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261. Canada and the European Union: Prospects for a Free Trade Agreement

Author:
Selen Sarisoy Guerin and Chris Napoli
Publication Date:
07-2008
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
This paper argues that there are significant potential economic gains to be obtained from an EU-Canada Free Trade Agreement. The evolution of trade between the US and Canada following the signing of CUSFTA in 1989 offers a good illustration of how trade might increase after an EU-Canada FTA, as the patterns and levels of protection between the EU and Canada today are very similar to the protection that existed between the US and Canada in 1989. Although many empirical studies fail to find support for 'trade diversion' created by NAFTA (or CUSFTA) at the expense of the EU and to the benefit of the US, there is some evidence of trade diversion when detailed regional trade is examined. If indeed trade diversion has occurred due to NAFTA, then an EU-Canada FTA is welfare-enhancing for Canada. For the EU, a potential FTA can level the playing field with the US and increase the competitiveness of European firms in the Canadian market.
Topic:
International Trade and Finance and Markets
Political Geography:
United States, Europe, and Canada

262. Preventing the Tragedy of the CO2 Commons: Exploring China's Growth and the International Climate Framework

Author:
Peter J. Wilcoxen, Warwick J. McKibbin, and Wing Thye Woo
Publication Date:
07-2008
Content Type:
Working Paper
Institution:
The Brookings Institution
Abstract:
Under reasonable assumptions, China could achieve parity in living standard with Western Europe by 2100, and India by 2150. Climate change, however, may be a key obstacle preventing such a convergence. The business-as-usual (BAU) growth path of the world economy might increase concentrations of atmospheric greenhouse gases to unsafe levels and cause significant negative environmental feedback before China achieves parity in living standards with the OECD countries. We use a dynamic multi-country general equilibrium model (the G-Cubed Model) to project a realistic BAU trajectory of carbon dioxide (CO2) emissions, and we find it to be even above the CO2 emissions from the high-growth scenario estimated by the Energy Information Agency in 2007. This outcome is a reminder that it has been usual so far to underestimate the growth in China energy consumption.
Topic:
Climate Change, Environment, and Markets
Political Geography:
China, Europe, India, and Asia

263. Housing Market Risks in the United Kingdom

Author:
Robert F Martin
Publication Date:
11-2008
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
House prices in the United Kingdom rose rapidly in recent years. The run-up, larger than any other in U.K. history, leveled off early last year. House prices are currently declining at rates faster than those seen in the early 1990’s downturn. The housing downturn, however, is far from complete. Using the price-rent ratio as a guide, house prices are likely to fall at least a further 30 percent before leveling off. Given the historic links between housing and real activity, the downturn is likely to be associated with very slow growth. Going forward, we recommend the price-rent ratio as the appropriate measure of housing valuation.
Topic:
Markets, Housing, and Rent
Political Geography:
United Kingdom and Europe

264. Trade-offs in European energy policy: On choice, losses, gains, and how to have a go on both the swings and the roundabouts

Author:
Svend Aage Christensen
Publication Date:
01-2008
Content Type:
Policy Brief
Institution:
Danish Institute for International Studies (DIIS)
Abstract:
In the spring of 2007, a trio of researchers put forward five proposals for optimising the EU's energy policy. The European Commission had published its framework for an energy policy in January 2007, and now, in the autumn of 2007, the European Commission has been presenting its proposals in more detail. The stage is set for heated discussions. The research trio believe, amongst other things, that existing policies for the internal market and competition regulations provide an immediately accessible framework for an energy market on a European scale, and should be implemented in full. In other words, they are opposed to the trends towards re-nationalisation and protectionism that characterise parts of the debate.
Topic:
Energy Policy, Environment, and Markets
Political Geography:
Europe

265. A Mediterranean Success Story: Malta's EU Integration

Author:
Molly Bordonaro
Publication Date:
03-2008
Content Type:
Journal Article
Institution:
Council of American Ambassadors
Abstract:
Within the space of a few weeks earlier this year, the Mediterranean island nation of Malta further advanced its integration into European Union institutions by adopting the euro currency and joining the Schengen zone. Malta has the distinction of being the first and only EU member state to adopt the euro and join Schengen at the same time. This achievement is even more impressive when you consider the fact that Malta joined the European Union less than four years earlier, in May 2004.
Topic:
Economics and Markets
Political Geography:
Europe

266. EU and U.S. Free Trade Agreements in the Middle East and North Africa

Author:
Riad al Khouri
Publication Date:
06-2008
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
The political situation in much of the Middle East and North Africa (MENA) region is subject to persistent tension due to the Arab–Israeli conflict, the war in Iraq and its spillovers to other countries, and sporadic upsurges of terrorism. In addition, some countries face serious domestic political tensions, a lack of political openness, and the increasing popularity of Islamist opposition groups. Economically, fast demographic and labor force expansion has led to high un- employment and slow growth in per capita incomes. Unsustainable management of the environment and natural resources further threatens prospects for long-term economic growth. In this context, increased economic cooperation between the MENA countries, on the one hand, and the United States and the European Union (EU), on the other, aims not only at promoting growth and development but also at fostering more stable political environments.
Topic:
International Trade and Finance and Markets
Political Geography:
United States, Europe, Middle East, Israel, Arabia, and North Africa

