China-Japan economic complementarity will deepen

2018 ◽  
Keyword(s):  
Free Trade ◽  
Product Differentiation ◽  
Bilateral Trade ◽  
Value Added ◽  
Division Of Labour ◽  
Global Market ◽  
Economic Interdependence ◽  
Donald Trump ◽  
Content Type ◽  
Speaking Out

Significance Competition between Japanese and Chinese companies in the global market is increasing, but their bilateral trade reveals that the division of labour and economic interdependence between the two countries is deepening. Tokyo and Beijing have also become the two largest economies speaking out for global free trade -- albeit on their own terms -- amid Washington's turn to protectionism under President Donald Trump. Impacts Intra-industry trade will deepen. The share of high value-added items in trade in both directions will increase. Quality and product differentiation will become more important to exporters’ competitiveness on both sides.

Services in global value chains – the cases of Taiwan and Korea

2018 ◽  
Vol 22 (4) ◽  
pp. 364-404
Author(s):  
Min Hui Chen
Keyword(s):  
South Korea ◽  
Bilateral Trade ◽  
Service Industry ◽  
Value Added ◽  
Global Market ◽  
Value Chains ◽  
Intermediate Inputs ◽  
Content Type ◽  
South Korean ◽  
Service Sectors

Purpose The purpose of this paper is to explore the value added of exports of services, which increasingly involve intermediate inputs to manufacturing and are indirectly embodied in intermediate and finished good exports to the global market earned by Taiwan and South Korea. Design/methodology/approach This paper uses the World Input-Output Database to examine and compare the competitiveness of service industry between Taiwan and South Korea in China from 1995 to 2011. The author measures the value added of export in two ways: value added in trade (VAiT) and trade in value added (TiVA). Findings The proportion of domestic (intermediate and final demand) VAiT was created by Taiwanese and South Korean exports to China. The services amount share of value added embodied in Taiwanese electrical and optical equipment (ELE) exports to China increased gradually (38.0–45.7 percent) from 1996 to 2011, that was more than that of South Korea (26.7–23.3 percent). Taiwanese financial and business (F&B) service contributed to Taiwanese ELE production exported to China. In service sectors, the proportion of VAiT of Taiwanese F&B service embodied in ELE exports to China increased annually (9.8–11.5 percent), that was similar to that of South Korea (12.2–11.3 percent). Thus, F&B sector played an increasingly important role in service sectors. Taiwanese F&B promotes the ELE export to China with higher efficiency than South Korea does. Originality/value Over the past two decades, the development of information technology and the growth of international specialization and fragmentation of production processes have brought about a global value chains (GVCs) phenomenon in services, which has already been taking place in manufacturing for a long time. Intangible value added of services increasingly involved intermediate inputs from manufacturing and were indirectly embodied in intermediate and finished goods exported to the global market. The focus of this paper is to analyze how the service industry participates in the development of the GVC, with emphasis on the export of ELE production to China in the bilateral trade of Taiwan and Korea with China. In addition to the value-added components, the exports of F&B intermediate products to China have been increasing year by year, and Taiwanese is higher than South Korean. In the bilateral trade between Taiwan or Korea and China, for ELE production exported to China, double counted part of intermediate products is increasing year by year. In terms of the value added of the double counting of F&B exports to China, Taiwan is higher (PDC, 31.23–17.26 percent) than South Korea. (PDC, 8.7–15.12 percent). South Korea and China are not as closely related as Taiwan and China.

Philippine-US leaders meeting will refresh alliance

2017 ◽  
Keyword(s):  
Human Rights ◽  
Free Trade ◽  
Donald Trump ◽  
Content Type ◽  
Regional Powers ◽  
Us Government ◽  
Philippine Government ◽  
Trade Deals

Significance This follows a meeting between US President Donald Trump and his Philippine counterpart, Rodrigo Duterte, on November 13 during Trump's visit to Manila for the 40th US-ASEAN Summit. Impacts Manila will warm ties with Washington once more, but also with Beijing and Moscow. The Philippine government will also seek free trade deals (multilateral and bilateral) with other regional powers. US government pressure on Philippine human rights protections will likely be restrained in favour of trade.

Speedy Mexico-EU trade deal promises risks and rewards

2017 ◽  
Keyword(s):  
North America ◽  
Free Trade ◽  
North American ◽  
Free Trade Agreement ◽  
Trade Agreement ◽  
Transportation Costs ◽  
Donald Trump ◽  
Content Type ◽  
The North

Subject Mexico-EU trade talks Significance Talks on modernising the Mexico-EU Free Trade Agreement (FTA) have gained urgency since the election of US President Donald Trump as the prospect of an end to free trade within North America forces Mexican officials to get serious about diversifying relations. While negotiators hope to seal a new EU deal by the end of the year, many issues are yet to be addressed and renegotiation of the North American Free Trade Agreement (NAFTA) is absorbing bureaucratic capacity. Impacts Anti-American sentiment stemming from Washington’s hostility could favour European firms and investors in Mexico. The rush to conclude agreements risks bad deals and political blowback from Mexico’s opposition. Transportation costs and connectivity will ultimately matter more for Mexican diversification than already low tariffs.

