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182. The European Defence Fund and Norway
- Author:
- Karsten Friis
- Publication Date:
- 10-2020
- Content Type:
- Policy Brief
- Institution:
- Norwegian Institute of International Affairs
- Abstract:
- The establishment of the European Defence Fund (EDF) represents an important step towards a more coherent European security architecture. It is broadly recognised that Europe needs to reduce duplication between, as well as the number of, weapons systems and platforms. The EU recently opened up for associated countries to participate in the Fund, but the Norwegian government has failed to set aside money for the EDF, despite official policy to participate.
- Topic:
- Security, Defense Policy, European Union, and Trade
- Political Geography:
- Europe and Norway
183. Brexit: An Assessment of Zambia- UK Trade & Investment Relations
- Author:
- Shimukunki Manchishi and Mwanda Phiri
- Publication Date:
- 01-2020
- Content Type:
- Policy Brief
- Institution:
- Zambia Institute for Policy Analysis and Research (ZIPAR)
- Abstract:
- Following the Brexit referendum held in the UK in 2016 that resulted in a majority vote to leave the EU, there has been speculation and uncertainty surrounding the likely impact of Brexit on trade relations between the UK and developing countries such as Zambia. With Brexit, comes the exit of the UK from the EU, its customs union as well as the single market. Consequently, this implies that Zambia’s trade with the UK will no longer be under the ambit of the EU Everything But Arms (EBA) trade agreement which grants Zambian products other than arms, duty-free and quota-free market access to the UK. Naturally, this brings about questions of the likely impact of Brexit on trade relations between Zambia and the UK which thus far, has been determined collectively under the framework of the EU since the UK’s accession to the EU customs union. In this policy paper, we provide a contextual analysis of the same. From this, we deduce that a ‘deal’ or ‘no deal’ Brexit is not likely to adversely impact the UK’s trade with Zambia. This is on condition that the UK’s own unilateral preference scheme comes into place and in time, to replicate the EU-EBA scheme with no disruption to traders. On the Investment front, although the UK has been Zambia’s fourth-largest source country for FDI inflows over the period 2010-2017, investments have been waning. Brexit has the potential to turn things around as the UK seeks to increase investments in other jurisdictions outside of the EU. With the UK now envisioning to become the largest G7 investor in Africa by 2022, there is a high probability that Brexit could lead to a positive investment crowding in effect, provided Zambia becomes a more attractive investment destination.
- Topic:
- Bilateral Relations, Brexit, Investment, and Trade
- Political Geography:
- Africa, United Kingdom, Europe, and Zambia
184. How Germany and France Could Play a Leading Role in International Donor Coordination
- Author:
- Lennart Kaplan
- Publication Date:
- 01-2020
- Content Type:
- Working Paper
- Institution:
- German Institute of Development and Sustainability (IDOS)
- Abstract:
- In the framework of the Agenda 2030 for sustainable development, France and Germany face common challenges, ranging from security to global health. Against this background, this paper discusses opportunities and barriers for a French-German leadership in international donor coordination.
- Topic:
- Security, Climate Change, International Cooperation, Trade, and Donors
- Political Geography:
- Europe, France, and Germany
185. The European Union and its model to regulate international trade relations
- Author:
- Danièle Hervieu-Léger
- Publication Date:
- 04-2020
- Content Type:
- Policy Brief
- Institution:
- Robert Schuman Foundation (RSF)
- Abstract:
- The European Union is one of the main promoters of free trade agreements (FTAs). This position is not new: since the mid-2000s, and even more so in the decade now ending, the Commission, supported by the Council and the European Parliament, has constantly sought to negotiate and conclude new trade agreements. This strategy has paid off. In 2018, almost a third of trade between Europe and the rest of the world was covered by the preferential provisions of an FTA, a figure that is expected to increase significantly in 2020, following the entry into force of the agreement with Vietnam, and to rise in the coming years to more than 40% if the agreements currently being negotiated with Mercosur, the African, Caribbean and Pacific (ACP) countries and possibly the United Kingdom come into force.
