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51. Optimisation of Central Asian and Eurasian Trans-Continental Land Transport Corridors

Author:
Michael Emerson and Evgeny Vinokurov
Publication Date:
12-2009
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
There is at present an overlapping but inadequately coordinated combination of strategic trans-continental transport corridors or axes stretching across the Eurasian landmass, centred on or around Central Asia. There are three such initiatives - from the EU, China and the Asian Development Bank, and the Eurasian Economic Community. This paper reviews these several strategic transport maps, and makes proposals for their coordination and rationalisation. So far the EU Central Asia strategy has not paid much attention to these questions. However the EU's own initiatives (the Pan-European Axes and the TRACECA programme) are in need of updating and revision to take into account major investments being made by other parties. In particular the case is made for a 'Central Eurasian Corridor' for rail and road that would reach from Central Europe across Ukraine and Southern Russia into West Kazakhstan, and thence to the East Kazakh border with China, thus joining up with and completing the West China-West Europe corridor promoted by the Asian Development Bank. There should also be a North-South corridor that would cross over this Central Eurasian Corridor in West Kazakhstan and lead south to the Middle East and South Asia. These adaptations of existing plans could become an exemplary case of cooperation between Central Asia and all the major economic powers of the Eurasian landmass.
Topic:
International Trade and Finance and Infrastructure
Political Geography:
Russia, China, Europe, Central Asia, Ukraine, and Kazakhstan

52. Canada and the European Union: Prospects for a Free Trade Agreement

Author:
Selen Sarisoy Guerin and Chris Napoli
Publication Date:
07-2008
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
This paper argues that there are significant potential economic gains to be obtained from an EU-Canada Free Trade Agreement. The evolution of trade between the US and Canada following the signing of CUSFTA in 1989 offers a good illustration of how trade might increase after an EU-Canada FTA, as the patterns and levels of protection between the EU and Canada today are very similar to the protection that existed between the US and Canada in 1989. Although many empirical studies fail to find support for 'trade diversion' created by NAFTA (or CUSFTA) at the expense of the EU and to the benefit of the US, there is some evidence of trade diversion when detailed regional trade is examined. If indeed trade diversion has occurred due to NAFTA, then an EU-Canada FTA is welfare-enhancing for Canada. For the EU, a potential FTA can level the playing field with the US and increase the competitiveness of European firms in the Canadian market.
Topic:
International Trade and Finance and Markets
Political Geography:
United States, Europe, and Canada

53. The Trade and Climate Change, Joint Agenda

Author:
Thomas L Brewer
Publication Date:
06-2008
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
Climate change, international trade, investment and technology transfer are all issues that have intersected in diverse institutional contexts and at several levels of governmental activity to form a new joint agenda. The purpose of this paper is to advance understanding of this joint agenda by identifying the specific issues that have emerged, the policies that have been adopted, especially in the EU and US, and the options that are available for further policy-making.
Topic:
Government, International Political Economy, and International Trade and Finance
Political Geography:
United States

54. Should central banks target stock prices?

Author:
Paul De Grauwe
Publication Date:
09-2008
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
Abstract:
The question of whether central banks should react to stock price developments has been hotly debated. This discussion has intensified since the eruption of the credit crisis. According to some analysts, including myself, the failure of the US Federal Reserve under Alan Greenspan to react to the bubbles in the stock and housing markets helps to explain the financial excesses and the subsequent crisis.
Topic:
Economics, International Trade and Finance, Markets, and Monetary Policy
Political Geography:
United States

55. Recalibrating EU Policy towards the Western Balkans

Author:
Michael Emerson
Publication Date:
10-2008
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
Abstract:
The time is not only ripe but pressing for the EU and the states of the Western Balkans to recalibrate and reinforce the current pre-accession strategy. Trade policy should be moved beyond existing free trade commitments for all the Western Balkans to enter the customs union of the EU and Turkey. Eurozone doctrine should be adapted to realities. Rather than regarding the use of the euro by Montenegro and Kosovo as an unfortunate turn of events, the costs and benefits of unilateral adoption of the euro by not-yet member states of the region should be more openly appraised, and the option to 'euroise' recognised as a possibility. It is good that the EU has moved at the declaratory level toward s visa 'liberalisation', which means scrapping visas rather than just 'facilitation' measures. However the Commission has not yet published guidelines or timelines for this. The region should be put on track for access to the Structural Funds on terms and scales progressively approaching those from which new member states such as Bulgaria and Romania already benefit. The ratio of these aid receipts between the new member states and the Western Balkans is currently 4:1; the former are receiving more than they can handle efficiently, whereas the Western Balkans have huge unsatisfied needs. Overall the case is made for significant moves towards 'functional membership' of the whole of the region with the EU, which would be a highly useful advance, irrespective of how or when the EU overcomes its Lisbon Treaty hiatus.
Topic:
Economics and International Trade and Finance
Political Geography:
Europe, Turkey, Kosovo, Bulgaria, Balkans, Romania, and Lisbon

