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1. The Trade Effects of the Economic Partnership Agreements between the European Union and the African, Caribbean and Pacific Group of States: Early Empirical Insights from Panel Data

Author:
Frederik Stender, Axel Berger, Clara Brandi, and Jakob Schwab
Publication Date:
01-2020
Content Type:
Special Report
Institution:
German Development Institute (DIE)
Abstract:
This study provides early ex-post empirical evidence on the effects of provisionally applied Economic Partnership Agreements (EPAs) on two-way trade flows between the European Union (EU) and the African, Caribbean and Pacific Group of States (ACP). Employing the gravity model of trade, we do not find a general EPA effect on total exports from ACP countries to the EU nor on total exports from the EU to ACP countries. We do, however, find heterogeneous effects when focusing on specific agreements and economic sectors. While the agreement between the EU and the Caribbean Forum (CARIFORUM), which concluded several years ahead of the other EPAs in 2008, if anything, reduced imports from the EU overall, the provisional application of the other EPAs seems to have at least partly led to increased imports from the EU to some partner countries. More specifically, the estimation results suggest an increase in the total imports from the EU only in the Southern Africa Development Community (SADC) EPA partner countries. On the sectoral level, by comparison, we find increases in the EU’s agricultural exports to SADC, Eastern and Southern Africa (ESA) and the Pacific. Lastly, in the area of manufactures trade, we find decreases of exports of the ESA and SADC countries to the EU, but increases in imports from the EU into SADC countries. While this early assessment of the EPA effects merits attention given the importance of monitoring future implications of these agreements, it is still too early for a final verdict on the EPAs’ effects and future research is needed to investigate the mid- and long-term consequences of these agreements.
Topic:
International Relations, Development, International Cooperation, Regional Cooperation, Treaties and Agreements, Manufacturing, and Trade
Political Geography:
Africa, Europe, South Africa, Caribbean, Asia-Pacific, and European Union

2. Potential of Blockchain Technology for Trade Integration of Developing Countries

Author:
Jakob Schwab and Jan Ohnesorge
Publication Date:
01-2019
Content Type:
Policy Brief
Institution:
German Development Institute (DIE)
Abstract:
Blockchain technology (BT), famous due to its use in digital currencies, also offers new opportunities in other fields, one of which is trade integration. Developing countries especially could benefit from greater trade integration with BT, as the technology can, for example, remedy deficiencies with regard to financial system access, intellectual property protection and tax administration. BT allows virtually tamper-proof storage of transactions and other data on decentralised computer networks. In fact, it is possible to store not only data, but also entire programmes this securely: Smart contracts enable the automation of private transactions and administrative processes. This article summarises the latest research on the use of BT in trade integration by examining in more detail five key and, in some cases, linked fields of application. The first is trade finance, where BT could deliver direct cost savings for exporters and importers by removing the need for credit-lending intermediaries. Second, tamper-proof storage of information on the origin and composition of goods could enhance supply chain documentation. This makes it possible to more reliably verify compliance with sustainability standards, particularly for globally produced goods. However, for the information in blockchains to be truthful, it must be entered correctly (it is then tamperproof), a process that therefore requires monitoring. Third, BT could deliver improvements in the field of trade facilitation by making it easier for border authorities to access information on goods and thus easing reporting requirements for exporting firms. By reducing dependence on central database operators, BT could help bring about a breakthrough with existing digital technology in the area of trade. Fourth, facilitating access to information on goods could also simplify customs and taxation procedures and make them less vulnerable to corruption and fraud. This goes hand in hand with cost reductions for exporters and better mobilisation of domestic resources for public budgets. Fifth, in the field of digital trade, BT also facilitates management of digital file rights in environments where, for institutional reasons, there is little intellectual property protection. This could help to promote digital industries in developing countries. However, when it comes to using BT in border and customs systems in particular, it is essential to involve the relevant authorities at an early stage. At the same time, it is necessary to promote uniform technical standards for supply chain documentation in order to safeguard interoperability between the different systems across actors and national borders and thus fully leverage the cost advantages. If these guidelines are taken into account, then BT could effectively support sustainable trade integration of developing countries.
Topic:
Science and Technology, Currency, Trade, Integration, and Blockchain
Political Geography:
Germany and Global Focus