accounting for underutilization of trade preference programs the us generalized system of preferences the us generalized system of preferences gsp provides duty free market access to developing countries yet despite these preferences about 40 of imports qualifying for gsp enter the us without claiming the benefits this paper documents variations in gsp utilization rates and explains their determinants with a special emphasis on the production structure of beneficiary countries as captured by local content the findings suggest that higher local content shares in output lead to higher utilization rates in addition the utilization rate rises with the preference margin size of exports and regional cumulation in general and declines with degree ofprocessing resume expliquer la sous utilisation des programmes de preferences commerciales le systeme generalise de preferences des etats unis le systeme generalise de preferences sgp donne acces sans droits de douane au marche americain pour des pays en developpement mais malgre ce traitement de faveur a peu pres 40 des importations qui se qualifieraient entrent aux etats unis sans reclamer ces avantages ce memoire documente les variations dans le taux d utilisation du sgp et les facteurs qui peuvent expliquer ce phenomene en mettant l accent sur la structure de production des pays beneficiaires telle que saisie par le contenu local les resultats suggerent qu une portion elevee de contenu local dans le produit entraine un plus haut taux d utilisation du sgp de plus le taux d utilisation s accroit avec la marge de preference la taille des exportations et la cumulation d autres arrangements regionaux et diminue a proportion que le degre de transformation s accroit

import price elasticities reconsidering the evidence recent economic geography and trade empirical studies based on monopolistic competition suggest high levels of trade price elasticities between 3 and 1 1 however price elasticity estimations in trade equations using unit values as price proxies usually lead to lower values of around unity we show that those inconclusive results may be due to some misspecification in these equations as well as measurement errors in prices when suit able instrumental variables are used within a panel of industrialized countries we obtain high price elasticities the majority ranging from i to 13 the highest estimates correspond to industries producing homogeneous goods jel classification c2 c3 and f 1

stabilization of emissions of co 2 a computable general equilibrium assessment a multisector computable general equilibrium model is used to study economic development perspectives in norway if carbon dioxide emissions were stabilized the effects discussed include impacts on main macroeconomic indicators and economic growth sectoral allocation of production and effects on the market for energy the impact of pollutants other than carbon dioxide on emissions is assessed along with the related impact on noneconomic welfare the results indicate that carbon dioxide emissions might be stabilized in norway without dramatically reducing economic growth sectoral allocation effects are much larger a substantial reduction in emissions to air other than carbon dioxide is found yielding considerable gains in noneconomic welfare copyright 1992 by the editors of the scandinavian journal of economics

exporting to new destinations and the effects of tariffs the case of meat commodities this study uses a random parameter probit estimation to examine the effects of tariff liberalization on the probability of establishing new trading relationships in meat commodities our simulation results indicate that the effects of tariff reductions decrease with distance but increase with the level of development the probabilities of trade increase at an increasing rate with the size of tariff reductions thus justifying calls for ambitious liberalization schemes canada and mexico are the nafta countries that are most likely to export in response to eu tariff reductions on bovine and poultry meats while brazil and argentina emerge as the mercosur countries most likely to penetrate the eu bovine meat market after eu tariff reductions uruguay s probability to export poultry meat is most responsive to eu tariff reductions

border carbon adjustment and trade retaliation what would be the cost for the european union unilateral climate policy such as carbon pricing represents an additional cost to the economy especially to energy intensive industrial sectors as well as those exposed to international competition a border carbon adjustment bca is often presented as an attractive policy option for countries that wish to go ahead without waiting for a global climate agreement we used the computable general equilibrium model mirage to simulate the impact of the introduction of a bca on imports of energy intensive products in eu and efta countries and to evaluate the exports their main trade partners would lose given that a bca is a trade measure it might cause disputes at the world trade organization wto if the bca is considered illegal the losses suffered by some partners may justify trade retaliations at that point it would be likely that prohibitive retaliatory tariffs target sensitive products in the eu which are often related to the european agricultural sector these trade measures would limit the drop in production in the energy intensive and trade exposed eite sectors but at the expense of the other sectors nevertheless neither the bca nor retaliation would have sizeable impacts on real income or gdp in the eu or on the retaliators while leading to a small decrease in global emissions

