How Dependent Are the Baltic States on Russia?

Abstract

This article explores the impact of international trade on private investment in the three post-Soviet Baltic states—Estonia, Latvia and Lithuania—by applying the business cycle synchronisation theory and highlighting the importance of big neighbours for small open economies. The study covers 1995–2015. The study shows that changes in the GDP growth of trading partners can have a greater effect on domestic private investment in small open economies than GDP changes in their own economies. The ongoing business cycle synchronisation between Russia and the Baltic countries means that the impact of Russia as a big neighbour remains an important issue for the latter.     

China's Politics and Bilateral Trade Linkages

Abstract

China's position in the world economy during the past half-century provides vital information for investigating the relation between politics and trade. Although there is a substantial number of studies in this area, the current study extends the literature in at least three ways: (1) it is one of the first studies that investigates the problem of a potential sample selection bias—as a result of the fact that countries taken up in the analysis are not randomly sampled from all countries in the world; (2) it considers third-country effects that follow from the fact that China's relation with any two countries is affected by the relation between these countries themselves; and (3) it tests the impact of five political arrangements simultaneously, which is more comprehensive than any former study. By using data as to 78 of China's trade partners over the 1950–2002 period, this study provides empirical evidence for the hypotheses that the establishment of diplomatic relations, cooperation, visits of heads of states and political system similarity are associated with greater trade flows. The hypothesis that member countries of a Preferential Trading Agreement have had smaller trade flows with China, which is no member of any of these Preferential Trading Agreements, is not supported by the results.     

The Trade-Induced Learning Effect on Growth: Cross-Country Evidence

One of the important trade effects on growth is technology diffusion through learning by doing. Chuang [1998] proposed a trade-induced learning theory in which the nature of traded goods and the trading partners are two key factors determining the effectiveness of the trade-induced learning. The former conveys the characteristics that a country can learn; the latter determines the level of technology from which a country can learn. Using cross-country data, this article constructs a set of the trade-induced learning variables by taking into account trading partners and the characteristics of the traded goods and further tests the trade-induced learning hypothesis. The results show that holding other variables constant, trade-induced learning has a positive and significant effect on growth and the estimated effect implies that a one-standard-deviation increase in the trade-induced learning variable is estimated to generate an effect of between 0.4 to 1.0 percentage points on the annual growth rate. Robustness test shows that the trade-induced learning variable passes the extreme-bound analysis and also outperforms other conventional trade variables advocated in the literature.     

China–CEE Trade,Investment and Politics

Abstract

The growing and intensifying cooperation between China and 16 Central and Eastern European (CEE) countries has generated extensive criticism by and concerns among EU institutions and Western European member states of the Union. According to diplomatic presumptions, China aims to gain political leverage in exchange for economic benefits in the EU through its CEE members. The following article attempts to evaluate the correlation between the quality of bilateral political relations and economic relations of China and CEE countries in order to draw conclusions on the importance or, on the contrary, the irrelevance of Chinese activity in the region.     

Business,Brokers and Borders: The Structure of West African Trade Networks

Abstract

The objective of this paper is to show how a formal approach to networks can make a significant contribution to the study of cross-border trade in West Africa. Building on the formal tools and theories developed by social network analysis, we examine the network organisation of 136 large traders in two border regions between Niger, Nigeria and Benin. In a business environment where transaction costs are extremely high, we find that decentralised networks are well adapted to the various uncertainties induced by long-distance trade. We also find that long-distance trade relies both on the trust and cooperation shared among local traders, and on the distant ties developed with foreign partners from a different origin, religion or culture. Studying the spatial structure of trade networks, we find that in those markets where trade is recent and where most of the traders are not native of the region, national borders are likely to exert a greater influence than in those regions where trade has pre-colonial roots. Combining formal network analysis and ethnographic studies, we argue, can make a significant contribution to the current revival of interest in cross-border trade in the policy field.     

