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1631. Modelling the Effects of Trade Policy Scenarios on Multifunctionality in Greek Agriculture: A Social Accounting Matrix Approach

Author:
Dimitris Psaltopoulos and Eudokia Balamou
Publication Date:
09-2005
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
This paper presents a Social Accounting Matrix (SAM) model for conducting an assessment on the potential impacts of trade agreements on several multifunctionality indicators in Greek agriculture. More specifically, two SAM models were constructed, one for Greece and one for local economy of Archanes (Crete), an agriculturally dependent NUTS IV area, which has demonstrated a noticeable record in terms of the implementation of Pillar 2 policies. Along these lines, five alternative scenarios were specified with regards to anticipated EU policy reactions under different future outcomes of the Doha round negotiations. In broad terms these scenarios range from a status quo (2003 CAP reform) hypothesis to full decoupling, taking also into account the possibility of further reductions in domestic (EU) support as well as developments on Pillar 2 funding. Results suggest that under the scenarios examined, the effects of policy reform upon multifunctionality indicators are rather mixed and surely not extremely worrying. Effects of the status quo scenarios seem to be optimistic in terms of projected economy-wide output and employment at both national and regional level. On the other hand, Scenario 1(bis) generates negative results in terms of farm output and employment (for Archanes), land-use abandonment projections are marginal at the national and rather moderate at the regional level, while environmental repercussions are negative at the national level. The regional analysis has also shown that the impacts of Scenarios 2, 2b and 3 are rather worrying in terms of all categories of projections, with the exception of “Total Output”. Taking account of the specification of Scenario 3, this finding generates rather justified reservations on the “ability” of Pillar 2 policies to ameliorate for economic activity contraction caused by a decrease in Pillar 1 support in Archanes economy.
Topic:
Agriculture, Economics, and International Trade and Finance
Political Geography:
Europe

1632. Impact of Public R Financing on Employment

Author:
Jyrki Ali-Yrkkö
Publication Date:
08-2005
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
This study analyses how public R financing impacts the labour demand of companies. To our knowledge, no previous studies have distinguished the impact between a firm's global and domestic employment. Our company-level panel data covers a period from 1997 to 2002. The statistical method employed in the study takes into account the possibility that receiving public support may be an endogenous factor. Our results suggest that public R financing increases both group-level and domestic R employment. We also analysed the impact of public R funding on employment other than in the R area, and found that it is not affected by public funding. It is possible, however, that such funding has an impact in the longer term.
Topic:
International Relations, Civil Society, Economics, and International Trade and Finance

1633. Hub-and-Spoke or Else? Free Trade Agreements in the Enlarged EU - A Gravity Model Estimate

Author:
Luca De Benedictis, Roberta De Santis, and Claudio Vicarelli
Publication Date:
06-2005
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
The aim of this paper is to estimate the effect of the EU's eastern enlargement on the trade patterns of the Central and Eastern European countries (CEECs)1 that joined the EU in May 2004. In particular, the paper investigates whether and how the EU free trade agreements (FTAs) with the CEECs affected centre-peripheral and intra-peripheral trade flows. It also evaluates whether the prospect of joining the EU had the added positive effects on the export flows of the CEECs that had been anticipated.
Topic:
Development and International Trade and Finance
Political Geography:
Europe and Eastern Europe

1634. Economic Effects of Free Trade between the EU and Russia

Author:
Pekka Sulamaa and Mika Widgrén
Publication Date:
05-2005
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
This study simulates the economic effects of eastern enlargement of the EU and an EU-Russian free trade area. The main emphasis of the paper is on the effect this would have on the Russian economy. The simulations were carried out with a GTAP computable general equilibrium model, using the most recent GTAP database 6.0 beta, which takes the former Europe agreements between the EU-15 and the eight new Central and Eastern European member states into account. The results confirm the earlier findings that a free trade agreement with the EU is beneficial for Russia in terms of total output but not necessarily in terms of economic welfare when measured by equivalent variation. The main reason behind this is the deterioration that would occur in Russia's terms of trade. Improved productivity in Russia would, however, make the free trade agreement with the EU advantageous.
Topic:
Economics and International Trade and Finance
Political Geography:
Russia, Europe, and Asia

1635. A Gravity Model under Monopolistic Competition

Author:
Kari E. O. Alho
Publication Date:
03-2005
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
This paper presents an alternative derivation of the gravity equation for foreign trade, which is explicitly based on monopolistic competition in the export markets and which is more general than previously seen in the literature. In contrast with the usual specification, our model allows for the realistic assumption of asymmetry in mutual trade flows. The model is estimated for trade in Europe, producing evidence that trade flows and barriers do indeed reveal strong asymmetry. We then carry out a simulation, based on the estimated model, of the general equilibrium effects (through trade) of the UK's possible entrance into the economic and monetary union.
Topic:
Economics, Emerging Markets, and International Trade and Finance
Political Geography:
United Kingdom and Europe

1636. WTO Agricultural Negotiations: A Comparison of the Harbinson Proposal and the Swiss Formula

Author:
Martina Brockmeier, Marianne Kurzweil, Janine Pelikan, and Petra Salamon
Publication Date:
02-2005
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
The WTO agricultural negotiations of the Doha round are a key issue in the public debate. This paper analyses the effects of different options to improve market-access on the basis of a GTAP model, comparing the impact of the Harbinson proposal and the Swiss formula on trade balances. An extended version of the GTAP model is used to first project a base run that includes factors arising from Agenda 2000, EU enlargement, the EBA agreement and the EU's mid-term review. The policy simulation run additionally includes the WTO negotiations. Here, the model is differentiated between three experiments. While the first experiment simply implements the Harbinson proposal, the second one additionally takes into account an adoption of the EBA agreement by all industrialised countries. In the third experiment, the tariff cuts are based on the Swiss formula using a coefficient of 33 instead of the tiered approach of the Harbinson proposal.
Topic:
Economics and International Trade and Finance
Political Geography:
Europe

