Optimal Tariff and Endogenous Drivers for Trade Liberalization

Trade liberalization requires institutional coordination and openness,and is driven by a multitude of factors.This paper simulates endogenous optimal tariffs under different model structures to uncover the underlying drivers of trade liberalization.Parametric calibration and simulation methods based on the numeric general equilibrium model are employed to estimate the optimal tariff rates of countries with and without trade retaliation.Then,near-reality assumptions are added into the standard general equilibrium model structure,including the cross-border capital flow,multi-country assumption and trade cost,to simulate decreasing optimal tariff rates.The simulation results suggest that world economic development has increased the economic ties and interdependence among nations,making trade liberalization an endogenous optimal choice.The backlash against globalization in recent years is motivated by short-term factors,but will not persist in the long run since it goes against the law of economic growth and socio-economic development.

Effects of Trade Liberalization of the Host Country on the Inflow of FDh An Empirical Study on China

In general terms, either complementation relationships or substitution relationships may exist between the foreign trade of a country and its inflow of FDI. The present paper intends to reconstruct an analysis frame on the relationships between the foreign trade and inflow of FDI of China since its reform and opening to the outside world. Results from measurement and analysis indicate that there are cause-and-effect relationships between China＇s foreign trade and inflow of FDI.

Effects of Trade Liberalization and Outsourcing on Employment in China during 1995-2009

With the deepening of economic globalization, trade liberalization and outsourcing exert increasingly important effects on China＇s employment. Based on China＇s （imporO non-competitive input-output table and employment data provided by the World Input-Output Database （WIOD）, this paper has estimated China ＂s total employment and skill-specific employment between 1995 and 2009 and utilized structural decomposition method to investigate the effects of trade liberalization and outsourcing as two internationalization factors on China＇s job growth. Results indicate that between 1995 and 2009, China＇s total employment and skill-specific employment increased significantly, and the expansion of final output and particularly export expansion is a major driver of job growth, that the reduction in labor input coefficient is a major restraint of job growth, and that outsourcing is generally unfavorable to China＇s job growth. By specific product categories, their production internationalization effect of the production sectors of different types of products （aggregate effect of trade liberalization and variation in the level of outsourcing on employment variation） derives from different sources. For sectors of low technology products, their production internationalization effect mainly derives from the expansion of the share of export. For the production sectors of medium technology products, their production internationalization effect mainly derives from outsourcing expansion. By specific groups of workforce, low-skilled workforce is the most vulnerable to the impact of production internationalization, medium-skilled workforce is subject to relatively small effect, while the effect on highly-skilled workforce is negligible.

How Trade Liberalization of Intermediates Contributes to China's Technology Upgrade

Under a heterogeneous firm analysis framework,this paper creates a theoretical model to investigate how trade liberalization of intermediates influences the technology choice of firms based on the data of Chinese manufacturers during 2000-2006.According to our empirical result,after China's WTO entry,trade liberalization of intermediates significantly induced Chinese exporters to apply advanced technologies.In our further consideration of the differentiated productivity of firms,we found that such an effect is related to the initial productivity of firms and only significantly induces mediumproductivity firms to upgrade their technologies.In addition,the technology-promotion effect of trade liberalization of intermediates is the most significant for technology-intensive exporters and the least significant for labor-intensive exporters.

Input Trade Liberalization and Welfare Loss of Manufacturing Enterprises:Based on the Perspective of Efficient Market Power

Considering that upstream monopoly will lead to an exponential increase in the loss of social welfare,this paper investigates the impact of intermediate goods tariff concession on the welfare loss of manufacturing enterprises from the perspective of input trade liberalization and effective market power.It has been discovered that input trade liberalization significantly reduces the welfare loss of manufacturing enterprises.Due to the game condition in which oligopolies check each other and small businesses“gain from fishing”,the inhibitory impact increases as market share decreases.The mechanism test demonstrates that input trade liberalization boosts the effect of technical competition and minimizes welfare loss through promoting market development degree and reducing factor distortion.In addition,this paper also finds that the effect of input trade liberalization on high monopolistic power enterprises is obviously stronger than that of low monopolistic power enterprises.Furthermore,the impact on non-high-tech industries and capital-intensive enterprises is significant,while that on high-tech industries and labor-intensive industries is not.Therefore,the welfare loss should be investigated from the dual perspective of market structure and marker power.Competitiveness has an important effect,while trade liberalization of intermediate inputs has a pivotal effect on promoting market development and improving resource allocation efficiency.

Impact of Cross-Strait Trade Liberalization:A Computable General Equilibrium Analysis

This paper applies a computable general equilibrium model to investigate the potential economic effects of trade liberalization across the Taiwan Strait. Our simulation results reveal that cross-Strait trade liberalization will have significant positive impacts on external trade, domestic investment and real GDP for the economies in this area in general and in Taiwan in particular. Furthermore, the negative impact from the formation of a free trade arrangement between Taiwan and Chinese Mainland on Hong Kong seems to be rather small. These results suggest that cross-Strait trade liberalization is very likely to bring about a win-win situation for the economies in this area.

