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51. Post-shipment On-site Inspections: Multilateral Steps for Debating and Enabling Their Adoption and Use

Author:
Giovanna Maletta, Mark Bromley, and Lauriane Héau
Publication Date:
10-2022
Content Type:
Policy Brief
Institution:
Stockholm International Peace Research Institute (SIPRI)
Abstract:
Among the key tools that states that export arms and military equipment can adopt to help to prevent and mitigate the diversion of military materiel are post-shipment on-site inspections. These inspections involve the exporting state requiring and conducting physical checks on previously authorized and transferred military materiel on the territory of the importing state. In the past decade a growing number of states have adopted and implemented this policy tool. In addition, some multilateral bodies and instruments—including forums connected to the 2013 Arms Trade Treaty, the European Union and the United Nations—have been used to exchange views on the use of post-shipment on-site inspections and to develop related good practice guidelines. The wider use of post-shipment on-site inspections could help to prevent diversion of military materiel and reduce the human suffering that this generates, but several barriers and challenges appear to be blocking their broader adoption. This SIPRI Policy Paper reviews these barriers and challenges, and summarizes the steps that have been taken at the national level to address them. The paper then examines the steps that have been taken and that could be taken at the multilateral level to expand discussion about post-shipment on-site inspections and help to support those states that are considering adopting this policy tool. For each step, the policy paper presents a series of recommendations that could be taken forward by states, research institutes, or the executives or secretariats of relevant multilateral instruments or bodies.
Topic:
Weapons, Multilateralism, Exports, and Inspection
Political Geography:
Global Focus

52. The Second Phase of the EU Southern Gas Corridor: Which role for Azerbaijan?

Author:
Marika Karagianni
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
Hellenic Foundation for European and Foreign Policy (ELIAMEP)
Abstract:
The operation of the Southern Gas Corridor marks the first attempt of the EU to diversify its pipeline gas supplies and routes beyond Russia. The 2nd Phase of the Corridor, which involves the operation of several gas interconnectors in South Eastern Europe, is being promoted, while the EU is looking for additional supply sources, namely LNG. The Russian invasion of Ukraine, coupled with the intense energy crisis in Europe, has reinforced these trends. Field development in Azerbaijan and future prospects for LNG exports, primarily from the US, are discussed in this article as realistic options for alternative supply sources for Europe.
Topic:
Development, European Union, Gas, Exports, and Pipeline
Political Geography:
Europe, Central Asia, and Azerbaijan

53. Strengthening the impact of EU sanctions against Russian aggression in Ukraine

Author:
Svitlana Taran
Publication Date:
10-2022
Content Type:
Working Paper
Institution:
European Policy Centre (EPC)
Abstract:
As Russia’s largest trade and economic partner, the European Union (EU) has significant leverage to expand the current sanctions regime. Yet, EU countries continue to rely heavily on Russia for their energy, raw materials, and agricultural fertilisers. This dependency reduces the EU’s economic resilience and exposes it to supply chain disruptions. Much more should be done to turn the tide on this dependency. The EU has so far adopted eight sanction packages against Russia, which already impacted the country’s economy. However, these restrictions will have an even greater impact when all sanctions are in full effect, and Western supply chains reduce their reliance on Russian products. This Discussion Paper identifies five measures the EU can take to increase the impact of sanctions against Russia and end the war as soon as possible. Extending the scope of sanctions on Russian export revenues: A large part of Russian trade flow remains unsanctioned. Russia is receiving record revenues from energy exports due to rising prices. Even though Russia’s exports are likely to drop significantly after the implementation of the EU oil embargo, the impact of sanctions can be further increased. By expanding their scope to other sectors, such as the diamond industry, and placing embargoes on all iron and steel supplies, the EU can significantly impact Russia’s economy. Expanding and aligning export restrictions among the coalition countries: Many exports from the EU to Russia are not restricted. Sanctions should first target products that Moscow would find difficult to replace. EU and coalition partners (such as G7 members and other allies) should align their sanctions regimes to make it harder for Russia to redirect its trade to other markets and substitute its critical imports. Encouraging more company-level self-sanctions: Voluntary restrictions by companies can have a greater impact on Russian trade and investment flows than compulsory country-level sanctions. Self-sanctions by international companies should be encouraged in sectors unaffected by country-level sanctions, with public pressure serving as an effective catalyst for their trade and investment withdrawal from Russia. Preventing sanctions circumvention: Loopholes in the current sanction regime should be addressed. Sanctioning countries should take stronger enforcement actions, among others, against countries and foreign companies that facilitate sanctions evasion. The EU must work more closely with its allies to monitor and enforce the imposed sanctions. Prolonging renewal periods for economic sanctions: The current six-month period for renewing sanctions against Russia could lead to calls for lifting them, threatening EU unity. To avoid this and increase the sanctions’ impact, the EU should consider prolonging their renewal period until Russian troops leave the Ukrainian territory. Russia’s war of aggression has caused disastrous economic effects and devastating infrastructure damage to Ukraine. EU and Western sanctions against Russia should reflect the extent and consequences of these actions. Closing loopholes and widening the scope of sanctions must be a priority for the EU and its allies to strengthen their impact and curtail Russia’s capacity to continue its war. At the same time, existing possibilities for replacing Russian products with Ukrainian ones should be exploited. While maintaining EU unity over sanctions is a challenge, staying united will be crucial for sustaining the credibility of EU policies, accelerating the end of the war, and securing long-term peace in Europe.
Topic:
Sanctions, European Union, Economy, Exports, and Russia-Ukraine War
Political Geography:
Russia and Europe