Merger will strengthen Japan's shipping sector

2016 ◽  
Keyword(s):  
East Asia ◽  
Free Trade ◽  
Free Trade Agreements ◽  
Trade Agreements ◽  
Global Market ◽  
Shipping Industry ◽  
Content Type ◽  
International Shipping ◽  
South Korean ◽  
Retail Prices

Subject Developments in the Japanese shipping industry and the international shipping market. Significance Three of Japan’s largest shipping lines -- Nippon Yusen Kaisha, Mitsui OSK and Kawasaki Kisen Kaisha -- plan to consolidate their operations in July 2017 to save an estimated 1 billion dollars per year. The three lines combined will control an estimated 7% of the global market, and expand their share of the increasingly critical trans-Pacific market, which has realigned significantly in response to the bankruptcy of South Korean shipping firm Hanjin in August. Impacts This major consolidation may prompt other carriers in other states to follow suit. Powerful new opposition to free trade agreements in major economies will lead to previously unexpected trade contractions. Retail prices for goods imported from East Asia will likely rise.

Fragile Canada-US relations could fracture further

2018 ◽  
Keyword(s):  
Automobile Industry ◽  
North American ◽  
Bilateral Trade ◽  
Prime Minister ◽  
Donald Trump ◽  
Content Type ◽  
Bilateral Negotiations

Significance The tariffs, on 12.8 billion US dollars’ worth of US goods, respond to US tariffs on Canadian steel and aluminium exports. This could mark the beginning of a sharp deterioration in relations between the two close economic partners and military allies. The pending US response by President Donald Trump could include tariffs on Canada’s automobile sector, which would disrupt the closely integrated North American automobile industry. Impacts Both countries’ governments will gain new tariff revenues, but lose money from higher unemployment longer term. US steel and aluminium will still be supplied by Canadian suppliers, but increased costs could see firms fail. Prime Minister Justin Trudeau will push to keep NAFTA renegotiations going, seeking to work with Mexico. NAFTA renegotiations will stall, if not terminate; separate bilateral negotiations (US-Canada and US-Mexico) are then likely. Bilateral trade talks could cost Trudeau politically if he is seen to bow unduly to Trump.

scholarly journals The Effects of the Exchange Rate on Value-Added International Trade to Enhance Free Trade Sustainability in GVCs

2019 ◽  
Vol 11 (10) ◽  
pp. 2740 ◽  
Author(s):  
Myoung Shik Choi ◽  
Bongsuk Sung ◽  
Woo-Yong Song
Keyword(s):  
International Trade ◽  
Exchange Rate ◽  
Free Trade ◽  
Bilateral Trade ◽  
Value Added ◽  
Policy Implications ◽  
Negative Effect ◽  
The Exchange Rate ◽  
Positive Effect

This study investigates the role of value-added bilateral trade focused on global value chains to achieve sustainable economic development. Our findings address trade policy implications that help to mitigate the global imbalances and exchange rate conflicts. These policies are expected to provide a competitive advantage that can be crucial to the sustainability of free trade. We apply traditional trade models to the value-added framework to examine the effects on value-added trade. Empirically, we investigate the bilateral value-added trade for recent years. Our major findings are that currency devaluation has a positive effect on value-added exports but has a negative effect on gross exports because of the effect on intermediate goods trading dominating the effect on international trade, i.e., the effect on foreign content of intermediate imports dominating the effect on the domestic content of exports. The same effect applies to imports. Also, we confirm that foreign income has a positive effect on exports and value-added exports, and domestic income has a positive effect on imports and value-added imports. However, their effects on trade balance are not consistent. Our major findings imply that the analysis of value-added trade can best contribute to the sustainability of global free trade by considering trade policies as a result of reflecting the easing of the global imbalance and the exchange rate war.

China trade may bring new investment in Brazil

2017 ◽  
Keyword(s):  
Latin America ◽  
Natural Resources ◽  
Bilateral Trade ◽  
Value Added ◽  
Short Term ◽  
Trade Surplus ◽  
Domestic Activity ◽  
Content Type ◽  
Economic Relations ◽  
China Trade

Subject The evolution of Brazil-China economic relations. Significance China has been Brazil’s largest export partner since 2009. Brazil’s trade surplus with China reached 11.8 billion dollars in 2016 and 18.2 billion in the first nine months of 2017, largely based on exports of primary commodities. In addition to trade, China’s investment interests in the Brazilian economy are rapidly growing, in particular in sectors such as energy, infrastructure and natural resources. Impacts Bilateral trade would benefit from agreements that encompass higher value-added creation in both economies. Chinese investments in Brazil may represent a source of funding without increasing domestic activity in the short term. Closer Brazil-China relations will help to consolidate China’s presence in Latin America. An up-to-date regulatory framework for investments in Brazil will be crucial to make relations work for both countries.

