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We analyse the likely trade effects of the Trade and Cooperation Agreement (TCA), which defines the post-Brexit trading environment between the United Kingdom (UK) and the European Union (EU). We apply a computable general equilibrium model and focus on trade in value added rather than just the gross values of exports and imports. We describe the TCA and estimate its effects on the costs of conducting UK–EU trade, including various non-tariff barriers in both goods and services. We suggest that the TCA will reduce UK trade significantly: total exports by around 7 per cent and imports by around 14 per cent. In terms of value added (i.e. incomes generated), textiles and vehicles, both of which trade extensively with the EU, suffer heavily, as do services which trade significantly with the EU, face large increases in trade barriers, and experience declining demand from other sectors as those sectors' exports fall. Such inter-industry linkages spread the losses from Brexit widely through the economy. [ABSTRACT FROM AUTHOR]

Coherence between the WTO and the Bretton Woods Institutions (a formal WTO objective) has achieved some minor goals but has been expensive in terms of direct costs and inefficiencies in policy-making and policy debate. The so-called Integrated Framework has achieved relatively little and aid for trade has yet to be fully established. There is little role for the WTO in development and aid policy other than its traditional job of facilitating trade growth, and so its role in aid-for-trade is unclear. Coherence, especially when interpreted as allowing developing countries to avoid trade liberalization in the name of development, has confused and weakened the Doha Round of WTO negotiations. [ABSTRACT FROM AUTHOR]

WTO agricultural reforms Rich countries' agricultural trade policies are the battleground on which the future of the WTO's troubled Doha Round will be determined. Subject to widespread criticism, they nonetheless appear to be almost immune to serious reform, and one of their most common defences is that they protect poor farmers. Our findings reject this claim. The analysis conducted here uses detailed data on farm incomes to show that major commodity programmes are highly regressive in the US, and that the only serious losses under trade reform are among large, wealthy farmers in a few heavily protected sub-sectors. In contrast, analysis using household data from 15 developing countries indicates that reforming rich countries’ agricultural trade policies would lift large numbers of developing country farm households out of poverty. In the majority of cases these gains are not outweighed by the poverty-increasing effects of higher food prices among other households. Agricultural reforms that appear feasible, even under an ambitious Doha Round, achieve only a fraction of the benefits for developing countries that full liberalization promises, but protect the wealthiest US farms from most of the rigors of adjustment. Finally, the analysis conducted here indicates that maximal trade-led poverty reductions occur when developing countries participate more fully in agricultural trade liberalization. — Thomas W. Hertel, Roman Keeney, Maros Ivanic and L. Alan Winters [ABSTRACT FROM AUTHOR]

Examines the applicability of the Murray Kemp and Henry Wan theorem, which focuses on regional integration schemes. Tenets of the Kemp-Wan theory; Limitations of the theory; How the theory has been applied by other theorists; Expansion on the Kemp-Wan theory.

Regional integration agreements are examples of second-best policies and have an ambiguous impact on welfare. This article builds a model in which regional integration agreements unambiguously raise welfare by correcting for externalities. It assumes that trade between neighboring countries raises trust between them and reduces the likelihood of conflict. The optimum intervention in that case is a subsidy on imports from the neighbor. The article shows that an equivalent solution is for the neighboring countries to tax imports from the rest of the world—that is, to form a regional integration agreement—together with some domestic taxes.The article shows that (1) the optimum tariffs on imports from the rest of the world are likely to decline over time; (2) deep integration implies lower optimum external tariffs if it is exogenous; (3) optimum external tariffs are higher before deep integration and lower thereafter if deep integration is endogenous; and (4) enlargement of bloc size (in terms of symmetric countries) has an ambiguous impact on external tariffs but raises welfare, and some form of domino effect exists. [ABSTRACT FROM AUTHOR]

