The Art of Trade War: Spurring Investments in Indonesia Amidst the US–China Trade War

The US–China trade war creates significant opportunities for developing countries, as global manufacturers need to relocate their production facilities out of China to avoid future tariff hikes. However, Indonesia as the biggest economy in the ASEAN is not experiencing any substantial advantage relative to its neighbors, especially compared to Vietnam. While there is no clarity on how long the trade war will last, it is important for Indonesia to strategize quickly to capitalize the opportunities. This article addresses the question of how Indonesia should strategize through country comparison and analysis of two types of policy competition, namely, incentives-based (IBC) and rules-based competition (RBC). In the short-term, Indonesia should be more accommodating for investors of all sizes and maximize the trade-related investment assistance. In the longer term, Indonesia should prudently open up to trade, improve cooperation between investment and trade functions, and build a positive public mindset for free trade.

Convergence of competition policy, competition law and public interest in India

The objectives of competition policy and the application of competition law need defining and redefining along with changing structures of the economy and the maturing of the competition authority. Market structures associated with digital technology and globalization are often not in consonance with the prevalent law framed in economic analysis of traditional product markets. Antitrust interventions by the competition authorities are caught in a bind as was the case with the Competition Commission of India and the Competition Act, 2002. The emphasis on monopolistic competition, or on oligopolistic markets, as anti-competitive, which marked the earlier days of implementation of competition laws, is at variance with the prevalent monopolistic structures of platform markets or technology firms and the market for ideas. Competition authorities are grappling with identifying anti-competitive activities of these markets which tip towards monopolistic structures. In the process there has been a churning of possible diverse antitrust abuses and, as competition law grapples to incorporate these new market structures, there is another churn that is slowly emerging as a major concern — that of convergence of competition policy and public interest. This is an area in antitrust literature which is yet to receive sufficient attention. The core of antitrust intervention — that competition benefits consumers — is undisputed and perhaps axiomatic but what is not axiomatic is that monopolistic market structures can also lead to enhancing public welfare. Emergent trends towards monopolistic markets suggest a rethink of competition policy and law and their convergence for public interest. The focus of this article is on the importance of convergence of competition policy, competition law and public interest in new and emergent markets. It raises questions: Is there convergence or divergence between policy and law and public interest? What is public interest? Do consumers represent public interest and, if so, which set of consumers? Are innovation and technological development, which are part of public interest, also in the ambit of competition policy or are they in the realm of competition law? This is another question which has become acute in recent times. In India and the BRICS group, where usage of internet on smart phones is high, the convergence between competition policy, law and public interest suggests antitrust intervention is guided by public interest.

UNCONVENTIONAL MONETARY POLICY, COMPETITION AND FINANCIAL STABILITY. EVIDENCE FROM THE EUROZONE BANKS

This article analyses the effects of the ECB’s negative interest rates (or unconventional) policy on the degree of banking competition, lending and deposit supply, and financial stability. Using a dataset comprising 191 Eurozone banks for the 2002Q1-2016Q4 period, our results suggest that negative interest rates (i) increase banks’ lending and deposit supply, (ii) reduce banking competition, and (iii) weaken financial stability. This phenomenon is economically more significant for periphery country banks than for core country banks.

Policy competition in clean technology: Scaling up or innovating up?

Governments support clean technologies to advance both environmental goals and national competitiveness. By adopting environmental policies early on, governments are argued to create durable competitive advantages for domestic companies that develop clean technologies for export to late adopters. This paper argues that policy competition between lead and follower markets conditions the ability of governments to create durable competitive advantages in low-carbon technologies. Depending on the complexity of the technology, we observe two patterns of green industrial policy competition. In low-complexity technologies, such as solar photovoltaics, follower markets are likely to adopt policies that support manufacturing capacity to rapidly achieve price advantages from economies of scale, with global supply chains intensifying this competition (“scaling up”). In high-complexity technologies, such as electric vehicles, follower markets are likely to adopt policies that support research and development to develop differentiated high-tech products for export (“innovating up”). We also suggest that new forms of interdependence in policy competition can affect the political sustainability of lead market policies. Competition in scaling-up is more likely to undermine political coalitions in favor of government support for low-carbon technologies, while innovating-up dynamics embed political coalitions that support lead market policies for low-carbon technologies.