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131. Deeper Regional Integration and Global Value Chains

Author:
Nakgyoon Choi
Publication Date:
07-2019
Content Type:
Working Paper
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
Recently, international trade has become regional rather than global. This paper aims to test if deeper regional integration contributes to the organization of global value chains along the regional clusters including Asia, Europe, and America. We estimate the impacts of deep regional integrations on global value chains by region, investigating the implications of mega FTAs for global value chains by scenario. We use not only data on trade in value added but also global value chains participation indexes which reflect the global value chains better than domestic value added in goods and services exports. The estimation results reveal that a deep regional trade agreement has heterogeneous effects on global value chains depending on the regional clusters. In particular, Asia turns out to import more intermediate goods than Europe and America while RTA member countries tend to import more intermediate goods from Europe than Asia and America.
Topic:
International Trade and Finance, Regional Integration, Economic Policy, and Exports
Political Geography:
Europe, Asia, Global Focus, and North America

132. Does Canada’s Foreign Trade Policy Give Innovating Canadian Firms a Competitive Edge Internationally?

Author:
Olena Ivus and Marta Paczos
Publication Date:
05-2019
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation (CIGI)
Abstract:
In recent years, Canada has adopted the Comprehensive Economic and Trade Agreement (CETA), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Canada-United States-Mexico Agreement (CUSMA). Like other modern international trade agreements, CETA, the CPTPP and the CUSMA include protections for innovators’ profits and technologies in the form of intellectual property rights (IPRs) regulations. These trade agreements will have a first-order impact on the volume and composition of trade in goods and innovation with sensitive intellectual property (IP) in Canada, as well as having an impact on global welfare distribution. But is Canada’s membership in these agreements good for Canadian firms looking to compete globally? This paper begins with a review of the IP protections instituted through recent trade deals involving Canada. It discusses the nature and scope of Canada’s IP obligations under CETA, the CPTPP and the CUSMA and explains how these obligations fit within the current Canadian legal framework. The changes in the standards of IPRs under these agreements will have a first-order impact on the volume and composition of trade in IP-sensitive goods, innovation and global welfare distribution and so deserve thorough debate. The paper then proceeds with a broader discussion of the reasons to include IP provisions in international trade agreements and the rationale for international coordination of the IPRs policy. Next, the paper discusses how IP provisions in trade agreements limit the freedom to use IP policy to promote national interests, while acknowledging that the various IP obligations are counterbalanced by several flexibilities, including the right to establish local exhaustion policies. The paper concludes with policy recommendations.
Topic:
International Trade and Finance, NAFTA, Trans-Pacific Partnership, Innovation, and USMCA
Political Geography:
United States, China, Canada, Asia, North America, and Mexico

133. Digital Trade at the WTO: The CPTPP and CUSMA Pose Challenges to Canadian Data Regulation

Author:
Patrick Leblond
Publication Date:
10-2019
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation (CIGI)
Abstract:
On the margins of the Group of Twenty leaders’ meeting in Osaka, Japan on June 28-29, 2019, Canada and 23 others signed the Osaka Declaration on the Digital Economy. This declaration launched the “Osaka Track,” which reinforces the signatories’ commitment to the World Trade Organization (WTO) negotiations on “trade-related aspects of electronic commerce.” In this context, unlike its main economic partners (China, the European Union and the United States), Canada has yet to decide its position. The purpose of this paper is thus to help Canada define its position in those negotiations. To do so, it offers a detailed analysis of the e-commerce/digital trade chapters found in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Canada-United States-Mexico Agreement (CUSMA), the North American Free Trade Agreement’s replacement, in order to identify the potential constraints that these agreements could impose on the federal government’s ability to regulate data nationally as it seeks to establish a trusting digital environment for consumers and businesses. The analysis leads to the conclusion that Canada’s CPTPP and CUSMA commitments could ultimately negate the effectiveness of future data protection policies that the federal government might want to adopt to create trust in the data-driven economy. As a result, Canada should not follow the United States’ position in the WTO negotiations. Instead, the best thing that Canada could do is to push for a distinct international regime (i.e., separate from the WTO) to govern data and its cross-border flows.
Topic:
International Cooperation, International Trade and Finance, World Trade Organization, European Union, and Digital Economy
Political Geography:
United States, China, Europe, Canada, Asia, and North America

