Template-type: ReDIF-Paper 1.0 Author-Name: Julia Nielson Author-Name: Daria Taglioni Title: Services Trade Liberalisation: Identifying Opportunities and Gains Abstract: This study has two components: identification of concrete examples of services exports by developing countries, and quantitative studies on the gains from services liberalisation. While the study is by no means comprehensive, and is subject to many limitations, two fundamental findings emerge. The first of these findings, documented in Part I of the study, is that there is clear evidence that developing countries have important service sector export interests beyond mode 4 (temporary movement of services supplying personnel), being global or regional players in sectors such as business services (out-sourcing), port and shipping services, audiovisual services, telecommunications, construction services and health services. The second of these findings, documented in Part II of the study, is that for most countries, including many developing countries, export-related gains from services liberalisation are neither the only nor the largest basis of expected gains. A large portion of benefits from services liberalisation derive, not from seeking better market access abroad, but from the increased competitiveness and efficiency of the domestic market. Together, the study’s two findings underscore the potential benefits of services liberalisation, both for developed and for developing countries. Keywords: barriers, benefits, computable general equilibrium, developing countries, exports, liberalisation, sector, services Creation-Date: 2004-02-06 Number: 1 Handle: RePEc:oec:traaab:1-EN Template-type: ReDIF-Paper 1.0 Author-Name: Massimo Geloso Grosso Title: Managing Request-Offer Negotiations Under the GATS: The Case of Legal Services Abstract: This study forms part of on-going OECD work on trade in services, in co-operation with UNCTAD, aimed at assisting WTO Members in managing request-offer negotiations under the GATS. The key objective is to help officials of WTO Members in both gaining a greater insight into the particular issues of importance in the legal services sector and how they might be approached in the negotiations. While only modest liberalisation of legal services trade was achieved during the Uruguay Round, the current negotiations offer the opportunity to achieve greater levels of liberalisation, which may lead to significant economic benefits to all countries. In addition, the peculiar characteristic of legal services is that the potential downsides stemming from liberalisation — both in terms of market failures to achieve social objectives and of the displacement of local suppliers — are likely to be less significant in these services. Keywords: barriers, benefits, exports, legal, liberalisation, regulation, services Creation-Date: 2004-06-14 Number: 2 Handle: RePEc:oec:traaab:2-EN Template-type: ReDIF-Paper 1.0 Author-Name: Denis Audet Title: Structural Adjustment in Textiles and Clothing in the Post-ATC Trading Environment Abstract: This study focuses on the adjustment challenges facing the textile and clothing industries across the globe. The analytical work was initially suggested during informal consultations between the OECD Trade Committee and Civil Society Organisations. It took two years of extensive discussions in the Working Party of the Trade Committee to deepen understanding of the issues and finalise the study... Keywords: Agreement on Textiles and Clothing (ATC), clothing, customs facilitation, labour adjustment, Multi-Fibre Arrangement (MFA), structural adjustment, technology and innovation, textiles, trade policy Creation-Date: 2004-08-13 Number: 4 Handle: RePEc:oec:traaab:4-EN Template-type: ReDIF-Paper 1.0 Author-Name: Dale Andrew Author-Name: Karim Dahou Author-Name: Ronald Steenblik Title: Addressing Market-Access Concerns of Developing Countries arising from Environmental and Health Requirements: Lessons from National Experiences Abstract: This report represents the stock-taking of the lessons learned from a series of twenty OECD case studies which examined specific market access problems arising from environmental and health requirements faced by developing country exporters. Together with a series of UNCTAD case studies and the experiences exchanged at an OECD Global Forum on Trade workshop, held in New Delhi in November 2002, the focus is on the approaches that contributed to addressing the market access difficulties. These are divided into two sections: first, those addressing information flows and capacity building needs of developing-country exporters, undertaken both by governments and non-governmental organisations; and then the procedures in developing, implementing and reviewing regulations and standards. While covering a range of natural resource-based exports and manufactures and one traded service in key OECD import markets, no generalisation can be drawn regarding the scale of the market-access problems created by environmental and health requirements. Keywords: capacity building, developing countries, environment, market access, regulation, standards Creation-Date: 2004-09-24 Number: 5 Handle: RePEc:oec:traaab:5-EN Template-type: ReDIF-Paper 1.0 Author-Name: Peter Czaga Title: Analysis of Non-Tariff Measures: The Case of Prohibitions and Quotas Abstract: This study, that investigates two specific types of quantitative restrictions, namely import prohibitions and quotas, is part of a broad reflection aimed at learning more about the nature and scope of non-tariff measures. The analysis reviews information on these measures contained in the WTO Trade Policy Reviews, WTO notifications and in various other trade reports. The objective of the report is to contribute to discussions, particularly on market access for non-agricultural goods, at the WTO, or elsewhere. The research revealed that the use of quotas and prohibitions for economic reasons has declined, but most countries use prohibitions as part of their regulatory frameworks for protecting human safety and health or the environment, and this tendency appears to be increasing. Traders would benefit from greater transparency of these measures. Also, there are import bans hampering the international trade in used goods, whose circumstances and appropriateness in terms of regulatory efficiency merit scrutiny. Keywords: non-tariff barriers, prohibitions, quantitative restrictions, quotas, used goods Creation-Date: 2004-09-27 Number: 6 Handle: RePEc:oec:traaab:6-EN Template-type: ReDIF-Paper 1.0 Author-Name: Nora Dihel Author-Name: Blanka Kalinova Title: Services Barriers and their Economic Impact: Examples of Banking and Telecommunications Services in Selected Transition Economies Abstract: This paper applies the most advanced methodologies for measuring services barriers to calculate the restrictiveness and the impact of services barriers in selected transition economies, i.e. the Baltic States, and eight South Eastern European (SEE) countries (for telecommunications and banking) and Russia (for telecommunications). Among the selected countries, the Baltic countries record the highest liberalisation scores for both telecommunications and banking services making their situation comparable to that of most developed countries. By contrast, the SEE countries have more room to improve their performance and the price level of their telecommunication services, both in fixed and cellular services by eliminating general restrictions on competition and removing barriers to foreign equity participation. With respect to banking services, the results suggest that the SEE markets are fairly contestable; policy priorities would thus appear to be broad issues of macroeconomic stability and structural reform. The telecommunications estimates put Russia in an intermediate position between the results for the Baltic States and the SEE countries. The WTO... Keywords: banking, barriers, benefits, liberalisation, services, telecommunications, transition economies, WTO Creation-Date: 2004-10-07 Number: 7 Handle: RePEc:oec:traaab:7-EN Template-type: ReDIF-Paper 1.0 Author-Name: Evdokia Moïsé Title: The Cost of Introducing and Implementing Trade Facilitation Measures: Interim Report Abstract: This report presents preliminary findings from a series of country surveys on the costs of introducing and implementing trade facilitation measures. It was prepared in response to concerns with respect to the cost implications of a future WTO agreement on trade facilitation and will be complemented in the near future by additional data from a wider range of developing and least-developed countries. The report contains observations with respect to the methodology of assessing trade facilitation costs and highlights common cost features in the various country experiences. Keywords: capacity building, costs, customs, developing countries, trade facilitation Creation-Date: 2004-11-10 Number: 8 Handle: RePEc:oec:traaab:8-EN Template-type: ReDIF-Paper 1.0 Author-Name: Peter Czaga Title: Regulatory Reform and Market Openness: Understanding the Links to Enhance Economic Performance Abstract: This study examines the interconnections between domestic regulatory reform and market openness by drawing on OECD’s earlier work on the regulatory aspects of trade. Part 1 considers how domestic regulations and regulatory reform affect market openness. It shows how with the help of advanced regulatory reform tools and approaches governments can create regulations and regulatory procedures that efficiently meet their policy objectives while at the same time supporting market access. Part 2 demonstrates that international market opening can contribute to facilitating domestic regulatory reform. Trade agreements signed on the multilateral, regional and bilateral levels can promote general principles or specific elements of good regulation and help guide or drive countries' individual regulatory reform efforts. Finally, part 3 analyzes the mutual benefits of regulatory reform and an open multilateral system for trade and investment. It is argued that by increasing domestic economic efficiency, raising the international competitiveness of domestic enterprises and reducing barriers to trade and investment, traderelated regulatory reform enables countries to take better advantage of trade liberalization and of open global markets. Keywords: domestic regulation, market openness, regionalism, regulatory reforms Creation-Date: 2004-12-15 Number: 9 Handle: RePEc:oec:traaab:9-EN Template-type: ReDIF-Paper 1.0 Author-Name: Walter G. Park Author-Name: Douglas C. Lippoldt Title: International Licensing and the Strengthening of Intellectual Property Rights in Developing Countries Abstract: This study presents an empirical analysis of the extent to which stronger intellectual property rights promote international technology transfer through licensing activities. The analysis focuses on licensing activities of U.S. multinationals as well as on international licensing alliances between firms in developing and developed nations. Both aggregate level data and firm level data are examined. The study provides general support for the proposition that the strengthening of intellectual property rights - as measured by selected indicators - has had a net positive effect on technology transfer via licensing during the 1990s. The general implication of this study for developing economies is that IPR reform should be one part of a general strategy for promoting economic development in combination with other complementary policy reforms. In particular, patent rights and effective enforcement can be instrumental in enabling firms in developing nations to access and exploit technologies and know-how through licensing agreements with parties in developed nations. Overall, the analysis presented here indicates that where developing countries have moved to address weaknesses in these areas in recent years, they have tended to experience enhanced access to technology through licensing. Keywords: economic development, intellectual property rights, licensing Creation-Date: 2004-12-21 Number: 10 Handle: RePEc:oec:traaab:10-EN Template-type: ReDIF-Paper 1.0 Author-Name: Massimo Geloso Grosso Title: Managing Request-Offer Negotiations under the GATS: The Case of Environmental Services Abstract: This study forms part of on-going OECD work on trade in services, in co-operation with UNCTAD, aimed at assisting WTO Members in managing request-offer negotiations under the GATS. The key objective is to help officials of WTO Members in both gaining a greater insight into the particular issues of importance in the environmental services sector and how they might be approached in the negotiations. The current set of GATS negotiations offers WTO Members an opportunity to achieve greater levels of liberalisation of environmental services, which may lead to significant economic and environmental benefits for all countries. Nevertheless, liberalisation, particularly of environmental infrastructure services, must be appropriately designed and supported by a strong regulatory framework. Making commitments in these services thus raises questions in relation to their nature, although the flexibility provided for in the GATS can be used to schedule them to take account of their characteristics. Risks of market failure to achieve social objectives appear to be less significant for environmental non-infrastructure and support services. Keywords: barriers, benefits, environment, exports, liberalisation, regulation, services Creation-Date: 2005-02-15 Number: 11 Handle: RePEc:oec:traaab:11-EN Template-type: ReDIF-Paper 1.0 Author-Name: Evdokia Moïsé Title: Trade Facilitation Reforms in the Service of Development: Country Case Studies Abstract: This document presents country studies on customs reforms that have taken place in Mozambique, Angola, Pakistan and Peru. The studies were used as supporting material for the report on "Trade Facilitation Reforms in the Service of Development" (document TD/TC/WP(2003)11/FINAL). Keywords: benefits, costs, customs, developing countries, reforms, trade facilitation Creation-Date: 2005-02-22 Number: 12 Handle: RePEc:oec:traaab:12-EN Template-type: ReDIF-Paper 1.0 Author-Name: Blanka Kalinova Title: Regulatory Reform in the Russian Federation: Enhancing Trade Openness through Regulatory Reform Abstract: This study forms part of Russia’s regulatory reform review undertaken under the OECD regulatory reform programme. It describes Russia’s trade environment and its recent trade and foreign investment policy developments with a focus on trade-related regulations and their role in supporting Russia’s market openness. It examines in particular to what extent Russia’s trade regulations comply with the principles of transparency and non-discrimination and facilitate foreign trade operations and international competition. The paper proposes a series of policy recommendations to make Russia’s regulatory framework more market-oriented and trade-andinvestment friendly. Keywords: customs, liberalisation, non-discrimination, regulation, Russia, trade, trade barriers, transparency, WTO Creation-Date: 2005-03-01 Number: 13 Handle: RePEc:oec:traaab:13-EN Template-type: ReDIF-Paper 1.0 Author-Name: OECD Title: Analysis of Non-Tariff Measures: Customs Fees and Charges on Imports Abstract: This study examines the nature and the extent of use of customs fees and charges that affect imports at borders. It is part of a series of studies that analyse various types of non-tariff measures and the objective of this paper is to contribute to discussions in the Negotiating Group on Market Access (NAMA), the Council on Trade in Goods and elsewhere in the trade policy community. The analysis draws on data collected from WTO Trade Policy Reviews, non-tariff barrier notifications to NAMA, and the UNCTAD TRAINS database and country notes. The study reveals that most types of customs fees and charges on imports are applied ad valorem rather than with regard to the underlying costs of the services rendered. The use of customs fees and charges has also evolved over time: the use of both customs surcharges and consular invoice fees has markedly declined over the last two decades while more countries nowadays charge importers fees for the use of various customs-related services. Keywords: custom charges, custom fees, GATT article VIII, non-tariff barriers, non-tariff measures Creation-Date: 2005-03-08 Number: 14 Handle: RePEc:oec:traaab:14-EN Template-type: ReDIF-Paper 1.0 Author-Name: OECD Title: Regional Trading Arrangements and the Multilateral Trading System: Agriculture Abstract: Following up a 2003 publication by the Trade Committee, this paper examines the treatment of agriculture in regional trading arrangements (RTAs) against the background of treatment under the multilateral trading system (MTS). This paper describes 18 RTAs and its findings may not be generalizeable to the 169 RTAs that have been notified to the WTO. The relationship between the treatment of agriculture in RTAs and that within the MTS is complex. This paper contains illustrates the topography of agricultural treatment within RTAs under four separate headings including: coverage, domestic support, contingency protection and sanitary and phytosanitary regulations. This descriptive analysis is prepared both as a basis for assessing progress on agriculture in RTAs and as frame of reference for considering the treatment of agriculture at the multilateral level. Keywords: regionalism, trade and agriculture Creation-Date: 2005-03-22 Number: 15 Handle: RePEc:oec:traaab:15-EN Template-type: ReDIF-Paper 1.0 Author-Name: OECD Title: Analysis of Non-Tariff Barriers of Concern to Developing Countries Abstract: This paper identifies non-tariff barriers (NTBs) faced by developing countries in their trade with developed countries and in South-South trade. The goal is to raise awareness of barriers that interfere with the ability of developing countries to build up trade. Data collected and analysed consist of the academic literature, notifications by developing countries to the Negotiating Group on Market Access for Non- Agricultural Products (NAMA) of the Doha Development Agenda, business surveys, and records relating to trade disputes brought before the World Trade Organization and regional dispute settlement mechanisms. The chapter identifies the categories and types of measures that are most reported and the products affected by the reported measures. Attention is also drawn to developing countries’ forwardlooking export strategies and related potential barriers. Overall, the chapter highlights similarities and differences in barriers reported in the data reviewed and compares barriers reported for trade with developed countries and for trade among developing countries. Keywords: developing countries, Doha Development Agenda, market access, NAMA notifications, non-tariff barriers, non-tariff measures, regional integration, south-south trade, surveys, trade disputes Creation-Date: 2005-06-03 Number: 16 Handle: RePEc:oec:traaab:16-EN Template-type: ReDIF-Paper 1.0 Author-Name: Douglas C. Lippoldt Author-Name: Przemyslaw Kowalski Title: Trade Preference Erosion: Potential Economic Impacts Abstract: This paper presents the new findings from the on-going work of the OECD project on trade preference erosion. Following a review of the recent literature, the paper develops two main types of analysis. First, a detailed statistical analysis is undertaken drawing on the trade preferences database developed by the Secretariat and covering the Quad countries and Australia. This includes a presentation of the structure of tariff regimes in these key developed countries and identification of countries and sectors that are most reliant on tariff preferences. The second analytical approach uses the standard model and database of the Global Trade Analysis Project to simulate trade liberalisation scenarios that would entail preference erosion. While highlighting a number of cases of preference reliance, the paper underscores the advantages of multilateral liberalisation. Globally and for a majority of developing regions, liberalisation by preference-granting countries will result in positive welfare gains, notwithstanding the effects of preference erosion. In a comparatively small number of cases, however, the analysis points to a risk of net welfare losses under the scenarios modelled here. Keywords: CGE simulation, developing countries, multilateral trade negotiations, nonreciprocal preferences, preference erosion, tariff reductions Creation-Date: 2005-04-26 Number: 17 Handle: RePEc:oec:traaab:17-EN Template-type: ReDIF-Paper 1.0 Author-Name: Przemyslaw Kowalski Title: Impact of Changes in Tariffs on Developing Countries' Government Revenue Abstract: This paper addresses tariff revenue concerns that some countries have been expressing in the context of the current multilateral trade negotiations under the Doha Development Agenda. This paper: discusses methodological issues associated with estimating revenue impacts; provides impact estimates for a sample of developing countries; links the differences in impacts to cross-country differences in existing tariff regimes as well as properties of formulas for tariff cuts; and, discusses efficient tax replacement policies and past experiences. Additionally, the paper presents results of a simulation of the welfare effects of reducing tariffs and simultaneously replacing lost tariff revenues with revenues from consumption tax. It concludes with some policy implications. Classification-JEL: C68; E61; E62; F13; F14; H20 Keywords: CGE simulation, government revenue, multilateral trade negotiations, tariff reductions formulas, tariffs Creation-Date: 2005-04-18 Number: 18 Handle: RePEc:oec:traaab:18-EN Template-type: ReDIF-Paper 1.0 Author-Name: OECD Title: Trade Policy: Promoting Investment for Development Abstract: This report describes the complex and changing interrelationship between trade, domestic investment and foreign direct investment (FDI) and provides examples of good practices in trade policymaking that create a healthy investment climate in developing countries. A two-by-two taxonomy is used to analyse the impact of policies affecting imports and exports in both host and home countries. After describing a typical investment project and its participants, the study identifies issues and practices that trade policymakers may wish to address to ensure that their trade policies attract investors and enhance the benefits of investment for development. The purpose of the document is to develop a framework for an operational and practical guide for trade policymakers. As such, it was circulated as a background document for the OECD Initiative on Investment for Development: A Policy Framework for Investment. Keywords: benchmarks, developing countries, development, exports, FDI, good practices, home, host, imports, investment, linkages, policy making, trade, trade policy Creation-Date: 2005-06-06 Number: 19 Handle: RePEc:oec:traaab:19-EN Template-type: ReDIF-Paper 1.0 Author-Name: Douglas C. Lippoldt Author-Name: Przemyslaw Kowalski Title: Trade Preference Erosion: Expanded Assessment of Countries at Risk of Welfare Losses Abstract: This paper presents additional findings from the on-going work of the OECD project on trade preference erosion. The purpose was to assess in more detail the situation of those preference-reliant countries seen as being most at risk of experiencing negative welfare effects from preference erosion as a consequence of multilateral tariff liberalisation (building on Lippoldt and Kowalski, 2005). Based on a selection criterion, 7 developing countries were chosen for inclusion in the present study: Bangladesh, Madagascar, Morocco, Mozambique, Tanzania, Uganda and Zambia. Using the standard GTAP database and model, the paper considers a scenario of multilateral tariff liberalisation involving a 50% linear reduction in the ad-valorem equivalent measure of protection. Whereas most developing regions experienced welfare gains as a consequence of such a scenario, the selected countries were found to be at risk of modest welfare losses, most of which were associated with tariff liberalisation by European Union countries (EU-15). Where negative welfare impacts occurred in the selected developing countries, they tended to be driven primarily by terms of trade losses (especially by negative export price effects). In line with the modest size of the estimated welfare losses, the overall impact in terms of structural adjustment -- as measured by an index of structural change -- tended to be relatively modest. For three of the seven developing countries, welfare losses primarily associated with the EU-15 tariff liberalisation are estimated to be more than fully offset by greater gains arising from improved market access in other sectors and markets. Keywords: CGE simulation, developing countries, multilateral trade negotiations, nonreciprocal preferences, preference erosion, statistical review, tariff reductions Creation-Date: 2005-08-18 Number: 20 Handle: RePEc:oec:traaab:20-EN Template-type: ReDIF-Paper 1.0 Author-Name: Michael Engman Title: The Economic Impact of Trade Facilitation Abstract: This paper examines the economic impact of trade facilitation and in particular the link between trade facilitation and trade flows, government revenue and foreign direct investment. It is part of a series of studies that analyse various aspects of trade facilitation and the objective is to contribute to discussions in the WTO Negotiating Group on Trade Facilitation (NGTF) and elsewhere in the trade policy community. The paper finds that improved and simplified customs procedures would have a significant positive impact on trade flows. It further shows that a large number of mostly developing countries have managed to boost government revenue by implementing customs modernisation programmes that result in more efficient collection of trade taxes. In addition, the paper demonstrates that facilitated cross-border movement of goods would have a positive effect on the ability of a country to attract foreign direct investment and better integrate in international production supply chains. Keywords: border procedures, customs, foreign direct investment, government revenue, trade facilitation, trade flows, trade transaction costs Creation-Date: 2005-10-12 Number: 21 Handle: RePEc:oec:traaab:21-EN Template-type: ReDIF-Paper 1.0 Author-Name: OECD Title: The Role of Automation in Trade Facilitation Abstract: This paper analyses customs automation which is one of the most powerful tools to increase customs efficiency. It focuses in particular on the benefits and implementation costs of automation. It is part of a series of studies that analyse various aspects of trade facilitation and the objective is to contribute to discussions in the WTO Negotiating Group on Trade Facilitation. Based on cost estimations in customsrelated lending projects, the paper finds that the costs for implementing, maintaining and operating automated customs systems are substantial. However, the very great majority of WTO members have already implemented such systems and past experiences show that the financial benefits in many cases have exceeded the costs over time. Among the various lessons learned from successful implementation of automated customs systems, two are particularly worth highlighting. First, automation should not be considered a panacea for trade facilitation; and second, commitment and financial sustainability are prerequisites for successful customs modernisation involving automation. Keywords: customs, customs automation, customs modernisation, trade facilitation Creation-Date: 2005-10-17 Number: 22 Handle: RePEc:oec:traaab:22-EN Template-type: ReDIF-Paper 1.0 Author-Name: Hyung-Jong Lee Author-Name: Karinne Logez Title: Trade Interests of the Tsunami Affected Countries Abstract: Since a catastrophic Tsunami hit coastal areas around the Indian Ocean on 26 December 2004, many have suggested that trade could be a more useful instrument to assist the recovery of affected countries than aid transfers alone. To probe this argument, this paper examines the economies of the affected countries and identifies their overall trade interests and market access concerns. In addition, it summarizes EU and US trade measures which aim to help the recovery. It is argued in the paper that, despite even when trade measures benefit the tsunami-affected countries overall, they may have limitations in delivering benefits directly to the affected people and region. Creation-Date: 2005-10-14 Number: 23 Handle: RePEc:oec:traaab:23-EN Template-type: ReDIF-Paper 1.0 Author-Name: Jane Korinek Title: Trade and Gender: Issues and Interactions Abstract: Increased global integration affects groups of individuals differently. This paper examines ways in which greater integration through trade impacts women and men differently, and ensuing implications for growth. The paper finds that trade creates jobs for women in export-oriented sectors. Jobs that bring more household resources under women’s control lead to greater investments in the health and education of future generations. Although women are more than ever formally employed, differences in wages earned by men and women persist in all countries. Women also have less access to productive resources, time and, particularly in many developing countries, education. Professional women continue to encounter discrimination in hiring and promotion, including in OECD countries. The impact of trade liberalisation on women is important not only because they represent over half of any population, but also because they face constraints which make them less able to benefit from liberalisation. Once different impacts are ascertained, well-designed policy responses may aid women in taking advantage of greater openness to trade. Creation-Date: 2005-11-23 Number: 24 Handle: RePEc:oec:traaab:24-EN Template-type: ReDIF-Paper 1.0 Author-Name: Jonathan Gage Author-Name: Molly Lesher Title: Intertwined: FDI in Manufacturing and Trade in Services Abstract: This study analyses the complex relationship between manufacturing FDI and trade in services. An examination of how recent developments in the economic landscape have resulted in changes in the industrial organisation as well the structure of multinational enterprises is presented. This analysis serves as the foundation for a discussion of fragmentation—and the increased use of traded services in the fragmentation process—in four different manufacturing value chains (apparel, automobiles, semiconductors, and wood furniture). To complement the value chain assessments, the results of empirical work examining the relationship between the liberalisation of services and manufacturing FDI are included. Finally, the study outlines several policy implications that draw upon the analysis. In sum, this study highlights how the increasingly international nature of fragmentation, in part the result of services liberalisation, has redefined the way in which many manufacturing firms use services, interact with service suppliers, and make foreign direct investments. Keywords: FDI, fragmentation, investment, manufacturing, off-shoring, outsourcing, services, trade policy, value chain Creation-Date: 2005-12-05 Number: 25 Handle: RePEc:oec:traaab:25-EN Template-type: ReDIF-Paper 1.0 Author-Name: OECD Title: Special and Differential Treatment Under the GATS Abstract: This report sets out the particular approach to special and differential treatment (SDT) in the General Agreement on Trade in Services (GATS). In particular, the report explores how the degree of flexibility afforded to all Members under the GATS shapes its approach to SDT. Further, the report analyses the current proposals for improving SDT provisions in the context of the GATS. Finally, some initial empirical evidence on the use and effectiveness of SDT provisions in the GATS is presented, both in terms of market access in sectors of export interest to developing countries and services-related technical assistance. Keywords: developing countries, services, special and differential treatment, trade policy, WTO Creation-Date: 2006-01-26 Number: 26 Handle: RePEc:oec:traaab:26-EN Template-type: ReDIF-Paper 1.0 Author-Name: Ken Heydon Title: After the WTO Hong Kong Ministerial Meeting: What is at Stake? Abstract: The WTO Ministerial Meeting in Hong Kong in December 2005 made some progress in advancing the Doha Development Agenda. But much remains to be done, particularly in settling negotiating modalities in agriculture and NAMA and in putting some flesh onto the bones of the GATS. And where progress was made it was qualified, whether in dealing with the concerns of African cotton producers or in improving market access for the products of the least developed countries. Given the work still to do, it is not guaranteed that new deadlines will be met or that the DDA will be concluded on time. There is much at stake should the momentum of multilateral liberalisation stall; analysis at the OECD points to the risk of both major opportunities forgone and of systemic strains to the multilateral trading framework. Developing countries would be amongst the principal losers. Charting the way ahead will require that trade policy be seen in a broader domestic context which recognises that market opening works best when it is backed by sound macroeconomic policies, flexible labour markets, a culture of competition and strong institutions. Through this lens, trade reform can be promoted as a necessary tool of growth and development rather than as a concession paid to others. Keywords: agriculture, cotton, development, goods, growth, labour markets, liberalisation, macroeconomic, negotiating modalities, regionalism, services, structural adjustment, trade barriers, trade facilitation Creation-Date: 2006-01-18 Number: 27 Handle: RePEc:oec:traaab:27-EN Template-type: ReDIF-Paper 1.0 Author-Name: Michael J. Ferrantino Title: Quantifying the Trade and Economic Effects of Non-Tariff Measures Abstract: Significant progress has been made in quantifying the effects of non-tariff measures since OECD commissioned its last major review of this topic in 1997. This paper reviews the literature of NTMs and assesses the different methods available. Additionally, the paper develops a series of questions to help determine which method of analysis is best given the interests of the researchers or policy makers. Of the possible avenues of future research, the trade costs approach is offered. This approach has the potential of shedding new light on the interactions among various policies and practices by assessing which areas offer the greatest potential for gains, and improving the precision of available estimates. Creation-Date: 2006-01-20 Number: 28 Handle: RePEc:oec:traaab:28-EN Template-type: ReDIF-Paper 1.0 Author-Name: OECD Title: The Linkages between Open Services Markets and Technology Transfer Abstract: Services are the main drivers of economic growth in OECD countries and they are becoming increasingly innovative. This study analyses the role of open services markets in the transfer and diffusion of technology from developed countries to developing countries. It first explores how trade in services increases exposure to foreign technologies. The four modes of supply of services, as defined in the General Agreement on Trade in Services (GATS), are closely interlinked with the main channel of technology diffusion identified in the economic literature. The report then investigates how open services markets can reduce the cost of technology transfer and help to build better absorptive capacities in five sectors (business services, telecommunications, financial services, higher education and training, and logistics services). The last part of the study highlights the productivity gains from services trade liberalisation and the technological spillovers inside the receiving economy. The report shows that emphasis should be placed on services in the debate on trade and growth and that services liberalisation in key sectors, which facilitate the exchange of knowledge between foreign and domestic companies, can have a significant impact on technology diffusion. Keywords: growth, linkages, open markets, productivity, services, spillovers, technology, technology diffusion, technology transfer, trade liberalisation Creation-Date: 2006-01-27 Number: 29 Handle: RePEc:oec:traaab:29-EN Template-type: ReDIF-Paper 1.0 Author-Name: Rupa Chanda Title: Inter-modal Linkages in Services Trade Abstract: According to the GATS, services can be traded through four different modes of supply, namely, cross border supply, consumption abroad, commercial presence, and movement of natural persons, termed modes 1, 2, 3, and 4, respectively. There is much evidence to indicate interdependence across these four modes in services trade. There are essentially two types of linkages, namely, positive and negative linkages, across the various modes of supply. Positive linkages take the form of (i) complementarities across modes, where one or more mode is simultaneously used for providing the service across borders; and (ii) facilitation across modes, where trade through one mode creates conditions that are conducive for trading through other modes. Negative linkages take the form of (i) substitution across modes, where trade through one mode is substituted by another; (ii) restrictions on one mode which affect trade through other modes of supply and distort the way in which a service is trade; and (iii) restrictions which apply across multiple modes and constrain several modes simultaneously. In addition to these first order linkages, there are also extended spillover effects across the modes that arise indirectly over the medium and long run. This paper discusses the various kinds of linkages that are found in service sector trade, using evidence from companies, countries, and surveys and from a wide range of services. The objective is to provide an integrated perspective on service sector trade and related multilateral negotiations under the GATS so that countries can better leverage cross modal and cross-subsectoral trade opportunities, address constraints in a holistic manner, and maximize the overall gains from services trade. Creation-Date: 2006-01-27 Number: 30 Handle: RePEc:oec:traaab:30-EN Template-type: ReDIF-Paper 1.0 Author-Name: Oliver Solano Author-Workplace-Name: OECD Author-Name: Andreas Sennekamp Author-Workplace-Name: OECD Title: Competition Provisions in Regional Trade Agreements Abstract: Regional Trade Agreements (RTAs) have grown dramatically in number and importance since the early 1990s and they increasingly include chapters and provisions encompassing competition issues. This study provides a taxonomy of the types of competition-related provisions contained in selected RTAs. It distinguishes different types of provisions addressing cooperation and coordination among competition agencies, as well as provisions directly addressing anticompetitive behaviour. It further contains information on dispute settlement, provisions concerning special and differential treatment and competition-specific clauses regarding non-discrimination, transparency, due-process, trade remedies and the exlusion of antidumping. The study also assesses the role and scope of competition provisions and distinguishes two families of agreements: those containing substantive provisions addressing anticompetitive behaviour and those focusing more on co-ordination and co-operation. Keywords: anti-competitive, competition, monopoly, regional trade agreements, regionalism, RTA, trade Creation-Date: 2006-03-21 Number: 31 Handle: RePEc:oec:traaab:31-EN Template-type: ReDIF-Paper 1.0 Author-Name: Evdokia Moïsé Author-Workplace-Name: OECD Title: Special and Differential Treatment in the Area of Trade Facilitation Abstract: Annex D of the July 2004 Decision of the WTO General Council indicates that "the principle (of special and differential treatment for developing and least-developed countries) should extend beyond the granting of traditional transition periods for implementing commitments. In particular, the extent and the timing of entering into commitments shall be related to the implementation capacities of developing and least-developed Members." The objective of this study is to offer reflections on how special and differential treatment for trade facilitation may be shaped by the cost implications of measures included in the future agreement. It is based on findings of OECD work on the costs of trade facilitation measures, which confirms that different countries - even at an equivalent level of development - face different situations and present differing implementation capacities, and points to the relative complexity of implementation of the different measures proposed for inclusion in a future trade facilitation agreement. Keywords: benefits, capacity building, costs, developing countries, implementation, least developed countries, special and differential treatment, trade facilitation Creation-Date: 2006-03-28 Number: 32 Handle: RePEc:oec:traaab:32-EN Template-type: ReDIF-Paper 1.0 Author-Name: Douglas C. Lippoldt Title: The Australian Preferential Tariff Regime Abstract: The purpose of this paper is to consider the preferential trade arrangements available to developing countries exporting into the Australian market. The paper opens with an overview of these arrangements, followed by a detailed statistical review. It then moves to examine several topics of particular interest in the discussion of Australian preferences. A simulation of the welfare impacts of preference erosion is then presented, followed by some brief concluding remarks. Keywords: developing countries, nonreciprocal preferences, preference erosion, tariffs Creation-Date: 2006-05-17 Number: 33 Handle: RePEc:oec:traaab:33-EN Template-type: ReDIF-Paper 1.0 Author-Name: Massimo Geloso Grosso Title: Liberalising Network Infrastructure Services and the GATS Abstract: This study reviews key issues in liberalising network infrastructure services ? including telecommunications, postal/courier, energy, water and sewage ? in the national and multilateral contexts. The economic and social significance of these services means that they are high on the list of development priorities in many countries. Enhanced trade and investment in network infrastructure services can help achieve these development goals. Liberalisation, however, is no easy task and requires sound regulation and effective institutions to address market failures and ensure public policy objectives. If appropriately designed, bound liberalisation under the GATS can contribute to the advancement of national objectives by improving investor?s confidence when countries decide to allow private sector participation in these services. The WTO services agreement can affect the regulatory conduct of governments in some areas of network infrastructure services, particularly when specific commitments are made. This is intensified by the fact that the GATS is a relatively young agreement and some of its provisions remain to be tested in practice. It is thus crucial to carefully examine its provisions and tailor-specific commitments to national policy objectives. Keywords: GATS, infrastructure, liberalisation, network, public services, regulation Creation-Date: 2006-05-22 Number: 34 Handle: RePEc:oec:traaab:34-EN Template-type: ReDIF-Paper 1.0 Author-Name: Hildegunn Kyvik Nordås Author-Name: Enrico Pinali Author-Name: Massimo Geloso Grosso Title: Logistics and Time as a Trade Barrier Abstract: This paper analyses the relation between time for exports and imports, logistics services and international trade. Time is found not only to reduce trade volumes, but more importantly lengthy procedures for exports and imports reduce the probability that firms will enter export markets for timesensitive products at all. Furthermore, a broader range of products are becoming time-sensitive following the proliferation of modern supply chain management in manufacturing as well as retailing. Labourintensive products such as clothing and consumer electronics are increasingly time-sensitive and many developing countries urgently need to shorten lead time in order to stay competitive in these sectors. The report argues that reforms to this effect can be implemented at relatively low cost also in low-income countries. The study provides case studies as well as econometric estimates of the relation between time, logistics services and trade performance and draws policy implications. Keywords: GATS, international supply chains, logistics services, trade barriers, trade facilitation Creation-Date: 2006-05-30 Number: 35 Handle: RePEc:oec:traaab:35-EN Template-type: ReDIF-Paper 1.0 Author-Name: Molly Lesher Author-Name: Sébastien Miroudot Title: Analysis of the Economic Impact of Investment Provisions in Regional Trade Agreements Abstract: As countries turn more to regionalism as a means of forwarding co-operation on trade rules and other areas of policymaking, rules on investment are increasingly being incorporated into regional trade agreements (RTAs). We analyse the economic consequences of including investment provisions in trade agreements by creating an index of the extensiveness of investment provisions in RTAs and then using that index in a gravity model framework of trade and investment. The results indicate that investment provisions are positively associated with trade and, to an even greater extent, investment flows. Further, we observe an insignificant effect of bilateral investment treaties on investment flows, suggesting either that substantive investment provisions in RTAs impact trade and FDI flows more profoundly, or that the combination of substantive investment rules and provisions liberalising other parts of the economy jointly impact trade and investment more significantly. The report also includes case studies that confirm that the relationship between investment and other provisions in trade agreements is complex and depends on many factors. Keywords: ANZSCEP, bilateral investment treaty, foreign direct investment, gravity model, investment, NAFTA, regional trade agreements, trade policy Creation-Date: 2006-07-11 Number: 36 Handle: RePEc:oec:traaab:36-EN Template-type: ReDIF-Paper 1.0 Author-Name: Barbara Fliess Author-Name: Raymond Schonfeld Title: Trends in Conformity Assessment Practices and Barriers to Trade: Final Report on Survey of Cabs and Exporters Abstract: This analytical report presents findings from a survey conducted in 2005/2006 of conformity assessment bodies (CABs) and exporting companies from the OECD region. The survey was conceived to gather primary data from key players in the field on perceptions of conformity assessment (CA) barriers: what they are, where they are, and how important they are. A second goal was to identify trends in CA practices, including in the use of tools aimed at removing barriers and facilitating international trade. Drawing on the survey, some follow-up research and expert discussions, the report identifies what appears to be major CA problems or issues and consequently... Keywords: accreditation, CASCO, conformity assessment, ISO, mutual recognition agreement, product certification, product testing, supplier's Declaration of Conformity (SDoc), technical barriers to trade Creation-Date: 2006-08-11 Number: 37 Handle: RePEc:oec:traaab:37-EN Template-type: ReDIF-Paper 1.0 Author-Name: Nora Dihel Author-Name: Felix Eschenbach Author-Name: Ben Shepherd Title: South-South Services Trade Abstract: This paper contributes to the debate on the development potential of South-South trade in services. It represents the first attempt to identify key features governing the South-South dimension of services. Services trade between developing countries is predominantly regional and may reflect an increasing tendency to incorporate disciplines to liberalise services trade in regional agreements. It is estimated that cross-border South-South exports currently represent around 10 percent of world services exports. The bulk of developing countries? exports is... Keywords: development, Doha Development Agenda, Doha round, efficiency gains, gains/benefits from liberalisation, multilateral liberalisation, North-South trade, services barriers/restrictions, services trade, south-south trade, trade between developing countries, trade policy, trade restrictiveness index, World Trade Organisation (WTO) negotiations Creation-Date: 2006-10-17 Number: 39 Handle: RePEc:oec:traaab:39-EN Template-type: ReDIF-Paper 1.0 Author-Name: Przemyslaw Kowalski Author-Name: Ben Shepherd Title: South-South Trade In Goods Abstract: The empirical analysis presented in this paper indicates that trade between developing countries (South-South trade) offers a wide scope for specialisation and efficiency gains. The first part of the paper takes an ex-post perspective and employs the gravity methodology to contribute to understanding past trends in world goods trade with a special focus on South-South trade. Analysis shows that far from experiencing a ?death of distance?, South-South trade is still severely... Keywords: computable general equilibrium, distance, gains from trade, gravity model, south-south trade, tariff barriers Creation-Date: 2006-10-16 Number: 40 Handle: RePEc:oec:traaab:40-EN Template-type: ReDIF-Paper 1.0 Author-Name: Michael Engman Author-Name: Osamu Onodera Author-Name: Norbert Wilson Title: Facilitating Adjustment: Sector Experiences from Agriculture, Telecommunications and Chemicals Abstract: This paper is a follow-up study to Trade and Structural Adjustment: Embracing Globalisation (OECD 2005) which identified policies for successful trade-related structural adjustment. It draws further policy implications through the analysis of three sectors which were not specifically/fully covered in the initial report: agriculture (tobacco and coffee), telecommunications and... Creation-Date: 2006-10-12 Number: 41 Handle: RePEc:oec:traaab:41-EN Template-type: ReDIF-Paper 1.0 Author-Name: Norbert Wilson Title: Examining the Trade Effect of Certain Customs and Administrative Procedures Abstract: Recent research at OECD provides new evidence that customs and administrative procedures have substantial effects on trade flows. Although customs and administrative procedures are necessary for the smooth application of trade and other policies, they can ?thicken? the borders between trading partners if the customs and administrative procedures are more stringent than necessary or... Creation-Date: 2007-01-26 Number: 42 Handle: RePEc:oec:traaab:42-EN Template-type: ReDIF-Paper 1.0 Author-Name: Hildegunn Kyvik Nordås Author-Name: Sébastien Miroudot Author-Name: Przemyslaw Kowalski Title: Dynamic Gains from Trade Abstract: The post world war II era has been characterized by unprecedented growth in the world economy and progressive reduction in barriers to international trade and investment. The objective of this study is to assess to what extent the observed growth and deepening international economic integration are related. It begins by discussing the concept of dynamic gains from trade. Narrowly defined, dynamic gains are traderelated changes in the long-run rate of productivity growth. Although there is no conclusive evidence that... Keywords: applied general equilibrium models, FDI, international trade, productivity growth Creation-Date: 2006-11-24 Number: 43 Handle: RePEc:oec:traaab:43-EN Template-type: ReDIF-Paper 1.0 Author-Name: Malory Greene Author-Workplace-Name: OECD Author-Name: Nora Dihel Author-Workplace-Name: OECD Author-Name: Przemyslaw Kowalski Author-Workplace-Name: OECD Author-Name: Douglas C. Lippoldt Author-Workplace-Name: OECD Title: China's Trade and Growth: Impact on Selected OECD Countries Abstract: This paper examines China's emergence as a global player in international markets over the last few decades. It provides an overview of China's trade policy environment following the country's process of market opening and joining the WTO. The report analyses China’s role in international processing activities and moving up the global value chain. It also examines China’s impact on world prices and the deterioration of its own terms of trade. The paper looks at China's two-pronged export... Keywords: banking, China, computable general equilibrium, FTAP, impact on global economy, insurance, intellectual property rights, international processing activities, investment, OECD countries, services trade, telecommunications, terms of trade, trade and growth, trade policy, trade restrictiveness index, value chain, world prices Creation-Date: 2006-11-28 Number: 44 Handle: RePEc:oec:traaab:44-EN Template-type: ReDIF-Paper 1.0 Author-Name: Barbara Fliess Author-Name: Carlos Busquets Title: The Role of Trade Barriers in SME Internationalisation Abstract: This paper discusses trade barriers that SMEs are likely to encounter in export markets and available policy tools aimed at their reduction or elimination. Drawing on recent work in the Trade Directorate and elsewhere, key types of barriers are identified based on a review of business surveys and other studies recently undertaken. The paper also explores how governments deal with trade barriers and how SME participation in the trade policy process... Keywords: business surveys, consultation, export markets, exports, negotiation, non-OECD, non-tariff barriers, OECD, small and medium-sized enterprises, tariffs, trade advocacy, trade association, trade barriers, trade policy Creation-Date: 2006-12-01 Number: 45 Handle: RePEc:oec:traaab:45-EN Template-type: ReDIF-Paper 1.0 Author-Name: Molly Lesher Author-Name: Hildegunn Kyvik Nordås Title: Business Services, Trade and Costs Abstract: This technical paper analyses the role of business services in selected OECD and non-OECD economies using recently published input-output tables for 32 countries in or close to the year 2000. Business services have long been recognised as important drivers in the global economy, and this study reinforces that view with a comprehensive, quantitative cross-country analysis of how the manufacturing and business services sectors interact in the production process. Our analysis suggests that... Keywords: backward linkage, Business service, concentration index, forward linkage, manufacturing, off-shoring, outsourcing, product variety, productivity, trade policy Creation-Date: 2006-12-13 Number: 46 Handle: RePEc:oec:traaab:46-EN Template-type: ReDIF-Paper 1.0 Author-Name: Barbara Fliess Author-Name: Hyung-Jong Lee Author-Name: Olivia L. Dubreuil Author-Name: Osvaldo R. Agatiello Title: CSR and Trade: Informing Consumers about Social and Environmental Conditions of Globalised Production: Part I Abstract: Focusing on consumer demands in OECD markets and voluntary initiatives taken in the private sector, this study investigates how consumers are informed about the social and environmental conditions under which products have been produced. Consumers of OECD increasingly attach importance to how companies they buy from conduct their business, and the voluntary adoption of CSR policies is spreading in the private sector. But how do consumers know... Keywords: certification, clothing, codes of conduct, consumer, consumer guide, consumption, corporate responsibility, corporate social responsibility, cosmetics, CSR, CSR branding, CSR marketing, cut flower, eco-label, eco-labelling, environmental conditions of production, environmental reporting, fisheries, labelling, MNEs, multinational enterprises, multinationals, OECD, reporting, retail trade, social conditions of production, social label, social reporting, supermarket, supply chain, textiles, value chain Creation-Date: 2007-01-10 Number: 47 Handle: RePEc:oec:traaab:47-EN Template-type: ReDIF-Paper 1.0 Author-Name: David Shortall Title: Regulatory Reform and Market Openness: Processes to Assess Effectively the Trade and Investment Impact of Regulation Abstract: Evidence suggests that differences in regulatory requirements of individual economies may actually impede gains from trade liberalization, while a smooth functioning, transparent regulatory system can have positive effects on trade and investment flows. This has increasingly induced policy makers to pay closer attention to the complementarities and interconnectedness between domestic regulatory reform and market openness. This study focuses on identifying regulatory processes, tools and policies adopted in order to support