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The restrictiveness of the multi-fibre arrangement on Eastern European trade
Get PDFHistorically, Eastern Europe has not been favorably treated in terms of quota growth in the European Community and U.S. markets - often quite the contrary. But the EC and U.S. treatment of these countries has already changed since their reform and can be expected to become even more favorable. Eastern Europe's exports of textiles and clothing have tended to be more capital-intensive and less specialized than those of other major suppliers, including Asia's newly industrialized economies. Erzan and Holmes argue that Eastern Europe's expansion of relatively labor-intensive products has probably been inhibited byquotas and by the weak adjustment mechanisms inherent in a centrally planned economic system. If so, given market reforms in Eastern Europe, exports of labor-intensive textiles and clothing should expand more than proportionately and the degree of specialization should increase if the Multi-Fibre Arrangement is abolished or its grip on Eastern Europe's exports is relaxed in the EC. Putting aside questions of the composition of exports, textile and clothing exports are to expand considerably because they make up a large part of labor-intensive manufacturers, where Eastern Europe's comparative advantage lies in the near future.Markets and Market Access,Economic Theory&Research,Environmental Economics&Policies,Economic Adjustment and Lending,Access to Markets
Tariff valuation bases and trade among developing countries : do developing countries discriminate against their own trade?
Get PDFIn establishing the value of imports for tariff assessment, most countries apply duties either to the cost-insurance-freight (c.i.f.) or the free-on-board (f.o.b.) value of the traded good. One effect of using the far more common c.i.f. base is to place a disproportinate burden on countries that have higher freight and insurance costs. Distant countries often not only pay higher transport costs, but are further penalized by disproportionate tariff costs that worsen their competitive disadvantage. The f.o.b. valuation procedure does not penalize exporters for their location, but applies a nominal tariff rate directly to the export costs of each country. Using cost information for six Latin American countries, this paper examines the influence of the two procedures on the level and incidence of tariff protection. It concludes that transport and insurance costs generally put developing countries at a disadvantage (compared to developed countries) on interregional trade and that the relatively high Latin American tariffs on c.i.f. prices further worsen their competitive position. To correct the bias against trade between developing countries, it is recommended that f.o.b. valuation procedures used by developed countries be adopted. This change would also reduce tariff barriers considerably.Economic Theory&Research,Common Carriers Industry,Transport and Trade Logistics,TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT,Environmental Economics&Policies
An evaluation of the main elements in the leading proposals to phase out the Multi-Fibre Arrangement
Get PDFTwo approaches took the lead in the negotiations to dismantle the Multi-Fibre Arrangement (MFA): (a) a phaseout with the framework of the MFA, proposed by developing countries, the European Community, Japan, and the Nordic countries; and (b) a new transitional structure relying on global quotas with country allotments for current quota holders, suggested by the United States and Canada. Under both scenarios, accelerated quota growth is the main device for phaseout. Country quotas, in the first approach, and global quotas in the second, will have to expand in such a way to avoid a"shock"when they are abolished at the end of the phaseout. The second most important element in the phaseout proposals, besides expanding quotas and abolishing them at the end of the phaseout period, is scrapping them along the way according to some predetermined criteria and scheme. In the proposals, this is defined in terms of country characteristics, specific products, product characteristics, or some criterion pertaining to the historical record, such a quota use. The historical record reveals that growth in highly utilized quotas was significantly lower compared with unfilled quotas. There is one important virtue in a phaseout based on the current structure of the MFA. Not only are the mechanisms in place familiar to the negotiating parties, but so are the magnitudes of most of the parameters: current quota levels, quota growth rates over the last few years, and their use ratios.Achieving Shared Growth,Economic Conditions and Volatility,Economic Theory&Research,Governance Indicators,Environmental Economics&Policies
How changes in the former CMEA area may affect international trade in manufactures
Get PDFThe authors give a long-term perspective on how changes in the former CMEA areas will affect international trade in manufactures. They show that expanding Eastern European exports to the West should be viewed as a step toward normalizing the Eastern European countries'trade patterns. First, proportionally less of the Eastern European economies'trade will be with each other, especially with the former Soviet Union. Second, Western Europe will be their major trading partner but their trade with (especially imports from) Japan and North America may increase dramatically (from a small base). Their exports to and imports from developing countries may also change dramatically. The volume of Eastern European trade is in line with the low income of these economies. In the long run manufactures trade will increase four- to sixfold, once Eastern European income levels catch up with industrial country levels. Until incomes in Eastern European and former Soviet economies increase significantly, labor-intensive goods are likely to dominate their exports to market economies, and sophisticated goods their imports. The authors contend that, since the end of the Cold War, the West has successfully improved the Eastern European countries'access to Western trade, and that the Eastern European countries should now enjoy equal or favorable treatment. Czechoslovakia, Hungary, and Poland, in particular, may become the most favored outsiders in the European Economic Space, the largest single market in the world. One short-term effect of the Eastern European countries'improved outlook may be that developing countries that rely on manufactures for export revenues may have tougher times in major Western markets. But the emancipation of Eastern European and former Soviet economies - and the pent-up demand for consumer goods likely from deprived populations - should provide important opportunities for the dynamic developing countries. The former Soviet Union was not a large market for developing countries - except for India and Yugoslavia and to a lesser extent Algeria and Egypt. Countries such as India that did supply the former Soviet Union with manufactures may soon have to seek alternative markets.Economic Theory&Research,Environmental Economics&Policies,TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT,Trade Policy,Transport and Trade Logistics
