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221. Integration within the European Single Market: accounting, computer, and construction services

Author:
Anna Malinowska, Krzysztof Głowacki, Malgorzata McKenzie, and Przemysław Kowalski
Publication Date:
05-2019
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
This report analyses the extent of integration within the European Single Market in three services sectors, (1) construction, (2) IT/computer services, and (3) accounting and auditing services, and draws key conclusions in the context of future Single Market services liberalisation efforts. The main body of the report provides a comparative analysis of trade integration and recent trade developments within the three sectors, focusing on Poland’s stakes in the agenda regarding liberalisation of trading in services. It assesses the still existing trade barriers, both for Polish services providers operating in the European Single Market and for foreign firms from other Single Market member states selling to customers in Poland. The discussion of potential benefits from further liberalisation of trade in these sectors for Poland is set in the broader context of the offensive and defensive interests in these sectors of three of Poland’s EU partners: Germany, Hungary and Sweden. The main body of the report is organised into three parts. The first one serves as the background for subsequent analyses, providing general information on trade in services in the EU and modes of the provision of services across borders, as well as presenting statistics on export competitiveness in the sectors of interest. The second part discusses the Services Directive and relevant liberalisation efforts within the Single Market. This is followed by a detailed analysis of the remaining barriers in the three sectors within the Single Market. The last section concludes and provides key policy recommendations. The Annexes present additional sectoral statistics and information on economic characteristics, trade integration, and the remaining trade barriers identified in Poland and the three selected EU partners (Germany, Hungary and Sweden). Additional information on the OECD Services Trade Restrictiveness Index methodology used to assess the significance and implications of remaining trade barriers is also included. The study “Integration within the European Single Market: accounting, computer and construction services” was commissioned by the Ministry of Foreign Affairs (in consultation with the Ministry of Entrepreneurship and Technology) and prepared by CASE – Center for Social and Economic Research. It is intended as a Polish contribution to the ongoing discussion on the future of the Single Market at the highest political level as well as in the context of upcoming programming of the agenda of the next European Commission.
Topic:
Markets, European Union, Economic Growth, and Trade
Political Geography:
Europe and Poland

222. Hungarian-Russian Economic Relations

Author:
Veronika Jóźwiak
Publication Date:
07-2019
Content Type:
Special Report
Institution:
The Polish Institute of International Affairs
Abstract:
Hungarian-Russian economic relations are based on the energy industry. Hungary’s efforts to build closer political relations with Russia after 2010 did not result in a marked increase in bilateral trade, investment, or greater Russian influence outside the energy sector. EU economic sanctions imposed on Russia and the introduction of counter-sanctions in 2014 caused a significant drop in Hungarian exports to Russia. However, this has not resulted in substantial losses to the Hungarian economy.
Topic:
Energy Policy, Bilateral Relations, Sanctions, European Union, and Trade
Political Geography:
Russia, Europe, Eurasia, and Hungary

223. Implications of Foreign Direct Investment, Capital Formation and its Structure for Global Value Chains

Author:
Amat Adarov and Robert Stehrer
Publication Date:
11-2019
Content Type:
Working Paper
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
In the age of globalisation, international trade and foreign direct investment (FDI) have become integral elements of cross-country production sharing. In this paper we empirically assess the impact of FDI, as well as capital dynamics and structure, on the formation of global value chains (GVC) and trade in value added at country and sectoral levels based on a database constructed for a sample of European countries over the period 2000-2014. The analysis reveals that inward FDI is especially conducive to the formation of backward linkages while outward FDI facilitates forward GVC participation, especially in high-tech manufacturing sectors. A particularly robust influence of FDI and capital accumulation on GVC integration is identified in the textile and clothing industry. While capital accumulation in general intensifies GVC linkages for most sectors, ICT capital appears to be especially instrumental for backward integration of electrical and transportation equipment sectors.
Topic:
Globalization, International Trade and Finance, Foreign Direct Investment, Trade, and Global Value Chains
Political Geography:
United States, Japan, and Europe

224. The state of China-European Union economic relations

Author:
Uri Dadush, Marta Dominguez-Jimenez, and Tianlang Gao
Publication Date:
11-2019
Content Type:
Working Paper
Institution:
Bruegel
Abstract:
China and the European Union have an extensive and growing economic relationship. The relationship is problematic because of the distortions caused by China’s state capitalist system and the diversity of interests within the EU’s incomplete federation. More can be done to capture the untapped trade and investment opportunities that exist between the parties. China’s size and dynamism, and its recent shift from an export-led to a domestic demand-led growth model, mean that these opportunities are likely to grow with time. As the Chinese economy matures, provided appropriate policy steps are taken, it is likely to become a less disruptive force in world markets than during its extraordinary breakout period.
Topic:
Economics, Governance, European Union, Investment, and Trade
Political Geography:
China, Europe, and Asia

225. Rebels without a Cause: Russia’s Proxies in Eastern Ukraine

Author:
International Crisis Group
Publication Date:
07-2019
Content Type:
Special Report
Institution:
International Crisis Group
Abstract:
Russia and the separatists it backs in Ukraine’s east are no longer quite on the same page, especially since the Kremlin abandoned ideas of annexing the breakaway republics or recognising their independence. The rift gives the new Ukrainian president an opportunity for outreach to the east’s embattled population, including by relaxing the trade embargo. What’s new? Russia’s gradual retreat from any plans to annex parts of eastern Ukraine has opened schisms between Moscow and its separatist proxies in the region. Why does it matter? For Kyiv, these divides could create opportunities to restart dialogue with the people of the east. Such contacts, in turn, could help lay the groundwork for Ukraine’s unification. What should be done? The rift between Moscow and its proxies should inform new Ukrainian President Volodymyr Zelenskyy’s policies. Kyiv should look to rebuild relations with the inhabitants of separatist-held areas, by easing the economic blockade on the east and increasing outreach to the population there.
Topic:
Non State Actors, Geopolitics, Conflict, and Trade
Political Geography:
Russia, Europe, Eurasia, and Ukraine

