Political–Economic Determinants of External Import Protection under a Preferential Trade Agreement

The stalling of WTO multilateralism and the proliferation of preferential trade agreements in recent decades have drawn substantial attention to the impacts of preferential liberalization. A critical question is how they affect the trade barriers imposed against outsiders. I examine the relationship between preferential trade liberalization and protection against non-member countries by testing the predictions of a political–economy model based on the previous literature. Focusing on a specific model allows me to uncover the mechanisms via which preferential liberalization affects external import protection, whereas most of the existing literature has focused on establishing the sign of the effect only. Furthermore, I focus on not only tariffs, as most studies do, but also on the temporary trade barriers of antidumping and safeguards. I test the predictions for Latin America and obtain results that provide solid evidence supporting two mechanisms from the theory, which lead to lower protection against non-members of a preferential trade agreement. First, a lower preferential import protection level means that the increase in preferential imports from increasing the external tariff creates a smaller increase in tariff revenue. Second, as preferential import protection is cut, there is a decrease in the markup and sales of domestic firms, and thus raising the external import protection generates less profit. Moreover, this second effect is present when the political motivation of the government is sufficiently strong.

Potensi Kerjasama Bilateral Indonesia Bangladesh Dalam Kerangka Preferential Trade Agreement

Currently, Indonesia is initiating trade cooperation between Indonesia and Bangladesh PTA. This trade cooperation is to increase Indonesia's exports to non-traditional markets. For that, it is a necessary overview of trade between Indonesia and Bangladesh to determine the market potential products Indonesia Bangladesh. From the simulation results of the Trade Complementary Index (TCI), Indonesian products for the last 2 years (2017-2018), it can be seen that Indonesian export products can meet the demands of the Bangladesh import market and it can be assumed that the people of Bangladesh have been able to receive products from Indonesia. From the simulation results of potential products, 283 tariff lines can be used as an indication of potential Indonesian request to initiate cooperation between Indonesia and Bangladesh this PTA.

The Impact of Indonesia-Bangladesh Railway Cooperation on the Establishment of Bilateral Preferential Trade Agreements

This research discusses the railway cooperation between Indonesia and Bangladesh which is motivated by the interest of Bangladesh to revitalize railways and increase the domestic demand for railways. This research aims to find out why the Indonesia-Bangladesh cooperation in the railway sector has a significant impact on the formation of the Indonesia Bangladesh Preferential Trade Agreement (IB-PTA) in 2018. This research using interview and literature study methods. The theory used in this research is the theory of interdependence and economic integration. The conclusion of this research is that the Indonesia-Bangladesh railroad cooperation has a significant impact, causing a sense of mutual dependence. The two countries finally agreed to form economic integration in the form of PTA in order to improve the economies of each country.

Chile and the European Union

Official relations between Chile and the European Union (formerly the European Communities) date back to 1967 when the two parties first opened diplomatic representations in Brussels and Santiago, respectively. As Chile transitioned to a democratic polity from 1990, the relationship deepened. Reflecting the EU’s support for democratization in Latin America, both parties formalized ties through the signing of a Cooperation Framework Agreement in 1991 and a Framework Agreement on Trade and Economic Cooperation in 1996. The latter set Chile and the EU on the path to eventually negotiating an Association Agreement, including a preferential trade agreement (PTA), between 1999 and 2002. The Association Agreement has been in force since 2003, and in 2017 Chile and the EU decided to launch negotiations to modernize the preferential trade agreement part of the Association. The bilateral relationship, and its study, have been defined by three key areas: (1) political relations, (2) cooperation relations, and (2) economic relations. The political and cooperation ties between the two parties have, in turn, been determined by two strands of EU external policies: (1) the EU’s overarching approach toward relations with Latin America, and (2) the evolution of the EU’s development policy. Economic relations, for their part, cover rising trade flows and increasing investment (especially EU foreign direct investment outflows and stocks in Chile). Chile’s attractiveness, despite its relatively small economy and population, derives from its specific political economy. Chile’s painful market reforms under the Pinochet regime set it on a path of greater economic openness than its neighbours. Democratic governments since 1990 have continued policies of trade liberalization, low tariffs, and active engagement in the creation of a dense network of global preferential trade agreements with Chile at its center as a gateway to Latin America. This has helped to diversify Chilean trade relations away from over-reliance on the EU or the United States, and has made Chile an attractive target for foreign investment. The trade agreement part of the Association Agreement ushered in deeper economic ties, and a body of scholarly analyses of the agreement and its impacts has slowly emerged. Relations with Chile have formed part of the EU’s broader strategy toward Latin America, rather than independent EU strategy. Initial steps toward an Association Agreement were within the context of negotiations for an Association Agreement between the EU and Mercosur (the Common Market of the South). Analysis of the EU–Chile relationship has, as a result, tended to be sparse and to be included as a subsection in studies of broader EU–Latin America relations, and especially EU–Mercosur relations. Nevertheless, the relationship represents a positive example of successful engagement with a relatively like-minded partner in a mature association, and demonstrates the extent of and possibilities for EU foreign policy engagement. Moreover, the relationship has served as a testing ground for new types of projects and collaborations and for mutual learning, such as the parties’ joint projects on increasing gender representation in politics, or the inclusion of gender clauses, for the first time in an EU preferential trade agreement, in the modernization of the EU–Chile agreement.

La Organización Mundial de Comercio, los acuerdos mega-regionales y los usos estratégicos del regionalismo

The paralysis of the Doha Round, the proliferation of preferential trade agreement and the launching of mega-regional trade negotiations have encouraged the debate about the governance of international trade. In contrast to a benign interpretation of the relationship between “XXI century regionalism” and the multilateral trade regime, we argue that there is a remarkable continuity between the incentives and characteristics of the “new regionalism” and those of “XXI century regionalism”. Even when the content of the regulatory agenda may have reduced the discriminatory nature of the new agreements, the basic conflict between the two modalities of governance of the international trade regime remains in place.

A Gravity Model for Country of Origin Consumer Evaluations

This paper tests the gravity model for country of origin consumer evaluations. The analysis, based on about 2500 country pairs, indicates that consumer evaluations in one country (rating country) of products made in another country (rated country) are directly related to GDP of rated country and inversely to GDP of rating country and distances between them. Country pairs with common languages, rated country being an island, and political stability in rated countries are found to have a strong positive influence on the country evaluations. Rated country being a colony of the rating country in the past, rated country being a landlocked country, and country pair being in at least one active preferential trade agreement covering goods have negative influence on the country of origin evaluations. Contiguity between country pairs is found to have no influence on the country of origin consumer evaluations.