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121. Global value chains and technology transfer: new evidence from developing countries

Author:
Davide Rigo
Publication Date:
06-2018
Content Type:
Working Paper
Institution:
Centre for Trade and Economic Integration, The Graduate Institute (IHEID)
Abstract:
This paper uses the World Bank's Enterprise Surveys as a sample of 18 developing and emerging economies to investigate the causal relationship between global value chains and the transfer of technology to manufacturing firms in developing nations. It focuses on one specific channel for technology transfer, namely the licensing of foreign technology. By using a propensity score matching difference-in-differences technique, I show that there is a positive and causal impact of being involved in complex international activities (i.e. being a two-way trader) on the licensing of technology. Importantly, domestic firms becoming two-way traders are more likely to acquire foreign-licensed technology than domestic firms starting to either export or import. These findings suggest that the complexity associated with the trading activity determines whether or not foreign technology is licensed.
Topic:
Development, Economics, International Trade and Finance, Science and Technology, World Bank, and Global Political Economy
Political Geography:
Global Focus

122. Soft vs Hard Governance for Labour and Environmental Commitments in Trade Agreements: Comparing the US and EU Approaches

Author:
Vandana Gyanchandani
Publication Date:
08-2018
Content Type:
Working Paper
Institution:
Centre for Trade and Economic Integration, The Graduate Institute (IHEID)
Abstract:
Three methodologies are used to enforce labour and environmental commitments in the US and EU trade agreements: cooperative, sanctions and composite. In-depth analysis of the scope of commitments, level of protection, institutional framework as well as types of informal and formal dispute processes elucidates the pros and cons of such methodologies. Sanctions approach weakens cooperation by misjudging the complexity of domestic policy adjustments through transnational governance. Cooperative mechanism within the NAAEC's composite design emerges as the best approach: Submission on Enforcement Matters (SEM). As it provides for an independent secretariat supported by civil society group and factual records as a sunshine remedy to review citizen submissions. However, the process is constrained by political clout, lack of managerial capacity and legal dilemmas around informal lawmaking (IN-LAW) procedures.
Topic:
Economics, Environment, International Cooperation, International Trade and Finance, Labor Issues, Sustainable Development Goals, and Global Political Economy
Political Geography:
United States, Europe, Global Focus, and European Union

123. The evolution of the EU law against criminal finance: the "hardening" of FATF standards within the EU

Author:
Leonardo Borlinia and Francesco Montanaro
Publication Date:
03-2018
Content Type:
Working Paper
Institution:
Centre for Trade and Economic Integration, The Graduate Institute (IHEID)
Abstract:
This article examines the recent evolution of the EU anti-money-laundering (AML) and counter-terrorist financing (CTF) legislative framework, focusing on the relationship between the main international standards in the field and the newest EU legislation. It suggests that international soft law norms—in particular, the Financial Action Task Force (FATF) Recommendations—have had a decisive influence on the latest development of legislation at the EU level and within its member states. It further argues that mainly the preventive component of the AML/CTF legislation will be strengthened by the EU instruments adopted in mid-2015. However, this Article concludes that the adoption of global soft standards has posed significant challenges to the EU legislative framework. The arguments are developed in four parts. The Article first highlights the main regulatory prescriptions that stem from the study of the phenomenology and the economics of AML/CTF regulation and underpin the current international regulatory paradigm. Second, it explores the evolution of the main international instruments in the field with a special focus on the role played by the FATF Recommendations. It also illustrates the relation between these instruments and the adoption of the new EU AML/CTF legislation from two different, but complementary, angles: (1) noting that the current international AML/CTF framework has a multidisciplinary approach, the Article focuses on the framework's repressive component and assessing the limits of the EU criminal approach against money laundering and terrorist financing; and (2) examining the recent EU preventive legislation and addressing the main challenges posed to the EU legislative framework when attempting to accommodate global standards, especially regarding tensions with fundamental freedoms and human rights protected within the EU.
Topic:
Corruption, Crime, Economics, International Trade and Finance, Law, Finance, and Global Political Economy
Political Geography:
Global Focus