Regionalism in the Global South: Mercosur and ECOWAS in trade and democracy protection

ABSTRACT

The aim of this article is to analyse the performance of regionalism in the Global South through a comparative analysis of Mercosur and Ecowas with regard to the trade and democracy protection agendas, by contrasting their institutional design and regional leadership concerning the two issues. Firstly, it analyses the evolution of intra-regional trade as well as the trade agenda of each bloc concerning international negotiations with other states or economic blocs. Secondly, it discusses the relevance of democratic stability in the two regional organisations and how each organisation has performed in cases of democratic rupture in member states. When comparing the dynamics of the two organisations, we argue that differences in terms of institutional design and regional leadership have meant that Ecowas has been less ambitious than Mercosur in its trade agenda, but more decisive vis-à-vis the region’s democratic stability. Thus, this article aims to contribute to the comparative regionalism literature, setting out an analytical comparative framework for assessing the performance of regional organisations, which remains a difficult task for this particular research agenda.     

Bilateral Graduation: The Impact of EPAs on LDC Trade Space

Abstract

As trade is prominently mainstreamed into development policies, the ongoing Economic Partnership Agreement (EPA) negotiations between the EU and the African, Carribbean and Pacific (ACP) countries are a turning point in Least Developed Countries (LDC) engagement with the international trading system. The process covers most UN-designated LDCs and is the first time they feature in the first row of international trade talks. We explore how the space LDCs occupy in the trade regime will be affected by EPAs. The analysis suggests that they move LDCs towards effective graduation from special and differential treatment, while innovating on policy tools to address underdevelopment.     

South Africa's governance challenges: assessing the South Africa–China mineral case

The past 50 years of Africa's history have been blighted by a lack of good governance, which has hindered economic growth and political stability. The continent continues to maintain weak states which are clearly evident in the persistent corruption, unconstitutional behaviour, inefficiency, waste and unnecessary bureaucracy that remain widely practised. However, owing to emerging markets such as China and India that have promoted foreign direct investment in developing countries, a lot of speculation has arisen regarding the impact of the Forum for Cooperation between Africa and China on continental governance. The speculation tends to focus on whether the multilateral trade agreement between Africa and China will be mutually beneficial, or promote bad governance practices such as corruption. This paper argues that in order for any multilateral agreement to become economically beneficial in Africa, the continental elites must first implement good governance best practices. Furthermore, the onus is on the African states, not their regional or trading partners, to implement economic institutional change.     

Differentiation within reciprocity: the European Union approach to preferential trade agreements

Recent statements on European Union (EU) trade policy towards developing countries (DCs) have stressed the need for differentiation between trading partners depending on their level of development. But what does this mean in practice? This article assesses the substance of EU trade policy towards a number of partners at different levels of development on the basis of the texts of recent preferential trade agreements (PTAs). It argues that EU PTA policy exhibits differentiation within a general shift towards reciprocity vis-à-vis DCs and that this needs to be assessed at the level of specific policy areas as much as partner country. It also suggests that the factors shaping EU policy vary from case to case with commercial competition and sector interests relatively more important in PTAs with emerging markets and high-income DCs and norms and institutional factors relatively more important in shaping those with least developed or low-income DCs.     

Contending eurocentric theories: the case study of Thailand's economic regionalism in ASEA

ABSTRACT

The Eurocentric theory of economic regionalism, as demonstrated by the empirical case of the European Union, has been widely recognized as the pathfinder, role model, and inspiration for other regional organizations, including ASEAN, due to its continuous attempts at deepening economic integration, formalizing the decision-making process, and legalizing the administrative body. Despite this concordant movement, it is evident from Thailand that ASEAN has evolved differently from the rationale, process, and prediction that Eurocentric theory dictates.

The purpose of this article is to argue that the economic regionalism of ASEAN has not developed in accordance with an economically-oriented rationale. Moreover, the process of economic integration has not necessarily derived from the free trade agreement itself, particularly when a country lacks continuity in terms of its development of regionalist projects. In addition, Thailand has not followed the path of economic integration due to spillover effects. This is because member countries have not given up their sovereignty in favour of the regional institution. Economic regional activities have been broadened within a limited scope, and the expansion has been conducted through bilateral talks, rather than a strengthening of regional solidarity.     