market openness and improve trade and investment opportunities. Although the elaboration of a market openness assessment toolkit is still at early stages, a number of promising approaches do come out, even if a number of issues call for further attention and work, on which the trade policy community might wish to focus in the future. Creation-Date: 2007-02-09 Number: 48 Handle: RePEc:oec:traaab:48-EN Template-type: ReDIF-Paper 1.0 Author-Name: Henk Kox Author-Workplace-Name: CPB Netherlands Bureau for Economic Policy Analysis Author-Name: Hildegunn Kyvik Nordås Title: Services Trade and Domestic Regulation Abstract: This paper argues that regulatory measures affect the fixed cost of entering a market as well as the variable costs of servicing that market. Moreover, differences in regulation among countries often imply that firms have to incur entry costs in every new market. Indicators of regulatory intensity and heterogeneity are introduced in a gravity model and their impact on market entry and subsequent trade flows estimated for total services, business services and financial services. It is found that regulatory heterogeneity has a relatively large negative impact on both market entry and subsequent trade flows. Further, regulatory barriers have a negative effect on the local services sectors’ export performance. Finally it is found that regulations that aims at correcting market failure can have a positive impact on trade. It is concluded that services trade liberalization and regulatory reforms are complementary in creating competitive services markets. Creation-Date: 2007-02-14 Number: 49 Handle: RePEc:oec:traaab:49-EN Template-type: ReDIF-Paper 1.0 Author-Name: Norbert Wilson Author-Name: Joyce Cacho Title: Linkage Between foreign Direct Investment, Trade and Trade Policy: An Economic Analysis with Application to the Food Sector in OECD Countries and Case Studies in Ghana, Mozambique, Tunisia and Uganda Abstract: Through empirical analysis and case studies, this document explores the relationships amongst foreign direct investment (FDI), trade and trade-related policies in OECD and four African countries (Ghana, Mozambique, Tunisia and Uganda). In OECD countries, tariffs and market price support may have an effect on how FDI is distributed geographically. FDI may be used to avoid or "jump" tariffs. Also, investors in a home country may invest in a host country to exploit the preferential tariffs that the host has with a third country. Participation in a regional trading agreement or customs union, e.g. NAFTA or the EU, may create investment opportunities. Market price support to agriculture may encourage outward investment and discourage inward investment. In aggregate, FDI and trade appear to complement one another. The four case studies in Africa highlight the interactions amongst regulations, foreign investment and trade. For example, FDI is useful in helping the firm develop the resources to meet the standards of OECD markets. Investment promotion agencies and export processing zones appear to prepare countries to attract FDI. Preferential trading agreements like the Everything but Arms with EU and the African Growth Opportunity Act with the US may have an impact on trade and investment. Beyond trade policies, other policies and factors contribute substantially to the location and distribution of FDI. As seen amongst OECD countries, factors like the GDP of a country (i.e. market size) and cost of production and transport can have an effect on FDI. Another factor that influences FDI is the degree of market competitiveness. For the four African countries, the country risk and the level of infrastructure can influence the volume of FDI attracted. Keywords: academic libraries Creation-Date: 2007-03-02 Number: 50 Handle: RePEc:oec:traaab:50-EN Template-type: ReDIF-Paper 1.0 Author-Name: Nora Dihel Author-Name: Ben Shepherd Title: Modal Estimates of Services Barriers Abstract: This paper presents improved approaches to measurement of services barriers by using alternative weighting methods and improved econometric specifications; the data include barriers affecting each mode of services supply and additional sector-specific regulatory variables. We provide an illustration of these improvements for banking, insurance, telecom (fixed and mobile), professional (engineering) and distribution services in selected countries in Africa, Asia, Central and Eastern Europe, Latin America and the Middle East. We report sector-specific restrictiveness indices at aggregate and modal levels along with aggregate and modal tax equivalents. We also provide confidence intervals for each estimated tax equivalent to take into account the limitations in the estimation techniques. Indeed these limitations lead us to argue against a strict interpretation of the empirical results and in favor of a more flexible, qualitative interpretation, combined with rank ordering of countries for indicative purposes. Keywords: banking, distribution, engineering, insurance, regulatory measures, services barriers/restrictions, tax equivalent, telecommunications, trade restrictiveness index Creation-Date: 2007-04-13 Number: 51 Handle: RePEc:oec:traaab:51-EN Template-type: ReDIF-Paper 1.0 Author-Name: Michael Engman Title: Expanding International Supply Chains: The Role of Emerging Economies in Providing it and Business Process Services Abstract: Offshoring of business process services (BPS) and information technology services (ITS) – whether through international insourcing or international outsourcing – is transforming the way many companies do business. This paper looks at the expansion of international supply chains and the rise of China, the Czech Republic, India and the Philippines as exporters of BPS and ITS. It also analyses the nature of and factors behind this trade and identifies major business- and trade-related challenges arising. In this context it presents some of the labour market implications resulting from increasing trade between OECD and non-OECD economies. The analysis shows that the BPS and ITS sectors in the four emerging economies are very differently structured: Chinese and Czech companies are predominantly supplying their domestic markets while Indian and Philippine companies are focused mainly on supplying foreign markets. In terms of exports, they also supply different geographies: China is mainly exporting to Japan; the Czech Republic to the European Union; the Philippines to the United States; and India to the United States and UK. Several of the larger home-grown companies in the four countries are establishing significant presence in foreign markets, in particular in other emerging markets, to build capacity and leverage local comparative advantage. This highlights the fact that different geographies have different strengths and BPS and ITS-related FDI between emerging economies is likely to expand rapidly in the future. All four countries are facing supply side constraints. The low supply of senior personnel with industry-relevant experience in China, the Czech Republic and the Philippines acts as a break on growth. Many companies are also struggling to manage high levels of staff attrition and salary inflation. Regulatory restrictions are relatively few but still affect some companies. In the ITS sector, temporary movement of personnel can pose a significant challenge for home-grown exporters. The issue is most relevant for the Indian ITS sector that is dependent on sending professionals for longer visits to client premises. Slow and unpredictable procedures for issuing business visas and work permits, and quota limitations for work permits, give rise to operational challenges. In the BPS sector, and to a lesser extent in the ITS sector, data privacy and security legislation can have a negative effect on international outsourcing. But new regulations have also created entirely new business opportunities, including the medical transcription sector. Creation-Date: 2007-05-25 Number: 52 Handle: RePEc:oec:traaab:52-EN Template-type: ReDIF-Paper 1.0 Author-Name: Michael Engman Author-Workplace-Name: OECD Author-Name: Osamu Onodera Author-Workplace-Name: OECD Author-Name: Enrico Pinali Author-Workplace-Name: OECD Title: Export Processing Zones: Past and Future Role in Trade and Development Abstract: This paper studies export processing zones (EPZs) which have become increasingly popular as a policy tool for development and export-oriented growth, and can be found in 130 countries around the world. The report consists of four parts. Part I provides a broad overview on the current use of EPZs, including the evolution of EPZ policy, their objectives and how these are achieved, and the incentives commonly offered. It presents case studies from China, India and Russia illustrating new trends and policies. Part II then provides a review of the economic costs and benefits of EPZs with particular focus on their trade and employment implications. Part III presents an analysis of how common EPZ policies relate to trade rules. It reviews the relationship between EPZs and the WTO Agreements such as the WTO Agreement on Subsidies and Countervailing Measures (ASCM), followed by a discussion of how EPZs are commonly treated in RTAs. Part IV concludes. EPZs are a sub-optimal policy from an economic point of view since it benefits the few and distorts resource allocation, but may be useful as a stepping stone to trade liberalisation on a national basis. Governments should consider all available policy options, and conduct a thorough cost/benefit analysis before implementation. Creation-Date: 2007-05-23 Number: 53 Handle: RePEc:oec:traaab:53-EN Template-type: ReDIF-Paper 1.0 Author-Name: Sébastien Miroudot Author-Name: Enrico Pinali Author-Name: Nicolas Sauter Title: The Impact of Pro-Competitive Reforms on Trade in Developing Countries Abstract: This report proposes an analysis of the mutually reinforcing relationship between trade, investment and competition policies and how together they impact trade in developing countries. An index of pro-competitive reforms is provided for 82 countries over the period 2001-2005. The index synthesises 13 indicators of the policy stance of countries with regard to trade, investment and competition. It is then used in quantitative analysis to determine the impact of barriers to competitive markets on trade. The results shows that there are substantial gains for developing countries in market and regulatory reforms in terms of higher trade flows and higher income per capita. Moreover, the paper further examines pro-competitive reforms in key services sectors and the extent to which trade agreements can promote them through the experience of the WTO telecoms Reference Paper. The analysis highlights that countries achieved a high degree of liberalisation in the telecoms sector and that regulatory principles of the Reference Paper were useful in promoting sound policies under domestic regulatory reforms of the sector. Classification-JEL: F12; F14; L50; L96 Keywords: gains, gravity, indicators, pro-competitive reforms, reference paper, regulatory reforms, telecommunications, telecoms, trade and competition, trade and investment, trade liberalisation Creation-Date: 2007-06-15 Number: 54 Handle: RePEc:oec:traaab:54-EN Template-type: ReDIF-Paper 1.0 Author-Name: Marie-France Houde Author-Workplace-Name: OECD Author-Name: Akshay Kolse-Patil Author-Workplace-Name: OECD Author-Name: Sébastien Miroudot Author-Workplace-Name: OECD Title: The Interaction between Investment and Services Chapters in Selected Regional trade Agreements Abstract: This report analyses the interactions between the investment and services chapters of 20 regional trade agreements. It classifies agreements into two broad categories of NAFTA-inspired and GATS-inspired agreements and identifies four major types of interaction between the investment and trade in services chapters. The report then looks at the implications of the services/investment interface for levels of investment protection and liberalisation. Classification-JEL: F13; F21 Keywords: GATS, investment, investment liberalization, investment protection, MFN, NAFTA, regional trade agreements, RTA, services Creation-Date: 2007-06-19 Number: 55 Handle: RePEc:oec:traaab:55-EN Template-type: ReDIF-Paper 1.0 Author-Name: Csilla Bartók Author-Workplace-Name: OECD Author-Name: Osamu Onodera Author-Workplace-Name: OECD Title: Facilitating Trade and Structural Adjustment Chile: Experiences in Non-Member Economies Abstract: This paper is the first of four country case studies which is a part of a broader research programme addressing trade and structural adjustment issues in non-member economies which was conducted as a follow-up to Trade and Structural Adjustment: Embracing Globalisation (OECD, 2005) which identified policies for successful trade-related structural adjustment. This paper studies the trade liberalisation experience of Chile from 1973 onward. The report consists of 5 main parts; Part 1 provides the introduction, part 2 looks at the trade liberalisation in Chile which was implemented in three phases, (1) initial trade reforms (1973-84), (2) trade reform after a temporary policy reversal(1985-89) and (3) after 1990. Part 3 looks at the evolution and structure of exports and imports, and Part 4 looks at sectoral developments in the copper industry, agrofood industry, wood and wooden products industry and the textiles and clothing industry. Part 5 concludes with lessons learnt. The experience of Chile shows that trade reform has been essential for realigning the incentive structures in Chile. A stable macroeconomic environment, trade reform starting with the elimination of quantitative restrictions, introduction of flat tariffs, coherent exchange rate policy, sound institutional framework, rule of law, mild promotion of exports, use of foreign capital, and relatively flexible labour market policies have been important factors in Chili's successful trade liberalisation experience. Keywords: agro-food industry, Chile, copper industry, exchange rate policy, export promotion, forestry and wood sector, import-substitution, liberalisation, liberalization, macroeconomic instability, regional trade agreements, social and labour policies, structural equation modelling, tariffs, textile and clothing industry, trade, unilateral tariffs Creation-Date: 2007-10-25 Number: 56 Handle: RePEc:oec:traaab:56-EN Template-type: ReDIF-Paper 1.0 Author-Name: Massimo Geloso Grosso Author-Name: Molly Lesher Author-Workplace-Name: OECD Author-Name: Enrico Pinali Title: Services Trade Liberalisation and Tourism Development Abstract: This study analyses the role that services trade liberalisation could play in fostering tourism growth in developing countries. The economic and social importance of tourism means that the industry is high on the list of development priorities in many developing countries and LDCs. In order to have a successful tourism export industry, effective linkages need to be established with many different sectors, most of which are other services. Trade and investment liberalisation at the national, regional and multilateral levels can be a means to complement national efforts to attain these goals. Sustainable tourism development, though, requires strong public sector management and support. Due consideration needs to be given to develop effective regulation, including competition policy and institutions, to avoid exceeding the carrying capacity of assets, and to strengthen national capacity in order to minimise financial leakages. Keywords: GATS, liberalisation, linkages, services, tourism, trade Creation-Date: 2007-11-12 Number: 57 Handle: RePEc:oec:traaab:57-EN Template-type: ReDIF-Paper 1.0 Author-Name: Caroline Lesser Author-Workplace-Name: OECD Title: Do Bilateral and Regional Approaches for Reducing Technical Barriers to Trade Converge Towards the Multilateral Trading System? Abstract: As part of its work on regionalism, the OECD Trade and Agriculture Directorate has completed a series of studies that compare rule-making provisions in regional trade agreements with those in the World Trade Organisation (e.g., in the area of services, investment and competition). This paper aims to complement existing studies, by examining legal provisions regarding "technical barriers to trade" (i.e., technical regulations, standards and conformity assessment procedures) in selected bilateral and regional trade agreements, and their degree of similarity and convergence with the WTO Agreement on Technical Barriers to Trade, and with each other. The study reveals that most provisions regarding technical barriers to trade (TBT) included in bilateral and regional trade agreements converge towards the multilateral trading system. When implemented effectively, agreements seeking deeper economic integration and regulatory cooperation, in particular, can complement and strengthen the implementation the WTO Agreements on Technical Barriers to Trade by setting the pace for improved regulatory practices and TBT-related infrastructure in member countries (e.g., through regional consultation fora and joint standardisation and accreditation bodies). Some caveats however remain. When overlapping agreements promote different criteria for the harmonisation of standard-related measures and when bilateral or regional initiatives are conducted in isolation from international efforts and divert attention from multilateral trade and standards-related negotiations, new obstacles may arise both for regulators and businesses. Such constraints are further magnified for low income countries afflicted by administrative and technical capacity-related problems. To remedy these potential problems, the study proposes a number of policy recommendations. Keywords: bilateral free trade agreements, certification, conformity assessment procedures, custom unions, equivalence, harmonisation, metrology, multilateral trading system, mutual recognition agreement, non-tariff barriers, regional trade agreements, regionalism, regulatory measures, standards, TBT, technical barriers to trade, technical regulations, testing, WTO Agreement on Technical Barriers to Trade Creation-Date: 2007-10-18 Number: 58 Handle: RePEc:oec:traaab:58-EN Template-type: ReDIF-Paper 1.0 Author-Name: Emilio Antonio Author-Workplace-Name: University of the Asia and the Pacific Author-Name: Osamu Onodera Author-Workplace-Name: OECD Title: Facilitating Trade and Structural Adjustment the Philippines: Experience in Non-Member Economies Abstract: This paper is the second of four country case studies which is a part of a broader research programme addressing trade and structural adjustment issues in non-member economies which was conducted as a follow-up to Trade and Structural Adjustment: Embracing Globalisation (OECD, 2005) which identified policies for successful trade-related structural adjustment. This paper studies the trade liberalisation experience of the Philippines from the 1980s. The report consists of 7 main parts; Part 1 provides the introduction, part 2 looks at the economic policies in the Philippines from the 1970s, and part 3 takes a general look at the general structure of the economy. Part 4 takes a closer look at the trade liberalisation in the Philippines which was implemented in three phases, (1) initial trade reforms (1981-88), (2) second phase (1991-93) and (3) third phase (1994-96). Part 5 takes an overview of the structural adjustments which took place in manufacturing and agriculture, with Part 6 taking a closer look at four sectors, electronics, food processing, cement, and business process outsourcing sectors. Part 7 concludes with lessons learnt and opportunities and challenges for further liberalisation. Despite considerable liberalisation including in trade policy since the 1980s, the Philippines economy posted only lacklustre performance initially. After a growth period in the 1990s and the Asian crisis, it is only in the recent past that some of the reforms are starting to pay off. The importance of a stable political and macroecnomic environment, need for appropriate exchange rates, need for early elimination of quantitative restrictions in trade reform, early deregulation on FDI are some of the lessons learnt. While challenges remain, better results are expected in the future if complemented with further reforms. Keywords: business process outsourcing and IT services, cement, electronics, exchange rate policy, export processing zones, food processing, import-substitution, liberalisation, liberalization, macroeconomic instability, Philippines, structural adjustment, tariffs, trade Creation-Date: 2007-10-29 Number: 59 Handle: RePEc:oec:traaab:59-EN Template-type: ReDIF-Paper 1.0 Author-Name: Csilla Bartók Author-Workplace-Name: OECD Author-Name: Sébastien Miroudot Author-Workplace-Name: OECD Title: The Interaction amongst Trade, Investment and Competition Policies Abstract: The report focuses on the complementarities between trade, investment and competition policies and analyses how policy coherence can be promoted in these three important areas that shape incentives for firms and individuals to be more productive and for markets to be more competitive. It also deals with the potential inconsistencies or tensions that may arise between trade, investment and competition reforms and how to ease them. It shows that specific policy goals can be achieved while maintaining an open and procompetitive environment. Overall, the analysis highlights the role of governments in providing the right incentives to facilitate the adjustment to the internationalisation of production and the important synergies between policies that can be exploited to promote growth. It is not only the case in contestable markets but also in the context of market failures where pro-competitive policies can address specific distortions and mitigate the adverse effects of reforms. The report includes the results of a survey collecting the experience of policymakers on complementarities between trade, investment and competition policies. Classification-JEL: F1; F2; L5 Keywords: competition, distortions, investment, market failure, policy coherence, pro-competitive, reforms, supply-side, synergies, trade Creation-Date: 2008-02-22 Number: 60 Handle: RePEc:oec:traaab:60-EN Template-type: ReDIF-Paper 1.0 Author-Name: Karolina Ekholm Author-Name: Katarina Hakkala Title: International Production Networks in the Nordic/Baltic Region Abstract: The Nordic countries are characterized by relatively compressed wage structures, implying that the incentives to offshore activities intensive in low-skilled labour might be particularly strong in these countries. In this paper, we document the recent changes in measures of offshoring and find that there has been an overall increase since the mid 1990s but that the experience varies considerably across sectors. We also document the recent trends in wage-bill shares of workers with different levels of educational attainment. As in most industrialized countries, there has been an overall increase in the wage-bill share of highly educated workers, a development that is relatively uniform across sectors. In an econometric analysis we estimate the relationship between offshoring of intermediate input production and labour demand in Sweden, Finland and Norway, distinguishing between workers with different educational attainments. We only find weak relationships. In this sense, the results suggest that the gains from an increased specialisation due to fragmentation of production and the emergence of production networks involving low-wage countries are reaped without any large adverse effects on income distribution. For Sweden, we find that offshoring to low-income countries is associated with a shift in demand towards workers with a relatively high level of education. For Finland, however, it is rather offshoring to high-income countries that is associated with such a shift. Moreover, in the Swedish case the shift is away from workers with upper secondary education whereas in the Finnish case it is away from workers with lower secondary education. Keywords: Baltic, labour demand, manufacturing, Nordic, outsourcing, skill upgrading Creation-Date: 2008-01-22 Number: 61 Handle: RePEc:oec:traaab:61-EN Template-type: ReDIF-Paper 1.0 Author-Name: Walter G. Park Author-Name: Douglas C. Lippoldt Author-Workplace-Name: OECD Title: Technology Transfer and the Economic Implications of the Strengthening of Intellectual Property Rights in Developing Countries Abstract: This paper presents an empirical analysis of the influence of the strength of intellectual property rights (IPRs) on technology transfer to developing nations. The core contribution is to use regression analysis to examine the relationship between various measures of technology transfer and a set of indexes that quantify the strength of IPRs based on laws on the books, while controlling for other factors. For this purpose, the authors have assembled a data set covering a broad international panel of countries for an expanded time frame (1990-2005) in comparison with previous studies on IPRs by the Trade and Agriculture Directorate. Regression analysis is also used to assess the relationship between measures of local innovation and the IPR indexes. The study employs case study analysis of select countries - namely the BRIC countries (Brazil, Russia, India, and China) - to complement the statistical analysis. Keywords: development, intellectual property rights, investment, technology transfer, trade Creation-Date: 2008-01-25 Number: 62 Handle: RePEc:oec:traaab:62-EN Template-type: ReDIF-Paper 1.0 Author-Name: Somkiat Tangkitvanich Author-Workplace-Name: Thai Development Research Institute Author-Name: Osamu Onodera Author-Workplace-Name: OECD Title: Facilitating Trade and Structural Adjustment Thailand: Experiences in Non-Member Economies Abstract: This paper is the fourth of four country case studies which is a part of a broader research programme addressing trade and structural adjustment issues in non-member economies which was conducted as a follow-up to Trade and Structural Adjustment: Embracing Globalisation (OECD, 2005) which identified policies for successful trade-related structural adjustment. This paper studies the trade liberalisation experience of Thailand from the 1970s. The report consists of 6 main sections; Section 1 provides the introduction, while section 2 provides an overview of Thailand's growth experiences. Section 3 takes a closer look at the trade liberalisation and investment policies in Thailand: Thailand's initial trade regime and three phases of trade liberalisation: (1) initial tariff reforms (1982-84), (2) comprehensive tariff reform and its reversal with the Asian financial crisis (1993-), and (3) post crisis reforms (1999-) are studied. Section 4 looks at the changes in the investment and trade structure, while section 5 takes a closer look at structural adjustment in three sectors, the automotive and auto-parts sector, textile and clothing, and the telecom services sector. Section 6 concludes with lessons learnt. Thailand's experience confirms that a sound macroeconomic environment, sustainable public finances, a relatively stable political and economic environment, flexible labour markets and reliable infrastructure are crucial for economic growth. It provides an example of gradual trade liberalisation, and demonstrates the benefits of openness to international trade and foreign investment in correcting distortions in the economy. Keywords: automotive and auto-parts, exchange rate policy, import-substitution, liberalisation, liberalization, macroeconomic instability, structural adjustment, tariffs, telecommunication services, textiles and clothing, Thailand, trade Creation-Date: 2008-01-07 Number: 63 Handle: RePEc:oec:traaab:63-EN Template-type: ReDIF-Paper 1.0 Author-Name: Samuel Hill Author-Workplace-Name: OECD Author-Name: Molly Lesher Author-Workplace-Name: OECD Author-Name: Hildegunn Kyvik Nordås Author-Workplace-Name: OECD Title: Trade and Labour Market Adjustments Abstract: This study describes developments in international trade and OECD labour markets and analyses possible linkages between them. It depicts recent developments in offshoring, trade in tasks and the integration of large emerging economies into the world market. The labour market in major OECD countries has been characterised by rising employment relative to the total population and declining unemployment rates during the past decade. Job security has not changed greatly between 1995 and 2005, but the wage share of national income has declined in many OECD countries. The report does not find evidence of a linkage between import penetration and overall employment or unemployment, but relatively small effects on productivity and employment patterns are found. A shift towards sourcing of imports from emerging markets slightly improves labour productivity and reduces labour demand in the importcompeting sectors or activities. Offshoring of services has a relatively strong positive marginal impact on labour productivity, but the scale of offshoring is still modest. The labour market impact of offshoring is stronger in countries with high employment protection and high barriers to entrepreneurship. The study finally argues that offshoring is motivated by the need for flexibility and lower costs and helps firms remain competitive. Thus, offshoring may well relax the pressure to move the entire manufacturing production chain to low-cost countries. Classification-JEL: F16 Keywords: emerging economies, labour market adjustments, offshoring Creation-Date: 2008-03-25 Number: 64 Handle: RePEc:oec:traaab:64-EN Template-type: ReDIF-Paper 1.0 Author-Name: Sanghoon Ahn Author-Name: Kyoji Fukao Author-Name: Keiko Ito Title: Outsourcing in East Asia and its impact on the Japanese and Korean Labour Markets Abstract: This study describes the changing patterns of intermediate goods trade and foreign direct investment (FDI) in East Asia and investigates the impacts of international outsourcing on the Japanese and the Korean labour markets. The main findings of the paper are as follows. First, intra-regional trade in East Asia grew remarkably during the period 1990-2003. While overall trade with the rest of the world roughly doubled in this period, intra-regional trade in East Asia more than tripled. Second, the main factor behind increased intra-regional trade in East Asia was the trade in intermediate goods through outsourcing and the international fragmentation of production. Third, reflecting the fact that outsourcing to Asia (particularly to China) has a negative impact on the demand for workers with lower education and a positive impact on the demand for workers with higher education, relative wage shares of workers by educational attainment have changed substantially both in Japan and Korea. Fourth, our empirical analysis provides evidence of labour demand shift towards skilled labour in Japanese manufacturing as a result of outsourcing. For Korea, although the overall effects of outsourcing have been insignificant in Korea partly because a substantial part of Korean outsourcing remained directed towards Japan, our results imply that labour demand would shift away from less-skilled workers towards more-skilled workers if outsourcing to China increased and outsourcing to Japan decreased in the future. Classification-JEL: F14; F16; F23 Keywords: Japan, Korea, labour demand, manufacturing, outsourcing, skill upgrading Creation-Date: 2008-01-22 Number: 65 Handle: RePEc:oec:traaab:65-EN Template-type: ReDIF-Paper 1.0 Author-Name: Massimo Geloso Grosso Author-Workplace-Name: OECD Title: Analysis of Subsidies for Services: The Case of Export Subsidies Abstract: This study presents an exploratory analysis of export subsidies in the services field. It draws from a variety of sources in an effort to provide insights into the characteristics and use of these measures. The report, while not generating accurate measures of the extent and effects of export subsidies for services, provides evidence that these measures are used by many countries in the developed and developing worlds to support a wide range of services sectors. The analysis also indicates that broadly speaking the definitions contained in the WTO Agreement on Subsidies and Countervailing Measures (ASCM) are relevant for services. The most important types of export support appear to be direct tax incentives, particularly profit tax exemptions or reductions. Based on the detailed analysis of export subsidies for services, the study then discusses some possible elements of a definition of these measures. Keywords: ASCM, export subsidies, GATS, services Creation-Date: 2008-01-28 Number: 66 Handle: RePEc:oec:traaab:66-EN Template-type: ReDIF-Paper 1.0 Author-Name: Jose Duran Author-Workplace-Name: Economic Commission for Latin America and the Caribbean Author-Name: Nanno Mulder Author-Workplace-Name: Economic Commission for Latin America and the Caribbean Author-Name: Miguel Ruiz Author-Workplace-Name: Escuela Superior Politécnica del Litoral Title: Facilitating Trade and Structural Adjustment Ecuador: Experiences in Non-Member Countries Abstract: This paper is the second of four country case studies which is a part of a broader research programme addressing trade and structural adjustment issues in non-member economies which was conducted as a follow-up to Trade and Structural Adjustment: Embracing Globalisation (OECD, 2005) which identified policies for successful trade-related structural adjustment. This paper studies the trade liberalisation experience of Ecuador from the 1970s onwards. The report consists of 5 main sections; Section 1 provides the introduction, while section 2 provides an overview of Ecuador?s economic reforms from the 1970s onwards until the 2000s. Section 3 looks at the structural changes in the economy and trade dynamics behind the changes. Section 4 takes a closer look at structural adjustment in four sectors, the cut-flowers, processed tuna, cereals, and textiles and clothing. Section 5 concludes with lessons learnt. Ecuador provides a case of a country whose trade liberalisation and other structural reforms have led to mixed results. While trade liberalisation has improved resource allocations, macroeconomic instability, incomplete reforms, weak institutions and relatively restrictive (but also highly informal) labour markets have made it difficult for Ecuador to reap the full benefits of trade liberalisation. Keywords: cereals, cut flower, Ecuador, exchange rate policy, import-substitution, liberalisation, liberalization, macroeconomic instability, processed tuna, structural equation modelling, tariffs, textiles and clothing, trade Creation-Date: 2008-01-31 Number: 67 Handle: RePEc:oec:traaab:67-EN Template-type: ReDIF-Paper 1.0 Author-Name: Hildegunn Kyvik Nordås Author-Workplace-Name: OECD Author-Name: Massimo Geloso Grosso Author-Workplace-Name: OECD Author-Name: Enrico Pinali Author-Workplace-Name: OECD Title: Market Structure in the Distribution Sector and Merchandise Trade Abstract: This study aims at exploring how recent developments in the retail sector affect trade in consumer goods. It focuses on three areas of development: i) internationalisation; ii) market structure; and iii) the growing market share of retailers? private labels. It distinguishes between food and non-food products as there are significant differences between the sourcing patterns of these two product categories. The gravity model is extended by integrating a retail intermediary sector, and a novel estimation technique (zero inflated Poisson) is proposed. It is found that the foreign operations of a retailer are positively related to imports from the host to the home country of the retailer. The rate of market concentration and the market share of private labels are both found to be negatively related to imports of food and positively related to imports of non-food consumer goods, but private labels tend to shift sourcing towards low-income countries. Lower tariffs yield a stronger import response in countries with a less concentrated retail sector, particularly for food items suggesting that competition policy and trade policy are complementary. In developing countries the entry of international retailers can have a positive impact on exports and product quality. Classification-JEL: F12 Keywords: gravity model, retail sector, trade in consumer goods Creation-Date: 2008-02-01 Number: 68 Handle: RePEc:oec:traaab:68-EN Template-type: ReDIF-Paper 1.0 Author-Name: Osamu Onodera Author-Workplace-Name: OECD Title: Facilitating Trade and Structural Adjustment: Experiences in Non-Member Countries Abstract: This paper, together with five other background studies, is a part of a broader research programme addressing trade and structural adjustment issues in non-member economies which was conducted as a follow-up to Trade and Structural Adjustment: Embracing Globalisation (OECD, 2005) which identified policies for successful trade-related structural adjustment. This paper revisits and elaborates on specific parts of these policy recommendations with a view to reassessing their applicability to developing countries. The five background studies; a comparison study comparing East Asia and Latin America and four country case studies (Chile, Ecuador, the Philippines and Thailand), which were conducted as a part of this project, form the basis for the analysis, supplemented by existing literature. The report consists of 4 main sections; The first section provides an introduction and the second section provides an overview of the liberalisation experiences of the four countries. In the third section, some of the ?recommendations in OECD (2005) are revisited with a greater focus on developing countries, covering such issues as i) trade and investment policies, ii) macroeconomic policy, iii) social safety nets and labour market policies, iv) policies to facilitate export response, v) institutional frameworks and regulatory and competition environment, vi) role of multilateral cooperation and regional and bilateral initiatives, and vii) broad based approach to reforms. The fourth section concludes. Keywords: developing countries, exchange rates, export response, institutional frameworks, macroeconomic policies, multilateral cooperation, social safety net, structural equation modelling, trade, trade reform Creation-Date: 2008-02-05 Number: 69 Handle: RePEc:oec:traaab:69-EN Template-type: ReDIF-Paper 1.0 Author-Name: Jose Duran Author-Workplace-Name: Economic Commission for Latin America and the Caribbean Author-Name: Nanno Mulder Author-Workplace-Name: Economic Commission for Latin America and the Caribbean Author-Name: Osamu Onodera Author-Workplace-Name: OECD Title: Trade Liberalisation and Economic Performance: Latin America versus East Asia 1970-2006 Abstract: This paper, together with four other country case studies, is a part of a broader research programme addressing trade and structural adjustment issues in non-member economies which was conducted as a follow-up to Trade and Structural Adjustment: Embracing Globalisation (OECD, 2005) which identified policies for successful trade-related structural adjustment. This paper studies the trade liberalisation and structural adjustment experiences and their outcomes in terms of economic and trade performance in East Asia and Latin America. The report consists of 5 main sections; After an introduction, Section A first looks at the growth performance and role of trade and FDI. Section B looks at trade related policy trends in the two regions while section C looks at some trade and foreign direct investment indicators. Section D compares the structural adjustment in the two regions and Section E concludes. Keywords: East Asia, Latin America, liberalisation, liberalization, structural equation modelling, trade Creation-Date: 2008-02-07 Number: 70 Handle: RePEc:oec:traaab:70-EN Template-type: ReDIF-Paper 1.0 Author-Name: Ralph Lattimore Author-Workplace-Name: OECD Author-Name: Przemyslaw Kowalski Author-Workplace-Name: OECD Title: Brazil: Selected Trade Issues Abstract: The objective of this paper is to introduce an initial broad set of Brazilian trade and trade related issues for discussion within the OECD enhanced engagement context. Accordingly, the paper takes an historical perspective as an aid to understanding some current trade policy settings in Brazil. Brazil has faced a number of challenges over the last 60 years in its search for a high sustainable rate of economic growth and a dramatic improvement in its distribution of income. The Brazilian import substitution program after World War II stimulated periods of high but unsustainable growth, OECD (2006). From 1988, the Government began a process of general economic reform that included major trade policy liberalisation from around 1990. Successive governments have continued this policy stance in spite of the fact that a number of external and internal economic shocks have delayed reform dividends in the form of high sustained economic growth. In short, Brazil has not had the spectacular economic growth record over the last decade that has been seen in China and India ? in spite of its policy reforms. In this sense the Brazilian economy can be said to be in transition. However, policy continuity over the last fifteen years has had very good results in establishing macroeconomic and balance of payments stability coupled with strong employment growth and an improving distribution of income. Keywords: Brazil, economic reform, trade policy Creation-Date: 2008-04-24 Number: 71 Handle: RePEc:oec:traaab:71-EN Template-type: ReDIF-Paper 1.0 Author-Name: Osamu Onodera Author-Workplace-Name: OECD Title: Trade and Innovation Project: A Synthesis Paper Abstract: This paper, together with five case studies, is a part of a larger project looking at the various effects that trade and investment can have on innovation. The study looks at the role of trade and investment in technology transfer, the competition effects of trade and investment on innovation as well as economies of scale. The study also looks at Global Value Chains as an organisational innovation in its own right, which is supported by a freer trade and investment environment. The study also forms a contribution to the OECD Innovation Strategy launched at the OECD Ministerial Council Meeting in 2007. Keywords: absorption capacity, competition, Doha Development Agenda, global value chains, innovation, intellectual property rights, licensing, MNEs, multinational enterprises, scale economies, technology transfer, TRIPs Creation-Date: 2008-08-07 Number: 72 Handle: RePEc:oec:traaab:72-EN Template-type: ReDIF-Paper 1.0 Author-Name: Caroline Lesser Author-Workplace-Name: OECD Title: Market Openness, Trade Liberalisation and Innovation Capacity in the Finnish Telecom Equipment Industry: Trade and Innovation Project - Case Study No. 1 Abstract: There is today a great interest in understanding how governments can promote innovation and the benefits it brings, as evidenced by the discussions at the 2007 OECD Ministerial Council Meeting. Against this background, the OECD Trade Committee decided to undertake a "Trade and Innovation Project", to gain a better understanding of how trade and investment patterns and policies affect innovation capacity, and interact with other key policies influencing innovation performance. This paper is one of the five case studies conducted in the framework of this project. It examines how recent trade and investment patterns (including "trade in tasks" resulting from supply chain fragmentation) and Finnish and global policies promoting market openness and free trade have affected the innovation process in Finland’s (mobile) telecom equipment industry. The study illustrates how regulatory, trade and investment policy choices have helped -- alongside other key policies-- provide the right framework conditions for innovation in this country of 5.2 million people. In addition, it examines how the private sector, and more particularly Nokia, has taken advantage of those conditions to enhance its innovation capacity. This study does not constitute an in-depth evaluation of the effectiveness of Finnish public policies nor of Nokia’s business strategy. Rather, it provides an illustration of how certain public policy choices and business strategies can contribute to a country’s innovation performance. Keywords: deregulation, Finland, foreign direct investment, information and communication technologies, Information Technology Agreement, innovation, intra-industry trade, investment, Nokia, telecom equipment industry, trade reform Creation-Date: 2008-07-29 Number: 73 Handle: RePEc:oec:traaab:73-EN Template-type: ReDIF-Paper 1.0 Author-Name: Vangelis Vitalis Author-Workplace-Name: Ministry of Foreign Affairs and Trade, New Zealand Title: Domestic Reform, Trade, Innovation and Growth in New Zealand's Agriculture Sector: Trade and Innovation Project - Case Study No. 2 Abstract: This paper is one of five case studies which is a part of a larger project looking at the various effects that trade and investment can have on innovation. This paper studies the effect of domestic reform including trade on New Zealand's agriculture sector. Agricultural and trade reform has led to increased competition and has led to substantial changes in innovation in the commercial agriculture sector such as wine, fruit, livestock and dairy leading to a large change in composition and an across the board increase in innovation and productivity. Keywords: agricultural machinery, agricultural reform, agriculture, dairy, foreign investment, horticulture, innovation, New Zealand, sheep, trade reform, wine Creation-Date: 2008-08-06 Number: 74 Handle: RePEc:oec:traaab:74-EN Template-type: ReDIF-Paper 1.0 Author-Name: Janaka Wijayasiri Author-Workplace-Name: Institute of Policy Studies Author-Name: Jagath Dissanayake Author-Workplace-Name: Institute of Policy Studies Title: The Ending of the Multi-Fibre Agreement and Innovation in Sri Lankan Textile and Clothing Industry: Trade and Innovation Project - Case Study No. 3 Abstract: This paper is one of five case studies which is a part of a larger project looking at the various effects that trade and investment can have on innovation. This paper studies the effect of the ending of the Multi-Fibre Agreement (MFA) on innovation in the Sri Lankan textile and clothing sector. The ending of the quota system under the MFA led to an increase in the US and EU markets which has motivated a large number of innovations in the Sri Lankan textile and clothing sector. Some large companies have become a total services provider while some are trying to establish their own brands. Product innovations with foreign partners, process innovations such as introduction of CAD/CAM and various marketing and organisational innovations have been implemented. Keywords: brands, competition, corporate social responsibility, CSR, fair-trade, FDI, garment, innovation, joint-ventures, marketing, MFA, Multi-Fibre Arrangement (MFA), outsourcing, Sri Lanka, textile and clothing industry Creation-Date: 2008-08-06 Number: 75 Handle: RePEc:oec:traaab:75-EN Template-type: ReDIF-Paper 1.0 Author-Name: Ron Sandrey Author-Workplace-Name: TRALAC (Trade Law Centre for Southern Africa) Author-Name: Nick Vink Author-Workplace-Name: University of Stellenbosch Title: Deregulation, Trade Reform and Innovation in the South African Agriculture Sector: Trade and Innovation Project - Case Study No. 4 Abstract: This paper is one of five case studies which is a part of a larger project looking at the various effects that trade and investment can have on innovation. This paper studies the effect of deregulation and trade reform on South Africa's agriculture sector. South Africa's agriculture sector is highly dualistic consisting of a developed commercial sector and a subsistence farming sector. Deregulation and trade reform has led to substantial changes in innovation in the commercial agriculture sector such as wine and fruit, leading to a large change in composition while innovation seems to have been more limited in subsistence agriculture which lacks absorption capacity. Legal uncertainties related to land reform may also be one factor which can negatively affect innovation in the commercial farming sector. Keywords: absorption capacity, agriculture, deregulation, field crops, foreign investment, fruit, innovation, South Africa, trade reform, wine Creation-Date: 2008-08-06 Number: 76 Handle: RePEc:oec:traaab:76-EN Template-type: ReDIF-Paper 1.0 Author-Name: Osamu Onodera Author-Workplace-Name: OECD Author-Name: Hann Earl Kim Author-Workplace-Name: KDI School of Public Policy and Management Title: Trade and Innovation in the Korean Information and Communication Technology Sector: Trade and Innovation Project - Case Study No. 5 Abstract: This paper is one of five case studies which is a part of a larger project looking at the various effects that trade and investment can have on innovation. This paper studies the effect of trade and investment liberalisation on Korea’s Information and communication technology (ICT) sector and finds that trade and investment have played a crucial role in innovation in the sector. In the initial stages of development, imported capital goods and components, joint ventures, licensing and Original Equipment Manufacturer (OEM) contracts were important sources of technology and exports were key to gain the necessary economies of scale for innovation. Free trade and investment policies in the 1990s and stronger protection of intellectual property rights have led to an increase in R&D and innovation and has led to the transformation of Korea into a knowledge based economy in the recent decade. Classification-JEL: O Keywords: ICT, information and communication technologies, Information Technology Agreement, innovation, intellectual property rights, Korea, patents, trade reform Creation-Date: 2008-09-26 Number: 77 Handle: RePEc:oec:traaab:77-EN Template-type: ReDIF-Paper 1.0 Author-Name: Barbara Fliess Author-Workplace-Name: OECD Author-Name: Frédéric Gonzales Author-Workplace-Name: OECD Author-Name: Raymond Schonfeld Author-Workplace-Name: OECD Title: Technical Barriers to Trade: Evaluating the Trade Effects of Supplier's Declaration of Conformity Abstract: Since the WTO Agreement on Technical Barriers to Trade (TBT) came into force, Members have invested considerable efforts in adopting and promoting the use of measures intended to reduce conformity assessment (CA) related barriers to trade. Our knowledge of the impact of specific trade facilitating programmes in the CA field is limited so far, making empirical studies of their trade impact desirable. This study investigates the impact of Supplier’s Declaration of Conformity (SDOC) on trade flows. As under SDOC regimes suppliers themselves provide written assurance of conformity to applicable technical regulations of a market, the costs of compliance are assumed to be smaller than for CA regimes requiring certification by third parties. The study focuses on three cases of SDOC introduction in the European Union covering eligible products from the medical devices, telecommunications equipment and machinery sectors. The paper explains the rationale for using SDOC, expected benefits and design characteristics of SDOC regimes. The quantitative analysis uses a gravity model and finds compelling evidence that the introduction of SDOC in the EU was a factor that influenced the evolution of import flows into EU markets positively. Intra-EU trade flows and imports from extra-EU OECD countries increased for SDOC-eligible radio and telecommunications equipment and low-risk medical devices, whereas the results for machinery are ambiguous. The most striking increases, visible in all three sectors, are found for exports to EU markets from non-OECD (developing) countries included in the sample. Analysis of the effect of SDOC for selected individual EU members furthermore suggest that the magnitude of effect depends on the nature of the CA regime that SDOC replaced. Keywords: certification, developing countries, European Union, France, Italy, OECD, targets, technical barriers to trade, telecommunications, United Kingdom Creation-Date: 2008-09-26 Number: 78 Handle: RePEc:oec:traaab:78-EN Template-type: ReDIF-Paper 1.0 Author-Name: Jane Korinek Author-Workplace-Name: OECD Author-Name: Mark Melatos Author-Workplace-Name: University of Sydney Author-Name: Marie-Luise Rau Author-Workplace-Name: OECD Title: A Review of Methods for Quantifying the Trade Effects of Standards in the Agri-Food Sector Abstract: This paper evaluates the different approaches to quantifying the trade impact of standards in the agri-food sector. The approaches discussed fall into two broad categories: ex post empirical estimation and ex ante simulation. Recent developments on the impact of standards on market segmentation are also examined. Since both the level and design of a standard are important determinants of its impact, the most suitable choice of quantification strategy will depends on the characteristics of the standard itself. For example, ex ante simulation techniques are more appropriate when measuring the impact of complex standards regimes. On the other hand, ex post empirical estimation is preferable when the level of the standard is more important than its design. Keywords: standards, TBT Creation-Date: 2008-09-29 Number: 79 Handle: RePEc:oec:traaab:79-EN Template-type: ReDIF-Paper 1.0 Author-Name: Molly Lesher Author-Workplace-Name: OECD Author-Name: Sébastien Miroudot Author-Workplace-Name: OECD Title: FDI Spillovers and their Interrelationships with Trade Abstract: Foreign direct investment (FDI) represents an increasingly important dimension of international economic integration with global FDI flows growing faster than output over the past two decades. FDI is a particular form of investment, as it transfers knowledge as well as finance that may otherwise be unavailable in the domestic economy. This paper uses firm-level data to identify FDI spillovers across countries, sectors and time. The analysis suggests that knowledge-related spillovers from FDI vary considerably across sectors. Services industries enjoy the strongest productivity-enhancing effects of FDI, particularly through backward linkages. There is no strong evidence of horizontal productivity spillovers at the aggregate level. The results also indicate a significant and positive correlation between the degree of trade openness and output when measuring the impact of foreign presence in the domestic economy. A positive interaction is found between trade liberalisation and productivity spillovers. Thus, trade liberalisation can be seen as an important component of any reform package designed to help countries maximise the benefits of FDI. Keywords: backward linkage, FDI, forward linkage, IAS 19, investment, micro data, services, spillovers, technology, trade liberalisation, trade openness Creation-Date: 2008-10-07 Number: 80 Handle: RePEc:oec:traaab:80-EN Template-type: ReDIF-Paper 1.0 Author-Name: Hildegunn Kyvik Nordås Author-Workplace-Name: OECD Title: The Impact of Services Trade Liberalisation on Trade in Non-Agricultural Products Abstract: This study finds that trade in services contributes to a broader services supplier base that supports competitiveness in high-technology and high-value added manufacturing. It is shown that with low, but still significant trade costs in services, large countries have a comparative advantage for services-intensive manufactured goods, an advantage that is enhanced if the country also produces intermediate services more effectively or has lower barriers to entry for services suppliers. Countries with superior organisational technology (using producer services more effectively) will strengthen their comparative advantage in manufacturing following services trade liberalisation. The impact of services trade liberalisation on trade in manufacturing is non-linear. Until trade costs have reached a threshold level the trade response is quite modest. Consequently, going the last mile of services trade liberalisation, including lowering regulatory barriers, will have the largest impact. Exports of labour-intensive manufactures require a host of supporting services and the need for these services has increased over time due to rapidly changing consumer tastes and growing consumer awareness of health, safety and social standards. In order to support industrial development, developing countries