Showing papers in "The World Economy in 1996"

The Free Trade Area of the Americas: Good for Latin America?

Abstract: The following sections are included:IntroductionMercantilist Bias in the Effects of Discriminatory LiberalizationPreferential Tariff Liberalization: The Basic CaseBeyond the Basic CaseFTAs under QuotasNon-traditional Gains from North-South IntegrationNAFTAStatic Welfare GainsNon-traditional GainsMarket AccessShelter from New Protectionism in the United StatesCredibility to and Lock on the ReformsA Digression to the European UnionThe Free Trade Area of the AmericasRegionalism and HarmonizationA Summary of ConclusionsReferences

Peripherality in economic geography and modern growth theory : evidence from Ireland's adjustment to free trade

Abstract: In light of the ambiguous convergence experience of peripheral regions in the EU and in the post-war world economy, this paper studies the implications of some recent trend models that do not predict convergence as a necessary outcome of market integration. These models are then confronted with data on the Irish experience under free trade. The Irish case is arguably of general interest because it has served as one of the longest-running examples of the type of outward-oriented strategies recommended for developing countries by international institutions such as World Bank and the IMF. The purpose of the paper is twofold: to identify lacunae in the recent theoretical analyses and to develop further insights into the structural transformation of a peripheral economy. (This abstract was borrowed from another version of this item.)

The Government Procurement Agreement: Implications of Economic Theory

Abstract: This paper analyzes the provisions of the new Agreement on Government Procurement (GPA), drawing insights from trade theory and recent developments in the economics of information and law. A central conclusion is that in a world where imperfectly informed procurers purchase from imperfectly competitive firms on behalf of imperfectly informed tax-payers, it is not easy to devise rules which would be optimal in all situations. Nevertheless, the non-discriminatory provisions of the GPA seem to approximate closely the rules which would maximize global welfare. A significant benefit of the GPA is in helping to overcome national agency problems in procurement by creating mechanisms for reciprocal international monitoring supported by multilateral enforcement. There is, however, scope for improvement. First, the GPA does not equip bidders for government contracts to vault over trade restrictions, so the creation of genuine international competition for government procurement remains crucially dependent on the liberalization of trade. Secondly, weaknesses remain in the enforcement mechanism. These include the low level of compensation to a successful challenger, the absence of restrictions on settlements, and the lack of provision for challenge and review of bail-outs. The paper proposes certain improvements. (This abstract was borrowed from another version of this item.)

The European Union's Mediterranean Free Trade Initiative

Abstract: The option of a Euro-Mediterranean Agreement gives the Mediterranean countries a unique opportunity to credibly pursue far-reaching trade liberalization gradually. Further unilateral efforts will be required to ensure that Mediterranean countries gain. Liberalization of foreign direct investment and the service sector are essential to ensure a supply response and create new job opportunities. Many countries in the Middle East and North Africa that are considering liberalizing, privatizing, and deregulating markets face difficult policy issues. Gradual, piecemeal reform efforts have had limited success. The option of a Euro-Mediterranean Agreement (EMA) offers a new opportunity to implement structural reform. Two questions can be posed: (1) Why pursue regional integration? and (2) Is an EMA sufficient? Justifications for regional integration include the following: ° The EMA may offer a stronger mechanism for locking in economic reform than does the World Trade Organization (WTO), while the preferential nature of an EMA might help overcome domestic resistance to liberalization. ° Harmonization of regulatory regimes and administrative requirements could facilitate trade. ° Market access could be more secure if countries agreed not to impose contingent protection, such as antidumping actions. ° Transfers from the European Union to partner countries (financial or technical assistance) would help offset lost tariff revenue and the costs of trade diversion. The EMA signed between Tunisia and the European Union does not go significantly beyond existing multilateral (WTO) disciplines. The long 12 - year transition path may reduce incentives to initiate rapid restructuring and may create problems in implementing future tariff reductions. While the EMA option gives the Mediterranean countries a unique opportunity to pursue far-reaching trade liberalization credibly and gradually, the economic benefits will be limited if trade liberalization is restricted to manufactured products. Service markets and foreign investment must also be liberalized to ensure a supply response and create new employment opportunities. Equally important are factors that cannot be imported through an agreement with the European Union: efficient public institutions, domestic competition, investment in education, high rates of private savings and investment, a stable economy, and openness to the world economy. The greater the extent to which the EMA-based preferential liberalization is extended to non-European countries, the greater the benefits for participating Mediterranean countries. This paper - a product of the Private Sector and Finance Team, Technical Department, Europe and Central Asia, and Middle East and North Africa Regions - is part of a larger effort in the department to monitor trade policy developments in the region.

The Automotive Industry in Southeast Asia: Can Protection Be Made Less Costly?

Abstract: COUNTRIES OF THE ASIA-PACIFIC ECONOMIC COOPERATION AREA (AUSTRALIA, BRUNEI, CHINA, HONG KONG, INDONESIA, MALAYSIA, NEW ZEALAND, PAPUA NEW GUINEA, PHILIPPINES, SINGAPORE, TAIWAN, THAILAND)