Trade Liberalization and Wage Inequality： Evidence from the U.S. States

This paper examines the relationship between trade liberalization and wage inequality for 50 U.S. states during the period from 1999 to 2008. The Difference-in-Differences and fixed effects methods are employed to evaluate the effect of trade liberalization on wage inequality in the U.S. states. Empirical results reveal that trade liberalization and de-unionization do increase the wage inequality between skilled and unskilled workers. Evidence shows skill-biased technological change has no significant impact on rising wage inequality. As Difference-in-Differences estimation on time-series cross sectional data involves many years, the conventional standard errors often understate the standard deviation of the estimators. This paper employs the standard bootstrapping procedure and the clustering error procedure to correct the problem, and all sign patterns still hold.

An Advocacy of Trade Liberalization between China and MRB Countries

This study provides a systematic analysis of the bilateral trade relationships between China and the Mekong River Basin （ MRB ） countries and the new phenomenon where China＇s foreign direct investment（FDI） flows to these countries in the past few years. The paper highlights the new development of China＇s trade with the MIKB countries and reviews the bilateral trade that has been substantially increasing from US S3.35 billion in 2000 to US $18.39 billion in 2007. The paper also explores the features of trade composition between the two sides. China＇s exports have largely concentrated on the manufactured goods while the exports of M1KB countries to China have been natural resources and agricultural goods, which reflects the relative comparative advantages for China and MRB countries and further reinforces the important strategy for the MRB countries to develop their industrialization further and increase their manufacturing capacity. Lastly, the overall results suggest that the impact of China＇s trades to the MRB countries is positive, but not as strong as currently expected.

Examining the Trends and Influencing Factors of International Trade in the Era of New Economic Globalization

In the context of the new era of economic globalization,the development of international trade holds immense significance in fostering global economic recovery and advancing the process of global economic integration.Against this backdrop,aspects such as trade liberalization,digital trade,trade in services,and the influence of multinational companies are becoming increasingly prominent.Concurrently,factors encompassing economic,political,technological,and environmental considerations,as well as regional economic integration,will exert influence on the trajectory of international trade development.This paper aims to comprehensively explore the development trends of international trade and the myriad influencing factors within the framework of the new economic globalization.

Inter-Industrial Trade on Iran’s Air Pollution

The related issues to trade liberalization and its impact on the environmental quality have become important since late 1996. The previous studies have shown that there has not been consensus among the economists in this field. Paper is analyzing the effect of inter-industrial trade on the Iran’s air pollution. Also in this paper, the pollution haven hypothesis is tested in Iran. To study the effect of inter-industrial trade on the environment in two ways: 1) direct effect on the environment and 2) an indirect effect through growth and the effect of growth on the environment were examined. The model has been estimated by using the panel data method for Iran’s various industrial sectors over 1980-2014. The results show that inter-industrial trade has positive effect on Iran’s air pollution. Also, pollution haven hypothesis is valid in Iran.

The Importance of the Creation of CEFTA-2006 for the Western Balkans＇ Trade Exchange of Goods

By integrating 32 bilateral free trade agreements, CEFTA-2006 became the first multilateral free trade agreement of the Western Balkan countries. Signed at the end of 2006, it was supposed to establish a free trade area among the following member-states： Albania, Bosnia and Herzegovina, Croatia, Macedonia, Moldova, Monte Negro and Serbia.l The free trade area was supposed to be fully functional by the end of 2010 and should provide trade liberalization by elimination of all tariff and non-tariff barriers for agricultural and non-agricultural goods, as well as trade facilitation by simplification of rules of origin and transit procedures. It should also provide mutual recognition of national sanitary, phytosanitary and technical standards. The free trade area should also enable free trade of services, full protection of intellectual rights, fair rules of public procurement procedures and liberalization of capital investment. The beginning of the creation of the free trade area of the Western Balkan countries created a positive effect upon the increment of the trade exchange of goods among its member-states. However, the weak individual economic capacity of each of them immediately caused a decrement in the exports of goods towards trading partners out of CEFTA-2006. Positive effects realized in the beginning of the creation of the free-trade area were very soon annulated by the influence of the economic crises in 2008. At present, the region experiences a slight, but very slow recovery.

Liberalization of Staple Crops： Lessons from the Mexican Experience in Maize

In this paper the authors inquire why, after more than 25 years of domestic agricultural reforms in Mexico and 15 years of trade liberalization of maize under the North American Free Trade Agreement （NAFTA）, the domestic production of maize, a non-competitive crop and the major staple in Mexico, has increased. The authors present new empirical evidence showing that, as expected, maize prices in Mexico dropped until 2006 and have experienced a process of convergence with USA prices, and maize imports from the USA have increased. However, despite lower prices, maize production in Mexico has trended upward since 1992, two years before the beginning of NAFTA＇s implementation. Based on the heterogeneity of maize production in Mexico, three possible explanations are proposed to explain this unexpected outcome： government supports to big commercial farmers in the agriculturally rich North of Mexico; the persistence of maize production by subsistence farmers; and to a lesser degree, increasing yields on some irrigated maize farms. We finish the paper by drawing lessons from the experience of Mexico for other Less Developed Countries.