The role of officially supported export credits in sub-Saharan Africa's external financing
Get PDFThis paper addresses the question of how important officially supported export credits (OSECs) were, both in quantity and quality, in Sub-Saharan Africa's (SSA) external financing during the last two decades, and examines the prospects for the 1990s. The paper begins by briefly explaining the financial structure of foreign trade, the role of export credits in this context, and the basic functions of export credit agencies (ECAs). It goes on to present the trends in OSECs during the 1970s and the 1980s as a source of external finance for developing countries in general, and for SSA in particular. The authors deal with some of the distortions caused by export credit subsidies, including the problems of"moral hazard"and"adverse selection". The paper looks at the current need and prospects for external finance in the 1990s and addresses how to enhance the efficiency of OSECs, emphasizing the cooperation between ECAs and multilateral development agencies, an issue which is particularly important for poorer developing countries such as those found in SSA.Economic Theory&Research,Banks&Banking Reform,Environmental Economics&Policies,Financial Intermediation,International Terrorism&Counterterrorism
How minilateral trading agreements may affect the post-Uruguay Round world
Get PDFOne issue dominating recent discussions on free trade areas and other minilateral associations (preferential trade arrangements) is whether such arrangements will detract from further multilateral trade liberalization on a most-favored-nation basis. But for much of this debate empirical information has been lacking on: the global importance of minilateral arrangements that have been, or are being, concluded; the relative size of other major bilateral trade flows not affected by minilateral arrangements, and their suitability for such arrangements; the global importance of Europe in this process; the possibility that other sorts of arrangements - such as managed trade initiatives (arrangements specifying quantitative trade targets) - are a more likely threat as far as trade flows not presently covered by free trade area arrangements are concerned. The authors argue that this lack of relevant data has led to several misconceptions about the movement toward minilateralism. In particular, their statistics suggest that fears about how the further spread of free trade areas will affect world trade volumes may be exaggerated - while the dangers of these blocks becoming hostile to each other may have been underestimated. Using data recently compiled by the United Nations, the authors show that the global importance of minilateral arrangements is now far greater than is often recognized. Almost half of world trade is affected by these arrangements. But major trade flows not covered by minilateral arrangements are dominated by important country-specific problems. In particular, problems relating to high-technology trade between Asian newly industrialized countries (NICs), Japan, and the United States, as well as between Asian NICs, Japan, and Western Europe, are sufficiently important to hinder the formation of additional free trade areas. This suggests that fears about the spread of such arrangements may have been exaggerated. The authors'tabulations and analysis of the discriminatory trade barriers applied to these flows indicate that managed trade is a far more likely outcome.Environmental Economics&Policies,TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT,Trade Policy,Economic Theory&Research,Trade and Regional Integration
Turkey's comparative advantage, production and trade patterns in manufactures : an application of the factor proportions hypothesis with some qualifications
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Would general trade liberalization in developing countries expand South-South trade?
Get PDFFor most developing countries, the proportion of exports going to other developing countries has steadily increased since the early 1970's. Until that time, most of the developing countries with an outward-looking trade strategy did proportionately less trade with other developing countries, particularly manufacturers. Since the early 1970's, however, an outward orientation has often gone hand in hand with more South-South trade. The proportionate increase in South-South trade occurred despite relatively higher protection in most developing countries against the products for which they, as a group, have a comparative advantage. As the annual growth rate slowed, it greatly affected the direction of developing countries trade. But the resumption of growth in industrial countries did not alter the increasing trend in South-South trade. The structure of tariff and nontariff protection in most developing countries discriminated against products that other developing countries could supply competitively. Hence, across the board, nondiscriminatory liberalization would generally favor South-South trade - particularly if liberalization focused on the most heavily protected sectors.TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT,Economic Theory&Research,Trade Policy,Earth Sciences&GIS,Poverty Assessment
The External Account, Growth and Employment in Egypt and Turkey: Historical Review and Prospects
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