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Gene Ellis

Learning about global value chains by looking beyond official trade data: Part 1 | vox - 0 views

www.voxeu.org/...ond-official-trade-data-part-1

shared by Gene Ellis on 25 Apr 14 - No Cached
  • Gross trade accounting: A transparent method to discover global value chain-related information behind official trade data: Part 1
  • With the rapid increase in intermediate trade flows, trade economists and policymakers have reached a near consensus that official trade statistics based on gross terms are deficient, often hiding the extent of global value chains. There is also widespread recognition among the official international statistics agencies that fragmentation of global production requires a new approach to measure trade, in particular the need to measure trade in value-added. This led the WTO and the OECD to launch a joint “Measuring Trade in Value-Added” initiative on 15 March 2012, which is designed to mainstream the production of trade in value-added statistics and make them a permanent part of the statistical landscape.
  • All the estimation methods used in recent efforts to measure trade in value-added are rooted in Leontief (1936). His work demonstrated that the amount and type of intermediate inputs needed in the production of one unit of output can be estimated based on the input-output structures across countries and industries.
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  • If one is only interested in estimating the domestic value-added embedded in a country’s or sector’s gross exports, applying Leontief’s insight is sufficient. However, for many economic and policy applications, one also needs to quantify other components in gross exports and their structures. In such circumstances Leontief’s original insight is not sufficient, as it does not provide a way to decompose intermediate trade flows across countries into various value-added terms according to their final absorption,
  • Our gross trade accounting framework in fact allows one to further decompose each of the four major parts of gross exports above into finer components with economic interpretations
  • By the gross statistics, presented in column 1 of Table 1, the trade is highly imbalanced – Chinese exports to the US ($176.9 billion in 2011) are five times that of US exports to China ($35.1 billion in 2011). If we separate exports of final goods and of intermediate goods (reported in columns 2a and 2b of Table 1), we see that most of the Chinese exports consist of final goods, whereas most of the US exports consist of intermediate goods.
  • In other words, the US exports rely overwhelmingly on its own value-added (only 2.1% from China and 5.8% from other countries in 2011), whereas the Chinese exports use more foreign value-added, especially value-added from third countries (with 3.2% from the US and 23.1% from Japan, Korea, and all other countries).
  • As a consequence of these differences in the structure of value-added composition, the China–US trade balance in this sector looks much smaller when computed in terms of domestic value-added than in terms of gross exports.
  • By identifying which parts of the official data are double counted and the sources of the double counting, our gross trade accounting method provides a transparent way to bridge official trade statistics (in gross terms) and national accounts (in value-added terms) consistent with the System of National Accounts standard.
Gene Ellis

American trade policy: How to make the world $600 billion poorer | The Economist - 0 views

www.economist.com/...pensive-mistake-how-make-world

american trade policy

shared by Gene Ellis on 25 Feb 14 - No Cached
  • American trade policy How to make the world $600 billion poorer
  • Reasonable estimates say that the Transatlantic Trade and Investment Partnership (TTIP) and the Trans-Pacific Partnership (TPP) could boost the world’s annual output by $600 billion—equivalent to adding another Saudi Arabia. Some $200 billion of that would accrue to America.
  • And the actual gains could be even larger. The agreements would clear the way for freer trade in services, which account for most of rich countries’ GDP but only a small share of trade. Opening up trade in services could help reduce the cost of everything from shipping to banking, education and health care. Exposing professional occupations to the same global competition that factory workers have faced for decades could even strike a blow against the income inequality that Mr Obama so often decries
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  • Why should Japanese politicians risk infuriating their farmers when any agreement can be torn up on Capitol Hill?
  • Europe’s leaders will now doubt America’s commitment, given how feebly Mr Obama has fought for fast-track. Trade sceptics, such as French farmers, are drooling. Angela Merkel, Germany’s chancellor, who is already furious about American spying, may decide that a trade deal is not worth battling for.
  • He seldom mentions, for example, that cheap imports help the poor by cutting their shopping bills, and so reduce inequality of consumption.
Gene Ellis