54. A European policy mix to address food insecurity linked to Russia’s war

Author:
Georg Zachmann, Pauline Weil, and Stephan von Cramon-Taubadel
Publication Date:
12-2022
Content Type:
Policy Brief
Institution:
Bruegel
Abstract:
The Russian war against Ukraine has put at risk a significant share of global food exports, and has contributed significantly to strongly rising global food prices. This has made poor, food-import dependent countries more vulnerable, with potentially serious humanitarian consequences. The crisis also has negative security, migration and foreign policy repercussions for the European Union. The EU and its members have a number of policy levers to address the crisis. These include agricultural, trade, environment, aid, energy, fiscal and foreign policy. However, in the complex interplay of local and global, agricultural and non-agricultural markets, apparently simple solutions can have significant unintended consequences and policy trade-offs must be taken into account. While EU agricultural policy can address the crisis directly by adjusting production, energy policies also have an impact on food security through the complex relationship between the food and energy systems. Energy is an input to food production but also, as bioenergy, competes for agricultural commodities. Fiscal policy can discourage inefficient food consumption and food waste, while trade policy and aid can improve the allocation of agricultural production factors (eg fertilisers) and products. Increasing information sharing on food stocks and building trust are prerequisites for trade policy and diplomacy to limit export restrictions, thus alleviating some of the price pressures on international markets. The crisis highlights food-system fragilities when confronted with global conflicts, climate change and economic shocks. Policies should seek to increase shock-resilience, for example by reducing structural rigidities in production, trade and consumption patterns, and by encouraging sustainable production in import-dependent countries. This is especially important considering that most food production is locally consumed. Only 20 percent of the global cereals volume is traded, making the current shock significant in terms of globally traded volumes (Ukraine represents 10 percent of the global grain market), but not relative to overall volume (Ukraine represents 2 percent of global grain production).
Topic:
European Union, Food Security, Exports, Russia-Ukraine War, and Green Economy
Political Geography:
Russia, Europe, and Ukraine