RCEP:特点、问题与前景

作为世界最大的自由贸易安排,RCEP所取得的突破不仅有利于改善区域贸易与投资环境、增强区域供应链、推动经济复苏,还为区域经济一体化、全球贸易自由化、基于规则的多边贸易体制注入了前行的动力。同时,它对中国贸易和投资的可持续发展、高水平制度型开放、实施自由贸易区提升战略、构建国内国际双循环相互促进的新发展格局也可以发挥积极作用。RCEP以市场准入、规则、合作为支柱,具有开放包容、全面、高质量、互惠等诸多特点,并突出东盟方式与东盟中心地位。RCEP的后续生效实施与适时升级,将面临成员差异性与利益诉求复杂性、外部因素牵制、既有FTA规则的多样性与整合的难度、区域身份认同与大国协调等现实问题的挑战,仍需要以渐进灵活的方式,不断推动其深化和拓展。中国应一如既往支持东盟的主导地位,推动RCEP尽快生效。既要助力东盟提升凝聚力、加强大国协调,也要加速推进中日韩FTA谈判、加快与东盟成员的FTA构建。应不断提高规则利用率,充分发挥FTA本应具有的效应,以制度型开放营造良好营商环境,持续推动区域制度性经济一体化。     

How does trade openness influence budget deficits in developing countries?

Abstract

This paper analyses the effects of trade openness on budget balances by distinguishing the effects of natural openness from those of trade policy. Revealed indicators of natural openness and trade policy are computed. Using GMM-system estimator, the econometric analysis focuses on 66 developing countries over 1974–98. The results show that trade openness increases a country's exposure to external shocks. This enforces the negative impact on budget balances of terms of trade instability. Additionally, trade openness influences budget balances through several other channels: corruption, income inequalities, etc. Then natural openness and trade policy have opposite effects: the former deteriorates budget balances whereas the latter enhances them.     

Does Drug Trafficking Impact Terrorism? Afghan Opioids and Terrorist Violence in Central Asia

ABSTRACT

The relationship between drug trafficking and terrorism remains a contentious issue. While some assert that drug trafficking is a strong predictor of terrorism, others contest this observation. This study focuses on the impact of the Afghan opioid trade on terrorist violence in Central Asia, a region of drug transit states. We employ Geographic Information Systems–enabled visualizations of the drug trade and terrorism as well as statistical tests to study the drug–terror relationship at the subnational level. Our findings lend support to the argument that the drug trade facilitates terrorism, but we also find that the drug–terror relationship is multifaceted, complex, and intimately linked to the state.     

Trading in Paranoia: Exploring Singapore's Security-Trade Linkages in the Twenty-first Century

Singapore's rude awakening to independence has led to the creation of one of the most important and strategic entrepôts in the Asia-Pacific. The country's limited territorial lands and natural resources, combined with huge per capita income, high population density and sensitive racial mix, make Singapore the quintessential pragmatic trading state of the twenty-first century. This paper examines how Singapore has embedded itself at the centre of regional and global trade systems by exploiting various forms of free trade activities including multilateral, regional and bilateral FTAs that underpin its security and survival. It argues that in order to maintain the city-state's geo-economic and geo-political viability, the Singaporean government has progressively linked its security interests with its multilevel free trade activities. Given the ‘vulnerability fetish’ and siege mentality that confront Singaporean leaders and policymakers, the pursuit of economic development via free trade has become the heart of its national security policy and strategy. The paper concludes by arguing that the enhancement and preservation of Singapore's survival as a sovereign nation-state demands a strategic utilization of FTAs with different trade partners, especially with regional and trans-regional powers such as the United States and China.     

Clash of Realities: Gazprom’s Reasoning on the EU Gas Trade

Abstract

Gazprom, the state-controlled Russian energy company, has major export markets in the European Union, but these are changing, challenging the established trading principles of Russian gas. The EU promotes switching to hub-based pricing, whereas Gazprom, despite adapting to some degree, has continued to highlight the advantages of long-term contracts. This article analyses the reasoning of selected Gazprom actors from an institutional-cultural perspective. Apart from conflicts of interest between Russia and the EU, it finds deep-seated differences in worldviews and perceptions of appropriate behaviour in trade relations. Such factors may play a larger role in decision-making than is generally acknowledged.     

