Myanmar’s Manufacturing Exports After the Lifting of Economic Sanctions

This article aims to evaluate Myanmar’s exports of manufacturing products by using a gravity trade model for emerging ASEAN economies. The main focus of this study is to assess whether Myanmar’s manufacturing exports have recovered in terms of the gravity trade standard of the other emerging ASEAN countries for the post-sanction period of 2013–2018. Unlike the previous studies, this article contributes to the literature by targeting the post-sanction period and by applying both in-sample and out-of-sample estimation methods to ensure the consistency and robustness of their results. The main findings from the gravity trade model estimation are summarised as follows: first, Myanmar’s manufacturing exports for the post-sanction period are still significantly below the level of the gravity trade standard. Second, the downward deviation from the standard could be explained by the two Myanmar-specific factors, that is, the low institutional quality and the Dutch Disease effect in Myanmar’s exports to Western countries, but not fully in those to Asian countries. The additional factor for the deviation against Asian countries might come from Myanmar’s sluggish participation in the international production networks. JEL Codes: F14, O53

Softwood lumber trade and trade restrictions: gravity model.

A gravity trade model can be used to determine the effects of policy on bilateral trade flows. The gravity model is initially explained and then used to determine the effect that U.S. tariffs have on softwood lumber (SWL) imports from Canada, using information from the 2006 Softwood Lumber Agreement. Quarterly data for seven Canadian and three U.S. regions for the period 2007-2017 are used to estimate a gravity model of SWL trade. The model is subsequently expanded to include Japan and China as separate regions, and then as a combined China-Japan region. The model is estimated using OLS and a Poisson Pseudo-Maximum-Likelihood method for trade quantity and value. Findings indicate that: (1) the imposition of a countervailing and/or anti-dumping duty usually has a negative effect on Canada's physical exports, but not in all cases; (2) the value of softwood lumber trade decreases by 26% on average under a tax/tariff compared with no duties; (3) the tax/tariff has a smaller but still significant impact on Canadian exports when China and Japan are included, as SWL exports are diverted from the U.S.; and, not surprisingly, (4) duties affect the value of lumber exports to a much greater extent than quantity.

Softwood lumber trade and trade restrictions: gravity model.

A gravity trade model can be used to determine the effects of policy on bilateral trade flows. The gravity model is initially explained and then used to determine the effect that U.S. tariffs have on softwood lumber (SWL) imports from Canada, using information from the 2006 Softwood Lumber Agreement. Quarterly data for seven Canadian and three U.S. regions for the period 2007-2017 are used to estimate a gravity model of SWL trade. The model is subsequently expanded to include Japan and China as separate regions, and then as a combined China-Japan region. The model is estimated using OLS and a Poisson Pseudo-Maximum-Likelihood method for trade quantity and value. Findings indicate that: (1) the imposition of a countervailing and/or anti-dumping duty usually has a negative effect on Canada's physical exports, but not in all cases; (2) the value of softwood lumber trade decreases by 26% on average under a tax/tariff compared with no duties; (3) the tax/tariff has a smaller but still significant impact on Canadian exports when China and Japan are included, as SWL exports are diverted from the U.S.; and, not surprisingly, (4) duties affect the value of lumber exports to a much greater extent than quantity.

What Determines Bilateral Trade Flows? Evidence from ECO Region

This study provides an analysis of Pakistan’s bilateral trade in Economic Corporation Organization (ECO) region. The main purpose of this study is to assess the determinants of bilateral trade flows using the gravity trade model. Panel least square regression has been applied over the period of 1995 to 2015. Two types of gravity models have been estimated: traditional gravity trade model and modified gravity trade model. The study has identified income, population, distance, adjacency, area, landlockedness, continent and terrorism as the main drivers of Pakistan’s bilateral trade flows with ECO countries. It is suggested that policies in Pakistan should focus on improving economic growth; offer incentives to Pakistani people to engage more in trade flows; improve transportation to trade with ECO countries; and take measures to eradicate terrorism.

Do EU and US GSPs matter for the cotton and textiles products exports of Pakistan?