124. Towards a More Inclusive Globalization: An Anti-Social Dumping Scheme

Author:
Dani Rodrik
Publication Date:
12-2018
Content Type:
Policy Brief
Institution:
Economics for Inclusive Prosperity (EfIP)
Abstract:
Theory and empirics both suggest that international trade has sharp distributional implications. Furthermore, redistribution caused by trade is often viewed by the general public as more harmful or disruptive than other domestic market shocks. I discuss conditions under which there may be a legitimate case for restricting trade to promote domestic social inclusion, and propose a specific policy – a social safeguards clause – targeting those circumstances.
Topic:
Economics, Globalization, International Trade and Finance, Economic Policy, Economic Theory, and Trade Liberalization
Political Geography:
Global Focus

125. Economic and Energy Aspirations of the Middle East

Author:
Carole Nakhle
Publication Date:
07-2018
Content Type:
Journal Article
Journal:
Fletcher Security Review
Institution:
The Fletcher School, Tufts University
Abstract:
The Middle East has several features that distinguish it from the rest of the world. Apart from sitting on the largest proven oil and gas reserves, the region is famous for its complicated politics, challenging demographics and fragile economic structures. ​ For oil- and gas-rich states, limited economic diversification is acute; this is where we find government dependence on hydrocarbon revenues reaching as high as 95 percent in countries like Iraq. This is also where we find a poorly diversified primary energy mix, which is heavily reliant on oil and gas, in a sharp contrast to the norm elsewhere where local energy needs are met by diverse sources of energy, mainly oil, gas, coal, nuclear, and renewable energy. ​ The lack of diversification – both in terms of the economy and energy mix – brings serious challenges for the region. The economic performance of the oil- and gas-rich states has simply mimicked the volatile and unpredictable movement in oil prices: when oil prices are high, these economies grow rapidly, but when oil prices go in the other direction, they shrink in tandem. Additionally, the dependence on oil and gas to meet local energy needs has caused two problems: first, the trade-off between the more lucrative exports and the highly subsidized domestic market, and second, the higher carbon footprint because of the absence of greener sources of energy. ​ In a world where international competition for global market share in oil and gas and the fight against climate change intensify, the region’s leaders seem to be increasingly convinced that the old model of governance is simply not sustainable...
Topic:
Climate Change, Energy Policy, International Trade and Finance, Oil, Governance, and Economy
Political Geography:
Middle East, Global Focus, and Gulf Nations

126. Price Discovery in Commodity Futures and Cash Markets with Heterogenous Agents

Author:
Sophie van Huellen
Publication Date:
11-2018
Content Type:
Working Paper
Institution:
School of Oriental and African Studies - University of London
Abstract:
The paper develops a price discovery model for commodity futures markets that accounts for two forms of limits to arbitrage caused by transaction costs and noise trader risk. Four market regimes are identified: (1) effective arbitrage, (2) transaction costs but no noise trader risk, (3) no transaction costs but noise trader risk and (4) both transaction costs and noise trader risk. It is shown that commodity prices are driven by both market fundamentals and speculative trader positions under the latter two regimes. Further, speculative effects spill over to the cash market under regime (3) but are confined to the futures market under regime (4). The model is empirically tested using data from six grain and soft commodity markets. While regime (4) is rare and short lived, regime (3) with some noise trader risk and varying elasticity of arbitrage prevails
Topic:
International Trade and Finance, Markets, Investment, Commodities, and Price
Political Geography:
Global Focus