1637. Multilateral Market-Access Reforms of the Doha Round: A Preliminary Assessment of Implications for EU Agricultural Trade

Author:
Wusheng Yu and Hans G. Jensen
Publication Date:
01-2005
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
The July package of the Doha Round of trade negotiations stipulates that a tiered-formula approach should be used to significantly reduce market access barriers across countries, implying that the EU would have to make larger cuts to its high external tariffs, in comparison with many other WTO members such as the US. This paper provides a preliminary assessment of the likely impact of the tiered-formula reform approach on EU agricultural sectors. Numerical simulations of a multilateral market-access reform scenario show that such cuts would lead to across-the-board decreases in intra-EU trade flows, as compared with a baseline projection. While intra-EU trade flows would decrease, the EU's trade with the rest of the world would increase. Yet such increases would not be symmetric – imports into the EU would increase more than exports, resulting in larger external trade deficits or smaller external trade surpluses in many EU agricultural products. Further, the resulting adjustments in member states' production and net trade positions are not equal: the new member states would generally lose part of their export shares in the EU market to external competitors, as highlighted in the cases of bovine meat and dairy products.
Topic:
Economics, Human Welfare, and International Trade and Finance
Political Geography:
United States and Europe

1638. Collective Bargaining Practices in Eastern Europe: Case Study Evidence from Romania

Author:
Aurora Trif
Publication Date:
11-2005
Content Type:
Working Paper
Institution:
European Research Papers Archive
Abstract:
There are several studies on recent developments in collective bargaining in Eastern Europe, but there is still a debate about the extent to which collective bargaining practices resemble those in continental Western Europe. This paper aims to contribute to this debate, by examining primary data on collective bargaining practices in Romania using an actor-centred institutionalist approach. It focuses on collective bargaining in four large chemical companies. Comparisons are made to other countries in order to highlight the developments in Romanian cases. Unexpectedly, the study's findings point to an increase in state intervention in establishing the terms and conditions of employment after 1989, due to the state's new roles during the transformation process that affected job security. The study suggests a considerable increase in the influence of top managers in determining pay and working conditions, while trade unions retained the considerable influence over social benefits in large companies. The findings show continuance of certain pre-1989 practices, such as a persistence of high state intervention and a limited independence of the trade unions from the management. This paper contributes to a deeper understanding of institutional changes in the context of a shift from a centrally planned economy to a market-based economy.
Topic:
Economics, Emerging Markets, and International Trade and Finance
Political Geography:
Eastern Europe and Romania

1639. Making and Breaking the Rules: French policy on EU "gouvernement économique" and the Stability and Growth Pact

Author:
David J. Howarth
Publication Date:
10-2005
Content Type:
Working Paper
Institution:
European Research Papers Archive
Abstract:
The failure of the Raffarin Government to respect the Stability and Growth Pact (Stability Pact, SP), its call for the Pact's reconceptualisation, reform of the management of the Euro-zone's monetary policy and EU-level reflation should be seen not as a significant change in French policy on 'gouvernement économique' (that is, EU-level economic governance (GE) but as a reassertion of long standing but contradictory French preferences. French policy-makers have been caught in a dilemma with regard to the construction of the Economic dimension of EMU between two strong preferences: on the one hand the supranational consequences of a dirigiste approach to macro-economic policy and, on the other hand, a Gaullist reflex to retain sovereignty as much as possible and to insist upon intergovernmentalism in EU-level macroeconomic policy-making. The 'price stability' function of GE as embodied by the Maastricht Treaty rules on convergence and the SP has been consistently marginalized in the discourse of French governments of both the Right and Left. Rather EG has been presented in five overlapping ways which can all be seen in terms of the paradox of the French pursuit of both reinforced macroeconomic policy coordination at the EU level yet also national margin of manoeuvre through intergovernmental policy making. Crucially, this paradox also explains the lack of clarity and inconsistency in French pronouncements on GE. Most elements of the 2002 Commission and Ecofin SP reform proposals and the precise elements of the Pact reform finally agreed in March 2005 met with French approval given that they render the SP more flexible allowing greater margin of manoeuvre in the development and implementation of the Broad Economic Policy Guidelines (BEPG) and the application of the Excessive Deficit Procedure (EDP), thus better meeting French intergovernmentalist preferences on EG but undermining the coordination of national macroeconomic policies that could contribute to an effective policy mix with the ECB's monetary policy.
Topic:
Economics, Government, and International Trade and Finance
Political Geography:
Europe

1640. Economic Integration, EU-US Trade Conflicts and WTO Dispute Settlement

Author:
Fritz Breuss
Publication Date:
10-2005
Content Type:
Working Paper
Institution:
European Research Papers Archive
Abstract:
Since its inception in 1995, more than 330 disputes have been raised under the WTO Dispute Settlement System. The major players in world trade–the EU and the USA–are also the busiest users of this instrument. After looking at links between economic integration and WTO involvement and a survey of the actual transatlantic WTO trade disputes, the welfare implications of the four most prominent trade disputes between the EU and the USA ("mini trade wars") are analyzed with GTAP5: the Hormones, the Bananas, the FSC and the Steel cases. The economic analysis reveals that the level of suspension of concessions hardly coincides with the level of nullification or impairment (expressed in lost trade effects) if one considers the overall welfare implications of retaliation with tariffs. The idea of "rebalancing" retaliation is a myth. Tariffs are a very bad instrument of retaliation. Maybe a mechanism of direct transfers or financial compensation would be better.
Topic:
Economics, International Trade and Finance, and World Trade Organization
Political Geography:
United States and Europe