134. The Global Interplay between Trade, Geopolitical and Commodity Shocks

Author:
Idris Ademuyiwa and Pierre Siklos
Publication Date:
10-2019
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation (CIGI)
Abstract:
Recent events have the potential to reverse the positive macroeconomic performance of the global economy and trigger a slowdown in both global growth and international trade. In particular, the implications of ongoing trade disputes that have undermined trust in the existing multilateral cooperation system and the incentive for countries to align with ongoing global policy coordination efforts. A compelling case for a mutually beneficial resolution of these tensions can be made by emphasizing the interdependence of the Group of Twenty (G20) economies — the G20 being the premier repository of international cooperation in economic and political matters. This study also considers the state of trade globalization, with an emphasis on the performance of the G20. The emergence of geopolitical risks (GPRs), that is, events that heighten tensions between countries and therefore threaten global economic performance, is an attempt to quantify the potential economic impact of the nexus between politics and economics. In the presence of heightened political risks, negative economic effects become more likely. Nevertheless, there is no empirical evidence investigating the links between the real economy, trade, the state of the financial sector, commodity prices and GPRs. Moreover, there is no evidence on these links that has a sample of countries that make up the G20. This paper begins to fill this gap. Relying on descriptive and statistical evidence, the conclusion is drawn that GPRs represent a significant factor that threatens global economic growth and economic performance, in the G20 countries in particular. Ultimately, however, GPRs reflect other factors, including threats stemming from trade tensions and large swings in commodity prices.
Topic:
International Cooperation, International Trade and Finance, Economic Growth, and Multilateralism
Political Geography:
Europe, Asia, South America, North America, and Global Focus

135. Emerging Countries in Global Financial Standard Setting: Explaining Relative Resilience and Its Implications

Author:
Andrew Walter
Publication Date:
11-2019
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation (CIGI)
Abstract:
This special report explores the role of emerging-country members in the Basel process, a key aspect of global financial standard setting. It argues that this process has been significantly more politically resilient than adjacent aspects of global economic governance, in part because major emerging countries have perceived continuing “intra-club” benefits from participation within it. Most important among these are learning benefits for key actors within these countries, including incumbent political leaders. Although some emerging countries perceive growing influence over the international financial standard-setting process, many implicitly accept limited influence in return for learning benefits, which are valuable because of the complexity of contemporary financial systems and the sustained policy challenges it creates for advanced and emerging countries alike. The importance of learning benefits also differentiates the Basel process from other international economic organizations in which agenda control and influence over outcomes are more important for emerging-country governments. This helps to explain the relative resilience of the Basel process in the context of continued influence asymmetries and the wider fragmentation of global economic governance. The report also considers some reforms that could further improve the position of emerging countries in the process and bolster its perceived legitimacy among them.
Topic:
International Trade and Finance, Financial Markets, Global Political Economy, and Emerging States
Political Geography:
Africa, Europe, Asia, South America, Australia, North America, and Global Focus

136. Chinese Investments in the US and EU Are Declining—for Similar Reasons

Author:
Jacob Funk Kirkegaard
Publication Date:
09-2019
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics (PIIE)
Abstract:
For years China has been one of the world’s most rapidly growing sources of outward foreign direct investment. Since peaking in 2016, however, Chinese outward investments, primarily to the United States but also the European Union, have declined dramatically, especially in response to changes in China’s domestic rules on capital outflows and in the face of rising nationalism in the United States. Concerns about growing Chinese influence in other economies, the ascendant role of an authoritarian government in Beijing, and the possible security implications of Chinese dominance in the high-technology sector have put Chinese outward investments under intense international scrutiny. This Policy Brief analyzes the most recent trends in Chinese investments in the United States and the European Union and reviews recent political and regulatory changes both have adopted toward Chinese inward investments. It also explores the emerging transatlantic difference in the regulatory response to the Chinese information technology firm Huawei. Concerned about national security and as part of the ongoing broader trade friction with China, the United States has cracked down far harder on the company than the European Union.
Topic:
Economics, International Trade and Finance, National Security, Foreign Direct Investment, and Investment
Political Geography:
China, Europe, Asia, North America, and United States of America

137. The 2018 US-China Trade Conflict after 40 Years of Special Protection

Author:
Chad P. Bown
Publication Date:
04-2019
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics (PIIE)
Abstract:
In 2018, the United States suddenly increased tariffs on nearly 50 percent of its imports from China. China immediately retaliated with tariffs on more than 70 percent of imports from the United States. This paper assesses what happened in 2018 and attempts to explain why. It first constructs a new measure of special tariff protection to put the sheer scope and coverage of the 2018 actions into historical context. It then uses the lens provided by the 2018 special tariffs to explain the key sources of economic and policy friction between the two countries. This includes whether China’s state-owned enterprises and industrial subsidies, as well as China’s development strategy and system of forcibly acquiring foreign technology, were imposing increasingly large costs on trading partners. Finally, it also examines whether the US strategy to provoke a crisis—which may result in a severely weakened World Trade Organization—was deliberate and out of frustration with the institution itself.
Topic:
Economics, International Trade and Finance, World Trade Organization, Bilateral Relations, Trade Wars, Donald Trump, and Imports
Political Geography:
China, Asia, North America, and United States of America