127. Applying Competition Policy to Optimize International Trade Rules

Author:
Hyo-young Lee
Publication Date:
02-2017
Content Type:
Working Paper
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
This paper delves into the relationship between trade and competition, which has long been a subject largely untouched since the issue had been dropped from the multilateral trade agenda in 2003. The need to incorporate elements of competition policy into international trade rules has long been discussed in the context of making the international trade regime more effective. The issue has gained more attention as state-owned enterprises (SOEs) began to emerge as new influential players in the international market, competing with private enterprises on an unequal footing. A growing number of bilateral trade agreements have included chapters on competition policy, albeit with rules that do not have sufficient binding force for disciplining the business practices of state-owned enterprises. The recently concluded Trans-Pacific Partnership (TPP), however, has introduced innovative rules for disciplining the competitive practices of SOEs by integrating the existing WTO disciplines on subsidies with competition rules. In this article, “competitive neutrality”, the fundamental principle underlying the SOE disciplines, is used as a framework of analysis for understanding the new disciplines and obligations in the SOE rules. Several legal issues and challenges are identified that are relevant for applying the new rules in the real world, and implications are derived for future rule-making involving other new trade issues.
Topic:
International Trade and Finance, Trans-Pacific Partnership, and Strategic Competition
Political Geography:
Global Focus

128. How Anonymous Shell Companies Finance Insurgents, Criminals, and Dictators

Author:
Jodi Vittori
Publication Date:
09-2017
Content Type:
Working Paper
Institution:
Council on Foreign Relations
Abstract:
The Panama Papers leak of eleven million documents in April 2016 revealed that former Iraqi Prime Minister Ayad Allawi, the brother-in-law of Chinese President Xi Jinping, longtime friends of Russian President Vladimir Putin, drug kingpins, and even a soccer megastar had something in common: they all channeled money through anonymous shell companies. Anonymous shell companies are entities that usually employ few or no workers, do not conduct any substantive business, and allow their owners to store or route money while hiding their identities. Because of the secrecy they can provide, anonymous companies represent an important nexus of corruption, money laundering, transnational organized crime, and terrorism, which directly harm U.S. interests. As one of the main facilitators of anonymous companies, the United States should pass legislation to disclose ownership information for all companies, increase federal contract transparency, and boost other business and government transparency mechanisms at home and abroad. Doing so would significantly cut back on the ability of terrorists, criminals, and their ilk to use American corporations, real estate, and trusts to finance activities that harm the United States and its foreign interests.
Topic:
Corruption, International Trade and Finance, Transparency, and Panama Papers
Political Geography:
Global Focus

129. The Future Development of EU Exports in a Global Context

Author:
Robert Stehrer, Roman Stöllinger, and Sandra Leitner
Publication Date:
11-2017
Content Type:
Working Paper
Institution:
Center for Social and Economic Research - CASE
Abstract:
Global trade patterns are changing rapidly. Emerging economies are increasing their share of exports overall and intensifying competition in nearly all sectors. Using a gravity-based approach, this report examines the future profile of European Union (EU) world market shares at the aggregate and sectoral level. It further points towards the changing patterns of trade within the EU. Based on the results, some conclusions on EU industrial policy are drawn.
Topic:
Industrial Policy, International Trade and Finance, Global Markets, Economic Growth, and Trade
Political Geography:
Europe, Global Focus, and European Union

130. The Outlook for Energy Under a Trump Administration Major Volatility Ahead

Author:
David L. Goldwyn
Publication Date:
01-2017
Content Type:
Special Report
Institution:
Atlantic Council
Abstract:
Oil, gas, and renewable energy markets will face high levels of uncertainty and potentially extreme volatility under a Trump administration in 2017. Some of these uncertainties flow from questions about the new administration’s yet-undefined policies on energy production, trade, and climate policy. Others flow from the basket of national security risks that a new US President was destined to inherit. Yet it is Mr. Trump’s signaling of major shifts in US foreign policy priorities that may have the greatest near-term impact on energy supply and demand. The impact of these uncertainties, following two years of reduced oil and gas investment and low energy prices, may inhibit investment and sow the seeds of a potential oil and gas price shock by 2020, if not sooner.
Topic:
Foreign Policy, Energy Policy, International Trade and Finance, and Post Truth Politics
Political Geography:
America and Global Focus