need to focus their services trade policy not only on offensive interests, but also on ensuring that local manufacturers have the best possible access to services. Improving market access in telecommunications and business services; particularly legal services, accounting, advertising and technical consulting services would have the largest impact. Classification-JEL: F12; F13; F14 Keywords: general equilibrium, linkages, services trade liberalisation Creation-Date: 2008-10-16 Number: 81 Handle: RePEc:oec:traaab:81-EN Template-type: ReDIF-Paper 1.0 Author-Name: Margit Molnar Author-Workplace-Name: OECD Author-Name: Molly Lesher Author-Workplace-Name: OECD Title: Recovery and Beyond: Enhancing Competitiveness to Realise Indonesia's Trade Potential Abstract: As Indonesia recovered from the 1997-98 Asian Financial Crisis, the economy underwent significant political and structural changes, and the role of trade policy evolved. It is clear that there is much scope for trade to enhance economic growth. However, there remain significant challenges in realising this potential, including the need to improve external competitiveness. This paper analyses Indonesian trade policy following the crisis, and identifies some key reforms that may help to increase competitiveness. In view of the evolving domestic and global environment, a comprehensive policy approach will be required involving trade policy reform moving in tandem with reforms in other policy areas. Suggested reforms include, among others, complementing applied tariff cuts with reductions in non-tariff barriers and bound tariffs, reducing trade costs by easing behind-the-border regulations, and further improving the investment climate. Keywords: Asian crisis, backward linkage, comparative advantage, competitiveness, FDI, forward linkage, horizontal linkages, Indonesia, micro data, productivity, spillovers, textiles Creation-Date: 2008-12-22 Number: 82 Handle: RePEc:oec:traaab:82-EN Template-type: ReDIF-Paper 1.0 Author-Name: Malory Greene Author-Workplace-Name: OECD Author-Name: Charles Tsai Author-Workplace-Name: OECD Title: Enhancing Market Openness through Regulatory Reform in the People's Republic of China Abstract: This study analyses the People’s Republic of China’s trade policy environment with a focus on trade-related regulations and their role in supporting China’s market openness. It examines in particular to what extent China’s trade regulations comply with the principles of transparency and non-discrimination and facilitate foreign trade operations and international competition. The report proposes a series of policy recommendations to make China’s regulatory framework more market-oriented and trade-and-investment friendly. The study is complemented with a business survey of OECD member country enterprises and Chinese firms. The survey assesses government influence on the investment climate through the impact of their policies on the costs, risks and barriers to competition facing firms. The main report and the business survey conclude that transparency plays a critical role in the development of a healthy business environment by reducing regulatory impediments. Keywords: China, conformity assessment, intellectual property rights, investment, market openness, non-discrimination, regulatory reforms, standards, trade policy, trade reform, trade restrictiveness index, transparency Creation-Date: 2008-12-18 Number: 83 Handle: RePEc:oec:traaab:83-EN Template-type: ReDIF-Paper 1.0 Author-Name: Mohamed Ali Marouani Author-Name: Laura Munro Author-Workplace-Name: OECD Title: Assessing Barriers to Trade in Services in the MENA Region Abstract: This paper aims to assess barriers to service provision in the financial, telecom, and transport sectors of selected MENA countries, including both trade and domestic restrictions. The analysis is focused on computation of aggregate and modal trade restrictiveness indexes (TRIs) by sector, drawing on information gathered from detailed questionnaires and country reports prepared by local consultants. The conclusions highlight that significant regulatory reforms have taken place in the service sectors of Egypt, Jordan, Lebanon and Morocco over the last decade, but that a broad range of restrictions still remain. The most significant change in these service sectors has been the lifting or softening of the constraints imposed on foreign equity participation. Reforms, however, have had varying degrees of impact on market structure depending on the country and the sector. Keywords: MENA region, services, trade Creation-Date: 2009-02-09 Number: 84 Handle: RePEc:oec:traaab:84-EN Template-type: ReDIF-Paper 1.0 Author-Name: Hildegunn Kyvik Nordås Author-Workplace-Name: OECD Author-Name: Henk Kox Author-Workplace-Name: OECD Title: Quantifying Regulatory Barriers to Services Trade Abstract: This study analyses how domestic regulation affects trade in services through commercial presence and to what extent regulation, level and heterogeneity, has an impact on the choice of mode of servicing a foreign market for total services, financial services, transport, communication, computer, and other business services. Regulatory heterogeneity is found to have a relatively large impact on trade through commercial presence. If all countries in the sample harmonized or recognized each other’s regulation, total services trade through commercial presence could increase by between 13 and 30% depending on the country. The study also assesses what determines services suppliers’ choice of mode. Modes of supply are found to be complementary to various degrees. Commercial presence is more dominant the more similar a country pair is as far as regulation and business environment are concerned and countries sharing a common language are more likely to trade through commercial presence. For some sectors it is found that the disadvantage of remoteness is amplified by strict regulation. In most services sectors trade liberalisation generates meaningful market access only if commercial presence is allowed. Furthermore, absence of explicit barriers to trade and investment is not necessarily sufficient to attract foreign investors. Keywords: modes of supply, regulatory harmonization, regulatory reforms, trade in services Creation-Date: 2009-02-19 Number: 85 Handle: RePEc:oec:traaab:85-EN Template-type: ReDIF-Paper 1.0 Author-Name: Caroline Lesser Author-Workplace-Name: OECD Author-Name: Evdokia Moisé-Leeman Author-Workplace-Name: OECD Title: Informal Cross-Border Trade and Trade Facilitation Reform in Sub-Saharan Africa Abstract: The informal sector still constitutes an important part of developing country economies. In Africa, it is estimated to represent 43 percent of official gross domestic product (GDP), thus being almost equivalent to the formal sector. While this phenomenon may provide short-term solutions to poor households, in the longer term, it can seriously challenge the economic development of African countries. This study explores one particular aspect of the informal economy, namely informal cross-border trade in selected Sub-Saharan African countries, and identifies which trade facilitation measures (such as those currently negotiated at the World Trade Organisation) have the potential to encourage traders to switch from informal to formal trade. The paper considers measures that help reduce direct and indirect trade transaction costs arising from mandatory import- and export-related procedures; mechanisms that simplify trade-related regulations and requirements for selected low value transactions; and policies that help enhance compliance levels with existing international trade regulations. In addition, the study explores a number of complementary measures (such as the provision of effective business support services to ?formal? traders and enhanced dialogue between traders and border agencies) which can further encourage firms to formalise their cross-border transactions. The paper does however not suggest that trade facilitation reform alone will help reduce informal cross-border trade nor that governments will be able to fully eliminate its incidence in the region. Keywords: customs modernisation, customs procedures, economic development, informal trade, simplified trade regime, Sub-Sahara Africa, trade facilitation, World Trade Organisation Creation-Date: 2009-02-18 Number: 86 Handle: RePEc:oec:traaab:86-EN Template-type: ReDIF-Paper 1.0 Author-Name: Jane Korinek Author-Workplace-Name: OECD Author-Name: Mark Melatos Author-Workplace-Name: University of Sydney Title: Trade Impacts of Selected Regional Trade Agreements in Agriculture Abstract: This paper provides an in-depth examination of the trade effects of three regional trade agreements (RTAs) – the ASEAN Free Trade Agreement (AFTA), the Common Market for Eastern and Southern Africa (COMESA) and the Southern Cone Common Market (MERCOSUR) -- in the agricultural sector. Results from a gravity model suggest that the creation of AFTA, COMESA and MERCOSUR have increased trade in agricultural products between their member countries. There is no robust indication of trade diversion with respect to imports from outside the region. The agreements are therefore net trade creating. There is no robust indication however that there has been strong trade creation with non-members in the case of any of the RTAs under study. In some cases, lack of transport and communications infrastructure, in addition to supply constraints, lessens the effect of the RTA on trade flows. Trade costs such as transport and logistics seem to remain important factors in determining agricultural trade flows. In some RTAs, countries have a comparative advantage in exporting many of the same agricultural products, thereby decreasing the impact of the preferential market access. A number of implications for South-South RTAs can be drawn from examining these very different agreements. Classification-JEL: F13; F53 Keywords: access, AFTA, agricultural trade, ASEAN, COMESA, gravity model, Mercosur, preferential market access, regional trade agreements, RTA, South-South, tariffs, trade creation, trade diversion, trade liberalisation Creation-Date: 2009-04-03 Number: 87 Handle: RePEc:oec:traaab:87-EN Template-type: ReDIF-Paper 1.0 Author-Name: Przemyslaw Kowalski Author-Workplace-Name: OECD Author-Name: Nora Dihel Title: India's Trade Integration, Realising the Potential Abstract: This study examines economic implications of India’s trade and trade policy reforms during the period from 1990 to 2007. It first describes India’s economic growth and the composition and performance of its trade at the product and broad sector level. Next, recent reforms and the current trade policy stance are assessed and recommendations for further policy reforms are discussed. The impact of India’s openness on its total factor productivity is also addressed. The analysis shows that India has gone a long way in reducing its tariffs on non-agricultural products as well as selected non-tariff barriers and that this had a positive impact on the economy. Nevertheless, moderate to high protection still persists and adds to the hurdles faced by Indian enterprises. Overall, India’s pattern of specialisation is still affected by the pre- 1990s policies; while certain services have recently performed very well, their high reliance on skilled labour and capital means they can only address a small portion of the Indian jobless growth problem. India’s endowment structure and the recent services-dominated export profile suggest that it needs to improve conditions for the development of its manufacturing sector, with a particular emphasis—at this stage—on labour-intensive activities. The remaining goods and services trade barriers combine with domestic red tape, infrastructure bottlenecks and factor markets rigidities that restrict new entry and competition to keep India’s competitiveness, particularly in agriculture and manufacturing, at relatively low levels. In an effort to offset the remaining protection, India has developed a complex system of duty exemption schemes, special investment and establishment rules and special economic zones (SEZs) that provide incentives particularly to exporting firms. The paper argues that, while such a policy can have important demonstration effects, across-the-board reduction of trade and business barriers could have more beneficial economy-wide and export effects. Keywords: India, manufacturing, productivity, revealed comparative advantage, services, services trade barriers, special economic zones, tariffs, trade Creation-Date: 2009-05-19 Number: 88 Handle: RePEc:oec:traaab:88-EN Template-type: ReDIF-Paper 1.0 Author-Name: Sébastien Miroudot Author-Workplace-Name: OECD Author-Name: Alexandros Ragoussis Author-Workplace-Name: OECD Title: Vertical Trade, Trade Costs and FDI Abstract: Firms find advantages in sourcing inputs from abroad and in fragmenting their production process. On average, vertical trade represents about one third of total trade among OECD countries. This report describes and illustrates new firm strategies of vertical specialisation and explores the policy implications of new patterns of trade and FDI. It is in services industries that vertical trade has increased the most in recent years. While vertical trade seems to respond to the same determinants as the rest of exports and imports, distance-related trade costs play a more important role in explaining the volume of bilateral trade flows resulting from vertical specialisation. Distance-related costs have a lower impact on foreign direct investment and sales of foreign affiliates but there is a complementary relationship between trade and FDI. Vertical specialisation networks have created new challenges for trade policymakers. In particular, growth of bilateral exchanges between countries depends increasingly on barriers to trade and investment in the rest of the world. Moreover, the impact of a country’s own trade barriers on domestic firms is significant in the context of vertical specialisation. The analysis stresses the importance of multilateral negotiations for trade and investment liberalisation. Keywords: distance, export platform, FDI, firm strategy, MNEs, trade costs, trade liberalisation, vertical specialization, vertical trade Creation-Date: 2009-07-28 Number: 89 Handle: RePEc:oec:traaab:89-EN Template-type: ReDIF-Paper 1.0 Author-Name: Przemyslaw Kowalski Author-Workplace-Name: OECD Author-Name: Margit Molnar Author-Workplace-Name: OECD Title: Economic Impacts of the Phase-Out in 2005 of Quantitative Restrictions under the Agreement on Textiles and Clothing Abstract: This paper discusses the economic impacts of the phase-out of the Multi-Fibre Arrangement (MFA), which was provided for under the 1994 Agreement on Textiles and Clothing (ATC). It presents an overview of the integration process of textile and clothing products into the GATT, takes stock of the most recent changes in the global textile and clothing (T&C) markets, and analyses some major economic impacts and strategies adopted by producers in OECD and non-OECD countries to survive in the post-MFA global competitive arena. Keywords: adjustment, Agreement on Textiles and Clothing (ATC), clothing, horizontal differentiation, Multi-Fibre Arrangement (MFA), price competition, quality competition, quotas, textiles, trade, vertical differentiation Creation-Date: 2009-07-22 Number: 90 Handle: RePEc:oec:traaab:90-EN Template-type: ReDIF-Paper 1.0 Author-Name: Przemyslaw Kowalski Author-Workplace-Name: OECD Author-Name: Ralph Lattimore Author-Name: Novella Bottini Title: South Africa's Trade and Growth Abstract: This paper examines key trade and trade related issues facing South Africa. It describes South Africa‘s re-entry into the global trade architecture and its economic growth in the context of its trade performance, as well as the composition and performance of South African exports at the product and sector level in the period from the early 1990s to 2006. The study also assesses South Africa‘s comparative trade performance based on a gravity model of international trade and discusses some key historical and recent trade policy developments. Finally, the study provides an econometric assessment of the impact of South Africa‘s trade liberalisation during the period from 1988 to 2003 on labour and total factor productivity across its industrial sectors. It shows that while South African trade performance has been good in recent years there is significant room to liberalise further as an adjunct to labour market reforms. Further trade policy liberalisation would bring about important equity and efficiency gains. Multilateral trade liberalisation has the potential to maximise the gains and ease the transition to freer trade for South Africa but unilateral liberalisation also deserves consideration. Keywords: dynamic gains from trade, gravity model, productivity, regional integration, revealed comparative advantage, South Africa, tariffs, trade, trade network, trade performance Creation-Date: 2009-09-07 Number: 91 Handle: RePEc:oec:traaab:91-EN Template-type: ReDIF-Paper 1.0 Author-Name: Jane Korinek Author-Workplace-Name: OECD Author-Name: Patricia Sourdin Author-Workplace-Name: University of Adelaide Title: Clarifying Trade Costs: Maritime Transport and its Effect on Agricultural Trade Abstract: Maritime transport costs have a significant impact on the trade in agricultural goods. Maritime transport costs represent a high proportion of the imported value of agricultural products -- 10% on average, which is a similar level of magnitude as agricultural tariffs. This study shows that a doubling in the cost of shipping is associated with a 42% drop in trade on average in agricultural goods overall. The tendency to source imports from countries with low transport costs is therefore strong. Trade in some products is particularly affected by changes in maritime transport costs, in particular cereals and oilseeds, which are shipped in bulk. Time spent in transit also has a strong effect on trade: an extra day spent at sea on an the average sea voyage of 20 days implies a 4.5% drop in trade between a given pair of trading partners. Not only cost but also efficiency in getting agricultural goods to market are therefore important factors in explaining trade flows. Creation-Date: 2009-09-28 Number: 92 Handle: RePEc:oec:traaab:92-EN Template-type: ReDIF-Paper 1.0 Author-Name: Sébastien Miroudot Author-Workplace-Name: OECD Author-Name: Rainer Lanz Author-Workplace-Name: OECD Author-Name: Alexandros Ragoussis Author-Workplace-Name: OECD Title: Trade in Intermediate Goods and Services Abstract: This study analyses trade flows in intermediate goods and services among OECD countries and with their main trading partners. Combining trade data and input-output tables, bilateral trade in intermediate goods and services is estimated according to the industry of origin and the using industry for the period 1995-2005. Trade in intermediate inputs takes place mostly among developed countries and represents respectively 56% and 73% of overall trade flows in goods and services. Gravity regressions indicate that in comparison to trade in final goods and services, imports of intermediates are more sensitive to trade costs and are less attracted by bilateral market size. Further findings are that the activities of multinational enterprises can be associated with higher trade flows of intermediate inputs and with a higher ratio of foreign to domestic inputs in using industries. Results from production function regressions and from a stochastic frontier analysis suggest that a higher share of imported inputs leads to productivity gains in domestic industries and reduces inefficiencies in the use of technology. Classification-JEL: D57; F13; F23 Keywords: FDI, fragmentation, intermediate inputs, multinational enterprises, offshoring, outsourcing, parts and components, trade and productivity, trade in intermediates, trade policy Creation-Date: 2009-11-03 Number: 93 Handle: RePEc:oec:traaab:93-EN Template-type: ReDIF-Paper 1.0 Author-Name: Jean-Jacques Hallaert Author-Workplace-Name: OECD Author-Name: Laura Munro Title: Binding Constraints to Trade Expansion: Aid for Trade Objectives and Diagnostics Tools Abstract: Trade can be a powerful engine for economic growth, poverty reduction, and development. However, harnessing the power of trade is often difficult for developing countries, particularly the least developed countries, because of supply-side domestic constraints (lack of trade-related infrastructure and capacity). The Aid for Trade Initiative was launched to address these constraints. This paper sets forth strategies to identify the most binding constraints to trade expansion so countries and donors can channel resources toward reforms and projects that have the largest effect. It shows that the four most common objectives of aid-for-trade projects (increasing trade, diversifying exports, maximizing the linkages with the domestic economy, and increasing adjustment capacity) have the potential to boost growth and reduce poverty in developing countries. However, the potential of trade may not be realized as developing countries often face binding constraints that prevent them from turning trade opportunities into trade, and trade into growth. First, they face difficulties turning trade opportunities into trade flows because of capacity constraints and lack of adequate trade-related infrastructure. Second, some domestic constraints choke the impact of trade expansion on economic growth. The paper focuses on the first set of constraints and presents various diagnostic tools available to identify them. These tools often pinpoint a long list of constraints. As all constraints cannot be addressed simultaneously, there is a need to identify the most binding ones in order to prioritize reforms. The paper suggests combining the different diagnostic tools in an appropriate framework to achieve this prioritization. An adaptation of the growth diagnostics— originally developed by Hausmann et al. (2005) for guiding growth strategies—can be such a framework. By shifting the focus from growth to trade, this framework can be readily adapted by local authorities and development practitioners. Keywords: aid for trade, binding constraints to trade, diagnostic tools, export diversification, infrastructure, supply-side constraints, trade and growth, trade capacities, trade expansion, trade reform Creation-Date: 2009-12-02 Number: 94 Handle: RePEc:oec:traaab:94-EN Template-type: ReDIF-Paper 1.0 Author-Name: Jane Korinek Author-Name: Jeonghoi Kim Author-Workplace-Name: OECD Title: Export Restrictions on Strategic Raw Materials and Their Impact on Trade Abstract: Barriers to trade come in a variety of forms. This paper examines one such barrier, export restrictions, and how it impacts trade and global supply in selected strategic metals and minerals. The metals and minerals examined in the paper are of particular interest for a number of reasons: they are generally geographically concentrated in a few countries, many are used in the production of high-technology goods in strategic sectors and there are few substitutes for these raw materials given the present state of technology. For all these reasons, importing countries are dependent on a reliable supply of these raw materials. Export restrictions may be applied for a number of reasons: protection of the environment, preservation of natural resources, protection of downstream industries, or as a response to a number of different market imperfections. This paper examines the motivations for using export restrictions and finds varying impacts on trade and global supply. In one case, the export restrictions put into place did not fulfill their objective of environmental protection. In another, the presence of export restrictions in one country put pressure on other exporters to apply restrictions suggesting the potential for competitive policy practices in restricting exports. In a third case study, export restrictions were seen to impact investment decisions by potential suppliers worldwide by introducing an added element of risk in the industry. The impact of export restrictions on strategic metals and minerals are exacerbated in many cases because producing countries have a quasi-monopoly on supply. Since these metals and minerals are essential in the production of some high-technology products and are not easily replaceable in the medium term, industry participants in some importing countries are concerned about future access at sustainable prices. Keywords: Chromite, Chromium, environmental technologies, export duties, export licensing, export quotas, export restrictions, export taxes, geographical concentration, mineral reserves, minerals trade, Molybdenum, natural resource preservation, quantitative restrictions, Rare Earths, raw materials, strategic metals, trade, trade policy, Trade policy instruments, VAT Rebates Creation-Date: 2010-03-29 Number: 95 Handle: RePEc:oec:traaab:95-EN Template-type: ReDIF-Paper 1.0 Author-Name: Nico Meyer Author-Workplace-Name: Development Bank of Southern Africa Author-Name: Tamas Fenyes Author-Workplace-Name: University of Pretoria Author-Name: Martin Breitenbach Author-Workplace-Name: University of Pretoria Author-Name: Ernst Idsardi Author-Workplace-Name: University of the Free State Title: Bilateral and Regional Trade Agreements and Technical Barriers to Trade: An African Perspective Abstract: Regional trade agreements (RTAs) present opportunities for controlling technical barriers to trade (TBTs). Using key principles and provisions of the WTO Agreement on TBT as a yardstick for analysis, this paper examines whether and how eight major regional integration agreements within the African region address TBT issues. It finds that TBT are not an important issue in Sub-Saharan African RTAs. Only one of the 8 agreements surveyed refers explicitly to the WTO TBT Agreement. Existing provisions for eliminating TBT-related barriers or harmonising legitimate technical regulations are formulated mostly in broad and nonprescriptive terms. The paper describes concrete steps that parties to these RTAs have taken in order to reduce technical barriers. Such initiatives have been taken at the national level but can also involve collaboration between RTAs. Country case studies show that weak TBT infrastructure remains a handicap for businesses and governments and that, with the exception of the Southern African Development Cooperation (SADC), investment by regional economic communities (RECs) in institutional infrastructure related to TBT has not been significant. The paper describes in some detail relevant activities taking place within SADC which could serve as a best-practice model for other African regional agreements. Serious capacity constraints stand in the way of African countries taking on the challenge of reducing TBT barriers. Also, low local levels of living standards favour weak product standard, and this acts as a barrier to upgrading product standards for export markets. Amending TBT coverage in African RTAs, a review of performance of enquiry points and assistance with infrastructure modernisation are among a set of measures recommended for achieving better TBT policy alignment among countries of the region. Keywords: Central African Economic and Monetary Union, conformity assessment procedures, East African Community, Economic Community of West African States, free trade agreement, FTA, harmonisation, Kenya, mutual recognition, Nigeria, regional economic community, regional trade agreements, RTA, South Africa, South African-EU Trade and Development Cooperation Agreement, Southern African Development Community, standards, Sub-Sahara Africa, TBT, technical barriers, technical barriers to trade, technical regulations, trade barriers, West African Economic and Monetary Union, WTO Agreement on TBT Creation-Date: 2010-06-02 Number: 96 Handle: RePEc:oec:traaab:96-EN Template-type: ReDIF-Paper 1.0 Author-Name: G. M. Peter Swann Title: International Standards and Trade: A Review of the Empirical Literature Abstract: While there is a large literature on the economic theory of international standards, and their presumed effects, we know much less about how international standards work in practice. This paper reviews the body of empirical work that has investigated the specific question: How international standards impact on international trade? Do they help or hinder trade? The work reviewed ranges from econometric studies using a variety of measures of standards derived from e.g. the Perinorm database, diffusion of ISO9000, regional agreements, mutual recognition agreements and harmonisation, to surveys of exporting firms. A mapping of the findings from econometric models shows that there is often, but not always, a positive relationship between international standards and exports or imports, which is in line with the widely held view that international standards are supportive of trade. For national (i.e. country-specific) standards studies find positive as well as negative effects on trade and thus provide only qualified support for the commonly held view that national standards create barriers to trade. Overall, the literature reviewed does not provide a single answer to the question of trade effects, and the explanation for this appears to have to do with how the multiple economic effects of standards interact. The paper summarises some of the existing empirical evidence for some of these effects, which include network externalities, variety, knowledge, quality and trust, and which merit further research in order to understand when standards help trade, and when not. Keywords: econometric model, empirical, exports, harmonisation, harmonisation agreement, IEC, imports, International Electrotechnical Commission, International Organisation for Standardisation, international standards, International Telecommunication Union, international trade, ISO, ITU, MRAs, mutual recognition, mutual recognition agreement, Perinorm, standards, TBT Agreement, technical regulations, trade barriers, trade effect, WTO SPS Agreement Creation-Date: 2010-06-02 Number: 97 Handle: RePEc:oec:traaab:97-EN Template-type: ReDIF-Paper 1.0 Author-Name: Jane Korinek Author-Workplace-Name: OECD Author-Name: Jean Le Cocguic Author-Workplace-Name: OECD Author-Name: Patricia Sourdin Title: The Availability and Cost of Short-Term Trade Finance and its Impact on Trade Abstract: The systemic nature of the recent financial crisis precipitated a general and synchronized drop of activity in the interbank market, contaminating most banks in almost all regions. The ensuing economic crisis was characterised by a drop in production coupled with a much larger drop in trade flows. There may be a number of reasons for the particularly sharp drop in trade. This paper examines one potential reason for the drop in trade between mid-2008 and the first quarter of 2009 – changes in the cost and availability of trade finance to potential exporters and importers. Results from an econometric model developed to examine this question show that short-term trade finance availability has had an effect on trade flows during the crisis period, but that its impact has been smaller than that of falling demand. It also shows that the availability and cost of trade finance seem to have had a limited impact on trade outside crisis periods. During the crisis period, the cost of financing negatively impacted trade overall due to an increase in spreads. This indicates that financing was probably prohibitively expensive for some traders, thereby severely constraining their ability to trade. This paper however highlights one of the major difficulties regarding policymaking in the area of trade finance – that there is little reliable quantitative information. Creation-Date: 2010-06-02 Number: 98 Handle: RePEc:oec:traaab:98-EN Template-type: ReDIF-Paper 1.0 Author-Name: Lior Herman Title: Multilateralising Regionalism: The Case of E-Commerce Abstract: This study analyses the extent to which e-commerce provisions in existing RTAs can be multilateralised. E-commerce has been recognised as an important engine for growth and development, yet WTO negotiations in this area have yielded very little progress so far. Against the backdrop of WTO stalemate, an increasing number of RTAs adopted specific provisions and rules for e-commerce. While these provisions increase the tradability of e-commerce, they also risk the creation of an e-commerce spaghetti bowl that will undermine the prospects for future WTO consensus in this area. This study considers two broad approaches for multilateralisation of RTA provisions. First, it suggests bottom-up multilateralisation extending RTAs e-commerce undertakings and provisions to a larger number of trading partners. Second, it proposes top-down multilateralisation which can advance e-commerce provisions, commitments and common learning at the WTO level. Both approaches to multilateralisation emphasise the importance of common definitions, rule-making and extension of bilateral liberalisation undertakings. The study highlights that despite the proliferation of e-commerce provisions in RTAs, many commonalities exist thus increasing the possibility of multilateral convergence. Classification-JEL: F13; F14; F15; F50 Keywords: e-commerce, multilateralisation, political economy, regional trade agreements, WTO Creation-Date: 2010-06-28 Number: 99 Handle: RePEc:oec:traaab:99-EN Template-type: ReDIF-Paper 1.0 Author-Name: Jean-Jacques Hallaert Author-Workplace-Name: OECD Title: Increasing the Impact of Trade Expansion on Growth: Lessons from Trade Reforms for the Design of Aid for Trade Abstract: In order to reach its objectives, Aid for Trade should not only focus on helping developing countries to turn trade opportunities into trade but also tackle the binding constraints that choke the impact of trade on economic growth. This report shows that although most trade reforms had a positive impact on economic growth, some reforms proved unsustainable and others did not have a meaningful impact on growth. It discusses the various reasons for these outcomes in order to draw the lessons for the design of aid-for-trade projects and programmes and increase their impact on trade performance and on growth. It argues that the scope of activity of aid-for-trade is broad enough to support both the compatible policies that will make a trade reform sustainable and many of the complementary policies that will increase the growth impact of trade expansion. Supporting compatible and complementary policies is about policy coherence and adequate sequencing. As much as possible, proper sequencing and policy coherence should be reflected in the design of aid-for-trade projects and programmes. This cannot be achieved without adequate donor coordination and alignment on country priorities. Keywords: aid effectiveness, aid for trade, complementary policies, sequencing of reforms, supply-side constraints, trade and growth, trade expansion, trade reform Creation-Date: 2010-07-09 Number: 100 Handle: RePEc:oec:traaab:100-EN Template-type: ReDIF-Paper 1.0 Author-Name: Jeonghoi Kim Author-Workplace-Name: OECD Title: Recent Trends in Export Restrictions Abstract: Prices for commodities such as minerals and metals have increased significantly over the past few years. At the same time, there has also been an increase in restrictions on the export of raw materials which has led policy makers and business people to address free trade of raw materials. This paper provides information on the present situation regarding the use of export restrictions and international disciplines on these measures. Export restrictions are maintained to achieve diverse policy objectives, including environmental protection or conservation of natural resources, promotion of downstream processing industries, controlling inflationary pressures, and for fiscal receipts reasons. Export restrictions take various forms such as export duties, quantitative restrictions, and licensing requirements. The number of countries applying export duties over the period 2003-2009 was higher than in previous years and that such duties were introduced primarily by developing and least developed countries. Under the current WTO rules, unlike quantitative export restrictions which are in principle prohibited, there is no substantive discipline on export duties, although there have been efforts to revise this at the multilateral and bilateral levels. The WTO accession process imposes several disciplines. Export restrictions have also been discussed during the DDA negotiations in both NAMA (Non-Agricultural Market Access) and agriculture negotiations. Several regional trade agreements (RTAs) went beyond the WTO by including prohibition of export duties. Export restrictions, by creating a differential between the price available to domestic processors and the price charged to foreign processors, provide domestic processing industries with an advantage. Although several governments apply export restrictions to achieve diverse policy objectives, not all rely on such restrictions. Alternative policy options with different trade impacts are used. In view of the significant impacts of export restrictions on global supply chains, transparency on the use and implementation of such measures should be substantially improved. Keywords: accession, conservation of natural resources, Doha Development Agenda, export duties, export licensing, export restrictions, fiscal receipts, food security, non-agricultural market access, quantitative restrictions, raw materials, regional trade agreements, social objectives, subsidy, tariff escalation, terms-of-trade, trade policy review, transparency, WTO disciplines Creation-Date: 2010-07-19 Number: 101 Handle: RePEc:oec:traaab:101-EN Template-type: ReDIF-Paper 1.0 Author-Name: Barbara Fliess Author-Workplace-Name: OECD Author-Name: Frédéric Gonzales Author-Workplace-Name: OECD Author-Name: Jeonghoi Kim Author-Workplace-Name: OECD Author-Name: Raymond Schonfeld Title: The Use of International Standards in Technical Regulation Abstract: To what extent are governments drawing on relevant international standards in their technical regulations, as mandated by the WTO TBT Agreement? A number of sources of data exist, including electronic databases maintained by governments, but they cannot be used to obtain systematic, international perspective, because there is no harmonised international format and they are incomplete. This study develops an analytical frame for collecting and presenting data on the use of standards in regulation in any sector, as a basis for effective monitoring of the actual extent of use of international standards in regulation and for empirical analysis of the trade effects. This template is then applied to collect and report for five OECD countries detailed factual information on technical regulations, their objectives and standards use in three sectors – electrical household appliances, equipment for natural gas and telephony. The research finds that core government policies confirm the receptiveness of policy and regulation to the use of international standards. It illustrates the difficulty of identifying, for a given sector, which standards are used, for which regulatory objectives, and with which links – direct or indirect – to standards used internationally. The data collected in the harmonised format of the template show how transparency of data on standards use could be improved. Improved transparency can facilitate efforts to improve harmonisation where this can help to remove barriers to trade. Explicit identification of regulatory objectives can ensure that attempts to promote wider harmonisation take account of those objectives. Also, the range of non-national standards actually used as a basis for technical regulation is greater than sometimes acknowledged, and wider knowledge of their availability and use could be helpful to regulators. Another benefit of transparency is that factual presentations of the use of standards in technical regulations provide a source of rich and accurate data for use in empirical work on how regulatory use of standards influences international trade. Keywords: Agreement on Technical Barriers to Trade, Canada, European Union, harmonisation, household appliances, international standards, Korea, Mexico, natural gas, standards, technical barriers to trade, technical regulations, telephones, transparency, United States, WTO Creation-Date: 2010-07-19 Number: 102 Handle: RePEc:oec:traaab:102-EN Template-type: ReDIF-Paper 1.0 Author-Name: Nobuo Kiriyama Author-Workplace-Name: OECD Title: Trade and Innovation: Report on the Chemicals Sector Abstract: This study analyses linkages between trade and innovation in the chemicals sector, building on past work at the OECD on trade and innovation. The chemicals sector has a long history of innovation and is a large trading item. It covers very diverse sub-sectors. This paper analyses and compares different trade and innovation linkages in basic industrial chemicals, speciality and fine chemicals and consumer chemicals. This sector has also been a subject of successive rounds of multilateral trade negotiations, and partly as a consequence tariff rates have been reduced over time. Nonetheless remaining tariffs are still non-negligible and constitute impediments to trade. Export restrictive measures on raw material inputs are also being highlighted on the trade negotiating agenda. Moreover, the chemicals sector is heavily regulated for health and environmental reasons and further legislative initiatives have been pursued, whose practical impact on innovation remains to be seen. Intellectual property has played a very important role in technology diffusion in this sector, and infringement of intellectual property continues to be a major problem. Classification-JEL: F13; F14; L65; O31 Keywords: chemicals, Chemicals Tariff Harmonization Agreement, emerging economies, environmental regulations, export restrictive measures, financial crisis, innovation, intellectual property, multilateral trade negotiations, technical barriers to trade Creation-Date: 2010-09-29 Number: 103 Handle: RePEc:oec:traaab:103-EN Template-type: ReDIF-Paper 1.0 Author-Name: Ricardo H. Cavazos Cepeda Author-Workplace-Name: OECD Author-Name: Douglas C. Lippoldt Author-Workplace-Name: OECD Author-Name: Jonathan Senft Author-Workplace-Name: OECD Title: Policy Complements to the Strengthening of IPRS in Developing Countries Abstract: The past two decades have witnessed an active period of global reform with respect to policies concerning Intellectual Property Rights (IPRs). This paper examines – from an empirical, economic perspective – policies that complement the generally strengthened framework for IPRs in developing countries. The analytical approach involves three complementary levels of analysis: macro, micro and country case studies. Across all three approaches, the results point to a tendency for IPR reform to deliver positive economic results. Reforms concerning patent protection have tended to deliver the most substantial results, but the results for copyright reform and trademark reform were also positive and significant. Overall, the policy complements that were found to be most important in facilitating positive results were those related to inputs for innovative and productive processes and to the ability to conduct business. These include policies that influence the macro-environment for firms as well as the availability of resources (e.g. related to education), the legal and institutional conditions and the fiscal incentives. Keywords: copyrights, economic development, innovation, intellectual property rights, patents, policy reforms, trademarks Creation-Date: 2010-09-14 Number: 104 Handle: RePEc:oec:traaab:104-EN Template-type: ReDIF-Paper 1.0 Author-Name: Minyuan Zhao Title: Policy Complements to the Strengthening of IPRS in Developing Countries - China's Intellectual Property Environment: A Firm-Level Perspective Abstract: Along many dimensions, China has made progress in strengthening the protection of intellectual property (IP) and expanding its research and development (R&D) base over the past two decades. Meanwhile, people’s understanding of IP has gone beyond a mechanical interpretation of patent law or copyright law. Instead, with years of experience in innovation, imitation and knowledge management, firms have begun to realize that IP protection is part of a complex business environment including various cultural, economic and strategic factors. This study takes a firm-level perspective and addresses two related topics. First, the paper examines the IP environment faced by various firms. In particular, the importance of IP protection and the strength of protective measures vary widely depending on the firms’ ownership structures and industry characteristics. Second, the paper analyzes firms’ strategic responses to the perceived IP environment. Firms not only adjust their R&D strategies, but also product and marketing strategies based on their assessment of the IP environment, which may have significant implications for China’s economic development in general. The paper concludes that momentum for IP reform is related to the economic potential in China. Such reform is an on-going system project involving not only patent, trademark and copyright laws, but also privatization policies, trade and FDI policies, as well as the role of the government in China’s innovation strategy. Keywords: China, copyrights, economic development, innovation, intellectual property rights, patents, policy reforms, trademarks Creation-Date: 2010-09-14 Number: 105 Handle: RePEc:oec:traaab:105-EN Template-type: ReDIF-Paper 1.0 Author-Name: Sébastien Miroudot Author-Workplace-Name: OECD Author-Name: Jehan Sauvage Author-Workplace-Name: OECD Author-Name: Marie Sudreau Author-Workplace-Name: OECD Title: Multilateralising Regionalism: How Preferential Are Services Commitments in Regional Trade Agreements? Abstract: This report examines services schedules of commitments in 56 regional trade agreements (RTAs) where an OECD country is a party. The preferential content of RTAs is assessed through an analysis of market access and national treatment commitments at the level of the 155 sub-sectors of the General Agreement on Trade in Services (GATS) Sectoral Classification List. Partial commitments are broken down according to nine categories of non-conforming measures. The report confirms that on average RTAs in services go beyond GATS with commitments in about 72% of sub-sectors, among which 42% correspond to preferential bindings (GATS-plus commitments). In addition, the report provides an overview of rules of origin for services providers and MFN clauses in services chapters in order to see whether commitments granted might be extended to non-parties to minimise discrimination among foreign services suppliers. Despite the heterogeneity found in schedules of commitments, there is a certain degree of commonality in new and improved commitments that suggests that multilateralising RTAs is achievable. The multilateralisation of services commitments would however imply a more symmetric and systematic liberalisation than what is seen in the schedules of RTAs. In the end, this is a matter of political will and negotiations. Classification-JEL: F13; F15; L8 Keywords: commitments, free trade agreements, GATS, market access, MFN, multilateralisation, national treatment, preferential trade agreements, regional trade agreements, RTA, rules of origin, services Creation-Date: 2010-12-06 Number: 106 Handle: RePEc:oec:traaab:106-EN Template-type: ReDIF-Paper 1.0 Author-Name: OECD Title: The Impact of Trade Liberalisation on Jobs and Growth: Technical Note Abstract: This report shows how more open markets in goods and services can contribute to creating jobs and increase incomes. Reducing tariffs and non-tariff barriers can help in the short run where the economic crisis has led to significant involuntary unemployment by reducing costs of imported products for consumers and by providing new market opportunities for exporters. Taking a longer term view of a more healthy global economy, lasting gains can be found from reallocation of resources across sector and from productivity growth. Reducing barriers to foreign direct investment in services is found to particularly increase demand for higher skilled labour, while the offshoring of services is not found to shift jobs abroad. The report presents in detail new results based on two large scale global computable general equilibrium models, one for goods and one for services, using novel approaches to assess the effects of reducing trade costs related to non-tariff measures, and to assess the effects of regulatory impediments to foreign direct investment in services. The analysis disentangles the effects of actions that the G20 economies could take from the potential effects of global tariff liberalisation efforts in which all countries would participate. Classification-JEL: F12; F13; F16; F4 Keywords: foreign direct investment, general equilibrium models, global economy, non-tariff measures, services, trade liberalisation Creation-Date: 2011-01-31 Number: 107 Handle: RePEc:oec:traaab:107-EN Template-type: ReDIF-Paper 1.0 Author-Name: Jane Korinek Author-Workplace-Name: OECD Author-Name: Patricia Sourdin Author-Workplace-Name: University of Adelaide Title: To What Extent Are High-Quality Logistics Services Trade Facilitating? Abstract: Trade logistics facilitate trade. Quality logistics services play an important role in facilitating the transportation of international trade in goods: inefficient logistics services impede trade by imposing an extra cost in terms of time as well as money. As developed nations shift from traditional manufacturing and agriculture and are increasingly engaging in international vertical specialization, the need for efficient logistics services becomes ever more important. High quality logistics services improve the competitiveness of a country’s exports by reducing the cost involved in transporting goods – especially for countries that are disadvantaged by being far from major markets. This paper investigates the role that trade logistics play in the volume and value of international trade and the extent to which poor quality logistics constitute a barrier to trade. It examines the different impact of logistics quality on goods that are transported by sea and by air. The differentiated impact of trade logistics such as infrastructure on low, middle and higher-income countries is analysed. Classification-JEL: E6; F0; F13 Keywords: air infrastructure, border administration, customs procedures, freight forwarding, infrastructure, logistics, logistics competence, logistics services, ports, tracking and tracing, trade, trade costs, trade facilitation, trade logistics, trade policy working paper, transport infrastructure Creation-Date: 2011-03-01 Number: 108 Handle: RePEc:oec:traaab:108-EN Template-type: ReDIF-Paper 1.0 Author-Name: Susan Stone Author-Workplace-Name: OECD Author-Name: Ricardo H. Cavazos Cepeda Author-Workplace-Name: OECD Author-Name: Anna Jankowska Author-Workplace-Name: OECD Title: The Role of Factor Content in Trade: Have Changes in Factor Endowments Been Reflected in Trade Patterns and on Relative Wages? Abstract: The pattern of trade analysed from a factor content perspective reflects the relative factor endowments of the countries examined. Although some large economies, such as the United States, seem to exhibit counter-intuitive behaviour, this is reversed when intermediate trade is taken into account. We argue this is a reflection of the changing nature of production processes and trade. The evidence presented here implies factor endowments are undergoing changes that call for careful analysis of the measures commonly used in trade. Acknowledging the role of intermediate goods to understand a country‘s factor content trade position is one step. Additionally, one must account for the interaction between the domestic determination of employment and wages with international movement of goods and services, and location of tasks. Classification-JEL: F0; F14; F20 Keywords: comparative advantage, factor content, intermediate inputs, wages Creation-Date: 2011-04-01 Number: 109 Handle: RePEc:oec:traaab:109-EN Template-type: ReDIF-Paper 1.0 Author-Name: Susan Stone Author-Workplace-Name: OECD Author-Name: Ben Shepherd Author-Workplace-Name: Developing Trade Consultants Ltd. Title: Dynamic Gains from Trade: The Role of Intermediate Inputs and Equipment Imports Abstract: Dynamic gains from trade can be an important conduit for increased firm-level innovation and productivity, both key components of economic growth. This paper builds on previous research on the dynamic gains from trade by moving beyond a single country basis to examine impacts on firm-level productivity for a cross-section of countries. It also focuses on productivity gains through the import of intermediate inputs and capital goods and systematically explores the specific impacts of non-trade, or complementary, policies on firms‘ ability to realise dynamic gains. This paper shows that a range of complementary policies affects a firm‘s ability to generate productivity gains from intermediate and capital goods imports. Access to skilled labour is a particularly important policy variable with respect to the import of intermediate goods, followed by access to finance, while macroeconomic stability slightly outranks access to finance for capital goods importers. The importance of access to finance has particular policy significance given the wide-spread financial reforms being discussed or underway. Classification-JEL: F10; F13 Keywords: capital, complementary policies, dynamic gains, intermediate inputs, trade Creation-Date: 2011-04-01 Number: 110 Handle: RePEc:oec:traaab:110-EN Template-type: ReDIF-Paper 1.0 Author-Name: Evdokia Moïsé Author-Workplace-Name: OECD Title: Transparency Mechanisms and Non-Tariff Measures: Case Studies Abstract: Lack of regulatory transparency is a major and recurrent obstacle for businesses seeking to trade internationally. This study finds that transparency mechanisms applied at different stages of the design, finalisation and implementation of domestic regulation have allowed countries to reduce administrative burdens, generate savings both for the administration and for the private sector and maintain a relation of confidence conducive to a smoother enforcement of related policies. They have also helped them enhance the readability of laws and regulations and the predictability of their enforcement (thus further reducing indirect business costs), and prevent potential frictions with trading partners. The resulting improvements in terms of potential business costs can strongly influence the attractiveness of the country for foreign investors. Classification-JEL: F13; F14; H83; L51 Keywords: administrative burdens, market access, non-tariff measures, public consultation, regulation, regulatory impact assessment, transparency Creation-Date: 2011-04-01 Number: 111 Handle: RePEc:oec:traaab:111-EN Template-type: ReDIF-Paper 1.0 Author-Name: Craig VanGrasstek Title: The Political Economy of Services in Regional Trade Agreements Abstract: Do the services commitments that countries have made in their post-Uruguay Round regional trade agreements (RTAs) indicate the types of concessions that they would be willing to multilateralise in the General Agreement on Trade in Services (GATS)? While there are important legal and economic dimensions to ponder in answering this question, considerations of political economy must also be taken into account. This paper focuses on issues in political economy that underlay RTAs in general, and especially the specific commitments and concessions that countries make on trade in services. It examines in detail the way that considerations of political economy have helped to shape the RTAs of Chile, Japan, the European Union and the United States. These four case studies help to develop and test a series of hypotheses regarding the international and domestic political factors that influence why RTAs are negotiated in the first place, between what kind of countries and with what kind of content, especially with respect to their provisions affecting services. The analysis rejects on a preliminary basis the hypothesis that RTAs create constituencies opposed to multilateral liberalisation, and finds empirical support for other hypotheses