226. US-EU dispute over auto trade could get worse

Author:
Dong Yan and Xu Tingting
Publication Date:
02-2019
Content Type:
Policy Brief
Abstract:
The dispute over auto trade between the United States and the European Union is becoming more heated and uncertain. US President Donald Trump has threatened to slap additional tariffs of 25 percent on autos imported from the EU if the bloc doesn't agree to a trade agreement favorable to the US. Although Dutch Prime Minister Mark Rutte told CNBC on Monday that there's a lot happening behind the scenes to ensure the US and the EU reach a trade deal, Bloomberg, citing a senior EU official, reported on Friday that the EU is ready to target Caterpillar and Xerox if Trump hits cars.
Topic:
Treaties and Agreements, European Union, and Trade
Political Geography:
Europe, North America, and United States of America

227. Assessing China’s Influence in Europe through Investments in Technology and Infrastructure. Four Cases.

Author:
Frans-Paul van der Putten
Publication Date:
01-2019
Content Type:
Policy Brief
Institution:
Clingendael Netherlands Institute of International Relations
Abstract:
China’s role as a global investor and financier has grown rapidly in recent decades, nowhere more so than in Europe. In 2017, a full quarter of China’s outbound foreign direct investment was destined for Europe. China has stepped up promotion of its signature Belt and Road Initiative (BRI), with Europe as its final destination, ever greater flows of investment in Eurasian connectivity are on offer. However, in recent years scepticism about rising flows of Chinese investment into the EU has grown. This report aims to carefully scrutinize the linkage between Chinese investment in Europe and China’s influence in the region and provides a nuanced and careful analysis that goes beyond the alarmism and polarization that dominates so much of the recent discussion about China’s role in Europe. It is based on a series of case studies examining a Chinese port investment in Greece, a Chinese-financed rail project in Hungary and Serbia, and two Chinese acquisition deals in the Netherlands. Thus, the authors shed light on the motives behind these individual Chinese investments and financial packages, including the interests of both the Chinese and the host governments and firms involved, evaluating what, if any, Chinese “influence” can be linked to the deals. According to the findings, the specific terms of each investment or loan package are dependent on the individual circumstances of the countries and firms involved. In each case there is an identifiable commercial basis for the Chinese investment, but economic and political viability of each deal varies.
Topic:
Globalization, Investment, and Trade
Political Geography:
China, Europe, and Asia

228. The US–China trade–tech stand-off and the need for EU action on export control

Author:
Brigitte Dekker and Maaike Okano-Heijmans
Publication Date:
08-2019
Content Type:
Special Report
Institution:
Clingendael Netherlands Institute of International Relations
Abstract:
As the great power rivalry and (technological) trade conflict between the United States (US) and China intensifies, calls for an export control regime tailored to so-called emerging technologies are growing. In August 2018 the US government announced the Export Control Reform Act (ECRA), seeking to limit the release of emerging technologies to end uses, end users and destinations of concern. The contest is on for the leader in the development and use of emerging technologies, but also for shaping norms and writing the rules for their use. This requires the Netherlands and other EU member states – in coordination with key stakeholders from business and academia – also to redouble their efforts to recraft their own approach to export controls of so-called ‘omni-use’ emerging technologies. This Clingendael Report outlines four levels of action in the field of export control for the Dutch government to pursue in parallel: bilaterally with the US; European Union cooperation; ‘Wassenaar’ and beyond; and trusted communities.
Topic:
Development, Science and Technology, Power Politics, Exports, and Trade
Political Geography:
China, Europe, Asia, North America, and United States of America

229. Global Energy in Transition: How the EU Should Navigate New Realities and Risks

Author:
Andreas Goldthau
Publication Date:
11-2019
Content Type:
Policy Brief
Institution:
German Council on Foreign Relations (DGAP)
Abstract:
Global energy demand is shifting to Southeast Asia. This new trade flow is altering market power because it not only follows natural economic development, but also results from strategic trade and investment policies that promote national interests. In this context, the EU needs to account for the geo-economic side effects of the new European Green Deal.
Topic:
Climate Change, Economics, Energy Policy, European Union, Risk, and Trade
Political Geography:
Europe, Asia, and Southeast Asia

230. WTO'ing a Resolution to the China Subsidy Problem

Author:
Chad P. Bown and Jennifer A. Hillman
Publication Date:
10-2019
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics (PIIE)
Abstract:
The United States, the European Union, and Japan have begun a trilateral process to confront the Chinese economic model, including its use of industrial subsidies and deployment of state-owned enterprises. This paper seeks to identify the main areas of tension and to assess the legal-economic challenges to constructing new rules to address the underlying conflict. It first provides a brief history of subsidy disciplines in the General Agreement on Tariffs and Trade and the World Trade Organization (WTO) predating any concerns introduced by China. It then describes contemporary economic problems with China’s approach to subsidies, their impact, and the apparent ineffectiveness of the WTO’s Agreement on Subsidies and Countervailing Measures to address them. Finally, it calls for increased efforts to measure and pinpoint the source of the problems—in a manner analogous to how the Organization for Economic Cooperation and Development took on agricultural subsidies in the 1980s—before providing a legal-economic assessment of proposals for reforms to notifications, evidence, remedies, enforcement, and the definition of a subsidy.
Topic:
Economics, World Trade Organization, Tariffs, and Trade
Political Geography:
Japan, Europe, Asia, North America, United States of America, and European Union