- Topic:
- International Trade and Finance, European Union, Free Trade, and Trade
- Political Geography:
- Europe
186. Relations between the European Union and the United Kingdom: a final agreement in view?
- Author:
- Christian Lequesne
- Publication Date:
- 07-2020
- Content Type:
- Policy Brief
- Institution:
- Robert Schuman Foundation (RSF)
- Abstract:
- The United Kingdom officially left the European Union on 31 January 2020 following the signing of the exit agreement. This departure went hand in hand with the opening of a transitional period until 31 December 2020, during which the rules of the internal market continue to govern relations between the two sides. However, negotiations have not yet been completed, since the framework for the future relationship between the United Kingdom – which has now become a third country – and the 27 Member States of the European Union has yet to be established. The joint political declaration of 30 January 2020 accompanying the exit Agreement provides for : "an ambitious, broad, deep, flexible partnership in trade and economic cooperation – with a comprehensive and balanced free trade agreement at its centre –, law enforcement and criminal justice, foreign, security and defence policy, as well as broader areas of cooperation"[1]. Initiated in February 2020 the negotiations on the future Agreement have been hampered by the Covid-19 pandemic. The 27 Member States decided that the defence of their positions would, as with the exit Agreement, be entrusted to the European Commission represented by a single negotiator, the Frenchman Michel Barnier. On the British side, former diplomat, David Frost, is in charge of defending the positions of the British government led by Boris Johnson, however the former will be called to another post as Government Adviser for National Security from September 2020. Although face-to-face negotiations resumed in Brussels at the end of June 2020, in substance they have made very modest progress. Hence a legitimate question: can an agreement on the future relationship between the United Kingdom and the European Union be reached by 31 December 2020, while Boris Johnson's government has refused to make use of the possibility offered of extending the transition period and thus the negotiations until 30 June 2020? Is there a risk of ending the year 2020 without a no deal and to have economic relations between the United Kingdom and the European Union governed by the common law of the World Trade Organisation?
- Topic:
- Regional Cooperation, European Union, and Trade
- Political Geography:
- United Kingdom and Europe
187. Economic Costs of Ex ante Regulations
- Author:
- Hosuk Lee-Makiyama and Badri Narayanan Gopalakrishnan
- Publication Date:
- 10-2020
- Content Type:
- Research Paper
- Institution:
- European Centre for International Political Economy (ECIPE)
- Abstract:
- Regulations are an indispensable part of an economy and are proven to generate a significant impact on the economic, environment and social landscape. Through an extensive survey of literature and empirical study, the paper contrasts the benefits and costs arising in the light of the imposition of ex ante regulations of attempting to regulate a market sector, before a market failure has even occurred. It diverges from the norm of regulating ex-post, i.e. addressing market failures as they arise, which is the case in most modern open economies. The study highlights the economic impacts of shifting from ex post to ex ante in the online services sector as stipulated by the proposals for the Digital Services Act. It estimates a loss of about 85 billion EUR in GDP and 101 billion EUR in lost consumer welfare, due to a reduction in productivity, after accounting for other control variables. These costs are equivalent to losing all the gains that the EU has achieved to date from all its bilateral free trade agreements; or losing the contribution of passenger cars to the EU trade balance with the rest of the world. In the context of the pandemic-induced economic contraction, the GDP loss is equivalent to one-quarter of EU current account surplus projected for 2020. The extraordinarily high costs and rarity of ex ante rules warrant a discussion on the true objectives of the Digital Services Act. It is unclear which market failures it is envisaged to address – or how these failures can be so critical for the well-being for the European citizens, yet so irreparable and impossible to remedy ex post.