that are more multilateral-friendly. Classification-JEL: F13; F15; F59 Keywords: GATS, multilateralising regionalism, political economy, regional trade agreements, trade in services, WTO Creation-Date: 2011-04-14 Number: 112 Handle: RePEc:oec:traaab:112-EN Template-type: ReDIF-Paper 1.0 Author-Name: Nobuo Kiriyama Author-Workplace-Name: OECD Title: Trade and Innovation: Pharmaceuticals Abstract: Globalisation in the pharmaceuticals sector is entering a new phase. Many new drugs are marketed globally, and these revenues encourage further investment in research and development (R&D). The industry is undergoing substantial transition, with increased competition and downward pressure on prices. Moreover, there have also been widespread concerns that R&D productivity may be declining in recent years. This study examines how various linkages between trade and innovation work in the pharmaceuticals sector, focusing on the role of globalisation in the current innovation challenges of the pharmaceutical industry. It finds that emerging economies are increasingly important markets for pharmaceutical companies and more active participants in the R&D process. While this is an important part of an effort to reduce R&D costs and to improve R&D performance by established multinationals, this also contributes to upgrading the R&D capability of emerging economies. Various trade facilitating measures have been put in place at the international level, including tariff elimination under the World Trade Organization (WTO), plurilateral and bilateral regulatory harmonisation, mutual recognition and enforcement cooperation, and intellectual property protection. Given the growing participation of emerging economies in this sector, further involvement of emerging economies in these arrangements is likely to become more important to facilitate trade and globalisation of R&D. Classification-JEL: F13; F14; L65; O31 Keywords: emerging economies, globalisation of R&D, intellectual property, mutual recognition, pharmaceutical innovation, regulatory harmonisation, tariff elimination, WTO Creation-Date: 2011-04-01 Number: 113 Handle: RePEc:oec:traaab:113-EN Template-type: ReDIF-Paper 1.0 Author-Name: Rainer Lanz Author-Workplace-Name: OECD Author-Name: Sébastien Miroudot Author-Workplace-Name: OECD Title: Intra-Firm Trade: Patterns, Determinants and Policy Implications Abstract: The emergence of global value chains and the expansion of activities of multinational enterprises have increased the value of intra-firm trade flows. Despite growing attention from policymakers, few data are collected on trade transactions between related parties. Available evidence suggests that intra-firm trade represents a significant share of world trade but differs widely across countries and industries. Trade statistics and firm-level data point out that intra-firm trade and vertical integration occur predominantly among OECD countries and that firm behaviour and relationships between buyers and suppliers explain the patterns of intra-firm trade. The report analyses the implications of intra-firm trade for trade liberalisation, transfer pricing and the transmission of macroeconomic shocks. It finds that for trade policymakers, the rise of intra-firm trade underscores the benefits of trade liberalisation when domestic firms have affiliates abroad and foreign firms are established in the domestic economy. Trade policy should remain neutral with respect to firms. sourcing strategies but trade agreements should increasingly take into account vertical relationships between buyers and suppliers. Analysing the role of intra-firm trade during the 2008-09 trade collapse, the report furthermore highlights that while the role of global value chains was questioned in the transmission of the crisis, vertically integrated production networks can be more resilient in the context of an economic downturn. Classification-JEL: F13; F23; L22 Keywords: foreign affiliates, global production networks, global value chains, intra-firm trade, multinational enterprises, related party trade, sourcing strategies, trade liberalisation, transfer-pricing, vertical FDI Creation-Date: 2011-06-24 Number: 114 Handle: RePEc:oec:traaab:114-EN Template-type: ReDIF-Paper 1.0 Author-Name: Nobuo Kiriyama Author-Workplace-Name: OECD Title: Trade in Information and Communications Technology and its Contribution to Trade and Innovation Abstract: Information and communications technology (ICT) has been seen as a major contributor to productivity growth and as a key tool for innovation. Trade liberalisation can play a role in encouraging ICT adoption by fostering competition and by reducing ICT prices. While the trade in ICT goods has more than doubled since the mid-1990s, the share of trade involving low and middle income countries has significantly increased, with China now being the largest trader. During the same period, tariff levels have declined thanks in part to the Information Technology Agreement (ITA), although substantial tariffs remain with respect to ICT goods not covered by the ITA and by those imposed by non-participants to the ITA. The multilateral trading system produced early successes in the ITA and the negotiations on basic telecommunications at the World Trade Organization (WTO), but the progress has since been more modest. Yet it provides opportunities to further trade liberalisation in ICT goods, both with respect to tariffs and to non-tariff issues, not least through the Doha negotiations. Classification-JEL: F13; F14; L63; O24 Keywords: information and communication technologies, Information Technology Agreement, multilateral trade negotiations, non-agricultural market access, WTO Creation-Date: 2011-06-28 Number: 115 Handle: RePEc:oec:traaab:115-EN Template-type: ReDIF-Paper 1.0 Author-Name: Jean-Jacques Hallaert Author-Workplace-Name: OECD Author-Name: Ricardo H. Cavazos Cepeda Author-Workplace-Name: OECD Author-Name: Gimin Kang Author-Workplace-Name: OECD Title: Estimating the Constraints to Trade of Developing Countries Abstract: The severity of binding constraints to trade expansion in developing countries and the importance of the complementary policies that will maximize the impact of trade reforms on trade and economic growth are identified and quantified in this report. As trade-related needs of developing countries are numerous, such quantification is needed to identify the most binding constraints to guide the sequencing of reforms and aid-for-trade interventions. The constraints to trade expansion are largely country specific. However, countries which share important characteristics may face similar binding constraints. An econometric analysis is undertaken for as many partner countries as possible to produce an �\unrestricted sample. that can be used as a benchmark against which special country groupings can be assessed. The econometric work relies on experimentation to identify and rank (based on their relative severity) the most binding constraints for each country grouping. Two case studies, on Azerbaijan and Uganda, illustrate the mechanisms of the econometric work and the importance of several variables not captured because of data limitations Classification-JEL: F1 Keywords: aid for trade, binding constraints, developing countries trade, landlocked countries, resource rich countries, small and vulnerable economies, taxonomy of constraints, trade expansion Creation-Date: 2011-06-24 Number: 116 Handle: RePEc:oec:traaab:116-EN Template-type: ReDIF-Paper 1.0 Author-Name: Rainer Lanz Author-Workplace-Name: OECD Author-Name: Sébastien Miroudot Author-Workplace-Name: OECD Author-Name: Hildegunn Kyvik Nordås Author-Workplace-Name: OECD Title: Trade in Tasks Abstract: Specialisation or division of labour is an important source of economic growth, but the degree of division of labour is constrained by the extent of the market. Trade in tasks represents the latest turn in a virtuous cycle of deepening specialisation, expansion of the market and productivity growth. It has attracted a lot of attention in the policy debate not for its contribution to international division of labour and productivity growth, but for its possible detrimental impact on labour markets, particularly in high income countries. This paper analyses the task content of goods and services and sheds light on structural changes that take place following trade liberalisation. The task content of goods and services is estimated by combining information from the O*Net database on the importance of a set of 41 tasks for a large number of occupations and information on employment by occupation and industry. The study shows that tasks that can be digitised and offshored are often complementary to tasks that cannot. Therefore, the assessment of the offshorability of a job requires that one take into account all tasks being performed. The paper finds that import penetration in services has a small, but positive effect on the share of tasks related to getting and processing information being performed in the local economy. In other words, offshoring complements rather than replaces local information processing. As distortions in the market for intermediate inputs, including offshored tasks, have a larger negative impact the more diversified and complex the economy, possible adverse effects of offshoring on the labour market should be dealt with through social and labour market policy measures, not trade restrictions. In addition, if trade restrictions are imposed, they should be levied on imported value added, not on the total import value. Classification-JEL: F16 Keywords: cluster analysis, employment, trade in tasks Creation-Date: 2011-08-10 Number: 117 Handle: RePEc:oec:traaab:117-EN Template-type: ReDIF-Paper 1.0 Author-Name: Evdokia Moïsé Author-Workplace-Name: OECD Author-Name: Thomas Orliac Author-Workplace-Name: Institut d’Etudes Politiques Author-Name: Peter Minor Title: Trade Facilitation Indicators: The Impact on Trade Costs Abstract: This report presents the findings of the OECD indicators for assessing the economic and trade impact of specific trade facilitation measures in OECD countries. Twelve trade facilitation indicators (TFIs) have been constructed, corresponding to the main policy areas under negotiation at the WTO, with the aim to estimate the impact of addressing specific facilitation hurdles in the trade procedures of a given country. For OECD countries, the policy areas that seem to have the greatest impact on trade volumes and trade costs are advance rulings, information availability, formalities and procedures and inter-agency cooperation. If all TFIs are added their cost reduction potential would reach almost 10% of trade costs, which is an estimate consistent with existing literature. The use of individual trade facilitation indicators should enable countries to better assess which trade facilitation dimensions deserve priority. The OECD TFI project is now expanded to cover countries outside the OECD area. Classification-JEL: F13; F14; H83; L51 Keywords: customs, simplification, trade costs, trade facilitation, trade flows, transparency, WTO Creation-Date: 2011-08-22 Number: 118 Handle: RePEc:oec:traaab:118-EN Template-type: ReDIF-Paper 1.0 Author-Name: Marilyne Huchet-Bourdon Author-Workplace-Name: AgroCampus Ouest Author-Name: Jane Korinek Author-Workplace-Name: OECD Title: To What Extent Do Exchange Rates and their Volatility Affect Trade? Abstract: Trade deficits and surpluses are sometimes attributed to intentionally low or high exchange rate levels. The impact of exchange rate levels on trade has been much debated but the large body of existing empirical literature does not suggest an unequivocally clear picture of the trade impacts of changes in exchange rates. The impact of exchange rate volatility on trade also does not benefit from a clear theoretical cause-effect relationship. This study examines the impact of exchange rates and their volatility on trade flows in China, the Euro area and the United States in two broadly defined sectors, agriculture on the one hand and manufacturing and mining on the other. It finds that exchange volatility impacts trade flows only slightly. Exchange rate levels, on the other hand, affect trade in both agriculture and manufacturing and mining sectors but do not explain in their entirety the trade imbalances in the three countries examined. Classification-JEL: F01; F31; O24; Q17 Keywords: currency movements, depreciation, euro, exchange hedging, exchange rate appreciation, exchange rates, GARCH volatility, long-run effects, real exchange rates, short-run effects, trade, trade deficit, trade in agriculture, US dollar, volatility, yuan Creation-Date: 2011-10-10 Number: 119 Handle: RePEc:oec:traaab:119-EN Template-type: ReDIF-Paper 1.0 Author-Name: Przemyslaw Kowalski Author-Workplace-Name: OECD Author-Name: Molly Lesher Author-Workplace-Name: OECD Title: Global Imbalances: Trade Effects and Policy Challenges Abstract: The search for balanced, sustainable growth clearly involves the unwinding of large and persistent global imbalances. Much of the attention in the rebalancing debate has centred on how shifts in monetary and fiscal policies affect current account imbalances. This paper goes beyond macroeconomic management considerations and exchange rate realignments to assess how one type of structural policy reform – namely trade and trade-related policy reforms – may facilitate global rebalancing. In addition, the paper analyses how might various rebalancing scenarios, even if they do not explicitly include major trade policy reforms, impact global trade. Our analysis suggests that a co-ordinated response involving macroeconomic, exchange rate and structural reforms, including trade policy reforms, are needed to address imbalances in the global economy. Trade is a part of the solution since trade policy distortions reduce the benefits from trade and, through their effects on relative prices, jointly influence economic incentives on both the trade balance and net national savings sides of the national savings-investment identity. In particular, since some imbalances stem from the asymmetric pattern of remaining protectionism in goods and services sectors, a balanced approach to trade policy reform could facilitate the global adjustment process. Classification-JEL: F13; F15; F32; F37; F41; F42; L6; L8 Creation-Date: 2011-11-23 Number: 120 Handle: RePEc:oec:traaab:120-EN Template-type: ReDIF-Paper 1.0 Author-Name: Przemyslaw Kowalski Author-Workplace-Name: OECD Title: Comparative Advantage and Trade Performance: Policy Implications Abstract: This paper builds on recent generalisations of theory and empirics of comparative advantage and establishes the relative importance of different sources of comparative advantage in explaining trade, with particular focus on policy and institutional factors. The broad policy and institutional areas posited as determinants of comparative advantage in this paper include: physical capital, human capital (distinguishing between secondary, tertiary education and average years of schooling), financial development, energy supply, business climate, labour market institutions as well as import tariff policy. The empirical investigation is performed for bilateral trade of 55 OECD and selected emerging market (SEM) economies and 44 manufacturing sectors covering the entirety of merchandise trade. Our results show that comparative advantage remains an important determinant of trade and that it has changed over time, including as a result of changing policies and institutions. The policy and institutional areas shown to be important determinants of comparative advantage include physical and human capital accumulation (especially secondary and tertiary education), financial development, the business climate, as well as a number of aspects of labour market institutions. The results suggest also that comparative advantage has been — and is likely to be in the future — relatively more important for North-South and South-South trade. Overall, the results underscore the importance of a comprehensive approach to designing economic development policies, which should seek consistency between trade and other policy objectives. Classification-JEL: F11; F14; F16; F17 Creation-Date: 2011-10-05 Number: 121 Handle: RePEc:oec:traaab:121-EN Template-type: ReDIF-Paper 1.0 Author-Name: Susan Stone Author-Workplace-Name: OECD Author-Name: Ricardo H. Cavazos Cepeda Author-Workplace-Name: OECD Title: Wage Implications of Trade Liberalisation: Evidence for Effective Policy Formation Abstract: The relationship between trade and wages has been subject to intense scrutiny in the academic literature with no clear consensus emerging. This paper adds to this body of research by moving beyond the single country analysis level to a panel including developed and developing countries and data through the mid 2000.s. First we examine the relationship between wages and trade using the approach of Feenstra and Hanson to calculate mandated wage changes for our dataset. We find that imports have a significant and positive impact on wages while the sign on tariffs is negative and significant. We also look at the relationship of wage differentials at the occupation level between partner countries. We find that the difference in occupation wage is smaller for large trade partners. Finally, we discuss the potential role of NTMs in influencing the wage and trade relationship. Classification-JEL: F16 Keywords: mandated wages, occupations, trade, wages Creation-Date: 2011-10-12 Number: 122 Handle: RePEc:oec:traaab:122-EN Template-type: ReDIF-Paper 1.0 Author-Name: Elena Arnal Title: Trade and Employment: The Case of Denmark and Spain Abstract: Spain and Denmark are two European countries differing considerably in their development and productive structures as well as in their internationalisation process. This affects many dimensions of each economy, most notably their trade volumes, market sizes and product specialization. Spain and Denmark also differ significantly in labour market outcomes as well as in the design of labour market policies and institutions and the role they played in facilitating labour reallocation. For these reasons, it is instructive to compare them, in particular as they have demonstrated substantial labour market adjustments due to changing international economic conditions. While the results of direct comparisons cannot always be translated into policy action due to country-specific institutional settings and varying economic circumstances, comparative analysis has the potential to yield useful insights into best practices and transferrable policy lessons. With this in mind, the purpose of this paper is to consider the evolution of trade and labour market outcomes in Denmark and Spain since the early 1990s, in order to provide policy-relevant insights on the relationship between production, trade and labour markets in these countries. Special focus is given to the increased weight of some emerging economies in world trade patterns and how they have affected the trade patterns of these two European countries and their employment behaviours. Classification-JEL: F16 Keywords: employment, inclusive growth, trade, wages Creation-Date: 2011-11-01 Number: 123 Handle: RePEc:oec:traaab:123-EN Template-type: ReDIF-Paper 1.0 Author-Name: Francis Kramarz Author-Workplace-Name: CREST-ENSAE Title: Employment and Trade in France: A Firm-Level View (1995-2004) Abstract: This paper examines, in France, the relationship between imports – and trade more generally – and employment. It builds on the burgeoning literature relating trade and labour markets, taking into account theories of firm-level trade and previous empirical work. The analysis in the paper draws on three data sources to establish a matched firm-level data set covering trade, economic variables and employment for the time period from 1995 to 2004. The data set covers manufacturing firms. The paper develops estimates of the relationship between employment and trade activity at the firm level, first on an aggregate basis and then at industry level. Additional assessments are made with respect to the firms’ experience with changes in imports of finished goods and intermediates. The conclusion sums up the results and relates these to previous work on the relationship of trade and employment in France, pointing to some possible explanations and areas for further research. Classification-JEL: F16 Keywords: employment, inclusive growth, trade, wages Creation-Date: 2011-10-21 Number: 124 Handle: RePEc:oec:traaab:124-EN Template-type: ReDIF-Paper 1.0 Author-Name: Holger Görg Author-Workplace-Name: Kiel Institute for the World Economy Author-Name: Dennis Görlich Author-Workplace-Name: Kiel Institute for the World Economy Title: Trade and Labour Market Outcomes in Germany Abstract: The German economy is characterized by a high degree of foreign exposure through exports and imports. This paper considers the link between trade and labour market outcomes in Germany. To that end we combine individual-level data from the German Socio Economic Panel for the period 1999 to 2007 with industry-level data on various aspects of trade – exports, imports and offshoring. We consider their effects on wages and the probability of moving into unemployment. Our econometric analysis suggests that there is little impact of trade-related variables on individual-level wages, whereas there appears to be some impact with respect to employment. We find some important differences between manufacturing and services sectors, in particular with regard to exporting and offshoring. Classification-JEL: F16 Keywords: employment, inclusive growth, trade, wages Creation-Date: 2011-10-19 Number: 125 Handle: RePEc:oec:traaab:125-EN Template-type: ReDIF-Paper 1.0 Author-Name: P. Lelio Iapadre Author-Workplace-Name: University of L’Aquila Title: Trade and Employment in Italy Abstract: This paper addresses the relationship between trade, employment and wages in Italy from the perspective of the specific features of its international specialisation pattern. It focuses on several key questions: To what extent has international economic integration, including trade and international outsourcing, changed the structure of the Italian economy? To what extent has exposure to foreign competition helped Italian firms to restructure and upgrade their production, so as to increase the skill intensity of their activities? What are the effects of these processes on employment and wages? The paper opens with a short review of the relevant literature and a description of recent developments in the trade specialisation pattern of the Italian economy, including its linkages with the structure of employment. This is followed by the main original contribution of the paper consisting of an econometric study structured around two parts. The first part presents an estimate of the employment effects of trade and off-shoring in the Italian manufacturing industry based on a panel of 15 sectors for the period from 1999 to 2008. The second part addresses the relationship between trade and wages using a rich micro-level panel of individual workers for the period from 1997 to 2003. In light of the results, the paper then considers the main policies adopted in Italy to facilitate the adjustment of employment and wages to external shocks, including short-term effects of trade liberalisation. The Italian case appears to confirm that international economic integration, while generating important static and dynamic benefits, requires a flexible and efficient social security system, able to assist workers displaced by external competition or other kinds of structural change. In view of shortcomings in the existing system, a comprehensive social security reform, inspired by principles of universal access, medium-term financial equilibrium, and a proper design of individual incentives, may be necessary to better help workers displaced by international integration. Classification-JEL: F16 Keywords: employment, inclusive growth, trade, wages Creation-Date: 2011-10-19 Number: 126 Handle: RePEc:oec:traaab:126-EN Template-type: ReDIF-Paper 1.0 Author-Name: Kozo Kiyota Author-Workplace-Name: Yokohama National University Title: Trade and Employment in Japan Abstract: In light of the importance of the relationship between trade and employment in Japan, this paper examines the effects of exports on employment (i.e. the number of workers), working-hours, and total worker-hours (i.e. employment times working-hours). This paper utilized the Japanese input-output table for the period from 1975 to 2006, which enables us to estimate the effects of exports on the industry's employment (i.e. direct effect) but also on other industries' employment (i.e. indirect effect). The major findings are threefold. First, the demand for worker-hours from exports increased but this is not large enough to offset the decreases in demand for worker hours from domestic final demand. As a result, total worker-hours in Japan have declined since 1990. Second, the demand for employment from exports has increased since 1985 both in manufacturing and non-manufacturing. This result implies that the manufacturing exports affected indirectly non-manufacturing employment through inter-industry linkages. Finally, the overall demand for working-hours from exports and domestic final demand declined between 1980 and 2006 although it increased slightly in manufacturing after 1995. There are two possible policy influences behind these adjustment processes. One is the change in Japanese labour standard law. The other is the change in the Japanese worker dispatch law. Although these two policies have different implications, policy makers need to recognize the importance of the flexibility of the adjustment in either case. Classification-JEL: F16 Keywords: employment, inclusive growth, trade, wages Creation-Date: 2011-10-19 Number: 127 Handle: RePEc:oec:traaab:127-EN Template-type: ReDIF-Paper 1.0 Author-Name: Chin Hee Hahn Author-Workplace-Name: Kyungwon University Author-Name: Chang-Gyun Park Author-Workplace-Name: Chung-Ang University Title: Exporting, Employment, and Skill Upgrading: Evidence from Plant Level Data in the Korean Manufacturing Sector Abstract: This paper examines the role of exports in skill upgrading in the Korean manufacturing sector during the 1990s utilizing a unique plant-level panel data set. The empirical results indicate the important role of exports on relative employment on skilled versus unskilled workers. The main findings are as follows. Firstly, this paper documents the significant degree of skill upgrading that occurred during the 1990s in the Korean manufacturing sector. Secondly, a large part of the increase in the aggregate non-production employment share was due to the �\within. effect, rather than the �\between. effect. This tendency becomes stronger when we use plant-level, rather than industry-level data. Thirdly, most of the �\within. changes were accounted for by the skill-upgrading of exporters, especially those exporters that were either R&D active or large. This is suggestive of the positive interactive effects between exporting and R&D expenditure in skill upgrading. Fourthly, regression analysis shows that both the �\within. and �\between. components of skill composition changes at plant level are strongly and positively correlated with exporting activities, while R&D expenditure is correlated only with the �\within. components. Classification-JEL: F16 Keywords: employment, inclusive growth, trade, wages Creation-Date: 2011-10-20 Number: 128 Handle: RePEc:oec:traaab:128-EN Template-type: ReDIF-Paper 1.0 Author-Name: Raymundo Miguel Campos-Vázquez Author-Workplace-Name: Center for Economic Studies, El Colegio de México Author-Name: José Antonio Rodríguez-López Author-Workplace-Name: University of California Title: Trade and Occupational Employment in Mexico since NAFTA Abstract: We analyze the effects of trade liberalization on Mexican employment at an occupational level for the period from 1992 to 2009, ranking occupations by skill level. We find that the reduction in trade costs associated with Mexico's entry to NAFTA is related to larger employment expansions in low-skill occupations. This evidence runs counter to a story of skilled-biased technological change in Mexico, and in favour of a heterogeneous-firm model of trade in tasks where the offshoring cost of an occupation is positively related to its skill level. After NAFTA, labour demand for unskilled workers has increased and labour demand for skilled workers has been stagnant, even though supply of skilled workers has increased in the last 20 years. We provide intuitive evidence to identify a number of relevant bottlenecks in the Mexican economy that may be associated with these developments. Classification-JEL: F16 Keywords: employment, inclusive growth, trade, wages Creation-Date: 2011-10-19 Number: 129 Handle: RePEc:oec:traaab:129-EN Template-type: ReDIF-Paper 1.0 Author-Name: Ron Sandrey Author-Workplace-Name: National Agricultural Marketing Council Author-Name: Cecilia Punt Author-Workplace-Name: National Agricultural Marketing Council Author-Name: Hans Grinsted Jensen Author-Workplace-Name: National Agricultural Marketing Council Author-Name: Nick Vink Author-Workplace-Name: National Agricultural Marketing Council Title: Agricultural Trade and Employment in South Africa Abstract: This report provides an overview of policy changes in South African agriculture over the past three decades, and of some of the associated impacts on output, trade patterns and employment. In agriculture, the story is one of widespread substitution of labour for capital. While the sector has shed more than a million jobs over the past four decades, the paper highlights its continuing role as an employment creator in rural areas, albeit mainly in low-wage occupations. As for its principal analytical contribution, this paper considers future trade liberalisation in the agricultural sector. Using two different economic models, we find a remarkably consistent pattern whereby agricultural trade liberalisation in the region is predicted to increase agricultural employment. Classification-JEL: F16 Keywords: employment, inclusive growth, trade, wages Creation-Date: 2011-10-19 Number: 130 Handle: RePEc:oec:traaab:130-EN Template-type: ReDIF-Paper 1.0 Author-Name: Christopher J. O’Leary Author-Workplace-Name: W. E. Upjohn Institute for Employment Research Author-Name: Randall W. Eberts Author-Workplace-Name: W. E. Upjohn Institute for Employment Research Author-Name: Brian M. Pittelko Author-Workplace-Name: W. E. Upjohn Institute for Employment Research Title: Effects of NAFTA on US Employment and Policy Responses: A Product of the International Collaborative Initiative on Trade and Employment (ICITE) Abstract: The signing of the North American Free Trade Agreement (NAFTA) was a contentious event in United States (US) politics, in particular with respect to public views about the possible labour market effects. This paper is structured as follows. First, we provide background on the political debate in the United States at the time of the signing of NAFTA. We then outline the dynamics of trade and employment among the NAFTA partners over the last 20 years. The third section provides a literature review that summarises estimates of NAFTA’s employment impact, both shortly before its implementation and afterwards. Against this background, we provide an overview and assessment of US employment policy responses aimed at facilitating labour-market adjustment and support of trade-displaced workers. Creation-Date: 2012-02-24 Number: 131 Handle: RePEc:oec:traaab:131-EN Template-type: ReDIF-Paper 1.0 Author-Name: Laura Munro Title: A Literature Review on Trade and Informal Labour Markets in Developing Countries Abstract: This report provides a summary of the literature on the relationship between trade and informality in developing countries, with an emphasis on the BRIICS. While main conclusions of the ILO and WTO (2009) literature review are highlighted, the report focuses on additional and more recent literature. The report investigates four key issues in the literature on trade and informal labour markets: (1) theoretical predictions for trade and informality; (2) how trade liberalisation affects informal labour markets; (3) how trade flows affect the informal economy; and (4) what implications informality has for trade and growth. The main conclusion from this review is that empirical evidence on the relationship between trade and informality is complex and context-specific. Several of the empirical analyses reviewed in this report suggest that this variation is due to country-specific characteristics (in particular, labour market rigidity, capital mobility, level of economic development and heterogeneity of the informal workforce). Variation can also be partly explained by the fact that different methodologies are used and different measures of informality are employed across studies. Classification-JEL: F16 Keywords: employment, inclusive growth, trade, wages Creation-Date: 2011-10-19 Number: 132 Handle: RePEc:oec:traaab:132-EN Template-type: ReDIF-Paper 1.0 Author-Name: Craig VanGrasstek Author-Workplace-Name: Harvard University Title: Employment and the Political Economy of Trade: A Structured Review of the Literature Abstract: The aims of this paper are to review the main schools of thought on the political economy of trade and employment, to review the empirical evidence supporting these schools, and to consider the implications for public policy. Special emphasis is given to the potential costs of liberalization and the manner that concerns about these costs may inhibit countries‘ willingness to open markets and thereby limit the potential gains from trade. These issues are explored through a structured examination of the political economy literature, including the contributions of political scientists, economists, and historians, focusing on the role of different types of political actors in the formation of policy concerning trade-and-employment issues. Those actors include the general public (the members of which are simultaneously workers, consumers, and voters); economic interests (firms, associations, and labour unions); and policy makers in both the executive and legislative branches of government. The paper proceeds in three steps, the first being to define each of the main schools of thought. The next step is to review empirical studies that have tested the validity of these schools of thought. The third and final step is to consider complementary policies. Keywords: employment, inclusive growth, trade, wages Creation-Date: 2011-10-19 Number: 133 Handle: RePEc:oec:traaab:133-EN Template-type: ReDIF-Paper 1.0 Author-Name: Jorge Friedman Author-Workplace-Name: Economic Commission for Latin America and the Caribbean Author-Name: Nanno Mulder Author-Workplace-Name: Economic Commission for Latin America and the Caribbean Author-Name: Sebastián Faúndez Author-Workplace-Name: Economic Commission for Latin America and the Caribbean Author-Name: Esteban Pérez Caldentey Author-Workplace-Name: Economic Commission for Latin America and the Caribbean Author-Name: Carlos Yévenes Author-Workplace-Name: Economic Commission for Latin America and the Caribbean Author-Name: Mario Velásquez Author-Workplace-Name: International Labour Organization Author-Name: Fernando Baizán Author-Workplace-Name: International Labour Organization Author-Name: Gerhard Reinecke Author-Workplace-Name: International Labour Organization Title: Openness, Wage Gaps and Unions in Chile: A Micro Econometric Analysis Abstract: This paper examines the relationship between wages and levels of trade and FDI openness in twenty-nine sectors of the Chilean economy. Over the last four decades, this country almost fully liberalized its trade and foreign direct investment, which accelerated growth of flows in both areas and contributed to important changes in the labour market. Using cluster analysis, we divide 29 sectors into three groups of high, medium and low levels of trade and foreign direct investment penetration in 2003 and 2008. Subsequently, an average wage equation is estimated for salaried workers in each group based on their characteristics (gender, education, work experience and union membership) using microdata of the Supplementary Income Survey (SIS) database. Differences between average wages of the three groups are decomposed with the Oaxaca-Blinder method. The results confirm that the group of most open sectors pays a “wage premium” to its workers. It is also shown that most of this premium is accounted for by higher levels of labour unionisation compared to other sectors. An alternative grouping of sectors into two categories of tradable and non-tradable sectors based on export intensity only yields similar results. Classification-JEL: F16 Keywords: Chile, employment, inclusive growth, Oaxaca-Blinder method, openness, trade, unionisation, wage gap, wages Creation-Date: 2011-10-31 Number: 134 Handle: RePEc:oec:traaab:134-EN Template-type: ReDIF-Paper 1.0 Author-Name: Nobuo Kiriyama Author-Workplace-Name: OECD Title: Trade and Innovation: Synthesis Report Abstract: Innovation is critical to creating new sources of growth. Trade is one of the framework conditions that can strengthen innovation in the business sector, as set out in the OECD Innovation Strategy in 2010. This paper broadly sets out three channels through which trade affects innovation. First, imports and foreign direct investment (FDI) as well as trade in technology serve as channels of technology diffusion. Second, imports, FDI and technology licensing contribute to intensifying competition, which can affect incentives for innovation. Third, exports can affect innovation as it serves as a learning opportunity and gives incentives for innovative activities... Classification-JEL: F13; F23; L60; O24 Keywords: competition and innovation, exports and innovation, international technology diffusion, multilateral trade negotiations, NAMA notifications, trade and innovation, World Trade Organisation Creation-Date: 2012-01-20 Number: 135 Handle: RePEc:oec:traaab:135-EN Template-type: ReDIF-Paper 1.0 Author-Name: Marilyne Huchet-Bourdon Author-Workplace-Name: AgroCampus Ouest Author-Name: Jane Korinek Author-Workplace-Name: OECD Title: Trade Effects of Exchange Rates and their Volatility: Chile and New Zealand Abstract: Trade deficits and surpluses are sometimes attributed to intentionally low or high exchange rate levels. The impact of exchange rate levels on trade has been much debated but the large body of existing empirical literature does not suggest an unequivocally clear picture of the trade impacts of changes in exchange rates. In addition, much of the evidence on this subject considers currencies of large economies, and overwhelmingly the United States.This study examines the impact of exchange rates and their volatility on trade flows in two small, open economies – Chile and New Zealand – with three major trading partners, in two broadly defined sectors – agriculture on the one hand and manufacturing and mining on the other. It finds that exchange volatility impacts trade flows in the small, open economies more than was found for larger economies. Findings do not clearly indicate the direction of the impact, i.e. whether this volatility increases or decreases trade in all countries and sectors. Exchange rate levels, on the other hand, affect trade in both agriculture and manufacturing and mining sectors although their magnitude differs depending on the trading partner and sector. Moreover, this study indicates that a depreciation in the exchange rates in Chile and New Zealand would not lead to a strong change in their trade balances with three main trading partners across the board. Classification-JEL: F1; F31; O24; Q17 Keywords: Chile, Chilean peso, currency movements, depreciation, exchange hedging, exchange rate appreciation, exchange rates, GARCH volatility, long-run effects, New Zealand, New Zealand dollar, real exchange rates, short-run effects, small open economies, trade, trade deficit, trade in agriculture, volatility Creation-Date: 2012-03-22 Number: 136 Handle: RePEc:oec:traaab:136-EN Template-type: ReDIF-Paper 1.0 Author-Name: Greg Thompson Author-Workplace-Name: Australian Productivity Commission Author-Name: Tim Murray Author-Workplace-Name: Australian Productivity Commission Author-Name: Patrick Jomini Author-Workplace-Name: Australian Productivity Commission Title: Trade, Employment and Structural Change: The Australian Experience Abstract: International trade produces income gains across the world by facilitating an efficient allocation of production among trading countries. However, increased trade exposure also creates some challenges, and there are adjustment costs associated with changing trade patterns. Effective complementary policies, by promoting flexibility and adaptation within economies, can reduce adjustment costs associated with increased trade, and therefore ensure the benefits are maximised. This paper highlights these issues with reference to recent experience in Australia. Computable General Equilibrium modelling shows how the recent improvement in Australia‘s terms of trade is likely to have increased incomes and that the magnitude of these gains is directly linked to the degree of flexibility of the economy. Classification-JEL: F16 Keywords: employment, growth, trade, wages Creation-Date: 2012-03-29 Number: 137 Handle: RePEc:oec:traaab:137-EN Template-type: ReDIF-Paper 1.0 Author-Name: Molly Lesher Author-Workplace-Name: OECD Title: The OECD Regulatory Reform Review of Indonesia: Market Openness Abstract: This paper focuses on the market openness aspects of regulatory reform in Indonesia to devise recommendations for improving the country’s regulatory processes. These recommendations involve institutionalising independent and objective evaluations of policies from an economy-wide perspective, as well as instituting a process by which broad public consultations are systematically required. Moreover, the findings in this paper suggest that the Indonesian economy would benefit from streamlining the licensing regime. The paper also identifies a need to ensure that new laws and regulations benefit Indonesia as a whole. Finally, the paper advocates for better co-ordination between the central government and the periphery. The implementation of these recommendations will help Indonesia achieve its goal of becoming one of the world’s ten major economies by 2025. Keywords: APEC, ASEAN, DNI, Indonesia, INSW, INTR, investment, Investment Negative List, market openness, Regional Autonomy, Regulatory Process, regulatory reform, trade Creation-Date: 2012-06-27 Number: 138 Handle: RePEc:oec:traaab:138-EN Template-type: ReDIF-Paper 1.0 Author-Name: Jane Korinek Author-Workplace-Name: OECD Author-Name: Jessica Bartos Title: Multilateralising Regionalism: Disciplines on Export Restrictions in Regional Trade Agreements Abstract: The proliferation of preferential trade agreements has posed challenges for the multilateral trading system. But regional trade agreements (RTAs) also allow countries to develop and strengthen trade disciplines beyond what is possible at the multilateral level. In some instances, RTAs explore policy areas that are the subject of few disciplines at the multilateral level. They may provide lessons and suggest good practices that could be used to inform discussions in a wider setting. One such policy area is export restrictions and taxes. Export restrictions and duties have not been given the same degree of attention in multilateral trade agreements and negotiations as the elimination of import tariffs and quantitative restrictions. The WTO provides a general prohibition on quantitative export restrictions but the broad and, at times, ambiguous exceptions somewhat vitiate the ban. Moreover, export taxes are not explicitly forbidden in the WTO. This study suggests that there are a number of ways by which WTO disciplines could benefit from the approaches found in some RTAs in the area of export restrictions. Classification-JEL: F1; F10; F13; F15 Keywords: dispute settlement, export charges, export duties, export fees, export levies, export licensing, export restraints, export restrictions, export tariffs, export taxes, GATT, GATT Article XI, GATT Article XX, minimum export prices, multilateral trading system, preferential trade agreements, PTA,, quantitative export restrictions, regional trade agreements, RTA, trade creation, trade disciplines, trade diverting, trade instruments, WTO, WTO provisions, WTO-plus Creation-Date: 2012-06-29 Number: 139 Handle: RePEc:oec:traaab:139-EN Template-type: ReDIF-Paper 1.0 Author-Name: Barbara Fliess Author-Workplace-Name: OECD Author-Name: Tarja Mård Author-Workplace-Name: OECD Title: Taking Stock of Measures Restricting the Export of Raw Materials: Analysis of OECD Inventory Data Abstract: Governments appear increasingly inclined to resort to border and domestic measures that restrict the export of raw materials. For industrial raw materials, the OECD is constructing an Inventory of measures that have been applied since 2009. The underlying survey covers some 100 countries, some 15 types of measures and most minerals, metals as well as wood. This paper analyses 2009-2010 data collected so far for the minerals and metals sector. It sets out with observations, based on the Inventory research, about policy transparency. What information about use of export restrictions do governments publish on their websites? The paper then proceeds with a descriptive statistical analysis of the Inventory data. What are the measures most frequently used? What are the most affected minerals and metals? What motivates governments to resort to export taxes or other measures? The analysis takes account of different stages of production and makes use of trade data to illustrate supply concentration patterns and trade affected by export restrictions. Classification-JEL: F1; F13; O24; Q3; Q37 Keywords: aluminium, export licensing, export measures, export prohibition, export quotas, export restrictions, export taxes, exports, international trade, inventory, iron ore, metals, minerals, nickel, raw materials, transparency, waste and scrap Creation-Date: 2012-10-05 Number: 140 Handle: RePEc:oec:traaab:140-EN Template-type: ReDIF-Paper 1.0 Author-Name: OECD Title: Regulatory Transparency in Multilateral Agreements Controlling Exports of Tropical Timber, E-Waste and Conflict Diamonds Abstract: Export restrictions can be problematic if trading partners question either their conformity with international obligations or their possibly unintended negative impacts on others. Regulatory transparency can help. This paper examines how three multilateral environmental agreements (MEAs) incorporate transparency into their regulatory regimes: CITES (endangered species, especially tropical timber), the Basel Convention (hazardous e-waste), and the Kimberley Process (conflict diamonds). All three require producing countries to control exports of sensitive commodities, while allowing (Basel) or requiring consuming countries to control imports. Export and import restrictions are usually intended to affect relative prices, but in these three MEAs the ultimate objective is to limit the negative consequences, whether economic, environmental or societal, associated with improper exploitation of the covered commodities. In each case all trade in the target commodities ought to be covered, no export permits should be issued that do not meet the standards established by the MEA, and no imports should take place without the appropriate documentation. In order to have a consistent comparative basis for assessing the contribution of regulatory transparency to the success of these regimes, we use an analytic framework based on three major transparency principles: publication of the rules (the “right to know”); peer review by governments (monitoring and surveillance); and public engagement (reporting on results, and a role for non-governmental organisations, NGOs). The paper concludes with some observations about characteristics that appear to make transparency more or less effective. Classification-JEL: D7; F1; F5; L6; L7; Q2; Q3; Q5; Q53 Creation-Date: 2012-12-10 Number: 141 Handle: RePEc:oec:traaab:141-EN Template-type: ReDIF-Paper 1.0 Author-Name: Evdokia Moïsé Author-Workplace-Name: OECD Author-Name: Claire Delpeuch Author-Workplace-Name: OECD Author-Name: Silvia Sorescu Author-Workplace-Name: OECD Author-Name: Novella Bottini Author-Name: Arthur Foch Title: Estimating the Constraints to Agricultural Trade of Developing Countries Abstract: Agricultural trade is widely considered as an important contributor to developing countries‘ economic growth, poverty alleviation and food security. This report identifies and analyses some of the most important supply-side constraints to developing countries‘ exports of agricultural products, in order to inform prioritisation and sequencing of domestic policy reforms as well as targeting of donor interventions. The analysis is supplemented by case studies of Aid for Trade programmes supporting agricultural trade expansion in Indonesia, Zambia and Mozambique. The report confirms that developing countries‘ agricultural exports are highly responsive to the quality of transport and trade-related infrastructure, while tariffs still have a significant negative impact. The analysis also highlights the importance of complementary policies such as education and political stability on developing countries‘ agricultural trade performance. In the poorest countries of the sample, significant trade expansion could be achieved by easing constraints related to governance and infrastructure quality, as well as by lifting constraints related to the efficient use of existing freshwater resources. The case studies illustrate the impact on agricultural exports of constraints related to standards and conformity assessment or access to credit, in particular as regards small and medium agricultural producers, processors and traders. They also show the contribution of donor supported programmes promoting private sector initiatives to poverty reduction through increased employment and the promotion of production adapted to local endowments. Classification-JEL: F13; O13; O19; Q17 Keywords: agricultural trade, aid for trade, binding constraints, developing countries, food security, poverty reduction, trade expansion Creation-Date: 2013-01-31 Number: 142 Handle: RePEc:oec:traaab:142-EN Template-type: ReDIF-Paper 1.0 Author-Name: Susan Stone Author-Workplace-Name: OECD Author-Name: Patricia Sourdin Author-Name: Clarisse Legendre Author-Workplace-Name: OECD Title: Trade and Labour Market Adjustment Abstract: While it is widely accepted that there are adjustment costs associated with the reallocation of resources in response to freer trade, in most models these costs are assumed to be very small. However, more recent evidence is casting doubt on this assumption. This paper develops a unique dataset based on harmonised labour force surveys for six economies, facilitating the comparison of short term labour market impacts from trade across countries. Data are reported at the individual worker level, allowing a comparison of impacts at both the industry and occupation levels. While the results of this empirical analysis at the industry level are very much in line with established research, the results at the occupation level are more varied. Overall, and as expected, impacts are generally larger for occupations than at the industry level. These results are consistent with modern trade theory which posits that an expanding export sector rewards mostly high skilled workers and that some workers may find it more difficult to switch occupations than to switch industries. Outcomes can also be explained in the context of labour market frictions and highlight the important role of labour market policy – as well as trade policy – in structural adjustment. Our results are consistent with sticky sector-specific human capital and information asymmetries, especially with respect to opportunities in different regions within the same country. A wide range of policies can be employed to address these labour market frictions to improve worker mobility and reduce adjustment costs. Further efforts to specify appropriate policies to accompany trade openness is warranted; doing so would go a long way towards improving employment outcomes and generating more inclusive growth. Classification-JEL: F16; F23; F66; J08 Keywords: adjustment, duration, labour force survey, labour market, labour market policies, micro data, occupations, panel analysis, trade, trade policy, unemployment Creation-Date: 2013-02-07 Number: 143 Handle: RePEc:oec:traaab:143-EN Template-type: ReDIF-Paper 1.0 Author-Name: Evdokia Moïsé Author-Workplace-Name: OECD Author-Name: Silvia Sorescu Author-Workplace-Name: OECD Title: Trade Facilitation Indicators: The Potential Impact of Trade Facilitation on Developing Countries' Trade Abstract: This report presents the findings of the OECD indicators for assessing the impact of specific trade facilitation measures on developing countries’ trade. Sixteen trade facilitation indicators (TFIs) have been constructed, corresponding to the main policy areas under negotiation at the WTO, with the aim to estimate the impact of addressing specific hurdles in the trade and border procedures of a given country. The policy areas that seem to have the greatest impact on trade volumes and trade costs not only for imports but also to export performance are the availability of trade-related information, the simplification and harmonization of documents, the streamlining of procedures and the use of automated processes. The combined effect of improvements in these areas is greater than the simple sum of the impact of individual measures, reaching almost 14.5% reduction of total trade costs for low income countries, 15.5% for lower middle income countries and 13.2% for upper middle income countries. Classification-JEL: F13; F14; H83; L51 Keywords: customs, simplification, trade costs, trade facilitation, trade flows, transparency, WTO Creation-Date: 2013-03-04 Number: 144 Handle: RePEc:oec:traaab:144-EN Template-type: ReDIF-Paper 1.0 Author-Name: Jane Korinek Author-Workplace-Name: OECD Title: Mineral Resource Trade in Chile: Contribution to Development and Policy Implications Abstract: Mineral resources present a formidable source of wealth but a formidable challenge to regulate in order to maximize social welfare from their extraction. Some resource-rich countries, such as Chile, have been successful in developing their economies and managing their revenue streams effectively. Strong institutions and regulatory oversight have helped to capitalize on the benefits of the mining sector for economy-wide growth and development in Chile. This paper identifies some of the good practice areas in mining regulation in Chile whose economy has shown strong growth over most of the last two decades. Some of the areas touched on in this paper are the taxation of the minerals sector, management of the tax revenue, and policies designed to foster spillovers into other sectors of the economy and make the most of Chile’s comparative advantage as a long-time global leader in the copper industry. The paper concludes that there is much to be learned from the Chilean experience in regulating its mining sector and many areas where it could be well used as a model for other mineral rich economies wishing to develop their mining sectors to enhance economy-wide growth. Classification-JEL: O13; O19; Q32; Q33; Q37; Q38 Keywords: capital-intensive, Chile, copper, exchange rates, exploitation permits, exploration, export restrictions, extractive industries, fiscal responsibility, geological service, government revenue, industry standards, innovation, legal framework, Ley Reservada del Cobre, mineral deposits, mineral wealth, mining, mining services, natural resource, non-renewable, price volatility, regulation, resource curse debate, resource-rich, royalties, sovereign wealth funds, spillovers, structural balance rule, SWF, tax revenue management, taxation, world-class suppliers Creation-Date: 2013-03-01 Number: 145 Handle: RePEc:oec:traaab:145-EN Template-type: ReDIF-Paper 1.0 Author-Name: Osvaldo R. Agatiello Author-Name: Barbara Fliess Author-Workplace-Name: OECD Title: Export Restrictions: Benefits of Transparency and Good