norwegian emissions of co 2 1987 1994 several countries have introduced taxes on fossil fuels with the aim of reducing atmospheric emissions partly because of local environmental goals so2 nox and partly to participate in a global effort to reduce emissions of greenhouse gases many macroeconomic studies based on both global and national models have been made of how emissions can be reduced with the help of taxes and the consequent reduction in gdp following the introduction of such taxes norway has had a co2 tax for five years thereby providing a unique opportunity to evaluate the effects of this tax on emissions the paper provides a counterfactual analysis of energy consumption and emissions if no co2 taxes had been introduced compared with the actual situation in which such taxes exist the effect of a co2 tax on oil consumption and thus co2 emissions is studied on the basis of partial economic models for various sectors of the norwegian economy the study indicates that the co2 tax has had an impact on co2 emissions in norway

do decoupled payments affect u s crop area preliminary evidence from 1997 2000 the federal agriculture improvement and reform fair act of 1996 changed the manner in which the u s government provides direct payments to u s farmers under the fair act producers are eligible for fixed production flexibility contract pfc payments independent of the production of specific crops 1 with a few exceptions 2 supplemental market loss assistance mla payments authorized in subsequent legislation have been made to producers under similar terms i e a producer cannot increase or decrease mla payments by increasing or decreasing production the united states has declared that pfc

retaliating against terrorism rational expectations and the optimality of rules versus discretion the application of rational expectations theory to policies of retaliation against terrorism suggests that only unexpected retaliations will be effective in causing terrorist attacks to deviate from their natural rate and that there is a time inconsistency problem in responding to terrorism since the optimal response rate to terrorism would never be believable to the terrorists the first best policy may be for the government retaliating against terrorism to have its response rate constrained by an externally imposed rule a time series intervention model of terrorist attacks against israel supports the natural rate hypothesis and therefore also the desirability of a retaliatory rule over policy discretion israeli retaliation for the 1972 munich massacre was the first israeli retaliation of unexpectedly large magnitude and it produced a temporary deviation of terrorist attacks from the natural rate retaliation has no long term deterrent or escalation effect

eu economic partnership agreements and wto negotiations a quantitative assessment of trade preference granting and erosion in the banana market the paper provides a quantitative assessment of the impact on the banana market of the expansion of trade preferences the european union granted africa caribbean and pacific acp countries with the economic partnership agreements epa and of the possible erosion of these preferences as a result of different possible conclusions if any of on going wto negotiations the results of the simulations performed suggest that the impact of the epa on production and consumption of bananas in the eu will be limited while benefits for acp countries will be significant at the expense of most favoured nation mfn exporters an agreement between the eu and mfn countries to end the outstanding wto disputes on bananas and or the conclusion of the wto doha round may bring an erosion of the preferential margins currently enjoyed by acp countries of such an order of magnitude as to cancel out most of these benefits

fair trade or trade fair international food trade and cross border macronutrient flows abstract this study examines global food trade from a nutritional perspective paying particular attention to its implications for food security in low income countries by describing food trade in terms of the quantities of three essential macronutrients carbohydrates lipids and proteins embedded in food the analysis goes beyond a simple description of trade values quantities or caloric content as is common in the literature furthermore the study provides estimates of the implicit price of each macronutrient their evolution over time and their implications in terms of north south food trade the data show that over the 1996 2014 period the volume of macronutrients exchanged on international markets has more than doubled with carbohydrates accounting for over 60 of trade flows but proteins and lipids growing at a faster pace proteins were found to be the most expensive macronutrient followed by lipids and carbohydrates in general macronutrients embedded in animal and processed products are more expensive than those in vegetal and unprocessed food the results also suggest that the participation in international food trade has positive effects on low income countries aggregate food availability and food access two pillars of food security indeed low income countries register a net inflow of all macronutrients and take advantage of nutritional arbitrages available on international food markets due to macronutrients price differentials

carbon taxes and carbon emissions trading this paper surveys the literature on and examples of current implementation of carbon taxes and carbon emission permits it sets out the theoretical basis for these instruments with special reference to the revenue recycling and tax interaction effects this theoretical work concludes that instruments which raise revenue which can be recycled so as to reduce pre existing distortionary taxes are significantly less costly than those which do not the paper then reviews the sizable literature on the distributional effects of these instruments especially with regard to industrial competitiveness and regressive effects on low income groups evaluating attempts to mitigate these where they are perceived as unacceptable the paper concludes that such efforts at mitigation while possible can substantially reduce the efficiency benefits of the instruments the projected costs of carbon taxes depend on a wide range of assumptions this is still a contested area but the paper concludes that on a range of plausible assumptions these costs need not be high finally the paper notes that early evaluations of the environmental effectiveness of carbon taxes have been generally positive this suggests that if concern about anthropogenic climate change continues to increase more countries will introduce carbon taxes and emission permits with the latter increasingly auctioned