56. The Trade and Climate Change, Joint Agenda

Author:
Thomas L Brewer
Publication Date:
06-2008
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
Climate change, international trade, investment and technology transfer are all issues that have intersected in diverse institutional contexts and at several levels of governmental activity to form a new joint agenda. The purpose of this paper is to advance understanding of this joint agenda by identifying the specific issues that have emerged, the policies that have been adopted, especially in the EU and US, and the options that are available for further policy-making.
Topic:
Climate Change, International Cooperation, International Political Economy, and International Trade and Finance
Political Geography:
United States and Europe

57. Stock Prices and Monetary Policy

Author:
Paul De Grauwe
Publication Date:
09-2008
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
The question of whether central banks should target stock prices so as to prevent bubbles and crashes from occurring has been hotly debated. We analyse this question using a behavioural macroeconomic model. This model generates bubbles and crashes. We analyse how 'leaning against the wind' strategies, which aim to reduce the volatility of stock prices, can help in reducing volatility of output and inflation. We find that such policies can be effective in reducing macroeconomic volatility, thereby improving the trade- off between output and inflation variability. The strength of this result, however, depends on the degree of credibility of the inflation-targeting regime. In the absence of such credibility, policies aiming at stabilising stock prices do not stabilise output and inflation.
Topic:
Economics, Foreign Exchange, and International Trade and Finance

58. European Financial System Governance

Author:
Karel Lannoo
Publication Date:
06-2006
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
Abstract:
Much has been achieved in upgrading and integrating the 'governance' of the European financial system in recent years. In parallel with the successful adoption of the Financial Services Action Plan (FSAP), the EU managed to reform its regulatory structure, extending what was proposed by the Lamfalussy Committee for securities markets in early 2001 to banking and insurance. The EU thus created permanent committees of securities, banking and insurance supervisors (the 'Level 3 Committees' – CESR, CEBS and CEIOPS). This rapid reform demonstrated that national authorities were capable of overcoming domestic biases, adapting the supervisory structure, and instituting a much greater degree of supervisory cooperation than had existed previously.
Topic:
Economics and International Trade and Finance
Political Geography:
Europe

59. Foreign Investment in the US (I): Disappearing in a black hole?

Author:
Daniel Gros
Publication Date:
04-2006
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
The US international investment position today should in principle be equal to the sum of past current account balances (mostly deficits). However, this is by far not the case even taking into account the balancing item 'errors and omissions'. Between 1982 and 2004, the US has accumulated a grand total of around $4.5 trillion (thousand billion). (The sum of current account deficits has been about $1 trillion smaller than the amount of net sales of US assets to the rest of the world because of the anomaly in reinvested earning.) Despite this accumulation of deficits the US net international debtor position (IIP) has deteriorated 'only' by $2.7 billion (and is now estimated – at the end of 2004, end 2005 figures are not yet available for the US IIP – at 'only' around $2.5 trillion). This implies a total of 'unearned' gains to the US of around $1.8 trillion during 22 years. The quite detailed data available for a somewhat shorter period (1989-2004) show that only a very small part of this sum, around 10-20%, can be explained by exchange rate and stock market changes.</p
Topic:
International Relations and International Trade and Finance
Political Geography:
United States

60. Foreign Investment in the US (II): BEING TAKEN TO THE CLEANERS?

Author:
Daniel Gros
Publication Date:
04-2006
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
The income account of the US balance of payments has so far remained in surplus because of a very large differential in reported earnings on direct investment – US firms seem to enjoy a much higher rate of return than foreign firms in the US. There is little difference in terms of the rate of dividend payments; the difference is due to what is called 'reinvested earnings' (earnings minus dividends). Foreign firms report almost no reinvested earnings on their direct investment in the US whereas US firms report substantial reinvested earnings from their direct investment abroad, on average over $100 billion more p.a. than foreign firms report on their US investment. This anomaly is probably due to the desire of foreign firms to minimise their US taxes, whereas US firms do not face tax liabilities if they report high foreign profits to the US authorities. The procedure used to generate the data for reinvested earnings thus has a built-in bias to improve the US current account and – over time – its international investment position. The true picture is likely to be much worse.</p
Topic:
International Relations and International Trade and Finance
Political Geography:
United States