Practices Abstract: Recent years have witnessed an ever-increasing resort to export restrictions in the markets for raw materials, causing heightened uncertainty about supply availability together with friction among trading partners. Poor transparency can amplify and compound the effects of restrictive trade policies. This paper explores the issue of transparency with respect to the use of export restrictions, especially focusing on the question of what information governments applying them make publicly available. After explaining how transparency is operationalised in the conduct of trade policy and what its benefits are for trading firms, investors and other stakeholders, in importing countries inasmuch as in the economies applying export restrictions, the paper reviews applicable rules and commitments elaborated in GATT/WTO, regional trade agreements and other sources of rules. The review shows an evolutive, cumulative path towards greater transparency in trade policy over time and distills best-practice principles and tools specifically aiming at the provision of information. The last section of the paper applies a checklist of information elements consistent with these best practices to the study of actual national information policies. This is done by examining the content of public information on export restrictions in the minerals sector that is made available on the governmental websites of 33 countries that make use of such measures. The exercise suggests where national information policies appear to have gaps and could be improved. It also provides illustrations of country approaches for delivering such information in a comprehensive and efficient manner. Classification-JEL: F13; F53; F55; K33 Keywords: export quotas, export restrictions, export taxes, GATT, information, minerals, trade policy, transparency, WTO Creation-Date: 2013-03-27 Number: 146 Handle: RePEc:oec:traaab:146-EN Template-type: ReDIF-Paper 1.0 Author-Name: Przemyslaw Kowalski Author-Workplace-Name: OECD Author-Name: Max Büge Author-Workplace-Name: OECD Author-Name: Monika Sztajerowska Author-Workplace-Name: OECD Author-Name: Matias Egeland Author-Workplace-Name: OECD Title: State-Owned Enterprises: Trade Effects and Policy Implications Abstract: With a growing integration via trade and investment, state-owned enterprises (SOEs) that have traditionally been oriented towards domestic markets increasingly compete with private firms in the global market place. Three principal questions emerge from the international trade perspective: (1) How important is state ownership in the global economy; (2) What types of advantages granted to SOEs by governments (or disadvantages afflicting them) are inconsistent with the key principles of the non-discriminatory trading system; and (3) What policies and practices support effective competition among all market participants? Using a sample of world‘s largest firms and their foreign subsidiaries, this paper shows that the extent of state presence in various countries and economic sectors is significant. Moreover, many of the countries with the highest SOE shares and economic sectors with strong SOE presence are intensely traded. The potential for economic distortions is hence large, if some of these SOEs benefit from unfair advantages granted to them by governments–an allegation that is often raised in political and business circles. Existing information on such advantages is often either anecdotal or limited to individual cases. As a groundwork for future analysis and building on the existing information and literature, this paper presents a conceptual discussion of how potential SOE advantages can generate cross-border effects. It also describes several cases when actions of SOEs as well as advantages allegedly granted to them by governments have been contested as inconsistent with national or international regulations, albeit with varying degree of success. This may be partially explained by the fact that existing regulatory frameworks that discipline some forms of anti-competitive behaviour of SOEs have been designed with domestic objectives in mind or were conceived at times when the state sector was oriented primarily towards domestic markets. The survey of existing rules at the national, bilateral and multilateral levels presented in this paper is a first step in determining whether there is a need to fill any gaps and in finding the most constructive ways of doing so. Classification-JEL: F13; F14; F21; F23; G38 Keywords: competition policy, competitive neutrality, international investment, international trade, ownership, state-owned enterprises, WTO Creation-Date: 2013-04-24 Number: 147 Handle: RePEc:oec:traaab:147-EN Template-type: ReDIF-Paper 1.0 Author-Name: Hildegunn Kyvik Nordås Author-Workplace-Name: OECD Author-Name: Yunhee Kim Author-Workplace-Name: OECD Title: The Role of Services for Competitiveness in Manufacturing Abstract: This study analyses the relationships between competitiveness in manufacturing and the quality of key supporting services. Three indicators of competitiveness are considered: the degree of product differentiation, unit prices obtained in export markets and the duration of trade. The density of telecoms networks and the reliability of electricity supply stand out as the most crucial for competitive manufacturing. In addition the ease at which contracts can be enforced and the time it takes to export and import goods are strongly related to competitiveness. Our methodology allows us to go beyond a one size fits all policy analysis. Interestingly, we find that in low-income countries, the impact of services quality and policy on competitiveness is highest in low-technology industries; in middle-income countries it is highest in medium-technology sectors and in high-income countries the impact is highest in medium-high and high-technology industries. This suggests that better services contribute to moving up the value chain in industries where a country already has technological capacity and comparative advantage, but better services alone may not stimulate product differentiation in sectors where a country is far from the competitive edge – at least not in the short run. Policy reforms needed are to simplify procedures for contract enforcement, liberalisation of FDI, strengthen pro-competitive regulation of network services, and eliminate tariffs. It is concluded that new ways of doing business where manufacturers build relationships with customers and compete on the basis of products they are willing to pay a premium for has the potential to become an important driving force for growth after the great recession, provided that adequate support from competitive services markets is in place. Classification-JEL: F12; F13; F14 Keywords: competitiveness, contract enforcement, electricity, new industrial revolution, services liberalisation, services regulatory reform, tariffs, telecommunications, transport costs Creation-Date: 2013-04-05 Number: 148 Handle: RePEc:oec:traaab:148-EN Template-type: ReDIF-Paper 1.0 Author-Name: David Kupfer Author-Workplace-Name: Universidade Federal do Rio de Janeiro Author-Name: Marta Castilho Author-Workplace-Name: Universidade Federal do Rio de Janeiro Author-Name: Esther Dweck Author-Workplace-Name: Universidade Federal do Rio de Janeiro Author-Name: Marcelo Nicoll Author-Workplace-Name: Universidade Federal do Rio de Janeiro Title: Different Partners, Different Patterns: Trade and Labour Market Dynamics in Brazil's Post-Liberalisation Period Abstract: This paper seeks to evaluate to what extent the greater external exposure of the Brazilian economy in the past decade has contributed to the evolution of employment in the country. This investigation has been undertaken in two ways. First, the total employment variation was decomposed in order to identify the contribution of the final demand components – exports in particular – to this evolution. The decomposition was carried out using the Input-Output Matrix (IOM) methodology and, due to the availability of the estimated IOMs for Brazil, the exercise focused on the period 2000-07. Then, based on the labour content of trade, we estimated the volume of direct employment associated with exports, according to the skill level of workers and to the geographical composition of Brazilian exports, focusing in particular on the years 2002 and 2008. The paper finds that Brazilian exports expanded vigorously in the 2000s and contributed positively to employment generation, though this contribution was relatively small. Largely as a consequence of technological change and shifts in the composition of trade, the jobs created by exports only amounted to about 15% of those created by domestic demand and the export-related jobs were predominantly low skilled jobs. Classification-JEL: F16 Keywords: employment, exports, trade Creation-Date: 2013-04-18 Number: 149 Handle: RePEc:oec:traaab:149-EN Template-type: ReDIF-Paper 1.0 Author-Name: Evdokia Moïsé Author-Workplace-Name: OECD Author-Name: Florian Le Bris Author-Workplace-Name: OECD Title: Trade Costs - What Have We Learned?: A Synthesis Report Abstract: Understanding trade costs is essential for formulating policy interventions designed to reduce such costs. This report synthesises all OECD work on cost factors across the entire trade chain. These factors can be located behind the border, such as non-tariff regulatory measures, market access restrictions, trade finance availability and costs and general impediments on doing business; crossing the border, such as documentation and customs compliance requirements, lengthy administrative procedures and other delays; and in all stages of the international trade chain, such as transport infrastructure and logistics. The report proposes a series of questions to help identify priority areas, taking into account country specificities. The strong interdependencies between cost factors, magnified by the prevalence of global value chains, mean that policies to address costs and facilitate trade need to be undertaken in a comprehensive manner, although the cost-benefit ratio of certain trade facilitation reforms, particularly at the border, may offer immediate and significant benefits. Classification-JEL: F13; F14; F15 Keywords: border procedures, non-tariff measures, trade costs, trade facilitation, trade finance, transport and logistics Creation-Date: 2013-04-23 Number: 150 Handle: RePEc:oec:traaab:150-EN Template-type: ReDIF-Paper 1.0 Author-Name: Asako Ueno Author-Workplace-Name: OECD Title: Multilateralising Regionalism on Government Procurement Abstract: The potential multilateralisation of government procurement commitments in regional trade agreements (RTAs) presents many issues and challenges. To what extent do RTAs go beyond the 2012 revised Agreement on Government Procurement (GPA), and how do they differ among trading partners? This report surveys 47 RTAs in force with government procurement provisions where an OECD member is a party. Coverage commitments (entity coverage, thresholds, and goods and services coverage commitments) and procurement provisions including transparency mechanisms of government procurement in the OECD member RTAs are analysed in detail. In general, non-GPA parties have achieved the general GPA level of market access commitments in their RTAs. In particular, RTA services coverage commitments involving non-GPA parties are more extensive than those of GPA parties. RTA market access commitments signed by the same party are fairly homogeneous while some heterogeneity is observed possibly due in large part to reciprocity (e.g. the sub-central government entity coverage and the level of thresholds). With regard to procurement provisions including transparency measures, most RTAs broadly track those of the GPA, and recent RTAs incorporate new elements introduced in the revised GPA as well. If RTAs are to be seen as the “testing ground” for further multilateral liberalisation, it is concluded that there is a large potential for further expanding the government procurement market. Having observed that the potential costs would seem to be relatively limited at least for the non-GPA parties reviewed in this study, it may well be that this means there is more scope for considering accession to the GPA. Classification-JEL: F13; F14; F15 Keywords: free trade agreements, government procurement, GPA, multilateralisation, preferential trade agreements, public procurement, regional trade agreements, RTAs, WTO Creation-Date: 2013-05-10 Number: 151 Handle: RePEc:oec:traaab:151-EN Template-type: ReDIF-Paper 1.0 Author-Name: Iza Lejárraga Author-Workplace-Name: OECD Title: Multilateralising Regionalism: Strengthening Transparency Disciplines in Trade Abstract: Countries embarking on trade negotiations are not only seeking increased market access, but also, reduced market opacity. This study distils the most progressive practices for promoting regulatory transparency in over one hundred regional trade agreements (RTAs) concluded by OECD and large emerging economies over the last decade. While there is a lively discussion on strengthening transparency in the World Trade Organization (WTO), scant attention has been paid to the evolution of corresponding disciplines in RTAs. And yet, this study finds that RTAs can be credited for introducing instruments that not only deepen existing multilateral transparency commitments (“WTO-plus”), but expand them to new areas that do not have precedents in WTO agreements (“WTO-beyond”). In particular, the paper illuminates a number of options that may be useful for policy-makers to consider in their efforts to reinforce transparency and predictability in international trade policy. Most of the transparency mechanisms identified are being applied on a non-discriminatory basis, since they are often non-excludable and non-exhaustible. The implication is that, although WTO-plus transparency measures may be de jure preferential by virtue of being inscribed in an RTA, they are de facto being extended on a most-favoured nation (MFN) basis. Moreover, there is a considerable level of homogeneity in WTO-plus transparency provisions across a critical mass of RTAs, which may facilitate convergence and adoption at the multilateral level. Classification-JEL: F1; F10; F13; F15 Keywords: anti-bribery, anti-corruption, free trade agreements, FTAs, multilateralising regionalism, preferential trade agreements, PTAs, regional trade agreements, regulatory cooperation, RTAs, trade, transparency, World Trade Organisation, WTO Creation-Date: 2013-06-26 Number: 152 Handle: RePEc:oec:traaab:152-EN Template-type: ReDIF-Paper 1.0 Author-Name: Iza Lejárraga Author-Workplace-Name: OECD Author-Name: Ben Shepherd Title: Quantitative Evidence on Transparency in Regional Trade Agreements Abstract: What influences the adoption of transparency obligations in trade agreements, and what are its effects? This paper uses a new dataset on transparency provisions in over a hundred regional trade agreements (RTAs) to provide empirical evidence of the political economy determinants of international transparency commitments, as well as the trade impact of negotiating such transparency provisions in RTAs. The study finds that RTAs with deeper mechanisms for enhancing transparency appear to be more strongly trade-promoting than those with shallower commitments on transparency. Concretely, each additional transparency commitment negotiated in an RTA is associated with an increase in bilateral trade flows of more than one percent. Considering that comprehensive RTAs typically contain a dozen of such commitments, countries that opt for a comprehensive transparency agenda can expect to gain substantial increases in intra-regional trade. Moreover, the findings suggest that the readiness of trading partners to adhere to transparency norms is influenced by the quality of home institutions, which is consistent with a view that strengthening governance and regulatory capacities can contribute to a broader diffusion of transparency practices in international trade. Overall, the results of the analysis suggest that transparency should remain an important element of the trade agenda, both at the regional and multilateral levels. Classification-JEL: F1; F10; F13; F15 Keywords: anti-corruption, free trade agreements, FTAs, governance, gravity model of trade, institutions, preferential trade agreements, PTAs, regional trade agreements, regulatory cooperation, regulatory quality, RTAs, trade, transparency, World Trade Organisation, WTO Creation-Date: 2013-06-14 Number: 153 Handle: RePEc:oec:traaab:153-EN Template-type: ReDIF-Paper 1.0 Author-Name: Ben Shepherd Author-Workplace-Name: Developing Trade Consultants Ltd. Author-Name: Susan Stone Author-Workplace-Name: OECD Title: Global Production Networks and Employment: A Developing Country Perspective Abstract: This paper provides evidence of the links between Global Value Chains (GVCs) and labour market outcomes, focusing on developing economies. The literature generally indicates that firms with international linkages—which we use here as a proxy for GVC involvement—tend to employ more workers, pay higher wages, and employ more skilled workers than firms that deal exclusively with the domestic market. Our results are consistent with existing evidence found in developed economies, with internationalised firms tending to hire more workers and pay higher wages in developing economies as well. We also find a positive significant relationship between the number of skilled workers and firms with international linkages but not in certain key economies. However, this comes more from firms who are importers, exporters and foreign affiliates rather than engaging in any of these activities individually. We attribute this finding to the predominance of assembly work performed in many of the economies under consideration, where unskilled workers tend to dominate. Finally, we see a strong, positive association between shares of female workers and firms with international linkages. Engaging in international activity is shown to provide greater opportunities for women to enter the formal labour market. Classification-JEL: F14; F16; F23; F66; F68 Keywords: employment, gender, global value chains, international trade, skills, wages Creation-Date: 2013-05-14 Number: 154 Handle: RePEc:oec:traaab:154-EN Template-type: ReDIF-Paper 1.0 Author-Name: K.C. Fung Author-Workplace-Name: University of California Author-Name: Jane Korinek Author-Workplace-Name: OECD Title: Economics of Export Restrictions as Applied to Industrial Raw Materials Abstract: Governments intervene in non-renewable natural resources sectors more than in many others, including through the use of export taxes and quotas. Industrial raw materials sectors are characterized by a number of specificities: production is often geographically concentrated, firms are often large with substantial market power, production processes are highly capital intensive, products are relatively homogeneous and potentially substantial differences in costs of production are prevalent. This paper aims to increase understanding of the economic effects of export restrictions, in particular as they apply to the mining sector. It ascertains the prevalence of export restrictions on metals and minerals, proposes a Cournot-Nash model of export restrictions, suggests some of the economic effects due to the presence of export restrictions, and draws some implications for trade policy among producing and consuming countries of non-renewable natural resources. Classification-JEL: F12; F13; L72; Q37 Keywords: Cournot-Nash model, export ban, export prohibition, export quotas, export restrictions, export taxes, extractive industries, industrial raw materials, mining sector Creation-Date: 2013-05-14 Number: 155 Handle: RePEc:oec:traaab:155-EN Template-type: ReDIF-Paper 1.0 Author-Name: Ben Shepherd Author-Workplace-Name: Developing Trade Consultants Ltd. Title: Global Value Chains and Developing Country Employment: A Literature Review Abstract: This paper provides a review of the available literature on global value chains (GVCs) and employment markets in developing countries. Due to the difficulty of observing intra-GVC transactions, there is very little direct empirical work on GVCs and labour markets. However, it is possible to extrapolate from the extensive empirical work already undertaken on firm internationalisation and labour markets to draw inferences as to the likely impacts of GVCs. The review therefore focuses on the labour market impacts of three processes that lie at the core of GVC development: importing, exporting, and foreign direct investment (FDI). It examines their impact on labour demand and wages, and disaggregates the effects whenever possible by skill level. The available empirical evidence strongly suggests that the type of activities undertaken by GVC participants influence labour market outcomes. For instance, many GVC firms are vectors of technological upgrading that in turn increases the relative demand for skilled labour. In these cases, GVC participation is linked to higher relative wages for skilled workers, but also greater wage inequality between skilled and unskilled workers. The evidence on outcomes is more mixed as regards pure processing trade (assembly), however: the limited data available on firms engaged purely in these activities suggests that they do not systematically pay higher wages than domestic firms, which is the reverse of the finding for foreign-owned firms, exporters, and importers in general. The labour market effects of GVCs in developing countries are therefore likely to be broadly positive, but highly case specific. The review therefore concludes with two case studies—electronics in Asia and services in Chile—that demonstrate the complexity of the issues involved, and the role of complementary policies in areas such as human capital development. Classification-JEL: F16; F21; F23; O24 Keywords: developing countries, foreign direct investment, global value chains, labour markets, trade Creation-Date: 2013-05-14 Number: 156 Handle: RePEc:oec:traaab:156-EN Template-type: ReDIF-Paper 1.0 Author-Name: Evdokia Moïsé Author-Workplace-Name: OECD Title: The Costs and Challenges of Implementing Trade Facilitation Measures Abstract: This study provides data on the costs and challenges of implementing trade facilitation measures currently under negotiation in the WTO. It updates an earlier study undertaken in 2005, presenting data and insights from nine additional developing countries. The study confirms earlier findings that the costs of putting in place and maintaining trade facilitation measures are not particularly large and are far smaller than the benefits gained from implementing these measures. Capital expenditure to introduce the measures ranged between EUR 3.5 and EUR 19 million, while annual operating costs did not exceed EUR 2.5 million. Information technologies and single window mechanisms seem the most expensive elements but the most important area is training, because of its role in changing business practices of border agencies. Some measures may be expensive to introduce but not costly to operate, others require political commitment rather than funds. Moreover, an increasing amount of technical and financial assistance to implement these measures has been made available to developing countries over the last decade. Classification-JEL: F13; F14; F35; H5; H83 Creation-Date: 2013-05-15 Number: 157 Handle: RePEc:oec:traaab:157-EN Template-type: ReDIF-Paper 1.0 Author-Name: Przemyslaw Kowalski Author-Workplace-Name: OECD Author-Name: Max Büge Author-Workplace-Name: OECD Title: Assessing the Trade-Related Sources of Productivity Growth in Emerging Economies Abstract: This paper contributes new empirical evidence on the relationship between productivity and international trade. This is accomplished using an econometric approach that combines input-output and productivity data, which allows a more detailed tracking of the relationship between trade in intermediate and final products and productivity in countries at different stages of economic development. The results show that various forms of trade integration strongly support productivity in emerging economies. Exporting final products, importing intermediates for domestic production and re-exporting are all associated with higher productivity levels, pointing to the particular importance for this country grouping of being able to integrate into regional and global value chains. Our results emphasise also important linkages between different economic sectors and call for broad-based approaches to facilitating integration with foreign intermediate inputs and final products markets. Classification-JEL: F13; F14; F43; F63 Keywords: developing economies, emerging economies, global value chains, intermediate imports, international trade, productivity Creation-Date: 2013-07-30 Number: 158 Handle: RePEc:oec:traaab:158-EN Template-type: ReDIF-Paper 1.0 Author-Name: Koen De Backer Author-Workplace-Name: OECD Author-Name: Sébastien Miroudot Author-Workplace-Name: OECD Title: Mapping Global Value Chains Abstract: World trade and production are increasingly structured around “global value chains” (GVCs). The last few years have witnessed a growing number of case studies describing at the product level how production is internationally fragmented, but there is little evidence at the aggregate level on the prevalence of GVCs. The main objective of this paper is to provide for more and better evidence allowing the examination of countries’ position within international production networks. We propose a number of indicators that give a more accurate picture of the integration and position of countries in GVCs, as well as a more detailed assessment of the value chain in six broad industries: agriculture and food products, chemicals, electronics, motor vehicles, business services and financial services. Classification-JEL: F14; F23; L16; L23 Creation-Date: 2013-12-19 Number: 159 Handle: RePEc:oec:traaab:159-EN Template-type: ReDIF-Paper 1.0 Author-Name: Penny Bamber Author-Workplace-Name: Duke University Center on Globalization, Governance and Competitiveness Author-Name: Karina Fernandez-Stark Author-Workplace-Name: Duke University Center on Globalization, Governance and Competitiveness Author-Name: Gary Gereffi Author-Workplace-Name: Duke University Center on Globalization, Governance and Competitiveness Author-Name: Andrew Guinn Author-Workplace-Name: University of North Carolina Title: Connecting Local Producers in Developing Countries to Regional and Global Value Chains: Update Abstract: This report analyzes the specific factors that affect the competitiveness of developing countries in global value chains (GVCs), and how these factors differ across four major economic sectors: agriculture, extractive industries, manufacturing and offshore services. Although integration into GVCs allows firms in developing countries to participate in international trade without developing the full range of capabilities required to produce a product or service, it will not automatically translate into positive development gains from trade without the appropriate policies to build productive capacity and ensure inclusive growth and upgrading capabilities. In order to inform these policies, it is necessary to identify the various local factors that affected the capacity of developing countries to meet GVC and RVC requirements, including their productive capacity, infrastructure and services, the business environment, trade and investment policies and industry institutionalization. The report identifies the need for further data and analysis in many areas, in particular the trade-related policy implications of TiVA-GVCs for developing countries, including emerging economies. This would provide a starting point for the discussion of the domestic policies and actions needed to promote and support developing countries’ beneficial participation in value chains and inform aid for trade interventions promoting effective integration into markets via GVCs. Classification-JEL: F13; F15; F16; F21; F23; F35; F63 Keywords: competitiveness, developing countries, global and regional value chains, inclusive growth, productive capacity, trade integration Creation-Date: 2014-01-08 Number: 160 Handle: RePEc:oec:traaab:160-EN Template-type: ReDIF-Paper 1.0 Author-Name: Sébastien Miroudot Author-Workplace-Name: OECD Author-Name: Dorothée Rouzet Author-Workplace-Name: OECD Author-Name: Francesca Spinelli Author-Workplace-Name: OECD Title: Trade Policy Implications of Global Value Chains: Case Studies Abstract: Taking global value chains (GVCs) into account has important implications for trade policy. When production is vertically fragmented and trade in intermediate inputs is prevalent, one has to look differently at a certain number of issues. Through case studies, this paper provides new evidence on the incidence on services of tariffs levied on goods (case study 1) and then discusses effective rates of protection in a world of GVCs and what the removal of tariffs on intermediate inputs implies, using the example of Canada (case study 2). To illustrate how trade agreements could be made more relevant for GVCs, the paper further looks at sectoral approaches in trade negotiations through the example of the Information Technology Agreement (case study 3) and finally compares the network of regional trade agreements in force with global production networks (case study 4). Classification-JEL: F13; F14; F20; F23 Keywords: cumulative tariffs, effective rates of protection, fragmentation of production, global value chains, network trade, regional trade agreements, trade in intermediate inputs, vertical specialization Creation-Date: 2013-12-24 Number: 161 Handle: RePEc:oec:traaab:161-EN Template-type: ReDIF-Paper 1.0 Author-Name: Mark F. Schultz Author-Workplace-Name: Southern Illinois University Author-Name: Douglas C. Lippoldt Author-Workplace-Name: OECD Title: Approaches to Protection of Undisclosed Information (Trade Secrets): Background Paper Abstract: This paper takes stock of the available legal protection for trade secrets (undisclosed information) in a broad sample of countries. Drawing on national and international material, the paper develops and presents an indicator of the stringency of protection of trade secrets (the Trade Secrets Protection Index) and provides an assessment of variation in the available protection. The result is a finding that while the sample countries have some similarities, notably with respect to definition and scope of trade secrets, they have many more substantial dissimilarities with respect to implementation of protection for trade secrets. For example, differences are particularly pronounced in evidence gathering and discovery, protection of trade secrets during litigation, technology transfer requirements and the effectiveness of legal systems with respect to enforcement. This diversity is reflected in the wide range of scores in the Trade Secrets Protection Index. Such variation in the stringency of protection for trade secrets may influence firm-level decision-making and may have implications for some aspects of economic performance (in particular, in relation to innovation). Classification-JEL: F13; O34 Keywords: intellectual property rights, trade secrets, trade secrets protection index Creation-Date: 2014-01-30 Number: 162 Handle: RePEc:oec:traaab:162-EN Template-type: ReDIF-Paper 1.0 Author-Name: Jane Korinek Author-Workplace-Name: OECD Title: Export Restrictions on Raw Materials: Experience with Alternative Policies in Botswana Abstract: Demand for non-renewable natural resources is forecast to rise steadily over the coming decades. Underlying trends of long-term rising demand and falling supply of mineral resources will inevitably increase pressure on prices and intensify competition for scarce resources. This can create a substantial opportunity for development for minerals-rich countries. However, as suggested by the “resource curse” debate, broad-based economic development based on the extractive industries is far from assured. History suggests that not all countries, in particular many of those outside the OECD area, have benefitted economy-wide from their mineral resources: good governance and good policies are essential to benefit from their huge potential growth. Some countries have successfully regulated their mining sectors without resorting to highly distortive policies such as export restrictions. One such country is Botswana. This paper examines some of the policies in place in Botswana that have contributed to the governance and management of its substantial minerals sector. Lessons are drawn for minerals-rich countries keen to manage their raw materials sectors for increased economy-wide growth. Classification-JEL: O24; O55; Q32; Q37; Q38 Keywords: beneficiation, Botswana, De Beers, Debswana, Diamond Trading Company, diamonds, export restrictions, extractive industries, gemstones, mining, Pula fund, regulation, resource curse debate, royalties, SACU, South African Customs Union, sovereign wealth funds, sustainable budget index, SWF, tax revenue management, taxation Creation-Date: 2014-01-14 Number: 163 Handle: RePEc:oec:traaab:163-EN Template-type: ReDIF-Paper 1.0 Author-Name: Barbara Fliess Author-Workplace-Name: OECD Title: Transparency of Export Restrictions: A Checklist Promoting Good Practice Abstract: The incidence of export taxes, prohibitions and other measures that raise export prices, limit export quantities or place conditions on exporting is on the rise. Transparency can help mitigate the negative effects of export restrictions by enabling affected stakeholders to better understand and anticipate policy change and adjust their activities. This paper develops a checklist of good practice in transparency which can serve as a tool for self-evaluation by governments and for promoting better and more consistent transparency practices in this area. The items of the checklist are drawn from norms and practices found in WTO and regional trade agreements and good governance guidelines. Additionally, feedback was sought through a small business survey. The list provides guidance with respect to such questions as what, when and how information about export restrictions governments ought to make public. It assembles relevant principles for keeping stakeholders and the general public informed at different stages of developing and implementing export restrictions and identifies information content for an effective information policy. Transparency moreover depends on the ease with which information can be obtained and on the extent to which stakeholders have an opportunity to make their views known when a measure is still on the drawing board. Classification-JEL: F13; F53; F55; K33 Keywords: business surveys, export restrictions, exports, GATT, good practices, information, minerals, raw materials, rule-making, trade policy, transparency, WTO Creation-Date: 2014-05-20 Number: 164 Handle: RePEc:oec:traaab:164-EN Template-type: ReDIF-Paper 1.0 Author-Name: Iza Lejárraga Author-Workplace-Name: OECD Author-Name: Humberto López Rizzo Author-Workplace-Name: University of Paris I Author-Name: Harald Oberhofer Author-Workplace-Name: University of Salzburg Author-Name: Susan Stone Author-Workplace-Name: OECD Author-Name: Ben Shepherd Author-Workplace-Name: Developing Trade Consultants Ltd. Title: Small and Medium-Sized Enterprises in Global Markets: A Differential Approach for Services? Abstract: This study empirically investigates key restrictions to the internationalisation of small and medium-sized enterprises (SMEs) in manufacturing and across different types of services. The study explores the extent to which binding constraints faced by SMEs producing goods may differ from small firms operating in services sectors and takes stock of how existing policy initiatives address some of these differences. Our results suggest that while firm size clearly influences the trade performance of SMEs in manufacturing, it is an ambiguous predictor of export performance in the case of small-sized services firms. The findings show that firm size influences the choice of export channel and that small firms rely more on indirect and agglomeration networks. Finally, the results point to a strong degree of firm-level heterogeneity across services activities and enterprise size. It would seem that incorporating sectoral and size heterogeneity into existing policies might be desirable to address key constraints for SMEs. Classification-JEL: F14; F68; L8 Keywords: internationalisation, services, small and medium-sized enterprises, SMEs, trade, trade in services Creation-Date: 2014-09-05 Number: 165 Handle: RePEc:oec:traaab:165-EN Template-type: ReDIF-Paper 1.0 Author-Name: Kozo Kiyota Author-Workplace-Name: Keio University Title: Exports and Employment in China, Indonesia, Japan and Korea Abstract: This paper examines the effects of exports on employment in China, Indonesia, Japan and Korea. It draws on input-output data for the period from 1995 to 2009 to estimate the effects on each industry's employment (i.e. direct effects) and on other industries' employment through intra-industry linkages (i.e. indirect effects). There are four major findings. First, at the aggregate level, the implied employment from exports increased in China, Japan and Korea. Second, at the industry level, exports and the shares of implied employment from exports increased in machinery-related industries such as Machinery (NEC), Electrical and Optical Equipment, and Transport Equipment in China, Indonesia and Korea. Third, although more than 80% of exports in the four study countries are from manufacturing industries, the employment effects are not limited to manufacturing industries. A significant number of workers in non-manufacturing industries depend upon manufacturing exports through vertical inter-industry linkages. Non-manufacturing industries account for between 40% and 60% of the implied employment from exports. Finally, in 2009, the share of implied employment from Chinese final demand exceeded that from the US final demand in both Japan and Korea. An implication of the overall results is that even in cases where an industry is not particularly directly export-oriented, the industry may still be subject to potential effects – positive or negative – of changes in export demand. Classification-JEL: F16 Keywords: employment, exports, intra-industry linkages, trade Creation-Date: 2014-08-01 Number: 166 Handle: RePEc:oec:traaab:166-EN Template-type: ReDIF-Paper 1.0 Author-Name: Douglas C. Lippoldt Author-Workplace-Name: OECD Author-Name: Mark F. Schultz Author-Workplace-Name: Southern Illinois University Title: Uncovering Trade Secrets - An Empirical Assessment of Economic Implications of Protection for Undisclosed Data Abstract: This paper takes stock of the protection of trade secrets for a sample of 37 countries, provides historical data for the period since 1985, and considers the relationship of the stringency of the protection of trade secrets to relevant economic performance indicators. The paper finds that there has been a notable increase in the stringency of trade secrets protection in a broad sample of countries during the period from 1985 to 2010. The paper also finds a positive association between the stringency of trade secrets protection and key indicators of innovation and international economic flows. Further details of the methodology and additional country data can be found in the background paper provided in phase I of the OECD trade secrets project [OECD Trade Policy Paper No. 162]. Classification-JEL: F13; O34 Keywords: economic assessment, intellectual property rights, trade secrets, trade secrets protection index Creation-Date: 2014-08-11 Number: 167 Handle: RePEc:oec:traaab:167-EN Template-type: ReDIF-Paper 1.0 Author-Name: Iza Lejárraga Author-Workplace-Name: OECD Title: Deep Provisions in Regional Trade Agreements: How Multilateral-friendly?: An Overview of OECD Findings Abstract: Over the past decade, an increasing number of economies have resorted to regional trade agreements (RTAs) as a means to further the market-opening and rule-making agenda. In this context, this paper addresses the question as to whether and how selected elements of RTAs could be used as ‘stepping stones’ for multilateralisation in the future. The report synthesizes the OECD work on RTAs by examining regional provisions that deepen (WTO-plus) and expand (WTO-beyond) multilateral commitments across a broad range of policy areas. It finds that WTO-plus measures are becoming more widespread and similar over time, suggesting that there may be growing receptivity and preparedness to endorse higher levels of commitments. The report distils a set of attributes that may be able to render WTO-plus provisions more amenable to multilateralisation, either through a bottom-up (RTA-driven) or top-down (WTO-driven) approach. It considers the degree of convergence, homogeneity, discrimination, enforceability and economic impact of selected measures in RTAs, with a view to moving towards a shared understanding of multilateral-friendly practices that can be promoted in regional negotiations. Classification-JEL: F1; F10; F13; F14; F15 Keywords: multilateral trading system, multilateralising regionalism, preferential trade agreements, PTAs, regional trade agreements, RTAs, World Trade Organization, WTO Creation-Date: 2014-10-17 Number: 168 Handle: RePEc:oec:traaab:168-EN Template-type: ReDIF-Paper 1.0 Author-Name: Hildegunn Kyvik Nordås Author-Workplace-Name: OECD Author-Name: Massimo Geloso Grosso Author-Workplace-Name: OECD Author-Name: Frédéric Gonzales Author-Workplace-Name: OECD Author-Name: Iza Lejárraga Author-Workplace-Name: OECD Author-Name: Sébastien Miroudot Author-Workplace-Name: OECD Author-Name: Asako Ueno Author-Workplace-Name: OECD Author-Name: Dorothée Rouzet Author-Workplace-Name: OECD Title: Services Trade Restrictiveness Index (STRI): Computer and Related Services Abstract: This paper presents the services trade restrictiveness indices (STRIs) for computer services. The STRIs are composite indices taking values between zero and one, zero representing an open market and one a market completely closed to foreign services providers. The indices are calculated for 40 countries, the 34 OECD members and Brazil, China, India, Indonesia, Russia and South Africa. The STRIs capture de jure restrictions. This report presents the first vintage of indicators for computer services and captures regulations in force in 2013. The scores range between 0.08 and 0.34, with a sample average of 0.18. Explicit barriers to trade in computer services are rare, but the sector is subject to a number of economy-wide restrictions facing all sectors. Among these, restrictions on movement of people (mode 4 in GATS terminology) make the largest contribution to the index value, followed by regulatory transparency issues. The paper presents the list of measures included in the indices, the scoring and weighting system for calculating the indices and an analysis of the results. Classification-JEL: F13; F14; K33; L86 Keywords: computer services, regulation, services trade, services trade restrictions Creation-Date: 2014-11-04 Number: 169 Handle: RePEc:oec:traaab:169-EN Template-type: ReDIF-Paper 1.0 Author-Name: Massimo Geloso Grosso Author-Workplace-Name: OECD Author-Name: Iza Lejárraga Author-Workplace-Name: OECD Author-Name: Hildegunn Kyvik Nordås Author-Workplace-Name: OECD Author-Name: Frédéric Gonzales Author-Workplace-Name: OECD Author-Name: Sébastien Miroudot Author-Workplace-Name: OECD Author-Name: Asako Ueno Author-Workplace-Name: OECD Author-Name: Dorothée Rouzet Author-Workplace-Name: OECD Title: Services Trade Restrictiveness Index (STRI): Construction, Architecture and Engineering Services Abstract: This paper presents the services trade restrictiveness indices (STRIs) for construction, architecture and engineering services. The STRIs are composite indices taking values between zero and one, zero representing an open market and one a market completely closed to foreign services providers. The indices are calculated for 40 countries, the 34 OECD members and Brazil, China, India, Indonesia, Russia and South Africa. This report presents the first vintage of indicators for construction, architecture and engineering services and captures de jure regulations in force in 2013. The results for construction services indicate that the overall level of restrictiveness is relatively low, ranging from 0.05 to 0.32, with an average of 0.16. The more elevated levels of restriction can be largely attributed to general measures affecting all sectors of the economy. The STRI also supports the view that architecture and engineering services are less restrictively regulated than other accredited professional services, notably legal and accounting services. The average value for the STRI among the countries in the sample is 0.22 for architecture services, connoting a relatively low degree of regulatory restrictiveness; the corresponding value is only marginally lower, 0.2, for engineering services. The majority of regulations affecting trade in these sectors concern the movement of people. Classification-JEL: F13; F14; K33; L74; L84 Keywords: architecture services, construction services, engineering services, regulation, services trade, services trade restrictions Creation-Date: 2014-11-04 Number: 170 Handle: RePEc:oec:traaab:170-EN Template-type: ReDIF-Paper 1.0 Author-Name: Massimo Geloso Grosso Author-Workplace-Name: OECD Author-Name: Hildegunn Kyvik Nordås Author-Workplace-Name: OECD Author-Name: Frédéric Gonzales Author-Workplace-Name: OECD Author-Name: Iza Lejárraga Author-Workplace-Name: OECD Author-Name: Sébastien Miroudot Author-Workplace-Name: OECD Author-Name: Asako Ueno Author-Workplace-Name: OECD Author-Name: Dorothée Rouzet Author-Workplace-Name: OECD Title: Services Trade Restrictiveness Index (STRI): Legal and Accounting Services Abstract: This paper presents the services trade restrictiveness indices (STRIs) for the regulated professions of legal and accounting services. The STRIs are composite indices taking values between zero and one, zero representing an open market and one a market completely closed to foreign services providers. The indices are calculated for 40 countries, the 34 OECD members and Brazil, China, India, Indonesia, Russia and South Africa. This report presents the first vintage of indicators for legal and accounting services and captures de jure regulations in force in 2013. The STRI supports the view that legal and accounting services are subject to a relatively high level of regulation. Restrictiveness for legal services ranges from 0.11 to 0.73, with an average of 0.31. Accounting and auditing services show an average of 0.3 and STRI values ranging from 0.13 to 1. The results provide useful policy insights, particularly in order to identify priorities for reform at the national and international levels. Notably, in the case of legal and accounting services, easing a few prominent restrictions could result in a significantly more liberal and competitive market environment. Classification-JEL: F13; F14; K33; L84 Keywords: accounting services, auditing services, legal services, regulation, services trade, services trade restrictions Creation-Date: 2014-11-04 Number: 171 Handle: RePEc:oec:traaab:171-EN Template-type: ReDIF-Paper 1.0 Author-Name: Hildegunn Kyvik Nordås Author-Workplace-Name: OECD Author-Name: Massimo Geloso Grosso Author-Workplace-Name: OECD Author-Name: Frédéric Gonzales Author-Workplace-Name: OECD Author-Name: Iza Lejárraga Author-Workplace-Name: OECD Author-Name: Molly Lesher Author-Workplace-Name: OECD Author-Name: Sébastien Miroudot Author-Workplace-Name: OECD Author-Name: Asako Ueno Author-Workplace-Name: OECD Author-Name: Dorothée Rouzet Author-Workplace-Name: OECD Title: Services Trade Restrictiveness Index (STRI): Telecommunication Services Abstract: This paper presents the services trade restrictiveness indices (STRIs) for telecommunications. The STRIs are composite indices taking values between zero and one, zero representing an open market and one a market completely closed to foreign services providers. The indices are calculated for 40 countries, the 34 OECD members and Brazil, China, India, Indonesia, Russia and South Africa. The STRIs capture de jure restrictions. This report presents the first vintage of indicators for telecommunications and captures regulations in force in 2013. The scores range between 0.06 and 0.61, with a sample average of 0.22. Barriers to competition, reflecting inadequate regulation of incumbents with significant market power, and state ownership in some countries make the largest contribution to the index value, followed by restrictions on foreign entry. The paper presents the list of measures included in the indices, the scoring and weighting system for calculating the indices and an analysis of the results. Classification-JEL: F13; F14; K33; L96 Keywords: regulation, services trade, services trade restrictions, telecommunications Creation-Date: 2014-11-04 Number: 172 Handle: RePEc:oec:traaab:172-EN Template-type: ReDIF-Paper 1.0 Author-Name: Asako Ueno Author-Workplace-Name: OECD Author-Name: Massimo Geloso Grosso Author-Workplace-Name: OECD Author-Name: Iza Lejárraga Author-Workplace-Name: OECD Author-Name: Hildegunn Kyvik Nordås Author-Workplace-Name: OECD Author-Name: Sébastien Miroudot Author-Workplace-Name: OECD Author-Name: Frédéric Gonzales Author-Workplace-Name: OECD Author-Name: Dorothée Rouzet Author-Workplace-Name: OECD Title: Services Trade Restrictiveness Index (STRI): Distribution Services Abstract: This paper presents the services trade restrictiveness indices (STRIs) for distribution services. The STRIs are composite indices taking values between zero and one, zero representing an open market and one a market completely closed to foreign services providers. The indices are calculated for 40 countries, the 34 OECD members and Brazil, China, India, Indonesia, Russia and South Africa. The STRIs capture de jure restrictions. This report presents the first vintage of indicators for distribution services and captures regulations in force in 2013. The scores range between 0.02 and 0.40, with a sample average of 0.13. It is observed that the regulatory profile differs across countries. Restrictions on foreign ownership and other market entry conditions significantly contribute to the results for almost half of the countries covered by the STRI. The paper presents the list of measures included in the indices, the scoring and weighting system for calculating the indices and an analysis of the results. Classification-JEL: F13; F14; K33; L81 Keywords: distribution services, regulation, services trade, services trade restrictions Creation-Date: 2014-11-04 Number: 173 Handle: RePEc:oec:traaab:173-EN Template-type: ReDIF-Paper 1.0 Author-Name: Hildegunn Kyvik Nordås Author-Workplace-Name: OECD Author-Name: Iza Lejárraga Author-Workplace-Name: OECD Author-Name: Sébastien Miroudot Author-Workplace-Name: OECD Author-Name: Frédéric Gonzales Author-Workplace-Name: OECD Author-Name: Massimo Geloso Grosso Author-Workplace-Name: OECD Author-Name: Dorothée Rouzet Author-Workplace-Name: OECD Author-Name: Asako Ueno Author-Workplace-Name: OECD Title: Services Trade Restrictiveness Index (STRI): Audio-visual Services Abstract: This paper presents the services trade restrictiveness indices (STRIs) for motion pictures, television and broadcasting and sound recording. The STRIs are composite indices taking values between zero and one, zero representing an open market and one a market completely closed to foreign services providers. The indices are calculated for 40 countries, the 34 OECD members and Brazil, China, India, Indonesia, Russia and South Africa. The STRIs capture de jure restrictions. This report presents the first vintage of indicators for audio-visual services and captures regulations in force in 2013. The scores range between 0.06 and 0.72 for motion pictures, 0.07 to 0.78 for television and broadcasting, and between 0.05 and 0.37 for sound recording. The sample averages are 0.18 for motion pictures, 0.28 for television and broadcasting and 0.16 for sound recording. Limitations on foreign entry, including foreign equity limits contribute to about two thirds of the index values in television and broadcasting. In motion pictures screen quotas contribute to the indices in many of the countries with scores above average. Sound recording, i.e. music, is the most open of the three audio-visual services sectors where limitations on movement of people account for more than 40% of the index value. The paper presents the list of measures included in the indices, the scoring and weighting system for calculating the indices and an analysis of the results. Classification-JEL: F13; F14; K33; L82 Keywords: copyrights, motion pictures, regulation, services trade, services trade restrictions, sound recording, television broadcasting Creation-Date: 2014-11-04 Number: 174 Handle: RePEc:oec:traaab:174-EN Template-type: ReDIF-Paper 1.0 Author-Name: Dorothée Rouzet Author-Workplace-Name: OECD Author-Name: Hildegunn Kyvik Nordås Author-Workplace-Name: OECD Author-Name: Frédéric Gonzales Author-Workplace-Name: OECD Author-Name: Massimo Geloso Grosso Author-Workplace-Name: OECD Author-Name: Iza Lejárraga Author-Workplace-Name: OECD Author-Name: Sébastien Miroudot Author-Workplace-Name: OECD Author-Name: Asako Ueno Author-Workplace-Name: OECD Title: Services Trade Restrictiveness Index (STRI): Financial Services Abstract: This paper presents the services trade restrictiveness indices (STRIs) for financial services. The STRIs are composite indices taking values between zero and one, zero representing an open market and one a market completely closed to foreign services providers. The indices are calculated for 40 countries, the 34 OECD members and Brazil, China, India, Indonesia, Russia and South Africa. The STRIs capture de jure restrictions. This report presents the first vintage of indicators for commercial banking and insurance services and captures regulations in force in 2013. The scores in commercial banking range between 0.06 and 0.55, with a sample average of 0.19. The scores in insurance services range between 0.05 and 0.63, with a sample average of 0.20. The results are mainly driven by restrictions on market entry, where significant impediments remain in the form of foreign equity limits, restrictions on legal form, discriminatory licensing criteria and restrictions on cross-border transactions. Barriers to competition, including regulation of products and prices and preferential treatment granted to state-owned financial institutions, also make a substantive contribution to the index values. The paper presents the list of measures included in the indices, the scoring and weighting system for calculating the indices and an analysis of the results. Classification-JEL: F13; F14; F21; G21; G22; G28; L88 Keywords: bank, insurance, regulation, regulatory reform, services liberalisation, services trade restrictions, trade in services, trade policy Creation-Date: 2014-11-04 Number: 175 Handle: RePEc:oec:traaab:175-EN Template-type: ReDIF-Paper 1.0 Author-Name: Massimo Geloso Grosso Author-Workplace-Name: OECD Author-Name: Hildegunn Kyvik Nordås Author-Workplace-Name: OECD Author-Name: Asako Ueno Author-Workplace-Name: OECD Author-Name: Frédéric Gonzales Author-Workplace-Name: OECD Author-Name: Iza Lejárraga Author-Workplace-Name: OECD Author-Name: Sébastien Miroudot Author-Workplace-Name: OECD Author-Name: Dorothée Rouzet Author-Workplace-Name: OECD Title: Services Trade Restrictiveness Index (STRI): Transport and Courier Services Abstract: This paper presents the services trade restrictiveness indices (STRIs) for transport and courier services. The STRIs are composite indices taking values between zero and one, zero representing an open market and one a market completely closed to foreign services providers. The indices are calculated for 40 countries, the 34 OECD members and Brazil, China, India, Indonesia, Russia and South Africa. This report presents the first vintage of indicators for transport and courier services and captures de jure regulations in force in 2013. The STRI supports the view that these services are subject to very different regulatory frameworks and, in some cases, to a relatively elevated degree of regulation. Indices for air transport