55. Robots, Exports and Top Income Inequality: Evidence for the U.S.

Author:
Andrés César, Guillermo Falcone, and Pablo Garriga
Publication Date:
12-2022
Content Type:
Working Paper
Institution:
Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:
The last decades have witnessed a revolution in manufacturing production characterized by increasing technology adoption and a strong expansion of international trade. Simultaneously, the income distribution has exhibited both polarization and concentration among the richest. Combining datasets from the U.S. Census Bureau, the U.S. Internal Revenue Service, the International Federation of Robotics, EU KLEMS, and COMTRADE, we study the causal effect of industrial automation on income inequality in the U.S. during 2010–2015. We exploit spatial and time variations in exposure to robots arising from past differences in industry specialization across U.S. metropolitan areas and the evolution of robot adoption across industries. We document a robust positive impact of robotics on income for only the top 1 percent of taxpayers, which is largest for top income fractiles. Therefore, industrial automation fuels income inequality and, particularly, top income inequality. According to our estimates, one more robot per thousand workers results in relative increments of the total taxable income accruing to fractiles P99 to P99.9, P99.9 to P99.99 and P99.99 to P100, of 2.1 percent, 3.5 percent and 5.9 percent, respectively. We also find that robotization leads to increased exports to high-income and upper-middle-income economies, and that this is one of the key mechanisms behind the surge in top income inequality.
Topic:
Income Inequality, Exports, Automation, and Robotics
Political Geography:
North America and United States of America

56. The Price Cap on Russian Oil Exports, Explained

Author:
Catherine Wolfram, Simon Johnson, and Łukasz Rachel
Publication Date:
12-2022
Content Type:
Policy Brief
Institution:
Belfer Center for Science and International Affairs, Harvard University
Abstract:
If you’ve taken an introductory economics class, you were probably left with the strong impression that price caps are bad – they distort demand and discourage producers from supplying the market. So, why has Treasury Secretary Janet Yellen, the consummate economist, advocated so strongly for a price cap on Russian oil? The answer is that this price cap is different from the standard cap discussed in introductory economics classes. A standard price cap applies to all goods traded in a market. For example, in some countries there are price caps on bread for everyone or diesel for farmers or rent controls on housing. Such caps lead to excess demand for the good and insufficient supply, leading to shortages at the capped price. If prices are constrained, other non-price mechanisms, like first-come-first-served, are required to allocate the good. All too frequently, the result is empty bakery shelves or fuel shortages or difficulties finding housing. To understand why the cap on Russian oil is different, we first need to provide background on Russian oil trade and the proposed price cap.
Topic:
Economics, Markets, Oil, Exports, and Russia-Ukraine War
Political Geography:
Russia and Europe

57. Germany’s Economic Security and Technology: Optimizing Export Control, Investment Screening and Market Access Instruments

Author:
Tyson Barker and David Hagebölling
Publication Date:
11-2022
Content Type:
Special Report
Institution:
German Council on Foreign Relations (DGAP)
Abstract:
Technological development and increasingly fraught US-China competition have geopolitical consequences for technology access. The erosion of post-Cold War multilateral dual-use technology export control regimes, such as the Wassenaar Arrangement, and investment and other control frameworks have led to na-tional, EU, and ad hoc measures, such as the restrictions on Russian semiconductor access following the invasion of Ukraine. The German government must integrate technology access and control instruments – export controls, FDI screening, critical infrastructure access, research protection, and outbound investment– in its Digital Strategy and National Security Strategy. The former currently neglects critical technology access and control; the latter must address it comprehensively. German – and EU – dual-use export and FDI screening reforms have been updated and are now in place. Capacity building and alignment with EU and NATO partners now deserves greater attention. Measures could include more robust, institutionalized information-sharing and consultations on dual-use technology export, import, investment, and research controls in a Multilateral Technology Control Committee born out of the G7 or TTC. The commit-tee should also establish the capacity to deny end-user access to German technology through its own Foreign-Direct Product Rules and Entity List.
Topic:
Security, Economics, Science and Technology, Investment, and Exports
Political Geography:
China, Europe, Asia, North America, and United States of America