Purpose This study aims to estimate and compare the effect of EU and US GSP schemes on the cotton and textile sectors of Pakistan. Design/methodology/approach The analysis used data from 2003 to 2014 for all the 14 categories of cotton and textile products at two-digit using HS commodity classification. Effects of the EU and US GSPs are estimated using a gravity trade model. Findings Both the concessions are statistically significant determinants of wadding and nonwoven special yarn, articles of apparel-knitted, articles of apparel-not-knitted and made-up textiles sectors. In the rest of the sectors, the results are a mix. Among these, EU GSP is a statistically significant determinant of wool and animal hair and manmade filaments yarn exports, while the US GSP is important for the exports of cotton yarn and woven fabrics, manmade staple fibers, carpets, impregnated fiber and knitted or crocheted fabrics. Originality/value The research contributes in two major ways. First, it estimates the effects of EU and US GSPs on the textile sector of Pakistan while controlling for the effect of tariffs. Second, the study tests joint hypotheses about the role of EU and US GSPs in the cotton and textile products exports of Pakistan.

Trade Impacts of South Asian Free Trade Agreements in Sri Lanka

This article aims to examine the trade effects of the South Asian Free Trade Agreement (SAFTA) with a focus on Sri Lanka, by applying a gravity trade model. The study targets the following three FTAs: the SAFTA, the India–Sri Lanka Free Trade Agreement (ISFTA), and the Pakistan–Sri Lanka Free Trade Agreement (PSFTA). The outcomes of the gravity trade model estimation suggested that the trade creation effects were identified in the ISFTA, while those were not verified in the SAFTA and that the PSFTA had the trade creation effects only on the Sri Lankan imports. Those results seem to reflect the differentials in the preferential tariff rates. In particular, ISFTA could have the predominant positive effects on Sri Lankan trade flows due to its lowest preferential tariff rates, and thus the SAFTA effect might be crowded out at the current stage of Sri Lankan trade. JEL: F13, F14, O53

ANALYSIS OF BRAZILIAN EXPORTS OF CONIFER WOOD MOLDINGS THROUGH GRAVITY TRADE MODEL1

ABSTRACT This study aimed to analyze Brazilian exports of softwood moldings between the years 1997-2013, by means of a gravity trade model. The main explanatory variables used were GDP of Brazil, importing country´s GDP, and distance between Brazil and its trade partner. The results showed that all variables had the expected behavior. The variables´ coefficient of GDP of Brazil and the importing country's GDP presented a positive influence on trade flow of softwood moldings. The distance coefficient presented a negative influence on trade flow, which showed to be a barrier to Brazilian exports of this product. Results also show that the level of trade is more influenced by the GDP in Brazil than at the importing country's GDP.

Globalization and Foreign Trade of Pakistan with D-8 Group

<p><em>Globalization has made the world smaller and flatter which is called “the death of distance”</em><em>.</em><em> This phenomenon has brought considerable increase in international trade in recent past. Many developing countries have been benefitted from the fruits of globalization and many other like Pakistan have lagged behind in the race. Pakistan is suffering persistently from trade deficit since 2003 and by the same point of time India, Sri Lanka and Bangladesh which share similar socio-economic conditions to Pakistan: are experiencing upward trend. This study investigates the popular theory “the gravity model of trade” in the context of Pakistan’s export flow to D-8 group. The gravity trade model has been innovated by introducing overall </em><em>G</em><em>lobalization </em><em>I</em><em>ndex (GI) which led to improve explanatory power of gravity model. This research, in panel setting has used annual data ranging from 2003 to 2013, by employing advance estimation technique PPML, Estimator. The empirical results of the study infer that GDP, population and distance confirm the basic gravity model. While the globalization Index and contiguity variables are against the expected signs. Therfore, it is concluded that Pakistan need to explore new destinations specially should target the developing countries for its exports.</em><em></em></p>

Effect of non-tariff measures on international tea trades

Purpose The purpose of this paper is to analyze the impacts of differences in sanitary and phytosanitary measures as non-tariff measures (NTMs) in the tea trade between importing and exporting countries. With the progress of trade liberalization, there has been a shift of focus to NTMs as alternative or potential trade barriers. Design/methodology/approach In order to quantify an NTM on tea trade and implement its empirical application, this study designed an index of differences in maximum residue levels (MRLs) for the pesticide endosulfan and introduced it into a gravity trade model. The estimation challenges in the presence of heteroscedasticity and many zero-trade flows are resolved by taking the Heckman and Poisson pseudo-maximum likelihood estimators. Findings This study found that differences in MRLs, arising from the stricter standards in importing countries lead to a significant decrease in tea trade value. This negative impact of differences in MRLs is found to be slightly less than that of tariffs, implying that in this case, the NTM acts as a policy substitute for import tariffs in the global tea trade. Originality/value The main contribution of this study is to suggest and quantify the differences in MRLs across countries as a substantial NTM on the global tea trade and provide its empirical application.