covering measures affecting commercial establishment and accompanying movement of natural persons are on average quite high (0.43), with little variation across countries. A preliminary assessment of restrictiveness in cross-border trade in the sector shows that, while some progress in easing restrictions has been achieved through open skies agreements, significant limitations remain in place. The maritime transport sector is moderately open with an average STRI of 0.25. Foreign equity restrictions are still quite common in the sector and contribute significantly to the index. Most other sector-specific restrictions are found in the cabotage market and in ports. In road freight transport, the results confirm that the domestic road freight transport regime has been significantly liberalised over the years, and currently commercial establishment in the sector is largely affected by horizontal measures. The overall level of restrictiveness is relatively low with an average of 0.16, but exhibits pretty large variation. With respect to rail freight, the STRI also supports the view that considerable reforms have been undertaken in the sector in the past decades. The average level of restrictiveness is moderate at 0.22, although two countries maintain a statutory state-owned monopoly, which implies that the sector is completely closed to foreign suppliers. Finally, for courier services the results show that the overall level of restrictiveness is moderate with a sample average of 0.26. There is, however, large variation in STRI indices among countries. The elevated levels of restrictiveness are found in countries where foreign equity restrictions or statutory monopolies exist. Classification-JEL: F13; F14; K33; L87; L91; L92; L93 Keywords: courier services, regulation, services trade, services trade restrictions, transport services Creation-Date: 2014-11-04 Number: 176 Handle: RePEc:oec:traaab:176-EN Template-type: ReDIF-Paper 1.0 Author-Name: Massimo Geloso Grosso Author-Workplace-Name: OECD Author-Name: Frédéric Gonzales Author-Workplace-Name: OECD Author-Name: Sébastien Miroudot Author-Workplace-Name: OECD Author-Name: Hildegunn Kyvik Nordås Author-Workplace-Name: OECD Author-Name: Dorothée Rouzet Author-Workplace-Name: OECD Author-Name: Asako Ueno Author-Workplace-Name: OECD Title: Services Trade Restrictiveness Index (STRI): Scoring and Weighting Methodology Abstract: This paper presents the scoring and weighting methodology for calculation of the services trade restrictiveness indices (STRIs) for 18 sectors. The STRIs are composite indices taking values between zero and one, zero representing an open market and one a market completely closed to foreign services providers. The scoring system is based on binary scoring. To reconcile the complexity of services trade restrictions with binary scoring, non-binary measures are broken down to multiple thresholds; complementary measures are grouped and scored as zero only if all measures in the bundle are not restrictive. Finally in cases where one restriction renders others irrelevant, those measures that are rendered irrelevant are automatically scored one. The paper presents the general methodology that applies to the core measures found in all sectors as well as sector-specific scoring where relevant. Classification-JEL: C10; C80; F13; F14; F53 Keywords: composite indicators, services trade restrictions Creation-Date: 2015-01-23 Number: 177 Handle: RePEc:oec:traaab:177-EN Template-type: ReDIF-Paper 1.0 Author-Name: Hildegunn Kyvik Nordås Author-Workplace-Name: OECD Author-Name: Dorothée Rouzet Author-Workplace-Name: OECD Title: The Impact of Services Trade Restrictiveness on Trade Flows: First Estimates Abstract: This paper uses newly released OECD data on services trade restrictions (STRI) to analyse the relationship between services trade restrictions, cross-border trade in services and trade in downstream manufactured goods. A standard gravity model is enhanced by the STRI indices in a cross-section regression analysis. Services trade restrictions are negatively associated with both imports and exports of services. The surprisingly strong effect on services exports is probably explained by a negative relationship between the STRIs and sector performance indices. Consequently, services suppliers are less competitive abroad. A negative relationship is also found between the STRI indices and exports, imports and intra-industry trade in manufactured goods. The statistical significance and the elasticities vary across services and goods sectors in ways that intuitively make sense. Classification-JEL: F13; F14; F68 Keywords: regulatory spillovers, services trade restrictions, trade in services Creation-Date: 2015-02-06 Number: 178 Handle: RePEc:oec:traaab:178-EN Template-type: ReDIF-Paper 1.0 Author-Name: Przemyslaw Kowalski Author-Workplace-Name: OECD Author-Name: Javier Lopez Gonzalez Author-Name: Alexandros Ragoussis Author-Workplace-Name: OECD Author-Name: Cristian Ugarte Title: Participation of Developing Countries in Global Value Chains: Implications for Trade and Trade-Related Policies Abstract: Although global value chains (GVCs) are often considered a defining feature of the current wave of globalisation, little is known about: i) what drives GVC participation; ii) what the benefits associated to growing participation are; or iii) how developing countries engage and benefit from GVCs. This paper tackles these questions empirically. The evidence indicates there are important benefits to be had from wider participation in terms of enhanced productivity, sophistication and diversification of exports. Structural factors, such as geography, size of the market and level of development are found to be key determinants of GVC participation. Trade and investment policy reforms as well as improvements of logistics and customs, intellectual property protection, infrastructure and institutions can, however, also play an active role in promoting further engagement. A more in-depth analysis of GVC participation and policy context in five developing sub-regions in Africa, the Middle East and Asia highlights key differences and similarities, and can be a starting point for policy makers in the regions to assess their countries’ GVC engagement and to consider policy options. Classification-JEL: F1; F2; F6 Keywords: developing countries, East and Southern Africa, global value chains, GVCs, intermediate inputs, investment, Middle East and North Africa, regional trade agreements, South Asia, South East Asia, trade policy, upgrading, West and Central Africa Creation-Date: 2015-04-01 Number: 179 Handle: RePEc:oec:traaab:179-EN Template-type: ReDIF-Paper 1.0 Author-Name: Susan Stone Author-Workplace-Name: OECD Author-Name: James Messent Author-Workplace-Name: OECD Author-Name: Dorothee Flaig Author-Workplace-Name: OECD Title: Emerging Policy Issues: Localisation Barriers to Trade Abstract: Despite the predominately negative evidence of the impact of local content requirements on trade, they continue to play a significant role in trade policy. This has been particularly true since the financial crisis of 2008. The work presented here provides new evidence of the detrimental effects these policies have on the imposing country’s own economy. Most empirical studies have focused on the long run inefficiencies associated with LCRs, notably in the effected sector. This paper highlights the costs to other sectors in the economy, the different impacts on intermediate versus final demand, and the declines in trade in third-party economies, despite not engaging in direct trade with the imposing country. Economies imposing LCRs experience a decrease in exports in non-LCR effected sectors and a growing concentration of domestic activity in a few targeted sectors, undermining potential growth and innovation on a broader scale. The paper concludes by offering policy alternatives. Classification-JEL: F14; F47; F68 Keywords: CGE, impact, Local Content Requirements, trade policy Creation-Date: 2015-05-01 Number: 180 Handle: RePEc:oec:traaab:180-EN Template-type: ReDIF-Paper 1.0 Author-Name: Evdokia Moïsé Author-Name: Silvia Sorescu Author-Workplace-Name: OECD Title: Contribution of Trade Facilitation Measures to the Operation of Supply Chains Abstract: This report assesses how specific border procedures impact on the operation of supply chains and the resulting policy implications, using data from the OECD Trade Facilitation Indicators (TFIs) database and from the OECD-WTO database on trade-in-value-added. The assessment focusses on the impact of trade facilitation measures in three areas: on the amount of foreign value-added embodied in final domestic demand; on the amount of foreign value-added embodied in the gross exports of a reference country; and on the amount of domestic value-added embodied in foreign final demand for agriculture and primary products, low tech industries, medium-low tech industries, and high and medium-high tech industries. A small increase of 0.1 in TFIs performance could potentially generate increases in a country’s value-added “imports” in a range of between 1.5 and 3.5%, while in the case of “exports” these increases could range between 1 and 3%. Measures that enhance the predictability and the speed of movement of goods are critical factors that shape the sourcing decisions of companies. The impact is strongest when the value-added originates in medium-low tech industries, such as mining and quarrying or basic metals sectors, or in high and medium-high tech industries, such as transport equipment, chemicals and electrical and optical equipment, and is destined to high and medium-high tech industries. Key words: Customs, global value chains, GVCs, intermediate inputs, trade facilitation, trade flows, trade policy, transparency, simplification Classification-JEL: F1; F13; F14; F2; F6 Keywords: customs, global value chains, GVCs, intermediate inputs, simplification, trade facilitation, trade flows, trade policy, transparency Creation-Date: 2015-05-29 Number: 181 Handle: RePEc:oec:traaab:181-EN Template-type: ReDIF-Paper 1.0 Author-Name: Javier Lopez Gonzalez Author-Workplace-Name: OECD Author-Name: Przemyslaw Kowalski Author-Workplace-Name: OECD Author-Name: Pascal Achard Author-Workplace-Name: OECD Title: Trade, global value chains and wage-income inequality Abstract: The rise in global value chain (GVC) participation has coincided with significant changes in the distribution of wage income both within and across countries. This paper sets out to identify the linkages between these phenomena. It shows that GVC participation has a small effect on the distribution of wages and, when it has, it can reduce wage inequality when it concerns participation related to low-skilled segments of the labour force. This suggests that the potential tensions between equity and aggregate economic outcomes of GVC participation hold only in particular cases, namely when participation relates to high-skilled segments of the labour force. For policy-makers seeking to maximise the benefits of GVC participation, questions of a more equitable distribution of returns to workers might focus on skill-upgrading of low-skilled labour by promoting further tertiary education and development of skills. Classification-JEL: F14; F16; F6; J31 Keywords: global value chains, globalisation, GVCs, income inequality, offshoring, trade in tasks Creation-Date: 2015-06-26 Number: 182 Handle: RePEc:oec:traaab:182-EN Template-type: ReDIF-Paper 1.0 Author-Name: Kazuhiro Sugie Author-Name: Massimo Geloso Grosso Author-Name: Hildegunn Kyvik Nordås Author-Name: Sébastien Miroudot Author-Workplace-Name: OECD Author-Name: Frédéric Gonzales Author-Workplace-Name: OECD Author-Name: Dorothée Rouzet Author-Workplace-Name: OECD Title: Services Trade Restrictiveness Index (STRI): Logistics Services Abstract: This paper presents the services trade restrictiveness indices (STRIs) for logistics services. The STRIs are composite indices taking values between zero and one, zero representing an open market and one a market completely closed to foreign services providers. The indices are calculated for 40 countries, the 34 OECD members and Brazil, the People’s Republic of China, India, Indonesia, the Russian Federation and South Africa. The STRIs capture de jure restrictions. This report presents the first vintage of indicators for logistics services and captures regulations in force in 2014. The scores range from 0.08 to 1 for cargo-handling services, 0.04 to 1 for storage and warehouse services, 0.02 to 0.58 for freight transport agency services and 0.03 to 1 for customs brokerage services. It is observed that the regulatory profile differs across countries. In cargo-handling and storage and warehouse services, one country reserves all services provision to a statutory monopoly while another country reserves cargo-handling to a monopoly at port. Freight transport agency has the lowest average score among four subsectors while restrictions on foreign entry, restrictions on the movement of people and regulatory transparency significantly contribute to the results. One country is completely closed to foreign participation in customs brokerage services. The paper presents the list of measures included in the indices, the scoring and weighting system for calculating the indices and an analysis of the results. Classification-JEL: F13; F14; K33; L87; L89; L91 Keywords: logistics services, regulation, services trade, services trade restrictions Creation-Date: 2015-08-04 Number: 183 Handle: RePEc:oec:traaab:183-EN Template-type: ReDIF-Paper 1.0 Author-Name: Przemyslaw Kowalski Author-Workplace-Name: OECD Author-Name: Kateryna Perepechay Author-Workplace-Name: OECD Title: International Trade and Investment by State Enterprises Abstract: The recent surge in competition between state and private firms in global markets calls for a reflection on how to minimise any potentially distortionary effects on international trade and investment created by state enterprises while at the same time restraining any undue protectionist policy responses directed at them. This paper provides an assessment of the extent and nature of existing and potential problems as well as a stocktaking of regulatory approaches that can be used to alleviate them. The new empirical evidence on the extent and nature of existing problems presented in this paper comes from the OECD Business Survey on State Influence on Competition in International Markets conducted on 157 firms in 2014. The characterisation of the regulatory landscape draws on the information contained in the OECD Database on National Practices and Regulations with Respect to State Enterprises which comprises 41 indicators covering relevant practices and regulations across 43 countries. In conclusion, cross-border effects of state enterprises remain an important policy issue but views on how to obtain a more level international playing field differ across countries. Further consideration of the definition of entities which should be the focus of guidance of potential international disciplines would be an important area for future exploration and, crucially, would require greater transparency both from the governments and the entities under their influence. These discussions should not be limited only to state-owned entities, but should be extended to a broader spectrum of state firms. In the meantime, it is important that governments neither use state enterprises to influence competition in international markets, nor unduly discriminate against foreign state enterprises that trade and invest according to market principles. Classification-JEL: F02; F13; F21; F23; F5; F6; G34; G38; H1; H2; H4; H57; H7; H8; K2; K33; L3; L44; L5 Keywords: business surveys, international investment, international trade, WTO Creation-Date: 2015-09-29 Number: 184 Handle: RePEc:oec:traaab:184-EN Template-type: ReDIF-Paper 1.0 Author-Name: Sébastien Miroudot Author-Workplace-Name: OECD Author-Name: Kätlin Pertel Author-Workplace-Name: OECD Title: Water in the GATS: Methodology and Results Abstract: The water in the General Agreement on Trade in Services (GATS) refers to the difference between the bound level of trade restrictiveness permitted by the GATS and the actual trade regime. Using the OECD Services Trade Restrictiveness Index (STRI), this report provides estimates of the water in 15 service sectors for 40 countries. The level of water in GATS commitments varies across sectors. It is highest in sectors where most countries have no commitments (unbound), such as audio-visual services or transport services, as well as sectors where countries tend to make commitments only for selected types of activities, such as legal services. The lowest level of water is observed in sectors such as telecoms, construction, computer and distribution services that are also characterised by a more liberal trade regime. Generally speaking, current services trade policies are much more open than what countries have committed in the GATS and sectors that are “unbound” can be fairly open. Classification-JEL: F13; F53 Keywords: GATS, services trade restrictions Creation-Date: 2015-10-01 Number: 185 Handle: RePEc:oec:traaab:185-EN Template-type: ReDIF-Paper 1.0 Author-Name: Jane Korinek Author-Workplace-Name: OECD Title: Managing the Minerals Sector: Implications for Trade from Peru and Colombia Abstract: Managing and regulating the extractive industries can pose substantial challenges to minerals-rich countries. Aiming to overcome the “resource curse”, some countries attempt to generate greater gains from their natural resources by using trade policy instruments such as export restrictions. Others look to create a balanced regulatory framework to maximise gains from sustainable extraction and minimise the negative spillover effects. Colombia and Peru have aimed to do the latter. This study examines their experiences as regards some aspects of the management of their extractive industries. In particular, it examines the design of the tax system as it applies to non-renewable resources, the reform of the distribution of revenues from the sector, and strategies for tackling illegal mining. These policy areas are important to ensure that the extraction of natural resources benefits the economies and societies of the two Andean nations. Classification-JEL: O13; O24; O54; Q32; Q34; Q37 Keywords: corruption, export restrictions, extractive industries, mining, trade policy Creation-Date: 2015-12-02 Number: 186 Handle: RePEc:oec:traaab:186-EN Template-type: ReDIF-Paper 1.0 Author-Name: Luca Marcolin Author-Workplace-Name: OECD Author-Name: Sébastien Miroudot Author-Workplace-Name: OECD Author-Name: Mariagrazia Squicciarini Author-Workplace-Name: OECD Title: GVCs, Jobs And Routine Content Of Occupations Abstract: This work addresses the role of global value chains (GVCs), workforce skills, ICT, innovation and industry structure in explaining employment levels of routine and non-routine occupations. The analysis encompasses 28 OECD countries over the period 2000-2011. It relies on a new country-specific measure of routine intensity built using individual-level information from the OECD Programme for the International Assessment of Adult Competencies (PIAAC) survey, as well as on new industry-level Trade in Value Added (TiVA) indicators of offshoring and domestic outsourcing. The results suggest that employment in all types of occupations positively relate to innovation. With respect to offshoring patterns, a positive correlation is observed between the offshoring of inputs and domestic outsourcing with more routine-intensive jobs. Taken together, the results point to the existence of complex interactions between the routine content of occupations, skills, technology and trade, which do not allow for a neat identification of “winners” and “losers” in a GVC context. Classification-JEL: F16; F23; J24; O33 Keywords: employment, global value chains, offshoring, outsourcing, technology Creation-Date: 2016-04-26 Number: 187 Handle: RePEc:oec:traaab:187-EN Template-type: ReDIF-Paper 1.0 Author-Name: Luca Marcolin Author-Workplace-Name: OECD Author-Name: Sébastien Miroudot Author-Workplace-Name: OECD Author-Name: Mariagrazia Squicciarini Author-Workplace-Name: OECD Title: The Routine Content Of Occupations: New Cross-Country Measures Based On PIAAC Abstract: This work proposes a novel measure of the routine content of occupations, called the Routine Intensity Indicator (RII), built on data from the OECD Programme for the International Assessment of Adult Competencies (PIAAC) survey. The RII uses information about the extent to which workers can modify the sequence of their tasks and decide the type of tasks to be performed on the job. Based on median RII values of individuals in 3-digit occupations across 20 OECD countries, jobs are grouped into quartiles of routine-intensity. On average, in 2012, 46% of employed persons worked in non-routine (18%) or low (28%) routine intensive occupations, with the distribution differing significantly across countries. The relationship between the routine content of occupations and the skills of the workforce is also investigated. While a negative correlation does emerge between skill content and routine intensity – i.e. more routine-intensive occupations tend to be associated with lower skills – this relationship is not necessarily very strong. Classification-JEL: J24 Keywords: occupations, routine task, Skill Creation-Date: 2016-04-26 Number: 188 Handle: RePEc:oec:traaab:188-EN Template-type: ReDIF-Paper 1.0 Author-Name: Hildegunn Kyvik Nordås Author-Workplace-Name: OECD Title: Services Trade Restrictiveness Index (STRI): The Trade Effect of Regulatory Differences Abstract: This paper presents indices of regulatory heterogeneity based on the rich information in the STRI regulatory database. The indices are built from assessing – for each country pair and each measure – whether or not the countries have the same regulation. For each country pair and each sector, the indices reflect the (weighted) share of measures for which the two countries have different regulation. Estimates of the relationship between regulatory heterogeneity and trade shows that on average a reduction in the regulatory heterogeneity by 0.05 points is associated with 2.5% higher services exports and that the impact is larger the lower the level of trade restring regulation. The trade costs associated with the average score on the regulatory heterogeneity index (0.26) amounts to an ad valorem equivalent trade cost of between 20 and 75% at low levels of the STRI. Regulation has become slightly more similar from 2014 to 2015 in telecommunications. For the other sectors, countries have become slightly less similar over the same period. Classification-JEL: F13; F15; F42; F53 Keywords: regulatory cooperation, trade costs, trade in services Creation-Date: 2016-05-13 Number: 189 Handle: RePEc:oec:traaab:189-EN Template-type: ReDIF-Paper 1.0 Author-Name: OECD Title: Global Value Chains and Trade in Value-Added: An Initial Assessment of the Impact on Jobs and Productivity Abstract: This paper contributes to a better understanding of the impact of global value chains (GVCs) on jobs and productivity by providing new evidence on employment embodied in value-added trade flows. Linking jobs data to the Trade in Value-Added (TiVA) indicators first highlights that a large share of employment in OECD and key partner countries relies on consumption taking place abroad and for most countries this share has increased between 1995 and 2011. There are differences across industries in the share of jobs embodied in exports but in all industries a majority of these jobs originates in the service sector. In almost all countries, the jobs embodied in exports are shifting towards high-skill and medium-skill occupations. Within GVCs, there is also a shift from employment in core manufacturing activities to employment in service support functions such as R&D, distribution, logistics, marketing, sales and customer services. The impact of GVCs on the number of people engaged in each industry is the combination of several factors but related to specialisation patterns and the evolution of productivity. In this assessment, it is important to look at the whole value chain and not to focus only on industries where GVCs are prevalent. Job creation in sectors less exposed to GVCs is the consequence of productivity gains in sectors the most integrated in GVCs. Classification-JEL: F16; F23; J24 Keywords: employment, global value chains, occupations, productivity, trade, trade in tasks Creation-Date: 2016-07-07 Number: 190 Handle: RePEc:oec:traaab:190-EN Template-type: ReDIF-Paper 1.0 Author-Name: Javier Lopez Gonzalez Author-Workplace-Name: OECD Title: Using Foreign Factors to Enhance Domestic Export Performance: A Focus on Southeast Asia Abstract: A country or firm's position in the value chain will largely depend on its comparative advantage, and therefore the mix of skills and resource endowments it brings to international production. For some, this might initially involve specialising in the labour intensive segments while others may specialise in the high-tech elements. In either case what matters is whether participation leads to growing economic activity. This paper discusses how countries can use foreign value added to enhance their domestic export performance. It shows that foreign sourcing is a complement to, rather than substitute for, the creation of domestic value added and employment in exports highlighting how, with GVCs, export competitiveness is inextricably linked to importing. The paper discusses how ASEAN countries can leverage different policies in order to make the most out of GVCs. Classification-JEL: F12; F13; F14; F15; F63; F66; F68 Keywords: exports, global value chains, globalisation, South East Asia, trade Creation-Date: 2016-10-11 Number: 191 Handle: RePEc:oec:traaab:191-EN Template-type: ReDIF-Paper 1.0 Author-Name: Charles Cadestin Author-Workplace-Name: OECD Author-Name: Julien Gourdon Author-Workplace-Name: OECD Author-Name: Przemyslaw Kowalski Author-Workplace-Name: OECD Title: Participation in Global Value Chains in Latin America: Implications for Trade and Trade-Related Policy Abstract: This paper characterises the extent of GVC participation in selected countries of Latin America. It looks deeper into certain key trade policy-related aspects of Latin American trade integration with the potential to improve GVC participation. Latin America has a dense web of intra and extra-regional preferential trade agreements (PTAs). Nevertheless, the overlap, duplication and conflicts among the different rules and standards governing trade under these PTAs are likely reducing the benefits of these agreements. This is prompting renewed interest in the idea of linking or harmonising the various Latin American PTAs. To help inform this debate, this study analyses the impact of rules of origin (RoO) and non-tariff measures (NTMs) on GVC integration in the region, and examines relevant harmonisation initiatives. Classification-JEL: F1; F2; F6 Keywords: global value chains, non-tariff measures, trade agreements, trade policy Creation-Date: 2016-10-11 Number: 192 Handle: RePEc:oec:traaab:192-EN Template-type: ReDIF-Paper 1.0 Author-Name: Jorge Arbache Author-Workplace-Name: University of Brasilia Author-Name: Dorothée Rouzet Author-Workplace-Name: OECD Author-Name: Francesca Spinelli Author-Workplace-Name: OECD Title: The Role of Services for Economic Performance in Brazil Abstract: This paper highlights the large contribution of services to the Brazilian economy and the under-exploited potential of services to sustain productivity gains and international competitiveness. The areas with the largest potential for regulatory reform include improvements in the general business and trading environment as well as specific policies in transport sectors, telecoms and financial services. Reforms targeting services that add value by favouring productivity and quality enhancements, as well as services that increase efficiency by reducing production costs, have strong potential to unlock manufacturing performance. The set of proposed recommendations emerging from this analysis underlines the importance of streamlining sector-level regulatory frameworks to encourage foreign entry and competition, and the role that cross-cutting improvements in the trade and business environment would play to render services providers more competitive. Classification-JEL: F13; F14; F15; F6; L8; L9; O24; O54 Keywords: competitiveness, services, services trade restrictions, trade policy Creation-Date: 2016-10-20 Number: 193 Handle: RePEc:oec:traaab:193-EN Template-type: ReDIF-Paper 1.0 Author-Name: Dorothée Rouzet Author-Workplace-Name: OECD Author-Name: Francesca Spinelli Author-Workplace-Name: OECD Title: Services Trade Restrictiveness, Mark-Ups and Competition Abstract: This report explores the relationship between services trade policies and mark-ups at the firm level, taken as a measure of competitive pressure. Restrictive regulations are found to enable firms to charge higher mark-ups in a majority of services sectors, suggesting ample scope for pro-competitive gains from trade liberalisation. Barriers to establishment consistently enable incumbent firms shielded from competition to raise their prices, while a lack of regulatory transparency and complex administrative procedures tend to add to all firms’ operating expenses. A “tax equivalent” of trade-restrictive regulations is then inferred from the abnormal price-cost margin of domestic firms in each service sector. These estimates indicate the magnitude of the welfare costs of regulatory trade restrictions across sectors and countries. The sectors with the highest average tax equivalents of STRI indices are broadcasting, construction, storage, and air and maritime transport, while those with the lowest averages are road transport, architecture and cargo-handling. There is however considerable variation between countries in all sectors. Classification-JEL: D22; F13; F14; F61; L11; L8; L9 Keywords: competition, regulation, services trade restrictions, trade liberalisation Creation-Date: 2016-11-09 Number: 194 Handle: RePEc:oec:traaab:194-EN Template-type: ReDIF-Paper 1.0 Author-Name: Martin von Lampe Author-Workplace-Name: OECD Author-Name: Koen Deconinck Author-Workplace-Name: OECD Author-Name: Véronique Bastien Author-Workplace-Name: OECD Title: Trade-Related International Regulatory Co-operation: A Theoretical Framework Abstract: This report provides a conceptual foundation for the analysis of international regulatory co-operation (IRC) and its potential benefits through reduced trade costs. Different forms of IRC aiming to reduce specification, conformity assessment and information costs - which can arise from regulatory heterogeneity, costly conformity assessment procedures and insufficient regulatory transparency – are addressed. The report argues that trade costs need to be balanced against the regulatory objectives of mitigating various market imperfections. Integrating these two elements often allows significant gains in terms of national welfare, gains that can be augmented by negotiated outcomes among trading partners. IRC may also have important effects on trade with third countries. Related welfare implications are, however, ambiguous and depend on the specifics of the IRC outcome as well as on third countries’ own regulations. Classification-JEL: C72; K23; D61; L51; F13; C71; C73; D60 Keywords: conformity assessment costs, game theory, information costs, Nash equilibrium, regulation, specification costs, trade costs Creation-Date: 2016-12-20 Number: 195 Handle: RePEc:oec:traaab:195-EN Template-type: ReDIF-Paper 1.0 Author-Name: Sebastian Benz Author-Workplace-Name: OECD Author-Name: Anupam Khanna Author-Name: Hildegunn Kyvik Nordås Title: Services and Performance of the Indian Economy: Analysis and Policy Options Abstract: This paper highlights India’s unique services export led growth path. Observing that Indian business services have helped manufacturers all over the world to become more efficient and productive, it raises the question how Indian business services can do the same for local manufacturers and thus support the Make in India initiative. The paper also explores the potential for broadening the export base in services. The services sector that appears to have the largest prospect for unleashing the potential of both manufacturing and knowledge intensive business services is the telecommunications sector, particularly broadband internet services. In addition reforms in the distribution sector that enable multi-channel wholesale and retailing could facilitate the development of marketing channels for SME manufacturers both across the vast Indian market and abroad. Reforms in the logistics sector would further improve the competitiveness of local manufacturers producing time-sensitive goods including inputs to global value chains. Finally, competitiveness in knowledge-intensive services is obtained through knowledge sharing across borders. A prerequisite for broadening the export base in these sectors is openness to foreign professionals. The set of proposed recommendations emerging from this analysis underlines the importance of streamlining sector-level regulatory frameworks in all sectors to encourage foreign entry and competition, and the role that cross-cutting improvements in the trade and business environment would play to render services providers as well as down-stream manufacturers more competitive. Classification-JEL: F13; F14; F15; F60; L80; O53 Keywords: competitveness, services trade restrictions, trade in manufacturing, trade policy Creation-Date: 2017-01-20 Number: 196 Handle: RePEc:oec:traaab:196-EN Template-type: ReDIF-Paper 1.0 Author-Name: Sébastien Miroudot Author-Name: Charles Cadestin Title: Services In Global Value Chains: From Inputs to Value-Creating Activities Abstract: This report provides new evidence on the role of services in global value chains (GVCs). With the release of the Trade in Value Added database, it was highlighted that services account for a larger share of world trade than suggested by traditional statistics. But this evidence does not tell the whole story about services in GVCs. In addition to services bought as inputs, there are also services activities within manufacturing firms. Moreover, manufacturing companies increasingly produce and export services either as complements or substitutes to the goods they sell. This shift to services is related to strategies aiming at adding more value and creating a long-term relationship with customers. The report highlights that services inputs, whether domestic or foreign, account for about 37% of the value of manufacturing exports in the sample of countries covered. By adding service activities within manufacturing firms, this share increases to 53% and the overall contribution of services to exports is close to two-thirds. Across countries, between 25% and 60% of employment in manufacturing firms is found in service support functions such as R&D, engineering, transport, logistics, distribution, marketing, sales, after-sale services, IT, management and back-office support. SMEs are also part of this “servicification” and contribute to exports of services bundled with goods. Classification-JEL: F13; F14; F23; F68; L80 Keywords: bundles of goods and services, business functions, Global Value Chains, Services, servicification, trade in services, trade in value-added Creation-Date: 2017-03-15 Number: 197 Handle: RePEc:oec:traaab:197-EN Template-type: ReDIF-Paper 1.0 Author-Name: Julien Gourdon Author-Name: Véronique Bastien Author-Name: Laurence Folliot-Lalliot Title: OECD taxonomy of measures affecting trade in government procurement processes Abstract: This paper develops a taxonomy of government procurement (GP) measures to provide a basis for further analysis. It aims to undertake a more comprehensive, albeit not exhaustive, collection of GP barriers across countries, and to develop a classification system of GP measures to facilitate further data collection and analysis. The output is a taxonomy of different GP measures, policies and procedures which can impact cross-border public procurement. Classification-JEL: F13; F53; H41; H57; K20 Keywords: government procurement, GPA, international trade, public good government agreement, regulation Creation-Date: 2017-03-02 Number: 198 Handle: RePEc:oec:traaab:198-EN Template-type: ReDIF-Paper 1.0 Author-Name: Julien Gourdon Author-Workplace-Name: OECD Author-Name: James Messent Author-Workplace-Name: OECD Title: How government procurement measures can affect trade Abstract: A number of countries used discriminatory government procurement policies as part of stimulus packages designed to alleviate the effects of the global economic crisis. This paper collates and updates the evidence related to the size of procurement markets, the level of home bias they exhibit, and the effectiveness of multilateral and bilateral procurement agreements in reducing that bias. The share of procurement in GDP has been increasing gradually since 1995 with clear spikes during 2000-2002 and 2008-2010, the latter in response to the global economic crisis. The analysis presents evidence of domestic bias in government procurement markets, bias which has been increasing over recent years. The analysis in this paper suggests that the results of international efforts to address home bias in government procurement have been mixed to date. The World Trade Organisation's Government Procurement Agreement (GPA) is found to reduce discrimination in procurement markets, although available -- but limited -- evidence does not indicate a significant effect for bilateral agreements. The evidence suggests liberalisation of investment barriers undertaken in parallel with trade agreements increases the ability of those agreements to reduce discrimination. This suggests that countries negotiating procurement agreements could also benefit from negotiating investment agreements in parallel. Classification-JEL: D44; F13; F14; F15; F53; H57 Keywords: Auctions, Government procurement, Government Procurement Agreement (GPA), home bias, International Trade, preferential trade agreements Creation-Date: 2017-04-12 Number: 199 Handle: RePEc:oec:traaab:199-EN Template-type: ReDIF-Paper 1.0 Author-Name: Sebastian Benz Author-Workplace-Name: OECD Title: Services trade costs: Tariff equivalents of services trade restrictions using gravity estimation Abstract: Estimates for ad valorem tariff equivalents of services trade restrictions for cross-border trade in six services sectors are presented in this paper. These equivalents are found to be very big in several service sectors with estimates ranging as high as 2000% when trade flows are relatively inelastic, as opposed to between 20% and 300% in most other sectors. The results indicate that trade costs may even increase less than proportionally as the degree of services trade restrictiveness rises. In addition, the paper shows that services trade liberalisation has the largest effect on trade flows in smaller markets. The estimates presented in this Paper are based on a gravity framework using data on both bilateral trade flows and on the value of domestic production. Production values are used to construct measures for the domestic consumption of domestic services in each country, which enables country-specific trade restrictions to be identified, while controlling for multilateral resistance using fixed effects. Classification-JEL: F13; F14; F15; F68 Keywords: services trade restrictions, trade costs, Trade in services, trade liberalisation Creation-Date: 2017-04-21 Number: 200 Handle: RePEc:oec:traaab:200-EN Template-type: ReDIF-Paper 1.0 Author-Name: Przemyslaw Kowalski Author-Workplace-Name: OECD Author-Name: Daniel Rabaioli Author-Workplace-Name: OECD Title: Bringing together international trade and investment perspectives on state enterprises Abstract: State enterprises (SEs) have been increasingly competing with private firms in international markets, in terms of both cross-border trade and FDI. Given both the potentially positive contribution internationally trading and investing SEs can make, as well as the concerns raised about their competitive behaviour, there is an interest in elaborating policy approaches that minimise any potentially distortionary effects and at the same time restrain protectionist policies that may be directed at SEs. The growing interdependency between trade and FDI, the increased contestability and complexity of markets and the varied nature of state intervention in the economy today mean that policy approaches need to consistently cover issues which transcend the traditional boundaries between trade, investment and competition. This paper investigates how international trade and investment perspectives on SEs are being brought together in international trade and investment agreements and how they could be integrated further. It does so by examining both the ability of existing provisions to ensure a level playing field between private firms and SEs and the disparity in approaches to regulating international activities of SEs between international trade and investment treaties. The paper first reviews the work documenting international activities of SEs and the associated concerns, highlighting the example of the steel sector. Next, it discusses some of the non-binding approaches that can be used to level the playing field, before reviewing relevant provisions in multilateral and preferential trade and investment agreements and identifying potential gaps. The concluding section summarises the results and identifies key issues for policy consideration. Classification-JEL: F02; F13; F15; F21; F23; F5; F6; G34; G38; H1; H2; H4; H8; K2; K33; L3; L44; L5 Keywords: investment agreements, regulation, SOEs, state enterprises, state-owned enterprises, trade agreements Creation-Date: 2017-05-18 Number: 201 Handle: RePEc:oec:traaab:201-EN Template-type: ReDIF-Paper 1.0 Author-Name: OECD Title: Making trade work for all Abstract: Against the background of rising anti-globalisation sentiment, this report argues that, while there are good reasons for some people to be angry, trade is not the root of many problems, nor can it solve them on its own. What is needed is an integrated approach to make the whole system work better for more people. This means three things. First, creating the environments where benefits from trade can materialise through domestic policies that encourage opportunity, innovation and competition by cutting unnecessary trade costs and investing in people and digital and physical infrastructure. Second, doing more to bring everyone along, including in lagging regions where trade shocks can be concentrated. Third, making the international system work better, harnessing the full range of international economic co-operation tools to level the international playing field, addressing the gaps in the rules and doing more to ensure that everyone, from companies to countries, plays by the rules. Classification-JEL: F13; F16; F18; F6 Keywords: cooperation, Globalisation, labour, rules Creation-Date: 2017-05-25 Number: 202 Handle: RePEc:oec:traaab:202-EN Template-type: ReDIF-Paper 1.0 Author-Name: Javier López González Author-Workplace-Name: OECD Title: Mapping the participation of ASEAN small- and medium- sized enterprises in global value chains Abstract: Participation in global value chains (GVCs) can be a pathway for economic development. It is associated with growing productivity, exporting more sophisticated products and a less concentrated export basket (Kowalski et al., 2015). However, it is often argued that these benefits accrue mainly to larger firms and/or multinationals, leaving small and medium sized enterprises (SMEs), which tend to employ the largest share of workers, struggling to benefit from the opportunities offered by the evolving GVC landscape. This paper identifies how SMEs in ASEAN economies participate in GVCs by combining firm level data with the Trade in Value Added (TiVA) database. SMEs in the region might face more constraints than large firms in sourcing competitive inputs, limiting their ability to benefit from GVCs, as indicated by the lower share of foreign value added in their exports. That said, SMEs also tend to export intermediate goods to GVCs either directly, or, importantly, indirectly, through sales to larger domestic or multinational firms which then export. Policies seeking to integrate SMEs into GVCs could aim to address importing constraints through continued unilateral or regional liberalisation or sustained support for trade facilitation and connectivity. At the same time programmes aimed at promoting domestic and international production linkages should allow SMEs to better identify new opportunities and exploit their comparative advantage in the production of intermediate goods and services and integrate, directly or indirectly, into regional and global value chains. Classification-JEL: D22; D24; F13; F14; F15; F63; F68; L11; L23; L25 Keywords: globalisation, GVCs, importing, indirect exporting, SMEs, Southeast Asia, trade Creation-Date: 2017-06-23 Number: 203 Handle: RePEc:oec:traaab:203-EN Template-type: ReDIF-Paper 1.0 Author-Name: Barbara Fliess Author-Workplace-Name: OECD Author-Name: Ernst Idsardi Author-Workplace-Name: UK Department of Work and Pensions Author-Name: Riaan Rossouw Author-Workplace-Name: North-West University Title: Export controls and competitiveness in African mining and minerals processing industries Abstract: Governments may decide to control the export of unprocessed raw materials hoping that this will promote local downstream industries. There is scant empirical examination of the actual outcomes of such policies put in place. This paper describes use of export control measures by four minerals-rich African countries and looks for effects on activities downstream from the extractive sector that may be attributed to these measures. The measures studied are export taxes, non-automatic export licensing requirements and outright export bans. The industries are manganese in Gabon, lead in South Africa, copper in Zambia and chromite in Zimbabwe.For the empirical analysis the Revealed Comparative Advantage (RCA) index is calculated tracking over 20 years the relative global performance of the local mining and processing industries, for the specific minerals studied. The effect of the restrictive measures is investigated by way of identifying structural breaks in the level of the RCA index, for both the raw mineral and related processed products.The results suggest that use of export restrictions as a tool for stimulating local mineral processing does not pay off. There was no improvement in the revealed comparative advantage of processed products presumed to benefit from export controls on the raw material. Moreover, the measures may have undermined the overall performance of the industries in some of the cases studied because the relative export performance of the mined minerals deteriorated. Classification-JEL: F1; F2; L7; O1 Keywords: Africa, export tax, revealed comparative advantage, structural break, value chain of mining Creation-Date: 2017-07-12 Number: 204 Handle: RePEc:oec:traaab:204-EN Template-type: ReDIF-Paper 1.0 Author-Name: Javier López González Author-Name: Marie-Agnes Jouanjean Title: Digital Trade: Developing a Framework for Analysis Abstract: This paper explores the definition, measurement, and policy implications of digital trade, proposing a tentative typology of digital trade that can be used to unpack transactions and analyse the issues. Digitalisation is changing what and how we trade: from digital delivery to greater physical trade enabled by digital connectivity. Online platforms mean more small packages crossing borders, while new technologies are changing how services are produced and delivered. Underpinning digital trade is the movement of data: data is a means of production, an asset that can itself be traded, and the means through which some services are traded and GVCs are organised. While there is no single definition of digital trade, there is a growing consensus that it encompasses digitally enabled transactions in trade in goods and services which can be either digitally or physically delivered involving consumers, firms and governments. Unpacking trade transactions along these lines using a tentative typology can help in understanding and identifying issues. For example, measuring digital trade poses challenges ranging from identifying transactions that are digitally enabled to the sectoral classification of services in a transaction, and efforts are underway to better reflect digital trade in trade statistics. For trade policy, the increased bundling of goods and services raises issues about which trade rules (GATT or GATS) apply; trade facilitation is ever more critical for just-in-time delivery and GVCs; and the role of data flows in enabling digital trade may require further attention, along with how to ensure that the gains from digital trade are inclusive, within and across countries. Classification-JEL: F02; F13; F19; F42; F55; F68; L14; L22; L81; L86; O14 Keywords: data, digital transformation, Digitalisation, e-commerce, international trade, platforms Creation-Date: 2017-07-27 Number: 205 Handle: RePEc:oec:traaab:205-EN Template-type: ReDIF-Paper 1.0 Author-Name: Przemyslaw Kowalski Author-Workplace-Name: OECD Author-Name: Daniel Rabaioli Author-Workplace-Name: OECD Author-Name: Sebastian Vallejo Author-Workplace-Name: OECD Title: International Technology Transfer measures in an interconnected world: Lessons and policy implications Abstract: The aim of this paper is to inform the ongoing debate on the policies being used to encourage international technology transfer (ITT) and, of these, which have the potential to distort trade or investment and which may effectively promote ITT. The paper develops a first-cut approach to cataloguing ITT-related measures across countries. Following the literature, technology transfer-related policies are grouped into six categories: 1) absorptive capacity policies; 2) measures related to intellectual property rights (IPR); 3) FDI promotion measures; 4) FDI restrictions and FDI screening; 5) performance requirements; and 6) investment incentives. A list of regulatory questions about measures in place is devised for the four categories 3 through 6 on which information is currently particularly scarce. Summary results are presented for twenty four developing and developed countries which are important actors in global FDI, technology and product markets. The findings of the literature addressing both the impact of these measures on technology transfer and on market competition are summarised for each of the four policy categories. The paper also explores the extent to which various ITT measures are covered by existing international agreements, with a view to helping inform future approaches. The concluding section elaborates on policy implications. Classification-JEL: F1; F13; F15; F23; O3 Keywords: competition, FDI, innovation, intellectual property, international technology transfer, international trade Creation-Date: 2017-11-20 Number: 206 Handle: RePEc:oec:traaab:206-EN Template-type: ReDIF-Paper 1.0 Author-Name: Marie-Agnes Jouanjean Author-Name: Julien Gourdon Author-Name: Jane Korinek Title: GVC Participation and Economic Transformation: Lessons from three sectors Abstract: Integration into Global value chains (GVCs) provides opportunities for economic growth and development. However, the nature and extent of these opportunities differ across countries and sectors, and participation in GVCs can support processes of economic transformation in a variety of ways depending on the type of GVC. This paper explores some of the linkages between GVC participation and economic transformation at the sectoral level, with a view to assisting countries in assessing the various policy options for maximising their comparative advantages and their benefits from GVC participation. Three aspects of the relationship between GVC participation – defined as the use of foreign intermediates and integration into international production networks – and economic transformation are explored: i) sectoral differences in upgrading dynamics; ii) the role of services; and iii) resilience to external shocks. A range of qualitative and empirical approaches are used to explore and test the robustness of the relationship for three sectors presenting different characteristics in terms of their trade dynamics and links with economic transformation: mining and quarrying; motor vehicles, trailers and semi-trailers; and transport and storage services. Classification-JEL: F14; F60; F63 Keywords: Developing Countries, Economic Transformation, Global Value Chain, Multi-Regional Input Output, Network Analysis, Sectoral Analysis, Services; Resilience, Upgrading Creation-Date: 2017-11-27 Number: 207 Handle: RePEc:oec:traaab:207-EN Template-type: ReDIF-Paper 1.0 Author-Name: Sébastien Miroudot Author-Workplace-Name: OECD Author-Name: Charles Cadestin Author-Workplace-Name: OECD Title: Services in Global Value Chains: Trade patterns and gains from specialisation Abstract: Within global value chains (GVCs), services and manufacturing activities are intertwined. This report further investigates the role played by services in GVCs by looking at patterns of specialisation in 23 services industries over the period 2000-2014. Relying on the concept of revealed comparative advantage, it highlights that all countries have a comparative advantage in specific services industries, either in services within manufacturing value chains or in services exported as final products to consumers. A value-added approach is important to analyse the specialisation in services. In addition, there are tangible productivity gains out of this specialisation, as well as gains in terms of employment. Finally, empirical results suggest that services trade restrictiveness negatively affects bilateral flows of service value-added within GVCs. Both domestic reforms and the reduction of barriers in partner countries can benefit services sectors and the activities that rely on services inputs. Classification-JEL: F13; F14; F23; F68; L80 Keywords: global value chains, productivity, revealed comparative advantage, Services, servicification, trade in services, trade in value-added Creation-Date: 2017-12-06 Number: 208 Handle: RePEc:oec:traaab:208-EN Template-type: ReDIF-Paper 1.0 Author-Name: Jane Korinek Author-Workplace-Name: OECD Author-Name: Isabelle Ramdoo Author-Workplace-Name: European Centre for Development Policy Management Title: Local content policies in mineral-exporting countries Abstract: Resource abundance does not always bring sustained economic growth and development. Moreover, the mining sector generally provides little direct employment in the regions where extraction occurs. In an attempt to derive greater benefits from their resource endowments, and increase linkages with other parts of the economy, some minerals-rich countries have instituted local content and procurement policies (LCPs). The benefits sought include employment generation, supply chain development and technological and knowledge transfers. Measures that aim to increase local content and procurement in the extractive industries are common, including in many OECD countries.This study examines local content policies in 10 minerals-rich countries and provides some observations about their efficacy and the desirability of their use. A wide range of measures are examined, from industry-wide, mandatory quantitative targets to voluntary initiatives undertaken at the firm level, encompassing diverse policy objectives and implementation strategies. The range of countries covered is broad including OECD countries, developing countries and least developed countries. The study does not recommend a “one size fits all” policy mix but guards against the distortions created by overly prescriptive, mandatory local content requirements. Classification-JEL: F1; F13; O24; O33; Q32; Q37; Q38; R11 Keywords: extractive industries, Local procurement, mining, performance requirements, supply chains Creation-Date: 2017-12-15 Number: 209 Handle: RePEc:oec:traaab:209-EN Template-type: ReDIF-Paper 1.0 Author-Name: Dorothée Rouzet Author-Name: Sebastian Benz Author-Name: Francesca Spinelli Title: Trading firms and trading costs in services: