian model with a CES type of upper-tier utility function. It is shown that a strong tendency toward complete specialization emerges under free trade and that free trade is preferable to autarky from the viewpoint of each country’s welfare. This paper also considers the trade regime called semi-autarky, in which one sector is under free trade, while the other is closed. The analysis demonstrates that free trade does not necessarily attain higher welfare in all countries relative to semi-autarky if cross-sector substitution in consumption is elastic.

The exit of the United Kingdom from the European Union (Brexit) may have a negative impact on trade and investment flows not just for the UK, but also for the countries with the largest exposure to the UK. The indirect impact of a Brexit-induced recession in the UK –may also be felt in the EU because of the two countries’ strong trade, investment, and financial linkages. The magnitude of these impacts will depend on the type of trade relationship that the UK negotiates with the EU, the duration of the negotiations, and the market confidence in the leadership of the UK, EU and other mayor players during the transition period. The major effect of the Brexit vote is the withdrawal of the UK from the EU project of deep economic integration, raising the possibility that the same doubts that gave rise to Brexit lead to an interruption of trade openness and integration in other parts of the world. International development institutions like the World Bank Group can play an important role in informing debates in this area.

Global trade patterns are changing rapidly. Emerging economies are increasing their share of exports overall and intensifying competition in nearly all sectors. Low-cost advantage initially helped emerging economies, particularly China, penetrate low technology labour intensive sectors. More recently, emerging economies have started to compete in higher value-added sectors where European industries have traditionally had comparative advantage. Greater trade integration has also led to a dispersion of value chains well beyond national borders, increasing the granularity of trade. In this rapidly changing context, it is valuable to predict the future profile of EU exports so that the results can inform current policy. Using a model based approach this report examines the future profile of EU exports at sector and aggregate level in terms of trade volumes and quality competitiveness. A value chain approach allows then to quantify impacts on sectoral value added and GDP.

How do global supply chain linkages modify countries' incentives to impose import protection? Are these linkages empirically important determinants of trade policy? To address these questions, this paper introduces supply chain linkages into a workhorse terms-of-trade model of trade policy with political economy. Theory predicts that discretionary final goods tariffs will be decreasing in the domestic content of foreign-produced final goods. Provided foreign political interests are not too strong, final goods tariffs will also be decreasing in the foreign content of domestically-produced final goods. The paper tests these predictions using newly assembled data on bilateral applied tariffs, temporary trade barriers, and value-added contents for 14 major economies over the 1995-2009 period. There is strong support for the empirical predictions of the model. The results imply that global supply chains matter for trade policy, both in principle and in practice.

Countries differ on the extent to which their financial system relies on banks or on the financial market. We offer a model featuring a possible two way relationship between countries’ financial system architecture and their comparative advantage. Countries specialising in bank dependent sectors favour the development of the banking sector. Simultaneously, countries with more efficient capital markets develop comparative advantage in sectors with strong dependence on market finance. To empirically investigate our model’s predictions, we construct a measure of sector bank dependence and establish a strong relationship between countries’ comparative advantage and their financial system architecture.

International trade is the key element of globalisation and closer economic and political cooperation between countries. Regional integration is an important driver of closer trade ties among countries. In this context, the article focuses on analysing the factors, influencing the dynamics of trade patterns of the Baltic States. The research method used in the article is the gravity model of trade, which rests on the key assumption that trade between countries is defined by the size of the economies and the distance between the countries. The gravity equation estimates showed that the membership of the Baltic States in the EU had a positive effect on the export levels of the Baltic States to other EU members. On the other hand, the membership in the EU is not the main trade stimulating factor. The more important factor for the Baltic States’ exports is the former economic ties with Russia. An analysis also revealed that the Baltic States have many important trade partners with different levels of income. This finding does not support the Linder hypothesis which states that the main trading partners should have a rather similar level of income.

This paper examines the implications of global production sharing for economic integration in East Asia, with emphasis on the behavior of trade flows in the wake of the 2008 global economic crisis. While trade in parts and components and final assembly within production networks (“network trade”) has generally grown faster than total world trade in manufacturing, the degree of dependence of East Asia on this new form of international specialization is proportionately larger than elsewhere in the world. Network trade has certainly strengthened economic interdependence among countries in the region, with the People’s Republic of China (PRC) playing a pivotal role as the premier center of final assembly. However, contrary to the popular belief, this has not lessened the dependence of the export dynamism of these countries on the global economy. The rise of global production sharing has strengthened the case for a global, rather than regional, approach to trade and investment policymaking.

The evolution towards an informational society implied mutations in the competitive advantages of countries of the world, being advantaged those who produce goods with a high content of creativity, those who manage to fit in the modern patterns of international specialization and disadvantaged those who remain in traditional types. In the context of the increasing complexity of economy, the productive activity is oriented more and more to combining the specialized skills, requires strategies for the companies to rapidly acquire skills through a process of transforming information into knowledge. As a consequence, the very principle of division of labor will be renewed. It will transform from a technical and efficiency based sense to one based on competence and knowledge.

The development of Southeast European countries (SEECs) depends crucially on international trade. This paper empirically analyzes intraindustry trade between SEECs and the European Union using bilateral trade data at the combined nomenclature four-digit level from 1996 to 2004. We analyze trade patterns for Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Macedonia, Romania, and Serbia and Montenegro. Applying the Grubel-Lloyd index indicates changes in the trade of manufactured goods between the SEECs and the European Union during the first years of the Stabilization and Association Agreement implementation period.