Overwhelming evidence links openness and economic growth. In recent years many developing countries have attempted to liberalize their trade and investment regimes, mostly through autonomous unilateral liberalization. At the same time, a growing number of governments have begun to explore and participate in regional trading agreements. The agreements grant reciprocal trade preferences to participating countries, resulting in discrimination against nonmembers.The causes and consequences of regional integration have given rise to an extensive and vigorous debate among both scholars and policymakers. However, the quality of this debate has been seriously hampered by the absence of clear analytical models and empirical evidence on many of the factors under discussion. Few of the recent arguments in favor of regional integration arrangements have been satisfactorily formalized or tested. To address some of these issues, a World Bank research program focuses on new and developing country aspects of regionalism. The program explores lacunae in the traditional static analysis of regional integration arrangements; addresses the dynamic effects of integration, the economics of deep integration, and the politics and political economy of regional integration arrangements; and compares regionalism with multilateralism. The articles in this symposium address the topics of dynamics, politics, and political economy in regional integration agreements. [ABSTRACT FROM AUTHOR]

This paper assesses the impact of Britain's accession to the EEC on her imports of manufactures. It argues that account must be taken of the substitutability of imports for home production, and that price effects must be modelled consistently. It applies Deaton and Muellbauer's “Almost Ideal Demand System” to annual data on UK home sales and imports from ten sources. It identifies considerable trade creation, but little or no trade diversion. [ABSTRACT FROM AUTHOR]

Analyzes the effects of an expected future voluntary export restraint (VER) on the level of firms' exports to a market. Dependence of exports increase on the degree of collusion in the exporting industry; Anticipated restrictiveness of the VER; Likelihood of exporters' curtailing their exports with VER; Response of European Community to surveillance.

This article discusses the role of the General Agreement on Tariffs and Trade, and in particular the eight rounds of General Agreement on Tariffs and Trade talks, in the balance between bi-lateralism and multi-lateralism. This article also seeks to place the most recent round in a historical context, and to show how its agenda and procedures, as well as its problems and possible outcomes, have arisen from the conjunction of developments in patterns of world trade and the evolution of the General Agreement on Tariffs and Trade itself.

We examine export performance in the transition economies of Europe and central Asia. We conclude that early success in exporting required the simultaneous pursuit of stabilization and liberalization. Neither liberalizing the foreign trade regime alone nor drastic devaluations of domestic currencies will improve trade performance unless domestic prices are decontrolled, inflationary expectations lowered, and administrative controls over the economy relaxed. Within the foreign trade regime, removing export controls appears a more immediate priority than relaxing import controls: export controls induce undervaluation and high levels of protection that insulate domestic producers and consumers from international markets. [ABSTRACT FROM AUTHOR]

Previous economic policy in the Soviet Union and Eastern Europe sought to restrict international trade with market economies. Hence, liberalization and reform should now lead to a huge increase in such trade. This will have a major impact both on the reforming economies and on their new trade partners. In this article, the authors examine the opening up of international trade in Eastern Europe. They develop an empirical model of trade flows between existing market economies, and use this to forecast long-run trade flows as the Soviet Union and Eastern Europe are reabsorbed into the world economy.

The article investigates into the impact of excess pressure of demand on export performance in Great Britain. It generalizes the pressure hypothesis to take explicit account of changes in the profitability of exporting relative to selling at home. It hypothesizes that for any given degree of pressure on capacity, the extent to which exports are cut back is directly related to relative profitability.

This paper surveys the recent literature on trade liberalisation and economic growth. While there are serious methodological challenges and disagreements about the strength of the evidence, the most plausible conclusion is that liberalisation generally induces a temporary (but possibly long-lived) increase in growth. A major component of this is an increase in productivity. Part 2 stresses the importance of other factors in achieving growth, such as other policies, investment and institutions, but argues that many of these respond positively to trade liberalisation. It also considers the implementation of liberalisation and notes the benefits of simple and transparent trade regimes. [ABSTRACT FROM AUTHOR]

Presents an abstract of the article "Opening Up International Trade With Eastern Europe," published in the April 1992 issue of "Economic Policy."