Author: globestrategy

From trade diplomacy to economic warfare: the international economic policy of the Trump Administration

This paper is an analysis of the discursive practices of the international economic policy of the Administration of President Donald Trump, writ large. Within this conceptual context it offers an empirical case study of the US-China relationship across the spectrum, from tariff conflict through to the growing struggle for control of the 21st century high-technology industries. The argument is that the Trump Administration utilises the discursive practices of what some scholars call ‘securitisation’ (Buzan et al., 1998) through to what might more appropriately be described as a discourse of ‘economic warfare’>>ClickHere>>>

Multinational Corporations and their Influence Through Lobbying on Foreign Polic

Multinational corporations (MNCs) play significant roles in shaping the global economy. Despite the prevalence of the economic activities of MNCs across the globe, few studies exist that examine their political influence on foreign policy-making. This chapter develops a theoretical framework for understanding how MNCs’ unique positions in the market affect their political activities. Specifically, we argue that MNCs’ economic dominance reduces the relative cost of engaging in political activities, while their large-scale transnational activities increase the marginal benefits of influencing policy-making individually. To examine this empirically, we first introduce a novel dataset of lobbying in the US encompassing lobbying activities of all public firms from 1999 to 2019. We then employ the difference-in-differences identification strategy to estimate the effect of MNC status on lobbying. We find strong evidence for an increase in lobbying expenditures when firms become multinational. Furthermore, we find that MNCs tend to lobby on a more diverse set of foreign policy issues. Our findings suggest that MNCs are important political actors whose distinct interests and influence should be incorporated into our understanding of foreign policy-making>>ClickHere>>>

The international trade position of Argentina. Towards a process of export diversification

This study analyses how far the strong expansion of Argentine exports since 2003 has been due simply to favourable external conditions and how industrial manufactures have behaved. It finds that the country’s pattern of international specialization has not greatly altered at the major category level, but that both primary products and manufactures of agricultural origin, which account for much of the trade surplus, have undergone significant changes in composition. In addition, regional trade has consolidated and traditional partners such as the European Union and the United States have been displaced to some extent by China. Industrial manufactures have continued to suffer from a strong comparative disadvantage, but certain high-technology industrial sectors, such as agricultural machinery and pumps and compressors, have started to become competitive, while seamless oil and gas tubing is already highly competitive>>ClickHere>>>

Global Risk Sharing through Trade in Goods and Assets: Theory and Evidence

Exporting not only provides firms with profit opportunities, but can also provide for risk diversification if demand is imperfectly correlated across countries. This paper shows that the correlation pattern of demand shocks across countries constitutes a hitherto unexplored source of comparative advantage that shapes trade flows and persists even if financial markets are complete. With exporters making market- specific choices under uncertainty, countries whose shocks are riskier, in the sense that they contribute more to aggregate volatility, are less attractive destinations for both investment and exports. A gravity-type regression lends support to the hypothesis that, conditional on trade costs and market size, exporters sell smaller quantities in riskier destinations>>ClickHere>>>

rom Theory to Policy with Gravitas: A Solution to the Mystery of the Excess Trade Balances

Bilateral trade balances often play an important role in the international trade policy debate. Academic economists understand that they are misleading indicators of competitiveness and of the gains from trade. However, they also recognize their political relevance, calling for accurate statistical measurement and for more scholarly work. Disturbingly, Davis and Weinstein (2002) argue that the canonical gravity model of trade fails when confronted with bilateral trade balances data, dubbing this “The Mystery of the Excess Trade Balances”. Capitalizing on the latest developments in the theoretical and empirical gravity literature, we demonstrate that the workhorse international trade model actually performs well in explaining bilateral trade balances. Moreover, in our data, only 11 to 13% of the variance in bilateral balances is due to asymmetric trade costs, belying beliefs that bilateral imbalances are driven by ‘unfair’ manipulation of terms-of-trade. We also perform several general equilibrium experiments within the same structural gravity framework to show that free trade agreements tend to exacerbate bilateral imbalances and that macroeconomic rebalancing leads to adjustment with all trade partners>>ClickHere>>>

Heckscher-Ohlin Trade, Leontief Trade, and Factor Conversion Trade When Countries Have Different Technologies

This is another big challenge for international economics after Leontief paradox. This paper demonstrates that there are three trade types in international trade: the Heckscher-Ohlin trade, the Leontief trade, and the conversion trade, by using the 2 × 2 × 2 Trefler model. The conversion trade occurs when the model structure is with FIRs. The conversion trade is one that one country exports the commodity that uses its scarce factor intensively; another country exports the commodity that uses its abundant factor intensively. The conversion trade actually is the trade with factor content reversal2, i.e. that if one country exports the services of capital and imports the services of labor, another country does the same. This study demonstrates that both the Leontief trade and the conversion trade are rooted in the Heckscher-Ohlin theories. The three trade types are under the generalized trade pattern that each country exports the commodity that uses its effective (virtual) 3 abundant factor intensively and imports the commodity that uses its effective (virtual) scarce factor intensively <<ClickHere>>>

Shaping a New International Trade Order

Following the establishment of the World Trade Organisation in January 1995, American and European trade relationships were for a time characterised by ‘competitive interdependence’, as the US and EU simultaneously aimed to advance their commercial interests in third countries. Under conditions of competitive interdependence, trade actors resort to certain policy choices to gain advantage for their producers while restricting others’ ability to enter a market (Sbragia, 2010). In the last decade, however, European and American trade policymakers have faced the challenges of a more competitive world and the emergence of newer trade powers such as China. Both actors have veered away from multilateral deals as their preferred trade policy choices. In this paper, we use the Sbragia (2010) framework to analyse the trade policy shifts made by the EU and the US in the last decade. We argue that what had been a competitive interdependence relationship has recently changed to a trilateral structure in which both the EU and the US have focused their attention on countering Chinese competition. Moreover, China’s emergence has also pushed the US to reinvigorate the role of unilateralism and the EU to bolster bilateralism as they both seek to secure their commercial shares worldwide.>>>ClickHere>>>

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