- Topic:
- Economics, Environment, International Political Economy, Markets, Treaties and Agreements, Social Policy, and Trade
- Political Geography:
- Europe
188. Learning to Love Trade Again
- Author:
- Frank Lavin and Oscar Guinea
- Publication Date:
- 06-2020
- Content Type:
- Research Paper
- Institution:
- European Centre for International Political Economy (ECIPE)
- Abstract:
- We are at the moment, the first in seventy-five years, where there is no international consensus in support of trade. Indeed, trade is unloved, unsupported, and even unwanted. There is no shortage of topics in the rhetoric of trade complaints: from the rapid rise of China to Coronavirus as a metaphor for the evils of greater connectivity. Regardless of the validity of these complaints, none of them negate the central truth of trade: countries that engage in trade move ahead, and those that do not, stagnate. Our political leaders disagree. Anti-trade positions are held by leaders across the political spectrum, from Donald Trump to Bernie Sanders. And yet, the public is increasingly warm to the idea of trade. When Gallup asks Americans, “Do you see foreign trade more as an opportunity for economic growth through increased U.S. exports or a threat to the economy from foreign imports?” a record high of 79% see trade as an opportunity, with 18% viewing it as a threat. How did the world arrive at this moment where the benefits of trade are clearly evidenced while trade has become politically toxic? We identify four main factors: (i) U.S. absenteeism from the leadership role; (ii) detachment between trade and security architecture; (iii) no alternative leadership in Europe or elsewhere; and (iv) the cumbersome WTO process. Against this background we put forward five initiatives that will be big enough to count but unobjectionable enough to be adopted. The Big Three. The U.S., EU, and Japan, should establish a consultative body on trade to forge a new approach that allows trade to move ahead in the absence of universal consensus. No harm, no foul. Each of the Big Three should commit to zero tariffs on any item not produced in each particular market. A de minimis strategy. Tariffs should be eliminated on all products where the current tariff is less than 2%. At that level tariffs are simply a nuisance fee. Mind the social costs. Expand the Nairobi Protocols to include health products and green tech. Scrapping import tariffs on medical and green goods would not only encourage additional trade but will also provide health and environmental benefits. Harmonize down. The Big Three should commit that on every tariff line each of the three will be no worse than the next worse. In other words, each of the Big Three will agree to reduce its tariff on every product where it has the highest tariff of the three. These actions will spur the WTO, not undermine it. The measures we propose can be set up on a plurilateral basis that would allow other trading powers to participate. By breaking away from the tyranny of universal consensus, these actions will encourage the trading community – including the WTO – to get back in forward motion. In some respect, convergence between the Big Three is already happening. The EU and Japan signed an FTA that lowers import tariffs between these two economies, while the U.S. and Japan agreed to negotiate a comprehensive FTA. And if China is willing to step up? China should be welcomed into this group if it supports the four initiatives, changing the Big Three to the Big Four.
- Topic:
- International Political Economy, International Trade and Finance, Global Markets, Trade, and WTO
- Political Geography:
- United States, Japan, China, Europe, and Global Focus
189. The Role of Trade Policy in Promoting Sustainable Agriculture
- Author:
- Philipp Lamprecht and Fredrik Erixon
- Publication Date:
- 01-2020
- Content Type:
- Research Paper
- Institution:
- European Centre for International Political Economy (ECIPE)
- Abstract:
- There is now a long history of countries improving sustainability standards in most parts of the economy while at the same time pursuing the ambitions of rules-based international trade and economic integration with other countries. It is not surprising that countries at the vanguard of sustainability also tend to be the countries that are most open to trade. This Report looks closer at the interplay between the formulation of domestic standards and provisions in Free Trade Agreements that either acknowledge domestic standards or establish standards in a direct way. This interplay is crucial for two reasons: first to establish market access arrangements that help to promote sustainability standards, second to provide the policy basis to make standards and possible market access restrictions conducive to basic trade rules. It lays a focus particularly on the growing importance of sustainability standards in international trade agreements, or Free Trade Agreements (FTAs) – in particular for the food sector. Such standards are relevant for all new high-ambition Free Trade Agreements – from the EU-Japan Economic Partnership Agreement to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership between eleven trans-pacific nations. The Report considers especially nine modern FTAs. The purpose of the Report is to investigate how governments with high sustainability ambitions approach the issue of trade and sustainability – in particular how they work with, on the one hand, specific provisions in FTAs and, on the other hand, the development of domestic standards and their linkage to trade. The Report also looks directly