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11. Understanding the Dispute over the Treatment of Products Exported to the European Union from the Occupied Territories in the Context of the Transatlantic Trade and Investment Partnership

Author:
Oskar J. Chmiel
Publication Date:
01-2018
Content Type:
Journal Article
Journal:
Polish Political Science Yearbook
Institution:
Polish Political Science Association (PPSA)
Abstract:
While the European Union (EU) does not recognize any legal Israeli sovereignty over the territories occupied by Israel in 1967, it does not grant preferential access to the EU market for goods produced in the Israeli settlements in this area, contrary to the preferential treatment for goods produced in Israel. This situation is different, however, as regards the United States (U.S.) trade policy, which does not make any distinction between goods pro- duced in Israel and in the Occupied Territories, since it grants the preferential access to both. Furthermore, the currently suspended negotiations of the super-regional trade agreement called the Transatlantic Trade and Investment Partnership (TTIP), spurred the enacting of a law that set the principal negotiating objectives of the U.S. regarding commercial partner- ships, which included some provisions to discourage politically motivated economic actions against the State of Israel. As TTIP embraced the free trade agreement between the EU and the U.S., the EU differentiation policy could become problematic for the two partners, which despite the failure of the negotiations, revealed much about economic diplomacy. Conse- quently, this article attempts to show the different approaches adopted by the two trading powers, in order to deal with the dispute over the treatment of products exported to the EU from the Occupied Territories.
Topic:
Territorial Disputes, European Union, Investment, Trade, and Transatlantic Relations
Political Geography:
United States, Europe, Middle East, Israel, Palestine, and North America

12. Current Account Sustainability and Relative Reliability

Author:
Stephanie E. Curcuru and Charles P. Thomas
Publication Date:
09-2008
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
The sustainability of the large and persistent U.S. current account deficits is one of the biggest issues currently being confronted by international macroeconomists. Some very plausible theories suggest that the substantial global imbalances can continue in a benign manner, other equally plausible theories predict a disorderly resolution, and in general it is very difficult to discern between competing theories. To inform the debates, we view competing theories through the perspective of the relative reliability of the data the theories rely on. Our analysis of the dark matter theory is cursory; from a relative reliability perspective, it fails as it is built on the assumption that an item that is largely unmeasured is the most accurate component of the entire set of international accounts. Similarly, the best data currently available suggest that U.S. returns differentials are much smaller than implied by the exorbitant privilege theory. Our analysis opens up questions about potential inconsistencies in the international accounts, which we address by providing rough estimates of various holes in the accounts.
Topic:
International Trade and Finance, Markets, and Investment
Political Geography:
United States and North America

13. Assessing the Potential for Further Foreign Demand for U.S. Assets: Has Financing U.S. Current Account Deficits Made Foreign Investors Overweight in U.S. Securities?

Author:
Carol C. Bertaut
Publication Date:
10-2008
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
Since 2001, foreign investors have acquired roughly $5 trillion in U.S. securities – more than doubling their holdings of U.S. equities and bonds – as both official and private inflows have financed record U.S. current account deficits. Although the rapid growth of foreign holdings of U.S. securities raises concerns that foreign investors may have become too heavily weighted in U.S. assets, foreign investors have not in fact materially changed the relative allocations between U.S. and other foreign securities in their portfolios in recent years. Based on data from the most recent comprehensive surveys of foreign portfolio investment, the 2006 IMF Coordinated Portfolio Investment Surveys (CPIS), most foreign investors remain relatively more underweight in both U.S. equities and bonds than they do in foreign securities in general. Although the underweight position suggests that there remains potential for foreign investors to continue to acquire U.S. securities, econometric evidence indicates that the underweight position itself reflects a preference by foreign investors for securities of countries with which they have strong economic or cultural ties, consistent with recent research that suggests “location” or “information” preferences in both domestic and international portfolios. As securities markets abroad continue to deepen, such factors are likely to continue to attract investment from “nearby” markets, especially from European investors.
Topic:
Investment, Securities, Bonds, and International Portfolios
Political Geography:
United States, Europe, and North America

14. Do Fundamentals Explain the International Impact of U.S. Interest Rates? Evidence at the Firm Level

Author:
John Ammer, Clara Vega, and Jon Wongswan
Publication Date:
10-2008
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
This paper analyzes the impact of U.S. monetary policy announcement surprises on U.S. and foreign firm-level equity prices. We find that U.S. monetary policy has important influences on foreign equity prices on average, but with considerable variation across firms. We have found that this differing response reflects a range of factors, including the extent of a foreign firm's exposure to U.S. demand, its dependence on external financing, the behavior of interest rates in its home country, and its sensitivity to portfolio adjustment by U.S. investors. The cross-firm variation in the response is correlated with the firm’s CAPM beta; but it cannot fully explain this variation. More generally, we see these results as shedding some additional light on the nature and extent of the monetary and financial linkages between the United States and the rest of the world. In particular, since we are able to explain differences across foreign firms’ responses through established theories of monetary transmission, our results are consistent with the surprisingly large average foreign response to U.S. rates reflecting fundamentals, rather than an across-the-board behavioral over-reaction.
Topic:
Monetary Policy, Investment, Interest Rates, and Credit
Political Geography:
United States and North America