267. Thinking About the Future of Food: The Chatham House Food Supply Scenarios

Publication Date:
05-2008
Content Type:
Policy Brief
Institution:
Chatham House
Abstract:
Demand for food is increasing because the global population is rising and major developing economies are expanding. Global supply capacity, meanwhile, is struggling to keep up with changing requirements. Four global food supply scenarios have been developed by the Chatham House Food Supply Project to consider the challenges created and their impact on the EU/UK: 'Just a Blip': what if the present high price of food proves to be a brief spike with a return to cheap food at some point soon? 'Food Inflation': what if food prices remain high for a decade or more? 'Into a New Era': what if today's food system has reached its limits and must change? 'Food in Crisis': what if a major world food crisis develops? Across the world the responses to change will be conditioned by uncertainties surrounding the availability of sufficient energy, water, land and skills. EU/UK stakeholders need to start planning now to develop new food supply systems that are up to the task.
Topic:
Agriculture, International Trade and Finance, Markets, and Population
Political Geography:
United Kingdom and Europe

268. European Multinationals: A Globalization Scorecard

Author:
Stephen Thomsen
Publication Date:
03-2008
Content Type:
Policy Brief
Institution:
Chatham House
Abstract:
Global competition requires a global response, and European firms are now at the forefront of attempts to become internationally diversified multinational enterprises. European firms have been accused at various times of being too focused on their integrating regional market or too tied by historical links with certain countries or regions to develop a genuinely global strategy. Yet figures for foreign direct investment suggest not only that European firms have invested far more abroad than their American and Japanese rivals, but that they have also done so in far more countries. Of particular relevance for long-term profitability, European enterprises have a much stronger presence in emerging markets than either US or Japanese firms. Europe has in turn received more inward investment from those countries than either the United States or Japan. These growing links between Europe and emerging economies could provide European firms with a competitive edge in what are the most promising markets of the future.
Topic:
Globalization and Markets
Political Geography:
United States and Europe

269. Mobility of Labor and Services across the Baltic Sea after EU Enlargement: Trends and Consequences

Author:
Jon Erik Dølvik
Publication Date:
01-2008
Content Type:
Working Paper
Institution:
Minda de Gunzburg Center for European Studies, Harvard University
Abstract:
The enlargement of the EU / EEA area on 1 May 2004 to comprise 28 countries – including eight Central and Eastern European countries, in 2007 followed by Bulgaria and Romania – was a milestone. The subsequent opening of the markets for labor and services between countries with gaps in wages and living conditions comparable to those along the U.S./Mexican border has no modern precedent, prompting new patterns of competition, migration and adjustment in national labor market regimes. This paper reviews developments in labor migration after enlargement and the implications for the labor markets in the Baltic states and Poland, which have accounted for a predominant share of the intra- EU / EEA migration flows since 2004. Besides the UK and Ireland, where almost one million EU 8 citizens had registered in 2007, the booming Nordic economies have become important destinations, having granted more than 250,000 permits and seen sizeable additional flows of service providers and self-employed from the Baltic states and Poland. In the sending countries, rising demand for labor has, alongside strong outmigration – especially among young and well-educated groups – engendered falling unemployment, soaring wage growth, and made shortages of skills and labor an obstacle to further economic recovery. Yet, while better paid temporary work abroad may weaken the incentives for employment, mobility and training in the home country, aging will lead to shrinking working-age populations in the coming years. Unless the Baltic states and Poland can entice a larger share of the population to work in their home countries – and/or can attract substantial labor migration from third countries – the declining work force may easily entail economic stagnation and reinforce the outflow of human resources. These countries are thereby facing a critical juncture in their economic and social development. In the recipient Nordic countries, the growing labor and service mobility, low cost production, and competition for labor in Europe, as well as emerging lines of division in the labor markets, have, on the other hand, raised new questions as to how the principles of free movement and the egalitarian Nordic models can be made reconcilable in the open European markets.
Topic:
International Political Economy and Markets
Political Geography:
United States, United Kingdom, Europe, Eastern Europe, Poland, Bulgaria, Romania, and Ireland

270. The Negotiated Nordic Labor Markets: From Bust to Boom

Author:
Jon Erik Dølvik
Publication Date:
01-2008
Content Type:
Working Paper
Institution:
Minda de Gunzburg Center for European Studies, Harvard University
Abstract:
This paper provides an overview of the negotiated Nordic labor market regimes and their various paths of adjustment from bust to boom in recent decades. Developed in small, open economies, the Nordic labor regimes are often associated with strong centralized agreements and associations, high union density, and extensive worker representation, which have been embedded in social models based on close interaction between working life policies, the welfare state and macroeconomic policies. In leaner forms these features have undoubtedly contributed to the high Nordic levels of mobility, equality and employment in recent years (“flexicurity”), but an often overlooked part of the story is the increased scope for product market competition and the supply-side reforms undertaken in the Nordic countries since the crises in the 1980-90s. Another distinction of the revitalized Nordic models is the growing importance of management-union negotiations and dialogue at the company level. A key argument in this paper is thus that the capacity for negotiated flexibility and adjustment in Nordic labor markets has been critically reliant on the multilevel, single-channel pattern of articulation between centralized coordination and decentralized negotiations linking restructuring, training, productivity and pay issues.
Topic:
Development, Government, and Markets
Political Geography:
Europe, Finland, Norway, Denmark, Sweden, and Iceland