The impacts of Chinese direct investment in Thailand on the Sino-Thai bilateral trade

2016 ◽  
Vol 9 (1) ◽  
pp. 24-39 ◽  
Author(s):  
Mathavee Keorite ◽  
Huang Pan
Keyword(s):  
Direct Investment ◽  
Design Methodology ◽  
Bilateral Trade ◽  
Raw Materials ◽  
Value Added ◽  
Trade Surplus ◽  
Content Type ◽  
Practical Implications ◽  
Determinant Factor ◽  
Value Added Products

Purpose – The purpose of this paper is to investigate the impacts of Chinese direct investment in Thailand on the Sino-Thai bilateral trade. The economic relationship between Thailand and China has been strengthened through both trade and Chinese direct investment in Thailand for past decades. Design/methodology/approach – AR(p) model was used to examine the effects of Chinese direct investment on both Thailand exports and Thailand imports. Findings – This paper shows that Chinese direct investment in Thailand has contributed to the decrease of intermediate goods of Thailand exports to China. On the other hand, Chinese direct investment has contributed to the increase of finished products of Thailand exports to China. In addition, Chinese direct investment in Thailand has contributed to increase of Thailand imports from China. This suggests that strengthening cooperation for economic growth in either of the two countries can generate mutual benefits through trade. Research limitations/implications – The studies focus only on the effects of foreign direct investment (FDI) on trade, while the effects of trade on FDI are neglected. Practical implications – Policies should be devised to reduce reliance on exports of raw and semi-raw materials by turning on to final products with more value-added products and should improve the equality of infrastructure in the country to attract more FDI into the economy. Originality/value – This paper provides evidence that Chinese direct investment in Thailand is an important determinant factor of the rapid growth of the bilateral trade. It also shows that the appreciation of Thai Baht against Chinese RMB is associated with a decrease in Thailand trade surplus in the bilateral trade.

scholarly journals GEO-STRATEGIC INTERESTS OF UKRAINE AND ECONOMIC PARTNERSHIP WITH TURKEY

2021 ◽  
Vol 2 (37) ◽  
pp. 210-218
Author(s):  
N. Karasova ◽  
A. Mishchenko
Keyword(s):  
Economic Development ◽  
Gravity Model ◽  
Free Trade ◽  
Bilateral Trade ◽  
Value Added ◽  
Free Trade Area ◽  
Strategic Partnership ◽  
Trade Area ◽  
Economic Partnership ◽  
The Impact

Abstract. Broadening the scope of economic interests, together with the involvement of the strategic partner to resolve security issues, brings the dialogue between Ukraine and Turkey to a new level. This intensified negotiations on the establishment of a free trade area and the implementation of joint projects in the defense industry, cultural and humanitarian spheres. Thus, the study of priority areas of cooperation between Ukraine and Turkey in the Black Sea region for the effective realization of Ukraine’s geostrategic interests is becoming topical. The purpose of the article is to study the peculiarities of the economic partnership between Ukraine and Turkey, to calculate the impact and to determine the advantages and prospects of a deeper bilateral trade liberalization. The methodology is based on assessment of export specialization; the characterization of the relative advantages by the RXA coefficient; the impact assessment of bilateral trade on economic development through a descriptive gravity model. The study found that high tariff barriers are now applied to Ukrainian exporters in the Turkish market. Total exports from Ukraine to Turkey declined by more than 30 per cent from 2011 to 2019, while the low value-added products dominate in the highly concentrated structure of export flows. On the contrary, Turkish exports to Ukraine are quite diversified. The top ten exports include machinery, electrical equipment, vehicles and knitwear. Ukrainian grains, oilseeds and oils, iron and steel, ore and rail transport have comparative advantages in the Turkish market. The military-industrial sector and IT are promising areas for export development and investment cooperation in the Ukrainian economy. Bilateral trade surpluses are in favor of Ukraine. The economic development of Ukraine significantly influences the volume of bilateral trade, according to the results of the descriptive gravity model. A $1 increase in Ukraine’s GDP will lead to an increase in bilateral trade by $0.8. This makes Ukraine much more interested in entering the Turkish market. Keywords: strategic partnership, free trade area, international trade, exports, customs tariffs, liberalization. JEL Classification F13 Formulas: 3; fig.: 4; tabl.: 2; bibl.: 21.

Regional groups may see Brexit as cautionary tale

2016 ◽  
Keyword(s):  
Free Trade ◽  
Regional Integration ◽  
Presidential Candidate ◽  
Cautionary Tale ◽  
Donald Trump ◽  
Content Type ◽  
The United Kingdom ◽  
One Belt One Road ◽  
Economic Stagnation ◽  
The Eu

Subject Prospects for regional groups post-Brexit. Significance The June 23 referendum vote in the United Kingdom in favour of exiting the EU (Brexit), and the rise of Republican presidential candidate Donald Trump, have turned attention to concerns over globalisation. This includes issues of identity and sovereignty, but particularly free trade at a time of economic stagnation, and fears of industries -- and by extension jobs -- moving abroad or perceptions of migrants taking local jobs. This raises the question whether resistance to regional integration, and globalisation more generally, is growing. Impacts Brexit may strengthen the case for preserving greater national sovereignty over increased institution-based integration. New forms of integration -- such as China's 'One Belt, One Road' initiative -- will become more significant. Brexit highlights the need to address underlying problems such as growing inequality and diverging interests between elites and publics.

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