Impact of openness, economic policy reform and regional shocks on trade and growth of Thailand： An econometric study

Thailand has currently enhanced and promoted intensive trade and investment liberalization and implemented long-term growth policy according with current regional economic integration, WTO obligations and globalization. Nevertheless, several recent internal and external factors e.g. the massive SARS and avian flu outbreaks, the Indian Ocean tsunami devastation, the Asia financial crisis and domestic policy reforms （ICSEAD, 2006） have also impeded this policy. While the issues are important for Thailand and developing countries in Asia, only limited research has been undertaken to investigate them. The paper conducts a substantive quantitative study to contribute to these trade and development policy issues. A new econometric modelling policy method, namely the generalized gravity theory （Tran Van Hoa, 2004） is used to develop a simple flexible simultaneous-equation econometric model of Thailand＇s openness model with its seven major trade partners （ASEAN-4, Australia, the USA, the EU, China, Japan and India）. Using data from the ICSEAD, the World Development Indicators and the Bank of Thailand databases, the paper reveals efficient and reliable empirical findings on trade-growth causality, trade determination including the impact of shocks and policy reform on trade and growth between Thailand and its major trade partners over the past two decades. The paper also provides evidence on the linkages between trade in goods, FDI and services and regional economic integration for more credible policy implications.

Whether to Abolish or Introduce Dual Regulation as Trade and Environmental Policy?

China,which has already introduced an environmental tax in an effort to decarbonize,has recently begun emissions trading and is using two environmental policies in tandem,but there are concerns about the impact on growth and trade.Trade and environmental policies affect firms'entry and exit,resulting in changes in aggregate productivity and pollution emissions.This study compares the impacts of single regulation and dual regulation on welfare,using a research-and-development based growth model with heterogeneous firms.Under single regulation,the cleansing effect of trade liberalization could be undermined.Under dual regulation,trade liberalization decreases pollution and improves average productivity whereas decreasing total permits reduces pollution.From the perspective of improving welfare it is desirable to choose dual regulation because trade liberalization can reduce total pollution emissions via the cleansing effect of trade liberalization.

Long-term Effect of Export Expansion on Human Capital

This paper illustrates how trade liberalization during an individual's early life can affect long-term health and cognitive outcomes 15 years later(i.e.,in adolescence).China's accession to the World Trade Organization has brought significant economic benefits but has also given rise to some environmental concerns.Exploiting variations in each prefecture's exposure to trade shock and trade-induced pollution shock,this study constructed a shift-share instrument variable model.The trade shocks in early life improved health and cognitive outcomes significantly during adolescence while trade-induced pollution shock had the opposite effect,decreasing these two outcomes.These impacts were more pronounced among households with low economic status.Further investigation provided evidence for several underlying mechanisms,such as improved health and education resources and reduced SO,emissions by firms.This study provides useful insights into how to evaluate the long-term effects of trade liberalization on human capital in terms of economic benefits and environmental costs in China.

How Do China's Importing Firms Respond to Non-taritf Measures?

After the formation of the World Trade Organization(WTO)in 1995,most countries gradually reduced their import tariffs to a fairly low level.However,the reduced tariffs could not he simply read as a reduction in trade barriers.Indeed,many suspect that countries tend to use more non-tariff measures(NTMs),substituting them for tariff barriers,to protect their domestic economies.This paper uses newly compiled and detailed Chinese NTM data,together with highly disaggregated firm import data and manufacturing firm operational data,to investigate the impact of China s import-related NTMs on firm imports.The main empirical results show that,as in the case of tariff barriers,China s trade policy NTMs mainly inhibit firms'intermediate imports.In contrast,China s public policy NTMs significantly improve the intensive and extensive margins of firm s intermediate imports and raise the prices and quality of imported inputs.The greater the extent to which a firm engages in processing trade,the larger is the promoting effect of public policy NTMs on the firm s import margins far intermediate inputs,and the greater is the restricting ejfect on the prices and the quality of the firm's imported inputs.

An Evaluation of the Regional Comprehensive Economic Partnership Agreement:Market Access and Trading Rules

The Regional Comprehensive Economic Partnership(RCEP)agreement was signed on November15,2020.This marks the formal conclusion of the world's largest free tradeagreement in terms of population and economic scale.The RCEPagreement covers new liberalization commitments in goods,services,investment,and movement of natural persons,and addresses some emerging behind-the-border trade issues,to forge more transparent,open,and inclusive trade rules.Its aim is to build a comprehensive,modern,inclusive,and high-quality free trade agreement.This paper summarizes the framework and highlights of the RCEP agreement,measures the extent of tariff reduction from various perspectives,makes a quantitative assessment of the level of service trade liberalization of the member states adopting positive list commitments,and makes an in-depth analysis of trade rules and provisions in the RCEP agreement.Furthermore,this paper also makes a comprehensive comparison of main provisions among the Comprehensive and Progressive Agreement for Trans-Pacific Partnership,RCEP,and US-Mexico-Canada Agreement.The paper concludes with policy recommendations for Chinatopromote the implementationof the RCEPagreement.