138. China-Pakistan Economic Corridor: Geo-political Implications, Regional Constraints and Benefits of CPEC

Author:
Umar Farooq and Asma Shakir Khawaja
Publication Date:
07-2019
Content Type:
Journal Article
Journal:
South Asian Studies
Institution:
Department of Political Science, University of the Punjab
Abstract:
The article is intended to find out the geopolitical implications, regional constraints and benefits of China-Pakistan Economic Corridor. Researcher reviewed both published research articles and books to find out geopolitical implication, regional constraints and benefits of China-Pakistan Economic Corridor. For this purpose, researcher also reviewed newspapers articles and published reports by government and non-governmental stakeholders working on CPEC. Review of the articles and reports indicated that CPEC had enormous benefits not only for China and Pakistan but also for the whole region. But different internal and external stakeholders are not in favor of successful completion of this project. Extremism, sense of deprivation, lack of political consensus, political instability are some of the internal constraints. On the other hand, Afghanistan, India, Iran, UAE and USA are posing constraints to halt the successful completion of CPEC.
Topic:
Economics, International Trade and Finance, Regional Cooperation, Violent Extremism, and Geopolitics
Political Geography:
Pakistan, Afghanistan, China, Iran, South Asia, India, Asia, Punjab, United Arab Emirates, and United States of America

139. China’s Territorial Claim at South China Sea: A Strategic Competition with USA and its Implications

Author:
Kanwal Hayat and Rehana Saeed Hashmi
Publication Date:
07-2019
Content Type:
Journal Article
Journal:
South Asian Studies
Institution:
Department of Political Science, University of the Punjab
Abstract:
China claims South China Sea as its sovereign domain where it possesses the right to intervene militarily and economically. However, USA considers South China Sea as a common global passage where rule of law and freedom of navigation should prevail.These diverging viewpoints coexist in a wobbly peace environment where both US and China want their own version of international law to be applied and have occasionally resorted to minor armed conflicts over this issue. Every state claiming authority over South China Sea is willing to use coercion in order to get what they want, however, the extent of how far they are willing to go is not clear. This is resulting in a show of gunboat diplomacy involving maritime force of influential states that strives to manipulate the policy makers of the relevant nations (Costlow, 2012). The paper will focus on the situation in the South China Sea. South China Sea is not only claimed by China but various other Asian nations. Does this territorial strife possess the power to turn the region into a war zone? Being one of the most active trade routes in the world having complicated geography and the diverging regional and international interests makes it very sensitive area. China being the emerging economic giant gives competition to the USA in many spheres. Although America has no territorial claim in the South China Sea, it has strategic and economic interests. Where China wants a complete hegemonic control of the area, USA wants to find a way where free unchecked trade could be the future for all.Accompanied with numerous other South Asian nations claiming various portions of the region, a constant tension exists in the region.
Topic:
Conflict Prevention, Economics, International Trade and Finance, Sovereignty, Territorial Disputes, Hegemony, and Conflict
Political Geography:
China, Asia, North America, United States of America, and Oceans

140. China-Pakistan Economic Corridor (CPEC): A MultiDimensional Plan 2017-2030 and Its Characteristics

Author:
A. Z. Hilali
Publication Date:
07-2019
Content Type:
Journal Article
Journal:
South Asian Studies
Institution:
Department of Political Science, University of the Punjab
Abstract:
China-Pakistan Economic Corridor (CPEC) is a set of projects under China‟s Belt and Road initiative, marks a new era of economic ties in a bilateral relationship between the two traditional friends. The multi-dimensional project will not only reform Pakistan economy but it will serve for people‟s prosperity and will help to revive the country economy of both countries. The visions of project partners are clear and the goals of the short term, mid-term and long-term plans of CPEC have been identified. So, the CPEC is not just a transit route for China and Pakistan‟s exports but it will transform Pakistan‟s economy and overcome its problems such as unemployment, energy, underdevelopment, and overall external economic dependency by building capacity in all necessary sectors. Therefore, CPEC could promote economic development and growth which will open new avenues and investment to the country which is based on shared partnership of cooperation, mutual benefits and sustainability. Thus, the CPEC is a grand porgramme and will deliver the economic gains to both China-Pakistan and it can be executed more efficiently and in a balanced way to serve the interests of both the countries. The project of CPEC is also important to China‟s energy and strategic security with reference to South China Sea and other regional and global players. Thus, CPEC could bring economic avenues to Pakistan and can improve regional economic and trade activities for greater development and prosperity. It has perceived that the project will not only foster socio-economic development but it will also reduce the level of political humidity and will be source of peace and harmony between the traditional adversaries. It has also assumed that regional economic integration through CPEC could be a harbinger to resolve the political differences by economic cooperation and regional economic connection could make 21st century the Asian century setting aside the perennial political issues to start a new beginning. Thus, in a longer perspective the CPEC can foster an economic community in the entire region of Asia and beyond if its vision is materialized in its true sense. The time will prove that the CPEC reap its fruits and will be advantages for not only Pakistan and China but for the entire region.
Topic:
Economics, International Trade and Finance, Regional Cooperation, Power Politics, and Infrastructure
Political Geography:
Pakistan, China, South Asia, Asia, and Punjab