Firm-level analysis Abstract: This report presents evidence on how services trade restrictions influence the decisions and performance of firms engaged in international markets, drawing on micro-data from Belgium, Finland, Germany, Italy, Japan, Sweden, the United Kingdom, and the United States. It first describes the patterns of services exports and affiliate sales at the firm level, uncovering a number of stylised facts about the firms engaged in international trade in services, their choices of modes of supply and the links between services trade and manufacturing activities. The report then relates these outcomes to services trade policy barriers in destination markets as measured by the OECD STRI. It demonstrates that complex and restrictive regulatory environments limit the volume of services that firms are able to trade as well as the number of firms that engage with those markets. Hence services trade restrictions reflect not only ad valorem trade costs, but also fixed and sunk costs. Such barriers do not affect all firms equally. Restrictive services trade regulations disproportionately discourage SMEs. Size, productivity and previous exporting experience appear to be decisive factors in dealing with at-the-border and behind-the-border trade barriers. Finally, the cost of regulatory compliance is lower for foreign-owned firms with headquarters located in the export destination country and for firms that trade bundles of services and manufacturing products, than it is for pure services exporters. Classification-JEL: D22; F13; F14; F61; F68; L22; L25; L8; L9 Keywords: competition, firm-level data, foreign affiliates, productivity, regulation Creation-Date: 2017-12-12 Number: 210 Handle: RePEc:oec:traaab:210-EN Template-type: ReDIF-Paper 1.0 Author-Name: Charles Cadestin Author-Workplace-Name: OECD Author-Name: Koen De Backer Author-Workplace-Name: OECD Author-Name: Isabelle Desnoyers-James Author-Workplace-Name: OECD Author-Name: Sébastien Miroudot Author-Workplace-Name: OECD Author-Name: Davide Rigo Author-Workplace-Name: OECD Author-Name: Ming Ye Author-Workplace-Name: OECD Title: Multinational enterprises and global value chains: the OECD analytical AMNE database Abstract: In order to better understand the interdependencies between trade and investment in global value chains (GVCs), the OECD has developed a new dataset on the Activities of Multinational Enterprises (AMNE). This dataset starts from official AMNE statistics and combines the information with Inter-Country Input-Output (ICIO) tables to provide new insights on the trade-investment nexus in GVCs. This dataset allows the contribution of domestic firms, multinational enterprises (MNEs) and their foreign affiliates to global trade and production to be assessed. This paper details the methodology that was used to create the data, as well as the main assumptions and challenges in the work. Classification-JEL: F14; F23; L16; L23 Keywords: global input-output, global value chains, linkages, Multinational enterprises, trade in value-added Creation-Date: 2018-02-27 Number: 211 Handle: RePEc:oec:traaab:211-EN Template-type: ReDIF-Paper 1.0 Author-Name: Andrea Andrenelli Author-Workplace-Name: OECD Author-Name: Charles Cadestin Author-Workplace-Name: OECD Author-Name: Koen De Backer Author-Workplace-Name: OECD Author-Name: Sébastien Miroudot Author-Workplace-Name: OECD Author-Name: Davide Rigo Author-Workplace-Name: OECD Author-Name: Ming Ye Author-Workplace-Name: OECD Title: Multinational production and trade in services Abstract: Using the OECD analytical AMNE database, this paper provides new evidence on the services activities of multinational enterprises (MNEs) and discusses the relationship between cross-border trade in services and the production of services through foreign affiliates (“mode 3” trade in services in the General Agreement on Trade in Services). An econometric analysis indicates that policies restricting trade in services (as captured in the OECD Services Trade Restrictiveness Index) are associated with a lower output of foreign affiliates not only in services industries but also in the manufacturing sector. Moreover, services trade restrictions also impact the choice of firms when it comes to engaging in exports or in foreign direct investment to serve foreign markets. Overall, the results in this paper demonstrate the intertwined nature of manufacturing and services activities in global value chains. Classification-JEL: F14; F23; F68; L16; L23 Keywords: FATS, global input-output, global value chains, mode 3, Multinational enterprises, multinational production, trade in services, trade in value-added Creation-Date: 2018-03-19 Number: 212 Handle: RePEc:oec:traaab:212-EN Template-type: ReDIF-Paper 1.0 Author-Name: Philipp Lamprecht Author-Workplace-Name: OECD Author-Name: Sébastien Miroudot Author-Workplace-Name: OECD Title: The value of market access and national treatment commitments in services trade agreements Abstract: This paper looks at market access and national treatment commitments for services in the General Agreement on Trade in Services (GATS) and in 95 regional trade agreements (RTAs) involving the countries that are covered in the OECD Services Trade Restrictiveness Index (STRI). The objective is to quantify the impact of legal bindings on trade in services that result from a reduction in the uncertainty faced by exporters. Bilateral bindings indices are created for five broad service sectors (professional services, computer services, telecoms, financial services and transport services). They indicate how close the sector is from a fully bound regime with no possibility to introduce any new trade barrier, by comparing commitments with the actual trade regime. These bilateral indices are then tested over the period 2000-2014 in a structural gravity model. Despite differences across sectors, the results confirm that the legal bindings typically found in services trade agreements tend to have a positive impact on exports even if no actual liberalisation takes place. Classification-JEL: F13; F15 Keywords: legal bindings, market access, national treatment, regional trade agreements, services trade liberalisation, Trade in services Creation-Date: 2018-03-28 Number: 213 Handle: RePEc:oec:traaab:213-EN Template-type: ReDIF-Paper 1.0 Author-Name: OECD Title: Market Opening, Growth and Employment Abstract: What can further market integration contribute to growth and employment? A series of hypothetical trade reform scenarios explores what countries at different levels of development can expect to gain from reforming tariffs, non-tariff barriers, trade facilitation and domestic support to agriculture. Simulations of multilateral and regional trade agreements with the OECD METRO model show that positive effects are higher when more countries participate in trade integration because it broadens market opportunities, widens the range of products at lower prices, and reduces trade diversion. Smaller economies especially benefit. Firms in these economies can better specialise in international production networks as they have access to larger and more differentiated markets and also benefit from enhanced market access on the products they already produce. While trade integration boosts demand and lifts wages and factor returns, the required production adjustments also leads to reallocation of workers between sectors. The analysis highlights some of the distributional implications and emphasises the need for labour force adjustment policies to accompany trade integration. Classification-JEL: C54; C68; F13; F15; F16; Q17 Keywords: agriculture support, Asia, CGE model, income distribution, International trade, market access, regional trade agreements Creation-Date: 2018-04-11 Number: 214 Handle: RePEc:oec:traaab:214-EN Template-type: ReDIF-Paper 1.0 Author-Name: Olivier Cadot Author-Workplace-Name: University of Lausanne Author-Name: Julien Gourdon Author-Workplace-Name: OECD Author-Name: Frank van Tongeren Author-Workplace-Name: OECD Title: Estimating Ad Valorem Equivalents of Non-Tariff Measures: Combining Price-Based and Quantity-Based Approaches Abstract: A novel econometric method is used to estimate trade effects of non-tariff measures (NTMs) for roughly 5 000 traded goods and 80 countries. It explicitly distinguishes several types of measures and ascertains their distinct effects on trade volumes and prices. The latter feature allows disentangling trade-cost effects associated with non-tariff measures from possible demand-enhancing effects that come from reducing information asymmetries and strengthening consumer confidence in imported products. The volume-based estimates yield information on how NTMs ultimately affect trade: the trade cost associated with NTMs, as captured by the ad valorem estimates, often reduces trade volumes, as expected, but not always. In a number of cases, in particular in the sanitary and phytosanitary (SPS) area, trade is found to expand, even though trade costs rise. This is likely explained by closer regulatory environments between the countries examined, but the trade-enhancing features of such measures merit further study. Classification-JEL: F13; F15; L51 Keywords: Non-tariff measures, price gaps, regulation Creation-Date: 2018-05-16 Number: 215 Handle: RePEc:oec:traaab:215-EN Template-type: ReDIF-Paper 1.0 Author-Name: Julien Gourdon Author-Workplace-Name: OECD Title: Mapping the OECD Government Procurement Taxonomy with International Best Practices: An Implementation to ASEAN Countries Abstract: The OECD developed a taxonomy of measures affecting government procurement which provides a classification system for different GP measures, policies and procedures, which can impact cross-border government procurement. This project aims to further assist countries in assessing their procurement regimes by mapping the taxonomy against international good practices. The project maps the taxonomy against both the WTO Government Procurement Agreement and the UNCITRAL Model Law on Public Procurement (2011). It further tests this methodology with data collection in four ASEAN countries (Indonesia, Malaysia, Philippines and Viet Nam). Classification-JEL: F13; F53; H41; H57; K20; N55 Keywords: Asia, Government procurement, Government Procurement Agreement (GPA), international trade, public good, regulation Creation-Date: 2018-09-05 Number: 216 Handle: RePEc:oec:traaab:216-EN Template-type: ReDIF-Paper 1.0 Author-Name: Javier López González Author-Name: Janos Ferencz Title: Digital Trade and Market Openness Abstract: This paper aims to provide policy makers with a broad overview of the issues that the digital transformation raises for trade with a view to informing how these might be reflected in trade policy design. It discusses how digitalisation has changed international trade and provides estimates of the impact of increased digital connectivity on trade. It shows that digitalisation is particularly important for trade in more complex manufactures and digitally deliverable services; that it helps parties better exploit benefits from trade agreements; and that it gives rise to new complementarities between goods and services. The paper also discusses some trade-related regulatory challenges. Engaging in digital trade in goods means paying attention to a broader range of supporting services, such as logistics or e-payments. Similarly, the ability to engage in trade in services, particularly those that are digitally delivered, is also, in part, affected by market access in ICT goods. The paper argues that making the most out of the digital transformation for trade requires approaching market openness more holistically, thinking about measures affecting goods, services and digital connectivity more jointly, and about measures affecting the full value chain, including the enablers of digital trade and tackling all these through greater international cooperation. Classification-JEL: F13; F14; F68; O33 Keywords: digital connectivity, digital trade, Digital transformation, e-commerce, gravity, market openness Creation-Date: 2018-10-08 Number: 217 Handle: RePEc:oec:traaab:217-EN Template-type: ReDIF-Paper 1.0 Author-Name: OECD Title: Measuring distortions in international markets: The aluminium value chain Abstract: This report builds on the OECD’s longstanding work measuring government support in agriculture, fossil fuels, and fisheries in order to estimate support and related market distortions in the aluminium value chain. Results show that non-market forces, and government support in particular, appear to explain some of the recent increases in aluminium-smelting capacity. While government support is commonly found throughout the aluminium value chain, it is especially heavy in the People’s Republic of China and countries of the Gulf Cooperation Council. Looking across the whole value chain also shows subsidies upstream to confer significant support to downstream activities, such as the production of semi-fabricated products of aluminium. Overall, market distortions appear to be a genuine concern in the aluminium industry, and one that has implications for global competition and the design of trade rules disciplining government support. Classification-JEL: F23; G38; H25; H81; L61 Keywords: global value chains, government support, market distortions, subsidies, Trade Creation-Date: 2019-01-07 Number: 218 Handle: RePEc:oec:traaab:218-EN Template-type: ReDIF-Paper 1.0 Author-Name: Francesca Casalini Author-Workplace-Name: OECD Author-Name: Javier López González Author-Workplace-Name: OECD Author-Name: Evdokia Moïsé Author-Workplace-Name: OECD Title: Approaches to market openness in the digital age Abstract: The digital transformation has had a profound impact on international trade, lowering barriers to internationalisation and contributing to growing trade competitiveness, but at the same time making international trade transactions more complex. Distinctions between goods and services and between modes of delivery have become blurred, and trade today must not only to be faster and more reliable, but also meet a range of regulatory requirements that differ across markets, including those related to privacy, consumer protection and security. Against this backdrop, this paper suggests that new and more holistic approaches to market openness are needed for the 21st century. These should take into consideration issues that span goods, services and digital networks more jointly and involve more international dialogue between a range of stakeholders and policy communities. The paper then discusses how principles of good regulatory practice in relation to market openness – in particular, transparency, non-discrimination, interoperability and avoidance of unnecessary trade restrictiveness – can provide guidance when approaching some of these emerging challenges, with a view to helping inform policy makers as they consider rules for the digital age. Classification-JEL: F13; O33 Keywords: data flows, Digital trade, digitalisation, market openness, trade policy Creation-Date: 2019-01-21 Number: 219 Handle: RePEc:oec:traaab:219-EN Template-type: ReDIF-Paper 1.0 Author-Name: Francesca Casalini Author-Workplace-Name: OECD Author-Name: Javier López González Author-Workplace-Name: OECD Title: Trade and Cross-Border Data Flows Abstract: The ubiquitous exchange of data across borders has given rise to a range of concerns by governments and citizens about some of the effects of so much information being collected and used, often without the knowledge of data subjects. This has led countries to condition or prohibit the transfer of data abroad, affecting trade in the process. This paper develops an indicative taxonomy of domestic approaches to cross-border data flow regulation and local storage requirements; it then surveys international instruments that address the question of international data transfers. The paper then examines the issues that data flow restrictions might raise for consumers and businesses. Against this backdrop, the paper highlights the challenge of finding balance between ensuring that important objectives, such as consumer privacy and security, are met while maintaining the benefits from free flows of data, including the benefits from increased and more inclusive digital trade. Classification-JEL: F13; O3 Keywords: data-flows, Digital economy, privacy, trade policy Creation-Date: 2019-01-23 Number: 220 Handle: RePEc:oec:traaab:220-EN Template-type: ReDIF-Paper 1.0 Author-Name: Janos Ferencz Author-Workplace-Name: OECD Title: The OECD Digital Services Trade Restrictiveness Index Abstract: The rapid acceleration of digital transformation has had profound implications for services trade but the benefits of digitalisation risk being derailed by existing and emerging trade barriers. The OECD Digital Services Trade Restrictiveness Index (Digital STRI) is a new tool that identifies, catalogues, and quantifies cross-cutting barriers that affect services traded digitally. It consists of two components, the regulatory database and indices, which bring together comparable information from 44 countries. The Digital STRI shows a diverse and complex global regulatory environment affecting trade in digitally enabled services. Moreover, over the past years, the indices show an increasingly tightening regulatory environment highlighting that further international cooperation and dialogue is needed to maximise the benefits of digitalisation. Classification-JEL: F13; F14; F68 Keywords: digital trade, Digital transformation, digitally enabled services, regulation, services trade restrictions Creation-Date: 2019-01-23 Number: 221 Handle: RePEc:oec:traaab:221-EN Template-type: ReDIF-Paper 1.0 Author-Name: Andrea Andrenelli Author-Workplace-Name: OECD Author-Name: Julien Gourdon Author-Workplace-Name: OECD Author-Name: Evdokia Moïsé Author-Workplace-Name: OECD Title: International Technology Transfer Policies Abstract: Concerns are growing about policies and measures that restrict market access with the effect of “forcing” technology transfer. Efforts to target forced technology transfer are complicated by the sometimes blurred line between voluntary and mutually agreed upon technology transfers and that which is perceived to be, or is in fact, compelled. This study presents a discussion of the continuum of measures related to international technology transfer (ITT) and aims to identify those measures that pose the greatest concern over their potential to compel disclosure of commercially valuable and sensitive technology. It then briefly presents information on provisions in international trade and investment agreements that are relevant to ITT. The last section presents the perspective from the private sector in order to better understand how firms engage in technology transfers through research collaboration, licensing, joint ventures, and equity investments. The analysis in this report indicates that involuntary technology transfer is a complex issue, and it aims to provide a way for policy makers to think through the issues, to apply a systematic and analytical approach to assessing which policies are of the greatest concern. Classification-JEL: F1; F13; F15; F23; O3 Keywords: competition, FDI, innovation, intellectual property, International trade Creation-Date: 2019-01-24 Number: 222 Handle: RePEc:oec:traaab:222-EN Template-type: ReDIF-Paper 1.0 Author-Name: Sebastian Benz Author-Workplace-Name: OECD Author-Name: Frédéric Gonzales Author-Workplace-Name: OECD Title: Intra-EEA STRI Database: Methodology and Results Abstract: This paper presents new data on regulatory barriers affecting services trade within the European Economic Area (EEA), covering 25 EEA countries, 22 sectors and five years (2014-2018). Following the methodology of the OECD Services Trade Restrictiveness Index (STRI), qualitative information is scored and weighted to produce binary composite indices. The resulting intra-EEA STRIs reveal that services trade restrictiveness within the Single Market is considerably lower than the applied MFN regime of those EEA members. Moreover, they show that EEA members have achieved significant regulatory harmonisation through their integration process. Classification-JEL: F13; F15; F55; F68 Keywords: composite indicators, services trade restrictions, Trade in services, trade liberalisation, trade policy Creation-Date: 2019-01-28 Number: 223 Handle: RePEc:oec:traaab:223-EN Template-type: ReDIF-Paper 1.0 Author-Name: Anne-Célia Disdier Author-Workplace-Name: Paris School of Economics Author-Name: Susan F. Stone Author-Workplace-Name: OECD Author-Name: Frank van Tongeren Author-Workplace-Name: OECD Title: Trade and Economic Effects of IRC: Further Empirical Evidence from SPS and TBT Provisions Abstract: Cutting trade costs, especially those stemming from non-tariff measures, is a growing priority for policy makers. One way to achieve this is for countries to improve their co-operation on regulatory matters. An avenue open to governments is to include provisions related to international regulatory co-operation (IRC) into preferential trade agreements (PTAs). However, there exists little empirical evidence of the benefits of these co-operative mechanisms. This paper provides this evidence, in the context of Sanitary and Phytosanitary (SPS) and Technical Barriers to Trade (TBT) provisions. It measures the effect of IRC mechanisms on trade flows using the latest developments in the gravity literature and the most recent data sources. The work distinguishes between different forms of co-operation implemented between countries within PTAs while also accounting for the level of commitment between partners. The estimation results suggest that PTAs including SPS and TBT measures have a significant and positive effect on trade flows, with the legal enforceability of IRC mechanisms having the strongest and most robust impact on trade flows. This result holds even when WTO-related provisions and dispute settlement procedures are controlled for, implying that binding commitments are important in maximizing post-PTA trade flows. The work shows that transparency and co-operation are significant and robust factors in increasing trade. It also reinforces the view that the impact takes some time to materialise, which is important when evaluating the effectiveness of deep IRC mechanisms. Classification-JEL: F13; F14; F15; F53; F55; C54 Keywords: gravity equation, international regulation co-operation, Sanitary and Phytosanitary, technical barriers to trade, Trade, trade agreements Creation-Date: 2019-03-08 Number: 224 Handle: RePEc:oec:traaab:224-EN Template-type: ReDIF-Paper 1.0 Author-Name: Sebastian Benz Author-Workplace-Name: OECD Author-Name: Louise Johannesson Author-Workplace-Name: OECD Title: Job characteristics, job transitions and services trade: Evidence from the EU labour force survey Abstract: This report presents new cross-country evidence on labour market transitions in sectors exposed to growing volumes of international trade, and the job characteristics of workers employed in these sectors. It shows that export growth is significantly associated with lower job loss risk. In commercial services sectors, exports offer over-proportional employment opportunities to those currently outside the workforce. Men and women are not always impacted identically. For example, involuntary part time employment amongst women falls with growing export volumes, while there is no such effect for men. These results show that the distributional effects of international trade are not limited to wage effects or net changes in employment numbers and highlight the need for a comprehensive assessment of trade implications for individual workers. Classification-JEL: F14; F16; F61; J21; J63 Keywords: fixed-term contracts, labour market transitions, non-standard employment, part-time work, services, Trade, worker heterogeneity Creation-Date: 2019-03-18 Number: 225 Handle: RePEc:oec:traaab:225-EN Template-type: ReDIF-Paper 1.0 Author-Name: Hildegunn Kyvik Nordås Author-Workplace-Name: OECD Title: Offshoring of services functions and labour market adjustments Abstract: About 40% of employment in manufacturing is in services functions. This paper develops a measure of narrow outsourcing, matching services functions performed by workers inside manufacturing firms to the same services functions provided by outside suppliers. The measure allows us to analyse the competition that, say, workers at the IT services desk in manufacturing firms face from outside IT suppliers. Narrow outsourcing is entered into labour demand functions where labour is broken down on business functions using OECD data combined with the 2016 releases of the World Input Output Database (WIOD). On average, a one percentage point increase in narrow local outsourcing of services reduces manufacturing employment in the same services function by between 1.5% (R&D) and 3% (transport). The impact of offshoring on manufacturing labour demand is small on average, but depends strongly on the complexity of the value chain, the policy environment and technology. Manufacturing employment is more services intensive the longer the value chain. In-house IT functions complement and support offshored IT functions, while offshored R&D functions tend to replace in-house R&D. Tentatively, technology as measured by IT maturity and the length of the value chain is more important for employment in services functions in manufacturing than is offshoring. Classification-JEL: F16 Keywords: labour demand, offshoring, outsourcing, regulation, structural changes, technology Creation-Date: 2019-03-20 Number: 226 Handle: RePEc:oec:traaab:226-EN Template-type: ReDIF-Paper 1.0 Author-Name: Andrea Andrenelli Author-Name: Iza Lejárraga Author-Name: Sébastien Miroudot Author-Name: Letizia Montinari Title: Micro-Evidence on Corporate Relationships in Global Value Chains: The Role of Trade, FDI and Strategic Partnerships Abstract: Global value chains (GVCs) have sharpened the interdependencies between trade and foreign direct investment (FDI). Using a novel micro-level dataset covering about 27 000 corporate relationships of 147 multinational enterprises (MNEs) in 13 sectors, new evidence is provided on how firms organise their production globally by combining trade with investment, and on a range of non-equity, contract-based partnerships. The analysis leads to five stylised facts. First, MNE activities are a combination of trade, FDI and strategic partnerships. All firms rely on a mix of these different types of corporate relationships. Second, the configuration of trade, investment and strategic partnerships varies across sectors, firms and markets. The results highlight considerable firm-level heterogeneity within the same industry and across the different modes of entry. Third, investment performs various functions in GVCs. In addition to traditional forms of FDI such as “market-seeking” or “input-seeking”, investment “in capabilities” or “conglomerate” FDI also account for a relevant share of equity-based relationships. Fourth, support business functions emerge as key building blocks in GVCs, which suggests that policy reforms in transversal services sectors that support all GVCs should merit special attention. Fifth, GVCs display a clear geographical organisation. While domestic corporate relationships may lead to higher volumes of activities, in terms of the number of relationships MNEs have more partners abroad. Moreover, the large majority of GVC interactions take place within OECD countries. Overall, the complex and heterogeneous interlinkages observed in modern firm strategies highlight the importance of ensuring a level playing field for both trade and investment. Classification-JEL: L23; L24; F23 Keywords: investment, multinational enterprises, Trade Creation-Date: 2019-04-25 Number: 227 Handle: RePEc:oec:traaab:227-EN Template-type: ReDIF-Paper 1.0 Author-Name: Evdokia Moïsé Author-Name: Silvia Sorescu Title: Exploring the role of trade facilitation in supporting integrity in trade Abstract: Corruption at the border distorts resource allocation, undermines the level playing field for businesses, hampers the attractiveness of affected markets, and may result in significant revenue losses for developing countries. Trade facilitation policies could potentially reduce the incentives and the opportunities for corruption. This paper explores potential determinants of border-related corruption and trade facilitation policies most likely to address it. Countries with higher integrity at the border are found to also have more efficient border processes. Measures that appear to particularly support integrity at the border include transparency and predictability, streamlining of formalities – through simplification of documents, more automation of processes at different levels of complexity, or improved procedures along the border transaction chain – and coordinated border management. Classification-JEL: F13; D73 Keywords: corruption, customs, integrity, simplification, trade facilitation, transparency Creation-Date: 2019-05-15 Number: 228 Handle: RePEc:oec:traaab:228-EN Template-type: ReDIF-Paper 1.0 Author-Name: Javier López González Author-Workplace-Name: OECD Author-Name: Silvia Sorescu Author-Workplace-Name: OECD Title: Helping SMEs internationalise through trade facilitation Abstract: Small and medium-sized enterprises (SMEs) play an important role in generating economic activity and employment in developing and developed countries. However, partly due to remaining at-the-border trade costs, SMEs continue to be less represented in international trade – as direct exporters or importers – than larger firms. Drawing on cross-country data from the World Bank Enterprise Survey (WBES), together with the OECD Trade by Enterprise Characteristics (TEC), this paper looks at the relationship between the trade facilitation environment – as measured through the OECD Trade Facilitation Indicators (TFIs) – and various measures of international engagement of SMEs. While there are differentiated impacts across firm size for different trade facilitation areas, the analysis shows that firms of all sizes across both developed and developing economies benefit from improvements in the overall trade facilitation environment, helping them export and import. However, on aggregate, smaller firms benefit more from improvements in the overall trade facilitation environment relative to large firms. The analysis also suggests that some trade facilitation measures matter more in addressing fixed versus variable costs for SMEs and provides some guidance as to what trade facilitation policy reforms might be prioritised. Classification-JEL: D22; F13; F14; F63; F68; L11; L25 Keywords: exporting, importing, inclusive trade, SMEs, trade costs, trade facilitation Creation-Date: 2019-09-11 Number: 229 Handle: RePEc:oec:traaab:229-EN Template-type: ReDIF-Paper 1.0 Author-Name: Javier López González Author-Workplace-Name: OECD Title: Fostering participation in digital trade for ASEAN MSMEs Abstract: This paper provides a broad overview of some of the issues that digital trade raises for ASEAN countries and its MSMEs, including new opportunities that digitalisation presents for ASEAN firms to increase trade. However, it shows that adoption of relatively simple digital tools, such as webpages, remains relatively low, constraining the ability of ASEAN SMEs to engage in trade as exporters and importers. The paper argues that, to benefit from digital trade, policy makers need to consider issues related to accessing digital networks jointly with a range of old and new trade issues. Classification-JEL: D22; F13; F14; F63; F68; L11 Keywords: ASEAN, digital trade, SMEs, trade costs Creation-Date: 2019-09-11 Number: 230 Handle: RePEc:oec:traaab:230-EN Template-type: ReDIF-Paper 1.0 Author-Name: Javier López González Author-Workplace-Name: OECD Author-Name: Laura Munro Author-Workplace-Name: OECD Author-Name: Julien Gourdon Author-Workplace-Name: OECD Author-Name: Emanuele Mazzini Author-Workplace-Name: OECD Author-Name: Andrea Andrenelli Author-Workplace-Name: OECD Title: Participation and benefits of SMEs in GVCs in Southeast Asia Abstract: Although global value chain (GVCs) participation in Southeast Asia has been growing, little is known about whether the benefits from participation are accruing to larger firms or if small and medium sized enterprises (SMEs), which make up the majority of companies and employ the bulk of the domestic workforce, are also able to take advantage of the new opportunities on offer. This paper uses detailed firm level data from Southeast Asian countries to split the OECD Trade in Value Added database and map how SMEs have been participating in GVCs. It then identifies the benefits associated with this participation and looks into the policy levers that can help make GVC participation in the region more inclusive. It suggest that policy makers focus on: i) reducing trade costs that hit SMEs hardest; including tariffs, trade agreements and trade facilitation; ii) creating an enabling environment to promote domestic linkages so that SMEs can create partnerships with larger firms and multinationals to export indirectly; and iii) reducing non-tariff measures that are especially onerous for SMEs through wider ASEAN regulatory harmonisation and adopting more flexible rules of origin. Classification-JEL: D22; F13; F14; F63; F68; L11; L25 Keywords: Global Value Chains (GVCs), multinationals, Non-Tariff Measures (NTMs), Rules of Origin (RoO), Small and Medium-sized Enterprises (SMEs), trade in value added Creation-Date: 2019-09-11 Number: 231 Handle: RePEc:oec:traaab:231-EN Template-type: ReDIF-Paper 1.0 Author-Name: Janos Ferencz Author-Workplace-Name: OECD Author-Name: Frédéric Gonzales Author-Workplace-Name: OECD Title: Barriers to trade in digitally enabled services in the G20 Abstract: Digital transformation has enabled easier tradability of traditional services across borders and the emergence of new services that create value from data. But the benefits derived from digitalisation risk being derailed by existing and emerging trade barriers. The OECD Digital Services Trade Restrictiveness Index (Digital STRI) is a new tool that identifies, catalogues, and quantifies cross-cutting barriers between 2014 and 2018 that affect trade in digitally-enabled services across all G20 countries. This index is comprised of a regulatory database of existing trade barriers based on publicly available laws and regulations, as well as composite indices that measure the trade restrictiveness of these policies. The Digital STRI shows that the regulatory environment is complex and diverse across G20 countries, and that there is scope to reduce trade barriers, particularly with respect to communications infrastructure and burdensome measures that affect cross-border data transfers. The Digital STRI can also map regulatory heterogeneity across the G20, and help monitor regulatory convergence, e.g. from regulatory cooperation in trade agreements. Classification-JEL: F13; F14; F68 Keywords: digital trade, digitally enabled services, G20, services trade restrictions, trade policy Creation-Date: 2019-10-03 Number: 232 Handle: RePEc:oec:traaab:232-EN Template-type: ReDIF-Paper 1.0 Author-Name: Andrea Andrenelli Author-Workplace-Name: OECD Author-Name: Javier López González Author-Workplace-Name: OECD Title: Electronic transmissions and international trade - shedding new light on the moratorium debate Abstract: The debate about whether or not to extend the WTO Moratorium on imposing customs duties on electronic transmissions has, to date, narrowly focused on its potential customs revenue implications. This paper sets out to broaden and deepen this debate. First, by putting current estimates of the customs revenue implications into perspective, showing that potential losses tend to be low relative to overall government revenue. Second, by deepening the debate on the cost of tariffs, arguing that these are unstable sources of revenue, that they are associated with lower output and productivity and that their burden falls mainly on domestic consumers, not foreign firms. Third, by broadening the debate to consider the benefits associated with electronic transmissions, including growing consumer welfare and export competitiveness. The paper argues that, overall, the revenue implications of the Moratorium are likely to be relatively small and that its lapse would come at the expense of wider gains in the economy. Classification-JEL: F13; O33 Keywords: customs duties, digital economy, digital trade, digitisable goods, e-commerce, electronic transmissions, trade policy Creation-Date: 2019-11-13 Number: 233 Handle: RePEc:oec:traaab:233-EN Template-type: ReDIF-Paper 1.0 Author-Name: OECD Title: Measuring distortions in international markets: The semiconductor value chain Abstract: This report builds on the OECD’s longstanding work measuring government support in agriculture, fossil fuels, fisheries, and more recently in the aluminium value chain in order to estimate producer support and related market distortions in the semiconductor value chain. Results for 21 large firms operating across the semiconductor value chain indicate that total government support has exceeded USD 50 billion over the period 2014-18. Government support provided in the form of below-market debt and equity appears to be particularly large in the context of the semiconductor industry and concentrated in one jurisdiction. Other types of support identified include support for R&D and investment incentives, which benefitted all firms studied in this report. The report also discusses the implications that these findings have for trade rules, and in particular for subsidy disciplines in a context of growing government involvement in semiconductor production and poor transparency of support measures. Classification-JEL: F23; G32; H25; H81; L33; L63 Keywords: government support, market distortions, R&D policy, semiconductors, subsidies, trade Creation-Date: 2019-12-12 Number: 234 Handle: RePEc:oec:traaab:234-EN Template-type: ReDIF-Paper 1.0 Author-Name: Jane Korinek Author-Workplace-Name: OECD Title: The mining global value chain Abstract: The mining sector accounts for a substantial share of exports and GDP in some countries, but rarely creates many direct jobs. This paper examines the mining sector using a value chain perspective, looking at both direct and indirect inputs and outputs. It finds that inputs from other sectors, in particular services, represent an opportunity for some minerals-rich countries. This paper aims to shed light on what those opportunities might be, and on some of the policies that influence whether or not such sectors emerge and develop. Classification-JEL: F1; F13; F60; F63; O33; Q32; Q37; Q38 Keywords: embodied services, extractive industries, global value chains, GVCs, input-output methodology, mining Creation-Date: 2020-01-14 Number: 235 Handle: RePEc:oec:traaab:235-EN Template-type: ReDIF-Paper 1.0 Author-Name: Charles Cadestin Author-Workplace-Name: OECD Author-Name: Sébastien Miroudot Author-Workplace-Name: OECD Title: Services exported together with goods Abstract: How prevalent are services sold together with goods? Using aggregate and micro-data, this report assesses this prevalence so as to gain a better understanding of how firms combine goods and services in their exports. Leaving aside the specific case of distribution services, 'Other business services', 'Construction' and 'Research and development' are the most common services supplied by manufacturing firms. With respect to industries, 'paper and printing', as well as 'repair and installation' come first in terms of prevalence of bundles of goods and services. Since the trade regime is different for trade in goods and trade in services, manufacturing firms engaged in servitisation strategies may face higher trade barriers just by expanding their activities in sectors that are less open to trade. When negotiating trade agreements, policy makers need to take into account complementarities between goods and services, and look at the joint restrictiveness for goods and services. Classification-JEL: F13; F23; L16; L80 Keywords: services, servicification, servitisation, trade in services, trade policy Creation-Date: 2020-01-14 Number: 236 Handle: RePEc:oec:traaab:236-EN Template-type: ReDIF-Paper 1.0 Author-Name: Sebastian Benz Author-Workplace-Name: OECD Author-Name: Frédéric Gonzales Author-Workplace-Name: OECD Author-Name: Annabelle Mourougane Author-Workplace-Name: OECD Title: The Impact of COVID-19 international travel restrictions on services-trade costs Abstract: This report casts light on the impact of regulatory restrictions on the movement of people across international borders on services trade costs. Such restrictions were implemented on health and safety grounds following the COVID-19 outbreak in March 2020. The analysis relies on several illustrative scenarios in which all the countries are assumed to close their borders to passengers, but leave freight trade open. Services trade costs are estimated to increase by an average of 12% of export values across sectors and countries in the medium term in such a hypothetical scenario. The analysis identifies a large variability in the increase in services-trade costs across sectors and across countries, reflecting the stringency of initial regulations and the relative importance of business travel and labour mobility to international services trade. Classification-JEL: F2; F68; F14 Keywords: COVID-19 (coronavirus), trade in services, travel bans Creation-Date: 2020-07-06 Number: 237 Handle: RePEc:oec:traaab:237-EN Template-type: ReDIF-Paper 1.0 Author-Name: Sebastian Benz Author-Workplace-Name: OECD Author-Name: Alexander Jaax Author-Workplace-Name: OECD Title: The costs of regulatory barriers to trade in services: New estimates of ad valorem tariff equivalents Abstract: This paper presents new estimates of policy-induced trade costs in five services sectors for 46 countries. Results demonstrate the significant untapped economic potential of multilateral, plurilateral, and unilateral services trade liberalisation. Even though services trade has more than tripled in the last two decades, the results show that trade costs are still high. The results are not only interesting in and of themselves, but they can also be used as input for further analysis on the economic benefits from different scenarios regarding the dismantling of barriers to trade in services. This paper exploits recent advances related to the measurement of services barriers in the OECD Services Trade Restrictiveness Index (STRI). Classification-JEL: F68; F15; F14; F13 Keywords: services trade, services trade restrictions, trade cost, trade liberalisation Creation-Date: 2020-07-08 Number: 238 Handle: RePEc:oec:traaab:238-EN Template-type: ReDIF-Paper 1.0 Author-Name: Andrea Lassmann Author-Workplace-Name: OECD Title: Services trade and labour market outcomes Abstract: This report draws on individual-level and firm-level data to better understand the relationships between services trade and labour market outcomes. It seeks to shed light on how firms benefit from the rise in services trade, which groups of workers are affected the most, how employment and wages adjust to increased services trade, and the impact of policy settings on outcomes in these areas. It relies on new empirical analyses undertaken on the European Union, Brazil, India, Italy, Slovenia, Sweden, the United Kingdom, and Viet Nam together with insights from economic literature and a meta-analysis of the results underlying this report. Findings suggest that firms’ importing, offshoring and exporting activities are generally associated positively with firm employment in advanced and emerging market economies, although the relationship is more uncertain for the latter group of countries. Firm’s overall wage responses to services trade are on average positive as well, but quantitatively small. Looking at the distributional impact, there is mixed evidence for a skill bias in wages related to increased services exports and imports. Women are found to benefit from services export growth, while increased imports are estimated to exert downward pressure on the wages of women compared to the ones of men. Classification-JEL: C26; F16; F61; J40 Keywords: employment, individual and firm-level data, wages Creation-Date: 2020-09-09 Number: 239 Handle: RePEc:oec:traaab:239-EN Template-type: ReDIF-Paper 1.0 Author-Name: Ali Alsamawi Author-Name: Charles Cadestin Author-Name: Alexander Jaax Author-Name: Joaquim Guilhoto Author-Name: Sébastien Miroudot Author-Name: Carmen Zürcher Title: Returns to intangible capital in global value chains: New evidence on trends and policy determinants Abstract: Intangible capital, a broad category of knowledge-based assets that lack physical embodiment, increasingly shapes the distribution of income in global value chains (GVCs). While some intangible assets are reported in national accounts (e.g. R&D or computer software and databases), others are hard to detect in conventional statistics (e.g. brand value or organisational capital). In this paper, we combine information on factor income from national accounts with the OECD Inter-Country Input-Output tables in order to estimate returns to measured (i.e. included in national accounts) and ‘unmeasured’ intangible capital (captured as a residual) in GVCs. We find that total intangible capital accounts for about 27% of income in manufacturing GVCs and that this share has increased between 2005 and 2015 in OECD countries. The paper highlights differences across GVC stages and specific types of GVCs. A significant share of income is captured at the distribution stage, particularly in buyer-driven value chains. An econometric analysis suggests that trade and investment openness are important determinants of patterns in returns to intangible capital in GVCs. Direct public funding of R&D and the quality of intellectual property protection are associated with higher returns to intangible assets. Classification-JEL: E1; E22; F23; F68 Creation-Date: 2020-09-30 Number: 240 Handle: RePEc:oec:traaab:240-EN Template-type: ReDIF-Paper 1.0 Author-Name: Alexander Jaax Author-Workplace-Name: OECD Author-Name: Louise Johannesson Author-Workplace-Name: OECD Author-Name: Thi Xuan Thu Nguyen Author-Workplace-Name: Diplomatic Academy of Viet Nam Title: Services imports and labour in Viet Nam Abstract: This paper draws on detailed firm-level and worker-level information to explore the link between services imports and employment dynamics in the case of Viet Nam. The econometric analysis consists of two parts. First, data covering formal firms are exploited to investigate the relationship between sector-level services import intensity and firm-level employment and firm-level average wages. The second part is conducted at the level of workers and also covers informal workers. The results show that sector-level services import intensity positively affects firm-level average wages of Vietnamese formal services firms, whereas a small negative effect on firm-level employment is observed. For manufacturing firms, there is no conclusive evidence regarding the association between services import intensity and firm-level employment. The worker-level analysis identifies a positive wage effect of occupation-level exposure to services imports on domestic workers in foreign-owned businesses in all sectors. The results also suggest that higher skilled workers might be more likely to benefit from services imports. This paper provides support for an approach that combines an emphasis on lowering firms’ costs of sourcing foreign services inputs with efforts to strengthen SMEs’ capabilities and improve workers’ skills. Classification-JEL: F14; F16; F61; J21; J30; C26 Keywords: employment, individual and firm-level data, trade, wages, worker heterogeneity Creation-Date: 2020-10-23 Number: 241 Handle: RePEc:oec:traaab:241-EN Template-type: ReDIF-Paper 1.0 Author-Name: Ari Van Assche Author-Workplace-Name: HEC Montreal Title: Trade, investment and intangibles: The ABCs of global value chain-oriented policies Abstract: Located at the heart of global value chains (GVCs), intangibles are documented to have a high and rising value capture, and to depend on both agglomeration economies and global connectedness for their performance. In this paper, we study how the distinct nature of intangibles require countries to develop novel policy prescriptions to attract intangible-intensive activities and to increase the value capture of these activities. We suggest that such GVC-oriented policies fall into three categories: Attractiveness policies that aim to strengthen the appeal of a location for intangible activities; Buzz policies that intend to strengthen the local production and innovation ecosystem; and Connectedness policies that aspire to strengthen the local ecosystem’s connections to other locations. Together, they constitute the ABCs of GVC-oriented policies. Classification-JEL: E22; F23; F68 Keywords: Innovation, Intangible capital, Investment policy, Trade policy Creation-Date: 2020-11-25 Number: 242 Handle: RePEc:oec:traaab:242-EN Template-type: ReDIF-Paper 1.0 Author-Name: Andrea Lassmann Author-Workplace-Name: OECD Author-Name: Francesca Spinelli Author-Workplace-Name: OECD Title: Services trade and labour market outcomes in the United Kingdom Abstract: Services trade has become increasingly important, yet its impact on employment has been understudied at present. This paper uses fine-grained data on firm- and worker-level information to shed light on the impact of services trade on employment and wages in the United Kingdom. It finds that firms can benefit from services trade, through increased employment, production and productivity. On average, workers’ wages are also positively impacted by increased services trade. The findings suggest that services imports enhance female wages more than those of males, thereby contributing to narrow the gender wage gap. They also suggest that reduction of services trade barriers in foreign markets with which the United Kingdom trades coincides with higher wages for employees of trading firms in the United Kingdom. Classification-JEL: C26; F13; F16; J31; J40 Keywords: Employment, gender pay gap, skills, trade liberalisation, wages, worker and firm level data Creation-Date: 2020-12-03 Number: 243 Handle: RePEc:oec:traaab:243-EN Template-type: ReDIF-Paper 1.0 Author-Name: Nhung Luu Author-Name: Nicolas Woloszko Author-Name: Orsetta Causa Author-Name: Christine Arriola Author-Name: Frank van Tongeren Author-Name: Åsa Johansson Title: Mapping trade to household budget survey: A conversion framework for assessing the distributional impact of trade policies Abstract: Whether gains from trade are equally distributed within countries is the subject of a lively debate. This paper presents a novel framework to analyse the distributional effects of trade policy by linking the OECD’s CGE trade model, METRO, with consumption expenditure data from household budget surveys. Specifically, this paper describes a methodology to produce a concordance and transition matrix linking GTAP sectors to household survey classifications based on the Classification of Individual Consumption According to Purpose (COICOP). A mapping methodology is an important pre-requisite for investigating research questions concerning the influence of household behaviour changes on trade, as well as trade developments and policy on household welfare. The paper provides an illustration of the mapping of trade policy induced price changes onto household expenditures by conducting stylized tariff simulations with METRO and translating those into household expenditures by income decile for selected EU countries. Classification-JEL: C68; D12; E21; F13; F14 Keywords: Household expenditure microdata, Inequality, modelling, Trade policy Creation-Date: 2020-12-04 Number: 244 Handle: RePEc:oec:traaab:244-EN Template-type: ReDIF-Paper 1.0 Author-Name: Paulo de Sa Author-Name: Jane Korinek Title: Resource efficiency, the circular economy, sustainable materials management and trade in metals and minerals Abstract: A more resource efficient and circular economy will help to decouple global economic growth from natural resource use, decrease environmental degradation and improve energy efficiency. Existing circular economy policies have been largely focused at the national level. However, trade policies can promote greater resource efficiency and circularity by enabling economies of scale in recycling; by ensuring regulatory coherence between different frameworks for recyclable material; and by helping to address the problem of exports to countries without adequate recycling facilities.The vast majority of trade in end-of-life material ‒ waste and scrap ‒ is in metallic material. Recycling metallic waste and scrap means less mining of non-renewable resources, and producing the most commonly used metals from recycled material uses 60-97% less energy than producing them from mined material. Moreover, demand for some minor metals and minerals, such as lithium, cobalt and rare earth elements (REE) used in energy storage, wind turbines and other environmental goods is projected to increase sharply as the global economy strives to become more carbon-neutral. Recycling these low-volume minerals will become urgent. Trade in these recovered materials will be particularly important in order to allow economies of scale for recycling operations as technologies evolve. Classification-JEL: Q1; Q2; Q37; Q38; Q56 Keywords: Energy storage, Export restrictions, Rare earth elements, Raw materials, Recycling, Waste and scrap Creation-Date: 2021-03-01 Number: 245 Handle: RePEc:oec:traaab:245-EN Template-type: ReDIF-Paper 1.0 Author-Name: Jane Korinek Author-Name: Evdokia Moïsé Author-Name: Jakob Tange Title: Trade and gender: A Framework of analysis Abstract: Closing gender gaps makes good economic sense. Advancing the aim of women’s economic empowerment will require policy action across a wide range of areas, including increasing their participation in international trade. Although trade policies are not de jure discriminatory, they impact women and men differently due to dissimilar initial conditions. Mapping the channels and interactions between trade and gender for women as workers, consumers, and business owners shows that: (i) trade impacts women workers differently to men in part because they are employed in different sectors — in OECD countries, more often in services; (ii) trade lowers prices for consumers, which particularly increases the purchasing power of more vulnerable groups, where women are disproportionately represented; and (iii) higher trade costs impede smaller businesses’ access to international markets more than large firms, which impacts women who tend to own and lead smaller businesses. A framework is proposed for analysing the impacts of trade and trade policies on women that policy makers can use in order to ensure that trade and trade policies in their country support women’s economic empowerment. Classification-JEL: F13; F66; J16 Keywords: Gender equality, Gender impact analysis, Preferential Trade Agreements, Trade facilitation, Women entrepreneurs Creation-Date: 2021-03-26 Number: 246 Handle: RePEc:oec:traaab:246-EN Template-type: ReDIF-Paper 1.0 Author-Name: OECD Title: Measuring distortions in international markets: Below-market finance Abstract: The support that governments provide to their industrial producers has been a growing source of concern. Much of that support is provided by governments through the financial system, either in the form of below‑market borrowings or below-market equity. To better understand the nature and scale of this support, this report uses publicly available information for 306 of the largest manufacturing firms in 13 industrial sectors, covering the period 2005-19. It finds that below-market borrowings tend to be relatively large in heavy industries, including some that reportedly suffer from excess capacity, while below-market equity returns appear to be more common in high-tech industries such as aerospace and semiconductors. Below-market borrowings also appear to benefit firms with more than 25% government investment relatively more. These findings on below-market finance raise a number of important issues for trade rules, including in relation to transparency and the scope of subsidy disciplines. Classification-JEL: F13; F23; G32; H25; H81; L33; L52; L62; O25 Keywords: Excess