trade liberalisation the effects of free trade agreements on the competitiveness of the dairy sector in recent years preferential trade agreements ptas free trade agreements ftas in particular have proliferated while wto negotiations have stagnated this paper contributes to the literature on trade liberalisation and the agricultural sector by analysing the effects of ftas on the competitiveness of the dairy sector across 76 countries and over a 20 year period from 1990 to 2009 with a longitudinal econometric model the results demonstrate that when a country has a revealed comparative advantage in the dairy sector ftas positively influence several indicators of competitiveness in the dairy sector such as production market share and trade balance the results also indicate that multilateral ftas are more beneficial than bilateral ftas there is strong empirical evidence that ftas are more beneficial to developed countries than to developing countries there is no statistical evidence to support the hypothesis about a relationship between ftas and farm gate price

a future for carbon taxes abstract carbon taxes have been frequently advocated as a cost effective instrument for reducing emissions however in the practice of environmental policies only six countries have implemented taxes based on the carbon content of the energy products in this paper we evaluate carbon taxes with regard to their competitiveness distributional and environmental impacts the evidence shows that carbon taxes may be an interesting policy option and that their main negative impacts may be compensated through the design of the tax and the use of the generated fiscal revenues

multilateral agricultural trade liberalisation the contrasting fortunes of developing countries in the doha round an applied general equilibrium model is used to assess the impact of multilateral trade liberalisation in agriculture with particular emphasis on developing countries we use original data and the model includes some specific features such as a dual labour market applied tariffs including those under preferential regimes and regional agreements are taken into account at the detailed product level together with the corresponding bound tariffs on which countries negotiate the various types of farm support are detailed and several groups of developing countries are distinguished simulations give a contrasted picture of the benefits developing countries would draw from the doha development round the results suggest that previous studies have neglected preferential agreements and the binding overhang in tariffs as well as domestic support and have treated developing countries with a high level of aggregation and been excessively optimistic about the actual benefits of multilateral trade liberalisation regions like sub saharan africa are more likely to suffer from the erosion of existing preferences the main gainers of the doha round are likely to be developed countries and cairns group members

more or less ambition in the doha round winners and losers from trade liberalisation with a development perspective what is at stake in the standoff and suspension of the doha round of trade talks what impact would an agreement based on greater or lesser levels of ambition have on developing countries whose economies are relatively dependent on agriculture using the mirage computable general equilibrium model of the global economy in this article we compare different scenarios for the doha agricultural and nama negotiations taking real numbers from the proposals on the table from the united states us and the european union eu in december 2005 the results for both scenarios demonstrate the high stakes for successful completion of this negotiation given the positions articulated by the countries involved a cooperative reform outcome by the us and the eu based on the most ambitious components of their negotiating proposals delivers noticeably more benefits than an unambitious outcome we measure the degree of ambition in each scenario by the construction of a mercantilist trade restrictiveness index and focus the analysis on the impacts on developing countries

the effects of an increase in power rate on energy demand and output price in korean manufacturing sectors in korea price subsidies for industrial power are provided by the government in order to enhance industrial competitiveness and curb inflation however this repeatedly causes electricity shortages in the peak summer and winter seasons because of over consumption forcing a decline in the demand for electricity by raising power rates would thus help prevent a national blackout lowering dependence on foreign energy and reducing co2 emissions cost effectively this paper simulates the effects of a rise in power rate on demand for electricity and output price by estimating a restricted cost function in which the quantity of raw materials is set to its cost minimizing level jointly with an inverse supply relation for the top three electricity intensive manufacturing sectors the empirical results indicate that a 10 increase in electricity rate would result in 8 0 10 1 less demand across all three manufacturing sectors ceteris paribus the impact on output price is of little statistical significance in the basic metals sector while output price on average falls by 0 16 in the tv and communication equipment sector

how decoupled is the single farm payment and does it matter for international trade the extent to which decoupled agricultural support including the european union single farm payment sfp creates production incentives remains unclear we apply an extended version of the standard global trade analysis project model and generate a set of 21 databases that captures a comprehensive representation of domestic support by considering and modeling a range of different assumptions regarding the sfp s degree of decoupling we investigate the sfp s effect on the model s results the results of our analysis reveal substantially different effects that depend on the degree of decoupling and the findings can help validate trade analysis results particularly for developing countries

