To fuse, Not to Fuse, or Simply Confuse? Assessing the Case for Normative Convergence Between Goods and Services Trade Law

Goods and services were separated (politically) at birth when the Uruguay Round of multilateral negotiations was launched. The goods and services divide reflected in today’s structure of global trade governance has increasingly come into question in a world of cross-border production networks. This begs the question of the desirability and political economy feasibility of fusing the law of goods and services trade into one undifferentiated whole. This paper asks whether the current architectures of multilateral and preferential trade governance are compatible with a world of trade in tasks; whether existing rules offer globally active firms a coherent structure for doing business in a predictable environment; whether it is feasible to redesign the structure and content of existing trade rules to align them to the reality of production fragmentation; and what steps can be envisaged to better align policy with market realities if restructuring prospects appear unfavorable. The paper argues that fusing trade disciplines for goods and services is neither needed nor feasible and may actually deflect attention from a number of worthwhile policy initiatives where more realistic (if never easily secured) prospects of generic rule-making may well exist.

MNE’s THEORY AND GLOBAL VALUE CHAINS

This article analyzes a multinational enterprise (MNE) theories from the first pioneering papers of S. Hymer and the modern approaches to studying these institutions. A special focus is placed on the one of the research schools that studied the fragmentation of international production and the global value chain (GVCs) creation. In this context, various theoretical approaches to the study of modern global MNE networks are considered, the theory of trade in tasks and the macroeconomic approach to the evaluation of fragmentation effects. The paper argues that the concepts of MNEs international production and GVCs are interlinked, although not equal. Sometimes they are used as synonyms, but they characterize the contemporary process of internationalization from different perspectives. It shows the various types of organization of global value chains, such as the horizontal and vertical integration of production. Within such networking systems of multinational enterprises there are complex hierarchical relationships between individual participants and links. Technological slicing of production into separate fragments requires MNE to use not only own equity- controlled affiliates, but also the offshore production of partner firms.

On The East-West Trade in Skill Intensive Tasks: Theory vs. Evidence

In keeping with an already entrenched paradigm, international trade in tasks exerts upward pressure upon skilled workers’ wages in both home and host countries. Yet certain empirical evidence from intra-European trade shows that sometimes things occur in reverse, that is high skilled workers’ wages in home countries may decline as a result of offshoring, an outcome that looks like an inverse “maquiladora effect”. I try to show that such deviations do not fly in the face of mainstream theory but rather, they reflect the different conditions under which offshoring is performed today as compared to the ones prevailing two decades ago.