capacity, Government equity, Government support, Loan subsidies, State-Owned Enterprises, Subsidies, Trade Creation-Date: 2021-05-12 Number: 247 Handle: RePEc:oec:traaab:247-EN Template-type: ReDIF-Paper 1.0 Author-Name: Francesca Casalini Author-Name: Javier López González Author-Name: Taku Nemoto Title: Mapping commonalities in regulatory approaches to cross-border data transfers Abstract: Data flows across border underpin today’s digitalised and globally interconnected world, but have also given rise to a range of concerns, including about privacy protection, intellectual property protection, regulatory reach, competition, and industrial policy. This has led to the emergence of a patchwork of rules governing cross-border data flows, complicating both the enforcement of public policy goals and increasing the costs for firms of all sizes of operating on a global scale. In practice, countries are using a range of mechanisms and instruments to enable cross-border data transfers with “trust”, including unilateral mechanisms, plurilateral arrangements, and trade agreements. This paper identifies the commonalities, complementarities and elements of convergence in these different instruments for moving data across borders, with the aim of supporting international dialogue and co-operation on more predictable and transparent combinations of data flows and “trust”. Classification-JEL: O3; F13 Keywords: Data free flows with trust, Data-flows, Digital economy, Interoperability, Privacy, Trade policy Creation-Date: 2021-05-18 Number: 248 Handle: RePEc:oec:traaab:248-EN Template-type: ReDIF-Paper 1.0 Author-Name: Javier López González Author-Name: Silvia Sorescu Title: Trade in the time of parcels Abstract: Today, more parcels are crossing international borders than ever before. While this has given rise to new opportunities, not least for individuals and SMEs who are now more directly engaged in trade, it is also raising new challenges. This paper explores this complex and evolving environment, identifying the types of goods that are traded as parcels and the different actors along the parcels supply chain, as well as the policies to help ensure that parcels get to where they are needed. Empirical analysis shows that progress on digital connectivity and trade facilitation measures, such as increased transparency or automating border processes, are likely to have a greater trade-enhancing impact on parcel trade than on “traditional” trade. In contrast, greater differences in regulations across countries in transportation, courier or logistics services are associated with lower trade in parcels. Overall, enabling benefits from trade in parcels and facing forthcoming challenges requires a comprehensive policy approach across a number of areas and throughout the parcel supply chain. Classification-JEL: C54; F13; F68; L10 Keywords: COVID-19, E-commerce, Gravity estimation, Services, SMEs, Trade facilitation Creation-Date: 2021-05-25 Number: 249 Handle: RePEc:oec:traaab:249-EN Template-type: ReDIF-Paper 1.0 Author-Name: Sebastian Benz Author-Name: Inese Rozensteine Title: Services Trade Restrictiveness Index (STRI): Measuring services liberalisation and commitments in the GATS and RTAs Abstract: The number of Regional Trade Agreements (RTAs) have increased markedly over the last decade, with many addressing market openness and rule-making for services trade. Recent RTAs are breaking down existing barriers: on average, removing between 10% and 40% of services restrictions present in the multilateral regime, and going significantly further in binding applied services regimes. When measured against the benchmark of commitments in the General Agreement on Trade in Services (GATS), binding commitments in RTAs eliminate between 40% and 70% of the “water” in the GATS – although low levels of “water” are not necessarily synonymous with high levels of openness. Ultimately, national and collective services reforms and liberalisation will best drive inclusive and sustainable economic growth. Classification-JEL: F13; F15; F53 Keywords: Regional Trade Agreements, Services trade liberalisation, Services trade policy Creation-Date: 2021-06-03 Number: 250 Handle: RePEc:oec:traaab:250-EN Template-type: ReDIF-Paper 1.0 Author-Name: Taku Nemoto Author-Name: Javier López González Title: Digital trade inventory: Rules, standards and principles Abstract: Rules affecting digital trade are complex and spread across a diverse set of issues and fora. This paper provides an inventory of existing rules, standards, and principles related to issues that are being discussed in the context of the Joint Statement Initiative (JSI) at the WTO, highlighting the number of existing international instruments at the WTO and across a range of non-WTO fora on which these discussions can build. The Inventory thus aims to help governments better leverage resources towards enabling more informed discussions on digital trade. Additionally, the Inventory shows that there is already substantial uptake of instruments on issues related to digital trade among participants to the JSI discussions. Furthermore, many jurisdictions that do not currently participate in the JSI discussions are already in the process of undertaking reforms in the areas that are being discussed under that initiative. Classification-JEL: F13; F15; O3 Keywords: Data, Digitalisation, E-commerce, Joint Statement Initiative, Regional Trade Agreements, Trade, WTO Creation-Date: 2021-06-08 Number: 251 Handle: RePEc:oec:traaab:251-EN Template-type: ReDIF-Paper 1.0 Author-Name: Christine Arriola Author-Name: Przemyslaw Kowalski Author-Name: Frank van Tongeren Title: The impact of COVID-19 on directions and structure of international trade Abstract: 2020 marked some of the largest reductions in trade and output volumes since WWII. Focusing on the COVID-19 pandemic and using the latest monthly and quarterly data on international trade of selected countries and products, this paper documents key shifts in geographical direction and product composition of international trade in 2020. Trade in services declined by more than twice as much as trade in goods and its recovery has also been slower. While the size of the drop in global trade relative to the drop in output in 2020 was smaller than during the Global Financial Crisis (GFC), this was not related to the overall size of the trade impacts in 2020, but rather reflects the significant heterogeneity of trade and production impacts across specific goods, services and trade partners from COVID-19. Trade in several types of goods plummeted, while that in others increased markedly. As a result, the variation in trade impacts across the different product categories in 2020 was not only larger than during the GFC, but also larger than in any other year during the past two decades. The product structure of countries’ goods trade also changed significantly in 2020, indicating large adjustments. While some international supply chains came under pressure in early months of the pandemic, the data also show that supply chains were instrumental in the resumption of economic activity. The distance travelled by imported products actually continued to increase in 2020, largely as a result of China and other Asian countries filling supply gaps resulting from lockdowns and demand changes in other regions. These shifts occurred in the context of significant perturbations in the international transport sector. While it is not known which of the changes in 2020 will be only short-lived, some seem to show signs of longer-term shifts or are likely to result in long-term adjustments. Above all, the unprecedented heterogeneity of changes in trade flows across products, sources and destinations seen in 2020 suggests high uncertainty and adjustment costs, and implies an increased need ‒ and incentives ‒ for consumers, firms and governments to adopt new or intensify existing risk mitigation strategies. Classification-JEL: F10; F14; F40; F61 Keywords: COVID-19, Globalisation, International supply chains, International trade, Statistics Creation-Date: 2021-09-20 Number: 252 Handle: RePEc:oec:traaab:252-EN Template-type: ReDIF-Paper 1.0 Author-Name: Alexander Jaax Author-Name: Frédéric Gonzales Author-Name: Annabelle Mourougane Title: Nowcasting aggregate services trade Abstract: The increasing importance of services trade in the global economy contrasts with the lack of timely data to monitor recent developments. The nowcasting models developed in this paper are aimed at providing insights into current changes in total services trade, as recorded in monthly statistics of the G7 countries. Combining machine-learning techniques and dynamic factor models, the methodology exploits traditional data and Google Trends search data. No single model outperforms the others, but a weighted average of the best models combining machine-learning with dynamic factor models seems to be a promising avenue. The best models improve one-step ahead predictive performance relative to a simple benchmark by 30-35% on average across G7 countries and trade flows. Nowcasting models are estimated to have captured about 67% of the fall in services exports due to the COVID-19 shock and 60% of the fall in imports on average across G7 economies. Classification-JEL: C4; C22; F17 Keywords: Dynamic factor models, G7 economies, Machine learning Creation-Date: 2021-09-23 Number: 253 Handle: RePEc:oec:traaab:253-EN Template-type: ReDIF-Paper 1.0 Author-Name: Evdokia Moïsé Author-Name: Silvia Sorescu Title: Trade facilitation in perishable agro-food products: A feasibility study for addressing at-the-border challenges Abstract: Border processes for perishable agro-food products involve multiple agencies and raise complex compliance and enforcement issues. At the same time, the speed of border processes is of particular importance for exporters as delays at the border can have great negative impacts on the quality of perishable agro-food products and hence their value. This calls for a more detailed and nuanced look at the impact of trade facilitation reforms on agro-food trade. This report examines how a sub-set of OECD Trade Facilitation Indicators (TFIs) could be used to provide a more complete picture of the current performance of border processes for perishable agro-food goods. It highlights specific TFIs of relevance to agro-food, including: documentation requirements or border controls related to sanitary and phytosanitary measures and technical barriers to trade, and automation and streamlining of border formalities, and explores differentiated impacts across agro-food product groups. Practical approaches are identified to enrich the scope of the existing OECD TFIs with a view to deepening the information base on the performance of trade facilitation policies for perishable agro-food goods. Classification-JEL: F13; F68; Q17 Keywords: Agro-food trade, COVID-19, Simplification, Trade costs Creation-Date: 2021-10-14 Number: 254 Handle: RePEc:oec:traaab:254-EN Template-type: ReDIF-Paper 1.0 Author-Name: Evdokia Moïsé Author-Name: Stela Rubínová Title: Sustainability impact assessments of free trade agreements: A critical review Abstract: Trade negotiations are frequently accompanied by sustainability impact assessment (SIA) to evaluate the potential economic, environmental, social and human rights effects of a possible agreement. SIAs can help promote environmental protection, and support the better integration of women, vulnerable populations, and small businesses into the global economy, as well as address growing concerns from civil society. They provide a critical opportunity for dialogue among stakeholders and trade policy makers, and thereby help to rebuild confidence in the trading system. However, SIA approaches ‒ including economic modelling, qualitative causal chain analysis and stakeholder consultations ‒ each have their strengths, challenges and limitations. Those need to be understood by policy makers if reliable and policy relevant conclusions are to be provided. This paper offers a perspective on the challenges and opportunities of various approaches and discusses best practices for assessing the sustainability impact of trade and trade agreements. Classification-JEL: A13; B41; F6; F13; F18 Keywords: CGE models, Qualitative methods, Stakeholder dialogue, Sustainable growth, Trade liberalisation Creation-Date: 2021-11-03 Number: 255 Handle: RePEc:oec:traaab:255-EN Template-type: ReDIF-Paper 1.0 Author-Name: Andrea Andrenelli Author-Name: Javier López González Title: 3D printing and International Trade: What is the evidence to date? Abstract: 3D printing technologies have attracted the attention of the trade policy community for their potential to disrupt international trade. It is argued that greater cross-border exchange in design files for local printing may lead to less trade in physical goods. New evidence presented in this paper suggests quite the opposite: that the adoption of 3D printing technologies, proxied by measures of imports of 3D printers, appears to be complementary to goods trade. On average, an increase of around USD 14 000 in imports of 3D printers is associated with a USD 3.3 million increase in the value of exports of 3D printable goods. Similar dynamics are found for imports of 3D printable goods. Overall, this implies that the wider adoption of the technology has, at present, limited implications for the ongoing debate on the renewal of the WTO Moratorium on customs duties on electronic transmissions as it is unlikely to result in loss of goods trade and traditional tariff revenue. Classification-JEL: F13; F14; O33 Keywords: 3D printable goods, Additive manufacturing, Digital trade, Electronic transmissions, System GMM, WTO Moratorium Creation-Date: 2021-11-04 Number: 256 Handle: RePEc:oec:traaab:256-EN Template-type: ReDIF-Paper 1.0 Author-Name: Annabelle Mourougane Author-Name: Sebastian Benz Author-Name: Frédéric Gonzales Title: Services trade in the United Kingdom and the global economy Abstract: Services play a more important role in trade and employment in the United Kingdom than in most other OECD countries. The UK services sector is supported by an open and transparent trade regime, policies that support competition and innovation, and regulatory transparency that facilitates the creation of new services businesses and start-ups. That said, certain barriers to services trade remain. This report sheds light on the role of services trade in the UK economy, describing recent trends and highlighting future challenges, and explores policy options to support a sustainable recovery from the COVID-19 crisis. Classification-JEL: F13; F14; F15; F68; L80; O52 Keywords: COVID-19, Services Trade Restrictiveness Index Creation-Date: 2021-11-22 Number: 257 Handle: RePEc:oec:traaab:257-EN Template-type: ReDIF-Paper 1.0 Author-Name: Frédéric Gonzales Author-Name: Hildegunn Kyvik Nordås Author-Name: Michel Lioussis Title: Measuring competition in services markets with pass-through and speed of adjustment Abstract: Making trade work for all and harnessing popular support for openness to trade depends on consumers benefitting from lower prices and broader product variety. The present study reveals that those benefits depend on competition in services markets, in particular in telecommunication. These findings result from employing an industrial organisation framework to estimate the transmission of prices from the world market to consumers of certain services in local markets (distribution, transport, and financial services). The OECD Services Trade Restrictiveness Index (OECD STRI) is used to explore the relationship between the pass-through rate of input prices to consumer prices and policy measures that capture the openness and strength of competition in services markets. The OECD STRI in telecommunications is found to be associated with a more complete and faster pass-through of prices in all markets studied. The results also illustrate the crucial role played by the internet in allowing for price comparisons that generate competitive pressure on distributors. Classification-JEL: C1; D23; D41; L11 Keywords: Cointegration, Pass-through rates, Price signals, Services trade restrictions Creation-Date: 2021-12-01 Number: 258 Handle: RePEc:oec:traaab:258-EN Template-type: ReDIF-Paper 1.0 Author-Name: Donal Smith Author-Name: Przemyslaw Kowalski Author-Name: Frank van Tongeren Title: Modelling trade policy scenarios: Macroeconomic and trade effects of restrictions in cross border labour mobility Abstract: COVID-19 has drawn renewed attention to the economic importance of cross border mobility. Frictions in cross border mobility of labour can substantially impact the economy and international trade, by causing a long-term decrease in net migration that would alter the labour supply in many economies. To capture these macro-economic and trade effects, a global macroeconomic model (NiGEM) and a general equilibrium trade model (METRO) were used to simulate a stylised scenario equivalent to a 20% reduction in net-migration accumulated over the past ten years for all economies and regions. In OECD countries, this would translate into a reduction of the overall labour supply, and this shock would shift some economic activity towards non-OECD countries. At the sectoral level, exports of labour intensive manufacturing activities in OECD countries would contract, with electronics (13% of the total reduction of exports in the long term), automobiles (12%) and pharmaceuticals (9%) among the most affected. Classification-JEL: F22; F47; C63; E10; N10 Keywords: Computable general equilibrium model, International labour mobility, International trade, METRO model, NIGEM macroeconometric model, Sectoral economic effects Creation-Date: 2022-02-23 Number: 259 Handle: RePEc:oec:traaab:259-EN Template-type: ReDIF-Paper 1.0 Author-Name: Janos Ferencz Author-Name: Javier López González Author-Name: Irene Oliván García Title: Artificial Intelligence and international trade: Some preliminary implications Abstract: Artificial intelligence (AI) has strong potential to spur innovation, help firms create new value from data, and reduce trade costs. Growing interest in the economic and societal impacts of AI has also prompted interest in the trade implications of this new technology. While AI technologies have the potential to fundamentally change trade and international business models, trade itself can also be an important mechanism through which countries and firms access the inputs needed to build AI systems, whether goods, services, people or data, and through which they can deploy AI solutions globally. This paper explores the interlinkages between AI technologies and international trade and outlines key trade policy considerations for policy makers seeking to harness the full potential of AI technologies. Classification-JEL: F13; F14; O33 Keywords: Data flows, Digital trade, Innovations, Regional Trade Agreements, Trade policy Creation-Date: 2022-04-22 Number: 260 Handle: RePEc:oec:traaab:260-EN Template-type: ReDIF-Paper 1.0 Author-Name: Christine Arriola Author-Name: Przemyslaw Kowalski Author-Name: Frank van Tongeren Title: Understanding structural effects of COVID-19 on the global economy: First steps Abstract: The COVID-19 pandemic and associated policy responses are likely to alter the global economy in a way that affects its ability to adjust to future shocks and changes. This paper develops a point of reference for thinking about developments which could be deemed long-term and which could in turn be incorporated into what we call a “post-COVID-19 baseline”. Using the OECD’s CGE model METRO, the paper finds that output declines observed in 2020 were driven primarily by reductions in labour productivity due to varying abilities to telework across countries. Negative economic impacts were largely mitigated by government support to firms and households. Border measures to control the spread of the virus also had less of an impact on total output, reflecting important government efforts to facilitate cross border flows of goods and services whilst managing cross border movements of people. Demand shifts had the smallest impact on global GDP, but had significant and heterogeneous impacts on consumption, output and trade changes across countries and sectors. This in turn contributed to pressures on some global supply chains. Classification-JEL: F14; F17; C68 Keywords: general equilibrium model, shocks, trade Creation-Date: 2022-05-06 Number: 261 Handle: RePEc:oec:traaab:261-EN Template-type: ReDIF-Paper 1.0 Author-Name: Javier López González Author-Name: Francesca Casalini Author-Name: Juan Porras Title: A Preliminary Mapping of Data Localisation Measures Abstract: This paper maps the evolving data localisation landscape. It shows that the number of data localisation measures is on the rise and that the measures themselves are becoming more restrictive. The paper highlights the need to better understand and monitor the evolving regulatory environment with a view to enabling empirical analysis of the economic and societal implications of data localisation. This is an issue which is particularly important in the context of ongoing discussions on data localisation, be they in preferential trade agreements (PTAs) or in the context of the WTO Joint Statement Initiative on e-commerce. Classification-JEL: F14; O33; F13 Keywords: Data flows, Digital economy, Digital trade, Digitalisation, Trade policy Creation-Date: 2022-06-13 Number: 262 Handle: RePEc:oec:traaab:262-EN Template-type: ReDIF-Paper 1.0 Author-Name: Silvia Sorescu Author-Name: Carolin Bollig Title: Trade facilitation reforms worldwide: State of play in 2022 Abstract: Trade facilitation measures are key in offsetting some of the time and cost increases experienced by firms and consumers against a backdrop of continued supply chain disruptions. Through the lens of the updated OECD Trade Facilitation Indicators (TFIs), this paper assesses progress and challenges in trade facilitation reforms, including as these relate to the implementation of the WTO Trade Facilitation Agreement. Since 2019, most progress occurred in improving the availability of trade-related information, simplifying documentary requirements, and automating and streamlining procedures. The TFIs also show significant gaps between the establishment of regulatory frameworks for trade facilitation and operational practices across all areas covered. Confirming digital trade facilitation measures introduced during the COVID-19 crisis can help close these gaps. There is also scope to build on COVID-19 border agency co-operation structures, and international co-operation more broadly, to enhance crisis responsiveness and resilience. Classification-JEL: F13; F14; F63; F68 Keywords: Customs, Digitilisation, Simplification, Transparency, WTO Creation-Date: 2022-07-05 Number: 263 Handle: RePEc:oec:traaab:263-EN Template-type: ReDIF-Paper 1.0 Author-Name: Sebastian Benz Author-Workplace-Name: OECD Author-Name: Alexander Jaax Author-Workplace-Name: OECD Author-Name: Yoto V. Yotov Author-Workplace-Name: Drexel University Title: Shedding light on the drivers of services tradability over two decades Abstract: Services have become significantly more tradable in the first two decades of the 21st century. This paper documents that trade costs for financial services, communication services and business services fell by between 30% and 60% between 2000 and 2019. Information and communication technology and growth of air traffic have acted as key drivers of this development. While there is some variation across sectors, the analysis suggests that these two determinants jointly account for a quarter to half of the aggregate decline in trade costs for services during this 20-year period. Furthermore, services provisions in regional trade agreements (RTAs) can explain between 3% and 14% of the reduction in trade costs for communications services and financial and insurance services. These findings demonstrate the importance of whole-of-government strategies to promote services trade competitiveness, inter alia market access, regulatory reform, as well as investment in physical and digital infrastructure and adoption of new technologies. Classification-JEL: F13; F14; F15; O33; F68 Keywords: Digital trade, Digitalisation, Services trade, Trade costs, Trade liberalisation, Trade policy Creation-Date: 2022-10-20 Number: 264 Handle: RePEc:oec:traaab:264-EN Template-type: ReDIF-Paper 1.0 Author-Name: Christine Arriola Author-Name: Charles Cadestin Author-Name: Przemyslaw Kowalski Author-Name: Joaquim José Martins Guilhoto Author-Name: Sébastien Miroudot Author-Name: Frank van Tongeren Title: Challenges to international trade and the global economy: Recovery from COVID-19 and Russia’s war of aggression against Ukraine Abstract: Amidst the recovery from the impact of the COVID-19 pandemic, Russia’s war of aggression against Ukraine has resulted in new challenges to the global economy and to international trade. This report relies on detailed trade data to assess the impact of these two overlapping shocks on international trade and supply chains. In February 2022, global trade was approaching pre-Covid levels in absolute terms, but with a different product and geographical composition resulting in a continued sense of tension in the trading system. Russia’s war of aggression against Ukraine has added a new dimension of challenges as it has led to deliberate radical interruptions of trade linkages between Russia, Ukraine and many industrialised economies, with significant repercussions on prices of key commodities in the energy and agricultural sectors. Classification-JEL: C67; C68; F14; F17; F5; Q48 Keywords: AMNE, General Equilibrium Model, ICIO analysis, Oil Creation-Date: 2023-01-20 Number: 265 Handle: RePEc:oec:traaab:265-EN Template-type: ReDIF-Paper 1.0 Author-Name: Jens Mathias Arnold Author-Name: Christine Arriola Author-Name: Przemyslaw Kowalski Author-Name: Cyrille Schwellnus Author-Name: Colin Webb Title: Post-COVID-19 trade scenarios and priorities for Latin America Abstract: International trade and in particular global value chains have provided many economies with new opportunities to participate in international trade and access new technologies. The COVID-19 pandemic has brought to the fore specific vulnerabilities in some supply chains and ignited a discussion about future lessons to be learned from these events. This paper reviews patterns of integration into trade and global value chains among Latin American economies, traces some recent developments, including during the pandemic, and provides a look at future trade risks and opportunities for Latin American economies through model simulations. Classification-JEL: F1; F2; F6 Keywords: Global value chains, GVCs, International supply chains, International trade, Latin America and the Caribbean Creation-Date: 2023-01-17 Number: 266 Handle: RePEc:oec:traaab:266-EN Template-type: ReDIF-Paper 1.0 Author-Name: OECD Title: Measuring distortions in international markets: The rolling-stock value chain Abstract: Government support to producers of rolling stock is raising concerns about possible market distortions and unfair competition. This report aims to quantify both the scale of government support and to identify the various ways in which governments have been supporting local rolling-stock producers at the expense of foreign competitors. Over the period 2016-20, governments provided about USD 5 billion to the sector, much of it in the form of government grants and income tax concessions. While not quantified, discriminatory practices in government procurement and competition enforcement, forced technology transfers, as well as non-market export credits may have also distorted global competition in the rail-supply industry. Similar to earlier OECD studies of government support in the aluminium and semiconductor value chains, this report helps shed light on the magnitude and ways in which governments subsidise the producers of materials and equipment they view as strategic, with a view to informing efforts to revisit global trade rules. Classification-JEL: F13; F23; H25; H81; L52; L62; O25 Keywords: Competition, Procurement, Rail, Signalling, Subsidies, Trade Creation-Date: 2023-02-15 Number: 267 Handle: RePEc:oec:traaab:267-EN Template-type: ReDIF-Paper 1.0 Author-Name: OECD Title: Measuring distortions in international markets: Below-market energy inputs Abstract: Government support for industrial firms can come in many different forms and through a range of channels, varying in complexity. A particularly challenging form of support is energy inputs offered to industrial producers at below-market prices. To improve understanding about the scope and scale of such support, this report examines an illustrative sample of 33 companies and their subsidiaries operating in energy-intensive industries, namely aluminium smelting, steelmaking, chemicals (including fertilisers), and cement. Most of the energy subsidies identified appear to concern the provision of natural gas and electricity at below-market rates, resulting in an average subsidy of USD 0.4-1.3 per million British thermal units and USD 0.02-0.03 per kWh, respectively, over the period 2010-20. In some cases, estimates indicate that subsidies are a multiple of firms’ energy costs, suggesting a sizable impact on firms’ profits and operating margins. The results have important policy implications for efforts to better discipline industrial subsidies in the WTO and elsewhere, notably in relation to how to ensure policy transparency in a context where large energy providers tend to be majority owned by governments. Classification-JEL: F13; F23; H25; L52; L60; L94; O25; Q41 Keywords: Electricity, Fossil Fuels, Natural gas, State enterprises, Subsidies, Trade Creation-Date: 2023-02-15 Number: 268 Handle: RePEc:oec:traaab:268-EN Template-type: ReDIF-Paper 1.0 Author-Name: Przemyslaw Kowalski Author-Name: Clarisse Legendre Title: Raw materials critical for the green transition: Production, international trade and export restrictions Abstract: The challenge of achieving net zero CO2 emissions will require a significant scaling up of production and international trade of several raw materials which are critical for transforming the global economy from one dominated by fossil fuels to one led by renewable energy technologies. This report provides a first joint assessment of data on production, international trade, and export restrictions on such critical raw materials from the OECD’s Inventory of Export Restrictions on Industrial Raw Materials covering the period 2009-2020. It presents data on production and trade concentrations, sheds early light on the impact of export restrictions, and discusses possible directions of further work in this area. The evidence presented suggests that export restrictions may be playing a non-trivial role in international markets for critical raw materials, affecting availability and prices of these materials. OECD countries have been increasingly exposed to the use of export restrictions for critical raw materials. Classification-JEL: F13; F14; F18 Keywords: Export taxes, Global value chains, GVCs, International supply chains, Licensing requirements, OECD’s Inventory of Export Restrictions on Industrial Raw Materials Creation-Date: 2023-04-11 Number: 269 Handle: RePEc:oec:traaab:269-EN Template-type: ReDIF-Paper 1.0 Author-Name: OECD Title: Government support in industrial sectors: A synthesis report Abstract: Industrial subsidies take on a growing importance in trade discussions. Yet assessing the scope and scale of government interventions in manufacturing remains notoriously difficult due to a persistent lack of reliable and comparable data. With many governments failing to provide sufficient information, attention has increasingly turned to firm-level data as a possible alternative for measuring industrial subsidies. Using this approach, recent OECD work has identified and quantified government support across key industrial sectors and policy instruments. The results show that: (i) the type of support received by firms can differ greatly across sectors; (ii) state enterprises obtain relatively more support and can serve as providers of support to other firms; and (iii) the complexity of supply chains implies that it can be hard to identify the ultimate beneficiaries of government support. These findings have important policy implications in the context of discussions at the WTO and elsewhere as they provide indications as to the possible nature of gaps in trade rules. Classification-JEL: F13; F23; H25; L52; L60; O25 Keywords: Competition, Distortions, Subsidies, Trade, WTO Creation-Date: 2023-04-07 Number: 270 Handle: RePEc:oec:traaab:270-EN Template-type: ReDIF-Paper 1.0 Author-Name: Sebastian Benz Author-Name: Alexander Jaax Author-Name: Matteo Fiorini Author-Name: Elisabeth van Lieshout Title: Right here, right now? New evidence on the economic effects of services trade reform Abstract: This paper provides evidence on the “when, how and where” of the effects of service trade policy reforms, discussing short-term impacts on services trade as well as on the performance of downstream manufacturing industries. A combination of novel methodological approaches is used to be able to track impacts over time and along the supply chain. The OECD Services Trade Restrictiveness Index serves as the measure for trade policy reform. Results show that reducing policy barriers to services trade can increase services imports already in the short run, and that benefits continue to grow over time. The impact of services trade reforms may still vary significantly depending on the nature of the policy change, the economic context, and the targeted mode of services supply. Finally, services trade reforms can have sizeable spillover effects on the productivity of manufacturing sectors that use services as intermediate inputs. Classification-JEL: F13; F14; F61 Keywords: Manufacturing productivity, Services imports, Services trade policy, Short-run gravity, Synthetic control method Creation-Date: 2023-04-12 Number: 271 Handle: RePEc:oec:traaab:271-EN Template-type: ReDIF-Paper 1.0 Author-Name: Alexander Jaax Author-Name: Sébastien Miroudot Author-Name: Elisabeth van Lieshout Title: Deglobalisation? The reorganisation of global value chains in a changing world Abstract: New evidence is presented on the evolution of global value chains (GVCs) since the Great Financial Crisis. Drawing on novel OECD inter-country input-output tables in previous year’s prices, it shows there was no general trend towards deglobalisation in the period up to 2020. The fragmentation of production remained at a historically high level in 2019 and close to the level of 2011, confirming a stabilisation of the depth of global economic integration. Different trends are observed across economies: in the European Union, the import intensity of production grew before the COVID-19 pandemic, while China increasingly relied on domestic inputs. To explain these trends, bilateral trade costs are estimated and their cumulative impact along value chains is then calculated; structural changes and higher uncertainty seem to be the main drivers of increasing cumulative trade costs for some GVCs. To preserve the benefits of GVCs, policy makers should seek to increase the ease of trade and reduce uncertainty. Classification-JEL: F14; F15; C67 Keywords: Fragmentation of production, Global Value Chains, Trade costs Creation-Date: 2023-04-25 Number: 272 Handle: RePEc:oec:traaab:272-EN Template-type: ReDIF-Paper 1.0 Author-Name: Javier López González Author-Name: Silvia Sorescu Author-Name: Pinar Kaynak Title: Of bytes and trade: Quantifying the impact of digitalisation on trade Abstract: This paper provides an overview of the evolving nature of digital trade and digital trade policies. It shows that digital trade has been growing faster than “non-digital” trade. By 2018, 24% of global trade (USD 5.1 trillion) could be considered digital trade. In parallel, countries have embraced digital trade provisions in trade agreements and new digital economy agreements have emerged. The empirical analysis shows that growing digital connectivity delivers a double dividend, increasing both domestic and international trade. It also shows that digital trade chapters have the potential to double the effect of trade agreements, while reductions in domestic barriers affecting digital trade have a strong export-enhancing effect, particularly in digitally-deliverable services. Overall, the results suggest that digital connectivity and digital trade policies play a significant and growing role in reducing trade costs and increasing trade across countries at all levels of development. The paper calls for wider participation and ambition in discussions at the WTO. Classification-JEL: F13; F14; F15; F68; O33; C54 Keywords: Data Flows, Digital connectivity, Digital trade, E-commerce, Trade agreements, Trade costs Creation-Date: 2023-05-03 Number: 273 Handle: RePEc:oec:traaab:273-EN Template-type: ReDIF-Paper 1.0 Author-Name: Kazuyo Aoki Author-Name: Cemre Balaban Author-Name: Matteo Fiorini Author-Name: Sébastien Miroudot Author-Name: Irene Oliván García Title: Interactions between goods and services in international trade: Implications for customs valuation and rules of origin Abstract: This paper examines whether the customs valuation systems and rules of origin are sufficiently attuned to the changing landscape of commercial realities characterised by new and diverse configurations of goods-services trade. It proposes a framework to categorise relevant configurations of goods-services trade and applies it to identify potential challenges arising from the current procedures for customs valuation and origin determination. While the existing rules provide an adequate structure for doing business and achieving legitimate trade policy objectives, challenges can arise across different configurations of goods-services trade. Options for policy solutions include developing guidelines and implementation standards to fine-tune customs valuation and rules of origin that apply to specific goods-services trade configurations. The promotion of multilateral openness, harmonisation of rules and practices, and transparency of jurisprudence would contribute to minimising the impact and frequency of potential challenges. Classification-JEL: F13; F68; K33; K34; L80 Keywords: Customs valuation, Goods-services interactions, Servicification, Trade policy Creation-Date: 2023-07-06 Number: 274 Handle: RePEc:oec:traaab:274-EN Template-type: ReDIF-Paper 1.0 Author-Name: Andrea Andrenelli Author-Name: Javier Lopez Gonzalez Title: Understanding the potential scope, definition and impact of the WTO e-commerce Moratorium Abstract: New empirical evidence and analysis of provisions in regional trade agreements help bring clarity to debates on the potential scope, definition and impact of the WTO e-commerce Moratorium. OECD analysis demonstrates that the potential fiscal revenue implications of the Moratorium are small, amounting to, on average, 0.68% of total customs revenue or 0.1% of total government revenue. Well-designed value added or goods and services taxes (VAT/GST) can help offset potential foregone revenue in most countries. Failure to renew the Moratorium would result in greater policy uncertainty and less trade, and tariffs on electronic transmissions would reduce domestic competitiveness. Adverse effects would be most pronounced for low-income countries and smaller firms. Overall, evidence demonstrates that there is a strong case for the Moratorium to be renewed. Classification-JEL: F13; O33 Keywords: customs duties, customs revenue, digital economy, Digital trade, digitisable goods, e-commerce, electronic transmissions, Moratorium, trade policy Creation-Date: 2023-10-03 Number: 275 Handle: RePEc:oec:traaab:275-EN Template-type: ReDIF-Paper 1.0 Author-Name: Grégoire Garsous Author-Name: Donal Smith Author-Name: Dylan Bourny Title: The climate implications of government support in aluminium smelting and steelmaking: An Empirical Analysis Abstract: This report combines multiple novel datasets to provide evidence that government support has contributed to increased carbon emissions from aluminium and steelmaking activities through an increase in production output and by shifting production to more emission intensive plants. While improvements in technology have driven overall emissions downward, there is no evidence that government support in this sector has been targeted at, or has contributed to, developing techniques that improve environmental performance. Removing such support could therefore contribute to a cost-effective decarbonisation strategy. For example, removing government support to aluminium smelting and steel making worldwide would reduce carbon emissions by 75% more than the reduction observed in 2020 resulting from COVID-related restrictions. In addition, the removal of such support would free up scarce public resources for alternative uses. Classification-JEL: H24; L61; Q5; H32 Keywords: Emissions-intensive industries, Greenhouse gas emissions Creation-Date: 2023-10-27 Number: 276 Handle: RePEc:oec:traaab:276-EN Template-type: ReDIF-Paper 1.0 Author-Name: OECD Title: International trade in the wake of multiple shocks: OECD global trade monitor Abstract: In the midst of the recovery from the COVID-19 pandemic, trade and economic growth face new challenges as the Russian Federation’s large-scale war against Ukraine has increased uncertainty and tensions along supply chains and the People’s Republic of China’s trade performance has fallen short of expectations. Merchandise trade is recovering slowly and has been dampened by high and volatile commodity and energy prices, coupled with monetary tightening. Some durable goods, such as motor vehicles, have not regained their pre-pandemic share in global trade. Services trade has yet to recover losses incurred during the pandemic, with travel services in particular recovering slowly. Russia’s trade is adjusting as the war continues, with repercussions for commodities markets. This report uses detailed trade data to monitor recent developments in trade in goods and services and in commodity markets. Classification-JEL: F13; F14; F51; Q02 Keywords: China, Economic recovery, Russia, Transport Creation-Date: 2023-11-06 Number: 277 Handle: RePEc:oec:traaab:277-EN Template-type: ReDIF-Paper 1.0 Author-Name: Chiara Del Giovane Author-Name: Janos Ferencz Author-Name: Javier López González Title: The Nature, Evolution and Potential Implications of Data Localisation Measures Abstract: This paper examines the nature and evolution of data localisation measures and their impact on business activity. It highlights that data localisation measures are growing and increasingly restrictive. By early 2023, 100 such measures were in place across 40 countries, with more than two-thirds combining local storage requirements with flow prohibition, the most restrictive form of data localisation. Insights gained from businesses operating in the e-payments, cloud computing, and air travel sectors suggest that data localisation can have unintended consequences. It not only increases operating costs, with implications for downstream users, but can also lead to increased vulnerabilities to fraud and cybersecurity risks, and reduced resilience to unexpected shocks. While international regulatory efforts have largely taken place through regional trade agreements (RTAs), this paper calls for continued monitoring of the regulatory environment with a view to informing efforts to agree on global rules that take into account legitimate public policy objectives while avoiding excessive fragmentation, especially through discussion at the WTO under the Joint Initiative on e-commerce. Classification-JEL: F13; F14 Keywords: data flows, Data storage, digital economy, digital trade, e-commerce, trade policy Creation-Date: 2023-11-10 Number: 278 Handle: RePEc:oec:traaab:278-EN Template-type: ReDIF-Paper 1.0 Author-Name: Evdokia Moïsé Author-Name: Enxhi Tresa Title: Trade policies to promote the circular economy: A case study of the plastics value chain Abstract: Plastic products present several environmental, health, social and economic challenges that span from the extraction of raw materials to primary and final plastics production, to their distribution and use, and to the collection and sorting of plastic waste. International trade, which has facilitated the development of plastics supply chains, also comes with a range of challenges, such as a surge in demand for plastics ― notably in packaging ― difficulties to monitor plastics embedded in other products, and an increased risk of plastic waste leaking in countries that have less rigorous environmental regulations. Yet trade can also serve as a vehicle to access foreign pollution control technologies or to foster economies of scale for circular economy practices. Indeed, the implementation of circular economy solutions through trade policies is crucial in addressing plastic pollution. Such policies could include reduced tariffs on environmentally-friendly alternatives to plastic products; trade facilitation measures for reverse supply chains; or technical regulations, standards, labelling schemes, and conformity assessment procedures that promote product designs which will minimise pollution throughout the entire plastic lifecycle. Classification-JEL: F18; F53; F64; O34; Q38; Q53; Q56 Keywords: Green transition, Trade policies, Value chains Creation-Date: 2023-12-11 Number: 279 Handle: RePEc:oec:traaab:279-EN Template-type: ReDIF-Paper 1.0 Author-Name: Christine Arriola Author-Name: Mattia Cai Author-Name: Przemyslaw Kowalski Author-Name: Sébastien Miroudot Author-Name: Frank van Tongeren Title: Towards demystifying trade dependencies: At what point do trade linkages become a concern? Abstract: Supply chain disruptions, related to natural events or geopolitical tensions, have in recent years prompted policy makers to identify potential vulnerabilities related to critical trade dependencies. These are commercial links that could potentially impose significant economic or societal harm, be a source of coercion, a risk to national security, or disrupt strategic activities. Using three complementary methodologies — detailed trade data analysis, input-output data techniques, and computable general equilibrium (CGE) modelling — this paper examines the nature and evolution of trade dependencies between the OECD countries and major non-OECD economies (MNOE). It shows that global production has become increasingly concentrated at the product level, with China representing 15% of import dependencies in strategic products for OECD countries in 2020-21 compared to 4% in 1997-99. The methodologies used in this paper unanimously demonstrate a high degree of trade interdependency between OECD and MNOE countries. The current debate on “de-risking” international trade, therefore, needs to carefully consider the possible costs and benefits of different policy choices. Classification-JEL: C67; F14; F15; F6; C68 Keywords: Computable equilibrium analysis, Global supply chains, Global value chains, Input-output analysis, International trade, Market concentration, Supply concentration Creation-Date: 2024-04-17 Number: 280 Handle: RePEc:oec:traaab:280-EN Template-type: ReDIF-Paper 1.0 Author-Name: OECD Title: Trade impacts of economic coercion Abstract: In recent years, concerns have increased about the use of, or threatened use of, acts of economic coercion, often in the form of trade and investment-related measures. While economic coercion has been the subject of growing attention in fora such as the G7, limited information has been developed on the impacts on affected economies and other trading partners. This work provides an initial, objective economic analysis of economic coercion with a view to helping generate greater awareness and a basis for further discussions on this issue. Keywords: Economic analysis, Economy, Investment Creation-Date: 2024-05-03 Number: 281 Handle: RePEc:oec:traaab:281-EN Template-type: ReDIF-Paper 1.0 Author-Name: OECD Title: Quantifying the role of state enterprises in industrial subsidies Abstract: The growing participation of state enterprises in industrial supply chains raises concerns over the implications for global markets of the subsidies that some of these companies receive. New firm-level evidence from the OECD MAGIC database shows that state enterprises are relatively larger recipients of industrial subsidies than their private competitors. They can also benefit from indirect government support, such as favourable treatment under competition rules and government procurement. Despite these advantages, evidence indicates that state enterprises in manufacturing tend to underperform financially. The report provides unprecedented evidence about the role certain state enterprises play as providers of subsidies, such as when providing financing and inputs to other firms at below-market prices. The analysis concludes by describing the implications of these findings for trade rules and the governance of state-owned enterprises. Classification-JEL: F13; F23; H25; H81; O25 Keywords: Bank loans, Competition, Level playing field, Market distorsions, State-owned enterprises Creation-Date: 2024-06-24 Number: 282 Handle: RePEc:oec:traaab:282-EN Template-type: ReDIF-Paper 1.0 Author-Name: Christine Arriola Author-Name: Przemyslaw Kowalski Author-Name: Frank van Tongeren Title: Shocks in a highly interlinked global economy Abstract: This report analyses the broad risks associated with sectoral output disruptions both domestically and abroad, examining several exposure metrics. The results indicate that domestic shocks generally have larger sectoral impacts than foreign shocks. In most cases, foreign production disruptions cause minimal domestic output responses, suggesting that domestic and international linkages, along with economic adjustment mechanisms, tend to dampen rather than amplify foreign shocks. However, a cumulation of adverse shocks can significantly affect specific sectors, with manufacturing sectors are on average much more exposed to foreign output shocks than services and agrifood given their greater internationalisation of output and inputs. Economies with strong backward and forward global value chain links to major foreign economies also tend to be more exposed to foreign shocks. Classification-JEL: C68; F14 Keywords: CGE, Exposure risk, Global Value Chains, GVCs, METRO Model, Shock transmission, Supply Chains Creation-Date: 2024-06-26 Number: 283 Handle: RePEc:oec:traaab:283-EN Template-type: ReDIF-Paper 1.0 Author-Name: Sebastian Benz Author-Name: Alexander Jaax Author-Name: Elisabeth van Lieshout Title: Digital trade and labour markets in the United Kingdom Abstract: The contribution of services in the United Kingdom (UK) to exports, value added, and employment is one of the highest amongst OECD countries. UK employment also depends strongly on exports of digital services: in 2019 the jobs of around 3.2 million domestic workers in digital services sectors were embodied in UK exports. Median wages in these services are considerable higher than wages in other sectors of the UK economy. Econometric analysis shows that strong growth of employment in digital services generates multiplier effects benefitting local economies in the United Kingdom, with each additional digital services job creating around 0.3 jobs in the local non-tradable sector. Continued support for plurilateral and multilateral initiatives to dismantle barriers to services trade, including via the WTO Joint Initiative on Services Domestic Regulation, can help to enable more UK firms to take advantage of the potential for further growth in digital services trade. Improving the availability of training programmes and aligning curricula with the rapidly evolving needs of exporters of digital services is crucial to enable for workers to shift into sectors with growing labour demand. Classification-JEL: E4; F13; F15; F16; J21; L86; R11 Keywords: E-commerce, Multipliers, Services Trade, Wages Creation-Date: 2024-09-05 Number: 284 Handle: RePEc:oec:traaab:284-EN Template-type: ReDIF-Paper 1.0 Author-Name: Javier López González Author-Name: Silvia Sorescu Author-Name: Chiara Del Giovane Title: Making the most out of digital trade in the United Kingdom Abstract: The digital transformation is having a profound impact on the international trade of the United Kingdom (UK). Digital trade exports have grown three times faster than other exports and now represent more than half of total exports, twice the OECD and EU averages. This strong performance is, in part, driven by a favourable domestic regulatory environment and an ambitious digital trade agenda in the United Kingdom’s trade and digital economy agreements. Econometric analysis shows that digital trade chapters in trade agreements can double the impact of the agreements, with issues around data protection, consumer protection, source code and cybersecurity potentially delivering the largest gains. To remain at the forefront of digital trade the United Kingdom should continue domestic reforms, including digitisation of trade documents and processes. To ensure that exporters maintain access to other markets, the United Kingdom should continue to engage in discussions on digital trade provisions in trade agreements and support ongoing multilateral and plurilateral discussions, including in the context of the WTO Work Programme on E-commerce and the Agreement on E-commerce. Classification-JEL: C54; F13; F14; F15; F68; O3 Keywords: Data flows, Digital connectivity, E-commerce, Services trade, Trade agreements Creation-Date: 2024-09-05 Number: 285 Handle: RePEc:oec:traaab:285-EN Template-type: ReDIF-Paper 1.0 Author-Name: Bublu Thakur-Weigold Author-Name: Sébastien Miroudot Title: Promoting resilience and preparedness in supply chains Abstract: This working paper contributes to the debate on effective solutions for assuring the resilience of critical global supply chains by undertaking a review of both the supply chain management literature and recent actions by firms and governments. The report highlights that when pursuing the resilience of global supply chains, policy should focus on the performance of the system as a whole and not target a single objective, such as security of supply. In addition, resilience strategies should be segmented to address two distinct categories of risks: business-as-usual disruptions that can be mitigated by standard risk management practices of firms and unforeseen extreme disruptions where the role of governments is crucial as facilitators and providers of emergency resources. Effective interventions include reducing logistics frictions, regulatory co-operation and flexibility, and fostering an industrial commons for emergency preparedness. Regular preparedness conferences would enable public-private stakeholders to co-ordinate responses to future crises. Classification-JEL: D81; F23; F63; H12; L23 Keywords: Global supply chains, Risk management Creation-Date: 2024-11-28 Number: 286 Handle: RePEc:oec:traaab:286-EN Template-type: ReDIF-Paper 1.0 Author-Name: Piotr Stryszowski Author-Name: Morgane Gaudiau Title: Trade in counterfeit products and the UK economy Abstract: Intellectual property (IP) is a cornerstone of modern economies, driving innovation, economic growth, and competitive markets. IP protection ensures that owners receive the proper incentive to maintain innovation. However, IP infringement through counterfeiting and piracy poses significant threats, undermining profits, employment, government revenue, and the health and trust of consumers. This working paper updates previous studies from 2017 and 2019. It evaluates the extent of imports of counterfeits into the United Kingdom and its impact on consumers, industries, and the UK government. It assesses global trade violations of UK IP rights and their impact on the UK economy. The analysis reveals that trade in goods infringing UK IP rights, estimated at GBP 12.1 billion, resulted in 1.4% of forgone UK manufacturing sales, 20 000 job losses, and 0.23% of lost public revenue in the United Kingdom. The findings aim to inform public and private sector decision makers and to enable effective, evidence-based strategies that will address IP infringement. Classification-JEL: O34; F19 Keywords: Counterfeits, Illici trade, Intellectual property Creation-Date: 2024-12-16 Number: 287 Handle: RePEc:oec:traaab:287-EN