the economics of counterterrorism a survey we provide a review of theoretical and empirical contributions on the economic analysis of terrorism and counterterrorism we argue that simple rational choice models of terrorist behavior in the form of cost benefit models already provide a well founded theoretical framework for the study of terrorism and counterterrorism we also hint at their limitations which relate to the failure of accounting for the dynamics between terrorism and counterterrorism that may produce unintended second order effects as well as for the costs associated with counterterrorism and its international dimension we reevaluate previously proposed counterterrorism strategies accordingly finally in the light of our findings we discuss interesting areas of future research

whither armington trade models the armington trade model distinguishes commodities by country of origin and import demand is determined in a separable two step procedure this framework has been applied to numerous international agricultural markets with the objective of modeling import demand in addition computable general equilibrium cge models commonly employ the armington formulation in the trade linkage equations the purpose of this paper is to test the armington assumptions of homotheticity and separability with data from the international cotton and wheat markets both parametric and nonparametric tests were performed and the empirical results reject the armington assumptions this has important implications for international trade modeling and cge modeling

free riding and paid riding in the fight against terrorism overt terrorist acts and the specter of terrorism impose significant costs on the community of civilized nations these costs can be reduced by taking retaliatory action against terrorist organizations and the countries that sponsor them assuming a positive range over which retaliatory cost is less at the marginal than the resulting benefit from reduced terrorism there exists some positive level of retaliation which is efficient from the perspective of the victimized countries an obstacle to achieving the efficient level of retaliation against terrorists results from the fact that much of the benefit from retaliation is general and cannot be captured entirely by the retaliating country a fully efficient policy of retaliation will therefore require a cooperative response from all victimized countries achieving this cooperation however may confront the well known free rider or prisoner s dilemma problem while collectively the targets and potential targets of terrorism are better off retaliating each will likely see its advantage best served by not retaliating in this case it is quite possible that no one will retaliate when the best response is for everyone to retaliate a closer look at the problem of terrorism however suggests that the standard prisoner s dilemma may not be a significant obstacle to retaliation under plausible conditions it will pay one country to retaliate even if other countries choose to free ride indeed given the two options in the standard prisoner s dilemma setting cooperating retaliating or noncooperating nonretaliating it is very likely that all victimized countries will retaliate that no country will take a free ride but this does not mean that the prospects for genuine cooperation in confronting terrorism are good in the case of retaliation against terrorist free riding is only one way a country can increase the net benefit it receives from the public good provided by another it is possible for one country to in effect sell the public good of reduced terrorism that is generated by the retaliation of another country this paidrider possibility has important and obviously adverse implications for the prospects that retaliation will result from a cooperative effort on the part of those countries victimized by terrorists in section i the implication of free riding and paid riding for retaliation against terrorists will be investigated in a two country setting in section ii the circumstances that either encourage or discourage a country from being a paid rider on the retaliation of another country will be considered and some real world examples of paid riding will be discussed

the cycle of violence an empirical analysis of fatalities in the palestinian israeli conflict thomas c schelling s the strategy of conflict 1960 laid the groundwork for thinking about conflicts as non zero sum games in which each side may choose to exercise or threaten violence in order to deter or incapacitate the opponent or simply to exact revenge it has been difficult however to test many of the predictions formulated by schelling and others because of the lack of data on the strategic choices of the two sides engaged in a conflict observed at a high enough frequency for statistical tests to have any power this paper uses daily frequency data to analyze the dynamics of violence during four years of the second intifada the most recent outburst of the palestinian israeli conflict

the sufficiency strategy would rich world frugality lower environmental impact abstract one alleged weapon against unsustainable environmental impact is for the wealthy to consume less this sufficiency strategy is to complement the efficiency strategy of lowering ratios of resource inputs to economic outputs the former would reduce the affluence factor in i pat the latter the technology factor that the latter strategy suffers from a consumption rebound is widely recognized this paper identifies a similar rebound when the affluence factor is autonomously lowered the lower initial demand lowers prices which in turn stimulates new demand by others the strategy moreover addresses only the rich raising questions of its theoretical maximum efficacy its proponents usually conflate frugality with the north south dichotomy and intra generational with inter generational equity moreover there are difficulties with the supporting arguments that frugality is good for one s own sake as well as for the environment and that the rich should lead the way to living more lightly personal behaviour change is furthermore not a substitute for international political efforts finally since all changes in right side factors of the i pat equation change other right side factors such indirect attacks on impact should be abandoned in favor of supply and emissions quotas