58. Different Choices, Divergent Paths: Poland and Ukraine

Author:
Thorvaldur Gylfason, Eduard Hochreiter, and Tadeusz Kowalski
Publication Date:
12-2022
Content Type:
Special Report
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
We compare the economic growth trajectories of Poland and Ukraine since 1990 to try to understand the extent to which the observed growth differentials can be traced to increased efficiency in the use of capital and other factors (intensive growth), rather than to simple accumulation of capital (extensive growth). We stress the role of qualitative factors such as education, governance and institutions. We ask whether the EU perspective and NATO membership played a role. We discuss the closely related histories of the two countries and note the stark differences between them, including their different approaches to the EU vs Russia, full vs incomplete transition to a market economy, and democracy vs anocracy, as well as different initial conditions. We compare key determinants of growth and growth trajectories, using economic as well as social indicators, and trying to disentangle efficiency and accumulation and combine path dependence and the role and scope of creative destruction. While Poland had the shortest and mildest transformation recession among CEE countries, Ukraine has been stagnant, or in decline, since 1990. The statistics we report and the stories we tell suggest that both countries have a complex relationship with democracy and that the nearly threefold difference in per capita GDP at PPP in 2021 in Poland’s favour, with the ratio of investment to GDP similar in both countries, can most plausibly be traced to: (a) Poland’s more extensive and diversified exports, and fewer restrictions on trade, in addition to more comprehensive and quicker restructuring of the national economy inspired by the EU perspective; (b) Poland’s more extensive and better-quality education; (c) Poland’s greater democracy and longer experience of democracy, lower levels of corruption, better governance, and freer press; (d) Poland’s smaller agricultural sector and greater emphasis on manufacturing; and (e) Poland’s lower inflation and higher level of financial development. Furthermore, Poland built market-friendly institutions to EU specifications and joined NATO. Against all this, Ukraine had more economic equality and lower unemployment as well as, from the early 1990s, a lower initial level of income per person, but was hampered by political divisions, path-dependent corruption and poor governance. During the global Covid-19 pandemic, Ukraine apparently suffered fewer deaths than Poland, despite fewer vaccinations.
Topic:
Economics, Education, Governance, Reform, European Union, Economic Growth, Inflation, Exports, Transition, and Labor Market
Political Geography:
Europe, Ukraine, and Poland

59. The Effects of Online Export Promotion Policies for SMEs in Korea

Author:
Kyong Hyun Koo
Publication Date:
10-2022
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
This study explores the impact of participating in five major online export support programs currently being implemented by the Ministry of SMEs and Startups on online exports of SMEs in 2018-20. The main findings show that the online export support program appear to significantly have improved the online export-related performance of participating SMEs in a short period of time. In addition, the online export support program’s online export enhancement effect tend to be relatively greater when the participating SMEs have relatively little experience with online export and low sales volume. Manufacturers also appear to benefit from support programs more than resellers. In summary, the findings suggest that Korea's online export support policy has had a significant impact in providing incentives for SMEs to start/increase online exporting.
Topic:
Economics, Business, Exports, and Manufacturing
Political Geography:
Asia and South Korea

60. Systemic Geopolitical Analysis in the research of power distribution in Eastern Europe

Author:
Erwin Metera
Publication Date:
06-2022
Content Type:
Journal Article
Journal:
Nowa Polityka Wschodnia
Institution:
Faculty of Political Science and International Studies, Nicolaus Copernicus University in Toruń
Abstract:
The article presents Systemic Geopolitical Analysis, which as a scientific method can be an important tool for studying the distribution of power in Eastern Europe, supporting the assumptions of structural realism with an element of quantitative research. This region, as a place where spheres of influence and the ensuing economic and potentially military conflicts meet, is an area where the knowledge of the most precise distribution of power may be a crucial element in the analysis of the genesis of conflicts, the shifts in power distribution during their course, as well as in the prediction of future flashpoints. Being the first attempt to correlate Systemic Geopolitical Analysis with the issue of conflicts in Eastern Europe, the paper contains a hypothesis that Systemic Geopolitical Analysis is a research method that enables an effective analysis of the geopolitical reality in the region because of: 1) the conflicts occurring in the system due to differences in power distribution; 2) the nature of the components of power, measurable by the means of Systemic Geopolitical Analysis. Confirming the above hypothesis, the article points to the economic aspect, linked to the Russian natural gas exports, and the military aspect, by taking into account the characteristics of contemporary tensions in the region, which reduce the role of supra-systemic reserves.
Topic:
Geopolitics, Gas, Conflict, Exports, Regional Politics, and Structural Realism
Political Geography:
Russia, Europe, and Eastern Europe