jean monnet chair rethinking the eu trade policy for ... · trade is not only between producers and...
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P. Montalbano - Sapienza Università di Roma
INTERNATIONAL ECONOMIC POLICY AND
DEVELOPMENTAA 2017-2018
DOCENTEPIERLUIGI MONTALBANO
JEAN MONNET CHAIR -
RETHINKING THE EU TRADE
POLICY FOR DEVELOPMENT/
REUTRADE
P. Montalbano - Sapienza Università di Roma
International Economic Policy and Development
AA 2017-2018 CFU 9
Teacher: Prof. Pierluigi Montalbano email: [email protected]
Website: https://sites.google.com/a/uniroma1.it/pierluigimontalbano-eng/
http://www.coris.uniroma1.it/corso/18930
JEAN MONNET CHAIR - RETHINKING THE EU TRADE POLICY FOR DEVELOPMENT/
REUTRADE
P. Montalbano - Sapienza Università di Roma
Aims
Knowledge: to acquire knowledge on international economic policy, with a
focus on trade, economic performance, and living conditions in developing
countries.
Debates: to understand contemporary debates in development (e.g., trade
and poverty, trade and vulnerability, trade and GVCs; aid effectiveness,
etc.), the theoretical underpinnings of the different positions, and their
policy implications.
Tools: to be equipped with the tools necessary to practice as a working
economist, especially as they apply to the problems of low-income countries.
Data: to be able to collect and interpret data on developing countries.
Presentations: to be able to present arguments and information on the topic
in both written and verbal form.
P. Montalbano - Sapienza Università di Roma
Contents
The course is articulated in three different modules:
The first module (24h) is devoted to the basic notions of the most important
theoretical and technical background about trade policy.
The second module (24h) introduces the students to the EU trade policy for
development, such as: its evolution over time; multilateral negotiations; preferential
vs non preferential agreements; regional and intra-regional development agreements;
the Economic Partnership Agreeements; the Euro-Med free trade area; the European
Neighborhood Policy; the Everything but arms initiative, the EU Policy Coherence
for Development, etc..
The third module (24h) focuses on some selected challenges for the EU Trade and
development agenda, such as the new patterns of vertical integration and global
value chains; firms’ heterogeneity; the global imbalances and the role of emerging
economies; the preference erosion of developing countries; the stalemate of
multilateral and bilateral negotiations; climate change, poverty traps and
vulnerability to trade openness; trade policy and food and nutrition security;
inclusive growth and social innovation, etc..
P. Montalbano - Sapienza Università di Roma
Handouts
Tools: Lectures; readings; in-class presentations; open discussion.
Reference Books:
• Feenstra R.C., Taylor A.M., International Trade. Third or Fourth Ed., Worth
MacMIllan.
• Yannick Bineau and Pierluigi Montalbano Selected developmental aspects of
international trade and trade policies: a literature review, downloadable
open access from here:
http://trade.ec.europa.eu/doclib/docs/2012/june/tradoc_149606.pdf
Additional teaching materials: articles, ppt presentations, reports, EC
communications, etc will be distributed to the students during classes.
All the material will be posted as open access on the Sapienza web chair
system of the MSc Program in Economics for Development:
http://www.coris.uniroma1.it/cattedra/17155
P. Montalbano - Sapienza Università di Roma
Master’s Dissertation
To foster additional research on the subject of the EU trade and development
agenda, REUTRADE strongly encourages students to carry out Master’s
dissertations on the topic and will provide mentoring and assistance.
Taking advantage of the existing MoU with FAO at
least one of the Master dissertation each year will be
dedicated to the topic of the relationship between trade
and food and nutrition security.
Taking advantage of the Erasmus+ agreement with the
UK Trade Policy Observatory at University of Sussex
(UK) at least one of the Master dissertation each year
will be dedicated to the topic of the consequences of
Brexit for EU trade policy.
Each of these dissertations will benefit for additional mentoring and co-supervision activities by one
member of FAO and/or UKTPO. This will enhance the quality of the research thanks to the concrete
interaction with scholars actively involved in carrying out policies and related research activities on
these topics.
P. Montalbano - Sapienza Università di Roma
Facts, changes and
history of globalization
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The Network of World Trade in Goods, 2007
(major two export partners)
Source: De Benedictis, Nenci, Santoni, Tajoli, Vicarelli, GEJ, 2014
P. Montalbano - Sapienza Università di Roma
P. Montalbano - Sapienza Università di Roma
1860: a key date for International Trade
• Signature of the Cobden-Chevalier Treaty by France and UK
• Thanks to the MFN clause the CC Treaty determined a decisive shift toward a
«trade network» (i.e., about 50 PTAs)
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The Treaty was announced by Napoleon III in a
letter published by Le Moniteur, on January 5.