at how these standards are designed, and what lessons that can be learned for governments that want to raise sustainability ambitions. It puts the results of the analysis in the context of Norwegian ambitions to improve its sustainability standards for food placed on the Norwegian market. The analysis of how trade and sustainability have been made compatible starts with the rules of the World Trade Organisation (WTO). These rules are important in their own right, but they also carry political significance. WTO-rules form the basis of the bilateral free trade agreements that countries sign with each other – and that now make up the main plank of international trade negotiations. In the language of the WTO, basic trade rules serve to protect the principles of national treatment and non-discrimination. Sustainability policies that are grounded on solid evidence and that follow international scientific norms will be compatible with WTO rules. Sustainability policies that confer advantages to domestic producers or that are arbitrary will get a harsh treatment. Consequently, the bilateral free trade deals that the European Union or the European Free Trade Area (EFTA) have concluded with other parts of the world are not just compatible with WTO rules, they rely on these rules as the foundation stone. Moreover, these rules inform governments how they should organise their sustainability policy if they also want the opportunity to take part in modern trade agreements. If countries aren’t willing to play by these rules, they should also accept that they won’t be able to enjoy the benefits of trade agreements. What member countries of the WTO have agreed in past multilateral trade accords are not a blockage of sustainability policy, but they bar countries from pursuing such policies in a way that would lead to unequal application of trade rules – between home and foreign producers, or between different foreign producers. In addition, it is of interest – also to the Norwegian policy discussion – to consider how EU policies are likely to change in the forceable future. The analysis provides a discussion of issues that are likely to remain very high on the agenda of the next European Commission. These include possible improvements in the TSD Chapters of trade agreements in particular with regard to enforcement mechanisms, the engagement of civil society, and climate action. Further policy highlights include a possible introduction of a carbon border tax, as well as the discussions related to due diligence of supply chains, and multilateralism. In terms of conclusions, the Report identifies four main observations that should inform future policy development in Norway: First, there is clearly a case to be made for aligning Norwegian trade policy to EU trade policy when it comes to provisions on trade and sustainability in Free Trade Agreements. Second, there is a substantial body of scientific evidence, risk assessments and international experience of standards in areas that are related to sanitary and phyto-sanitary standards and to environmental standards which any government that want to raise sustainability standards can draw on. Third, many countries struggle to formulate their domestic sustainability standards in a structured way. Arguably, this is a critical point for governments that are considering to introduce higher standards with consequence for market access for foreign producers. To avoid confusion or accusation of standards being a disguised trade restrictions, countries like Norway would have to structure and systematise its standards if the ambitions were to be raised and formed part of market access policy. A first step for a policy that seeks to condition import on the compliance with a stand is to make the standard clear and explicit. Fourth, there are direct and indirect relations between domestic standards and provisions in FTAs. FTAs often deal with policies that cannot be directly formulated in a domestic standard, like some aspects of labour laws. They also deal with other forms of standards that need policy convergence in order to guarantee smooth trade between the contracting parties. Generally, it cannot be said that the EU or other entities use FTAs to “regulate” or to establish the standard. That rather happens bottom-up – through domestic regulations that later get reflected in trade agreements.
- Topic:
- International Political Economy, International Trade and Finance, Partnerships, Global Markets, Free Trade, Trade, and Sustainability
- Political Geography:
- Europe and Global Focus
190. Wealth and Shifting Demand Pressures on the Price Level in England After the Black Death
- Author:
- Anthony Edo and Jacques Melitz
- Publication Date:
- 12-2020
- Content Type:
- Working Paper
- Institution:
- Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
- Abstract:
- The scale of the rise in personal wealth following the Black Death calls the life-cycle hypothesis of consumption into consideration. This paper shows for the first time that the wealth effect of the Black Death on the price level continued in England for generations, up to 1450. Indeed, in absence of consideration of the wealth effect, other influences on the price level do not even appear in the econometric analysis. The separate roles of coinage, population, trade, wages and annual number of days worked for wages all also receive attention and new results follow for adjustment in the labor market.
- Topic:
- Economics, International Political Economy, Infectious Diseases, Population, Trade, and Labor Market
- Political Geography:
- Europe and England