The Role of Power in EU–Russia Energy Relations: The Interplay between Markets and Geopolitics

Abstract

Energy trade is an essential factor in EU–Russia relations. This essay argues that Russia and the European Union have deployed two types of power in their post-Cold War energy relationship. Russia has predominantly exerted geopolitical power through the sale of its vast energy resources and selected strategies to channel them to partners. With a large market but lacking fossil fuels, the EU attempted to achieve its aims mostly through regulatory power. However, both the Russian and the EU external energy policy strategies have recently become more nuanced. This evolution in their approaches has resulted in Russia’s gradual acceptance of the regulatory and market principles promoted by the EU.     

Lebanon in the context of regional politics: Palestinian and Syrian involvement in the Lebanese crisis

This article focuses on the negotiation of Economic Partnership Agreements (epas) which form the central focus of the commitments made in the Cotonou Agreement, signed in 2000 by the European Union and the African, Caribbean and Pacific (acp) states. epas are part of a much wider trend witnessed since the creation of the World Trade Organization (wto), characterised by the proliferation of bilateral free trade agreements. The article argues that both the material and ideational interests of the EU need to be considered alongside the historical context of EU–acp relations. The EU is making a concerted effort to ‘lock in’ neoliberalism across the seven different sub-regions of the acp group by negotiating epas that include both reciprocal trade liberalisation and various ‘trade-related’ issues. In this way epas will go beyond the requirements for wto compatibility, resulting in a reduction of the policy space for acp states to pursue alternative development strategies. The article then considers the potential developmental impact of epas with reference to the negotiations with seven of the 15 member states of the Southern African Development Community (sadc). It is argued that the EU is promoting ‘open regionalism’, which poses a threat to the coherence of the regional project in southern Africa.     

Czech and Slovak Relations with China: Contenders for China's Favour

This study examines the prospects for new European Union (EU) member countries in pursuing their foreign policy objectives in relations with China. Both the Czech Republic and Slovakia cherished an idea of making China an alternative economic partner. However, after 1989, China perceived these states as minor, almost unimportant partners, regardless of their efforts. Their profile was raised by EU accession but there was little change in their strength in terms of bilateral relations with China. The article investigates the failures and partial successes of the Czech and Slovak relationships with China, comparing their different approaches to the balance between focusing on political and human rights issues and the pursuit of economic and business interests.     

In Search of Regional Governance in East Asia: Processes and Outcomes

Abstract

This article employs the concept of ‘regional governance’ to analyze both the processes and outcomes of the emerging regional institutional arrangements in East Asia. It argues that while ASEAN has played a significant role in creating and sustaining the ‘processes’ of wider East Asian regional governance efforts, the level of achievement in translating these processes into tangible ‘outcomes’ remains severely constrained by great power rivalry, especially between Japan and China. By focusing on the areas of trade and finance, this article argues that the varying levels of outcomes between these two issue areas can be explained primarily by the degree of convergence between Japanese and Chinese interests. In particular, while Japan and China have a shared interest in contributing to the promotion of regional financial stability, they strongly disagree over the appropriate form and contours of a trade governance system.     

Beyond the Policy-Implementation Gap: How the City of Johannesburg Manufactured the Ungovernability of Street Trading

Abstract

Contemporary cities are said to have become ‘ungovernable’, especially in the Global South. They are certainly more difficult to govern due to the complexification of states’ apparatus (under the double dynamics of neoliberalisation and decentralisation), cities’ larger size, massive poverty, and informality. Yet, the ungovernability thesis arguably stems from a theoretical shift, from local government to urban governance, that has rendered the questions of steering, political choices, and accountability almost impossible to conceptualise. Unpacking the policy instruments used to govern street trading in Johannesburg, the paper shows that its so-called ‘ungovernability’ was largely manufactured by municipal choices.