It is frequently stated that Turkey's trade orientation has shifted in the last decade away from Europe and more towards the East, specifically Arab countries and Middle East. However, comprehensive presentation of the situation is lacking, causing concern over the validity of the statement. This paper examines the foreign trade of Turkey for years 1995 to 2012. The analysis focuses on a number of country groups and product categories. The analysis confirms the shift away from EU and towards not only Arab countries but Asia as a whole, primarily due to gas imports from Russia. It is observed that Turkey's exports are becoming more focused towards manufactured goods and increasing in technological complexity. An interesting observation is the increase in the share of “commodities and transactions not elsewhere classified”, especially with the Arab countries.

The main message of this report is that if Kazakhstan wants to take advantage of global integration and diversification opportunities, the government needs to improve its trade policy framework, its management, and its regulations. It is also finalizing accession to the World Trade Organization (WTO) while its trade strategy includes a number of free trade agreements to be negotiated. It is an active member of the Central Asia Region Economic Cooperation (CAREC). This report is composed of three policy notes that discuss how to improve the trade policy framework, management, and regulations: note one is on the trade policy framework and recommends joining the WTO on a tariff schedule that is more liberal than Russia’s; note two postulates that to benefit more fully from the WTO membership and future regional or bilateral agreements, the institutional framework for trade policy management will need a clearer strategic vision, better coordination within the government and with private sector, and enhanced human capacity; and note three suggests that for the private sector to benefit from global integration and diversification, the government should ease the burden of regulations that affect trade (non-tariff measures (NTMs)).

This paper develops a dynamic two-country model with an international public good, the stock of which has a positive effect on the private-goods sectors’ productivity in each country and the evolution of the stock is determined by each country’s voluntary contribution. It is shown that the country with a higher contribution technology becomes an exporter of the good which is more dependent on the stock of international public good. It is also shown that if the countries act cooperatively, the dynamics of the stock of international public good and its shadow price under free trade coincide with those under autarky, although the paths of each country’s contribution level are different. Specifically, the contribution level in the country with a lower contribution technology becomes smaller under free trade than under autarky, and it is shown that this country unambiguously gains from trade. In the noncooperative regime, free trade achieves a larger steady-state stock of international public good than autarky.

Este trabalho faz uma revisão da expansão das relações econômicas entre a China e os países da América Latina na última década. O grande processo de urbanização chinesa foi o principal estímulo para as exportações de commodities desses países e a China tornou-se o maior mercado para exportação e grande fornecedor de produtos manufaturados para muitos dos países da América Latina , assim como também tem ampliado sua contribuição para investimento e crédito. Nesse processo de reestruturação da divisão internacional do trabalho consideramos dois efeitos diferentes, um "efeito de demanda" e um "efeito de estrutura" e iinvestigamos como a complementaridade e as pressões competitivas afetou o comércio dentro da região e nos países de acordo com seus diferentes padrões e estrutura produtiva. The impact of China's rise on Latin-AAmerican countries. We review in this paper the expansion of economic relations between China and Latin America Countries (LAC) in the last decade. The large process of Chinese urbanization was the main driver for LAC commodity exports and China became the largest market for export and large supplier of manufactures for many LAC and its contribution for investment and credit has enlarged as well. In this process of restructuring of international division of labor we considered two different effects, a "demand effect" and a "structure effect" and investigated how complementarity and competitive pressures affected trade within region and in LAC according to their different patterns and productive structure.

The emergence of global value chains (GVCs) and their rapid expansion over the past two decades has transformed the global trade environment. GVCs involve task-based trade across multiple stages of the production process that take place across a number of different countries, in which multiple inputs and exports of intermediate goods and services are necessary to produce a final good, which may also be exported. GVC-oriented trade is seen to offer significant opportunities for developing countries, especially smaller ones, to benefit from global integration by changing the nature of competitiveness. With competition for GVC investment taking place in a truly global market, factor competitiveness relative to other countries matters a lot. In this context, the purpose of this note is to shed some light for policymakers, in this case specifically in the Southern African Customs Union (SACU) countries, on where to focus efforts to drive competitiveness for GVC participation. This is a data-intensive exercise that requires indicators to represent underlying capabilities, disaggregated international trade data, and finally, a classification of which products are likely to be trade within GVCs.

近年、国立大学の独立法人化が進み、従来の国公立大学も私立大学としての特徴が目立つようになってきた。こうした状況の中で、国際競争力が受ける影響について、理論的な枠組で分析してみる。特に、貿易パターンへの影響を調べるために、われわれは、人的資本の概念が導入された伝統的な特殊要素モデルを用いて、極端な二つのケースを検討してみる。つまり、国立大学しか存在しない国と私立大学しか存在しない国における、最終財の国内相対価格を調べ、最後に貿易パターンを導出する。結果的に、国立大学だけ存在する国が、人的資本を使って生産される最終財を、私立大学だけ存在する国に輸出することが示される。, We examine the trade patterns using traditional Ricardo-Viner model, but also consider one of the sectoral-specific factor as human capital which will be produced under education. The education service in a country may be provided by government or private sector. We will show that a country with a publicly provided education will export the good which is produced by using the human capital.