1860.Le Moniteur (5 gennaio 1860)
P. Montalbano - Sapienza Università di RomaFonte: De Benedictis L. & Nenci S. (2014) su dati Accominotti & Flandreau (2008) e Phare (2008)
P. Montalbano - Sapienza Università di RomaFonte: De Benedictis L. & Nenci S. (2014) su dati Accominotti & Flandreau (2008) e Phare (2008)
P. Montalbano - Sapienza Università di Roma
Fonte: De Benedictis L. & Nenci S. (2014) su dati Accominotti & Flandreau (2008) e Phare (2008)
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Globalisation waves
Fonte: WB (2002)
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The Volume of World Trade, 1850-2010
(in log scale)
Sources: Irwin & O’Rourke, 2011
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% change (1850-2010)
Irwin & O’Rourke (2011)
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What do we export today?
Source: WTO, 2013
The types of goods traded have changed drastically over the last decades
P. Montalbano - Sapienza Università di Roma
Figure 1.1 The Changing Face of U.S. Import and Export Industries, 1925–2009
Feenstra and Taylor: International Economics, Second EditionCopyright © 2011 by Worth Publishers
The Changing Face of U.S. Import and Export
IndustriesGoods category:
• foods, feeds, and
beverages;
• Industrial supplies and
materials (raw materials
and basic processed
ggods – steel, textiles,
etc)
• Capital goods (durable
goods, i.e.aircraft, cars,
computers, machinery,
etc)
• Finished consumer goods
P. Montalbano - Sapienza Università di Roma
World Trade Flows:
players and destinations
Figure 1.2 World Trade in Goods, 2006 ($ billions)
Feenstra and Taylor: International Economics, Second EditionCopyright © 2011 by Worth Publishers
The amount of
trade is illustrated
by the width of the
lines
Main trends:
1. the leading role of Europe in world trade (31%); possible
reasons?
2. the large amount of trade flows at regional level (within
Europe, within the Americas (11%) and between Asian
countries);
3. a relevant trade link between the United States and Europe
(about 37%); why?
4. the important share of world trade coming from Asia; why?
5. the marginal position of Africa (that accounts for only 2.5%
of World trade), and its close relationship with European
countries.
P. Montalbano - Sapienza Università di Roma
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Fonte: De Benedictis et al., (GEJ, 2014)
The Global trade network
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Barriers to trade
All factors that influence (restrict) the amount of goods
and services shippped across international borders
Main barriers are:
• Tariffs: A tax on a good coming into a country
• Quotas: Physical restriction on the number of goods
coming into a country
• Non-Tariff Barriers: Any methods not covered by a tariff,
most usually (ex: standards on fuel emissions from cars;
documentation required to sell drugs in different countries,
ingredients in products ; etc)• Rules
• Regulations
• Voluntary Export Restraints (VERs)
• Legislation
• Exacting Standards or Specifications
P. Montalbano - Sapienza Università di Roma
Figure 1.4 Average Worldwide Tariffs, 1860–2000
Feenstra and Taylor: International Economics, Second EditionCopyright © 2011 by Worth Publishers
Average Worldwide Tariffs, 1860–2000
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Who are the main players
in international trade? -1
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P. Montalbano - Sapienza Università di Roma
Trade is global…
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Production is global: Boeing 787 Dreamline
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Trade in intermediates
P. Montalbano - Sapienza Università di RomaBEC – World Trade Network of Trade in Intermediates, 2012
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iPhone
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iPhone: Added Value decomposition
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iPhone: global components
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The Smile curve of the iPhone
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The evolution of international trade:
let’s wrap up International trade has grown tremendously in the last 30 years, much
faster than global output
• World merchandise and commercial services trade have increased by
about 7 per cent per year on average
New players have risen to prominence in world trade, most notably large
developing countries and rapidly industrializing Asian economies
The composition of trade has changed (i.e. the product breakdown of
merchandise trade and the relative importance of commercial services
trade)
Countries have become less specialized over time in terms of their exports
and therefore more similar in terms of their export composition.
Trade has tended to become more regionalized since 1990, particularly in
Asia, but intra-regional trade shares in Europe and North America have
remained steady or declined.
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Trade is essentially a North-North phenomenon (60-70%)
Countries trade also in similar goods
Trade is not only between producers and final consumers:
• Intra-firm trade (30%), intermediate products (35%), final products
(35%), according to WTO’s estimates
Countries do not trade, firms do. But very few of them do it.
The evolution of international trade:
wrap up -2
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P. Montalbano - Sapienza Università di Roma
*Definitions
The term “developing countries” does not have a precise
definition, but it is a name given to many low and
middle income countries.
Developing Countries
Middle-income (annual per capita Gross National
Product between $ 1.006 and $ 12.275 in 2010) and low
($ 1.005 or less in 2010) countries.
Industrialized Countries
High income countries (except Hong Kong, Israel,
Kuwait, Singapore, and United Arab Emirates): annual
per capita Gross National Product > $12.276 in 2010Source: World Bank
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P. Montalbano - Sapienza Università di Roma
Data: Eurostat Comext and Electoral Commission UK. Figure: Piero
Stanig and Italo Colantone.
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P. Montalbano - Sapienza Università di Roma
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P. Montalbano - Sapienza Università di Roma
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