Kerry promotes U.S.-European trade deal - The Washington Post - 0 views

www.washingtonpost.com/...2-814b-063623d80a60_story.html

shared by Gene Ellis on 27 Mar 13 - No Cached
  • France wants to slow down consideration of the proposed transatlantic free-trade zone encompassing about 40 percent of the world’s trade. Germany and Britain are in favor of the plan and want to move fast.
  • The Obama administration says a comprehensive deal would further open European markets and expand exports to the euro zone of U.S. goods and services, currently worth $459 billion a year. Backers say the deal would add more than 13 million jobs in the United States and Europe.
  • But supporters also fear that trade talks will bog down or collapse over parochial concerns, and must be streamlined to succeed.
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  • one of the objections that France is expected to raise over what it calls cultural exceptions to free trade on products with a specific geographic or national significance, such as Champagne wine.
Gene Ellis

The Doha Trade Talks - Council on Foreign Relations - 0 views

www.cfr.org/...p10555

trade talks council relations

shared by Gene Ellis on 04 Apr 12 - No Cached
  • Gene Ellis on 04 Apr 12
     
    DOHA TRADE TALKS
Gene Ellis

Carmakers Are Central Voice in U.S.-Europe Trade Talks - NYTimes.com - 0 views

www.nytimes.com/...for-us-europe-trade-talks.html

shared by Gene Ellis on 18 Feb 15 - No Cached
  • With the dexterity of thieves stripping a vehicle for parts, they remove each van’s engine, bumpers, tires, drive shaft, fuel tank and the exhaust system.
  • Next, the crews pack everything into steel freight containers, which begin a journey by river barge and cargo ship to Ladson, S.C., near the port of Charleston. There, American teams put the vans back together again.
  • It would be more efficient to ship the vans in one piece, of course. But with current trade rules, efficiency is seldom the goal.
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  • Daimler’s stripped-down vans travel by cargo ship to Ladson, S.C., where a token portion of assembly occurs to avoid a costly American tariff.
  • It was first imposed on European light trucks during the 1960s in retaliation for German and French trade restrictions on American chickens.
  • The importance of European-American auto production, meanwhile, was highlighted by Volkswagen’s announcement on Monday that it would open a new production line in Chattanooga, Tenn., to make sport utility vehicles.
  • In Europe, discussion about the economic benefits of an agreement has been overshadowed by fears that more open trade would expose the Continent to what are widely perceived as less stringent safety and environmental standards in the United States. (And once again, chickens play a big role.)
  • Trucks, cars and other transportation equipment such as airplanes make up the second-biggest category of merchandise traded between the United States and Europe, just behind chemicals.
  • n the first three months of 2014 alone, the United States exported $2.6 billion in motor vehicles and parts to the European Union, and imported $12.3 billion worth.
  • The engines and other components used in Freightliner heavy trucks made in Portland, Ore., are similar to those installed in Mercedes-Benz heavy trucks made in Wörth, Germany. But Daimler must design and engineer many parts twice — and submit them for regulatory certification twice — to meet different United States and European rules.
  • The reason that Daimler goes to the trouble of finishing assembly in Germany in the first place is that the vehicles must be test-driven before they leave the factory. It would be too costly to set up a separate testing operation in the United States, the company said.
  • Industries like chemicals and pharmaceuticals are even trickier, and food is a particularly emotional issue in Europe.
  • there is a fixation on American chickens disinfected with chlorine, which local consumers find repellent
Gene Ellis

Europe Eyes Trade Pact With Obama - NYTimes.com - 0 views

rendezvous.blogs.nytimes.com/...ope-eyes-trade-pact-with-obama

europe eyes trade pact obama

shared by Gene Ellis on 08 Nov 12 - No Cached
  • “A car tested for safety in the United States could be sold in Europe without further tests, while a drug deemed safe by Brussels would not have to be approved as well by the U.S. government,” according to a Reuters report that cited examples of the benefits of a free-trade agreement.
Gene Ellis

IMF's Blanchard: Global Economy Gripped By Meta-Uncertainty - WSJ.com - 0 views

stream.wsj.com/...SS-2-33475

shared by Gene Ellis on 17 Jul 12 - No Cached
  • In 2008-09, there was a collapse of global trade. We were all very surprised. Output was not doing well, but the collapse in global trade was enormous. We realized at the time that the elasticity of trade with respect to global output was not 1, as you might think, but more like 3 to 4. So this explained it. And then it recovered like crazy.
  • This is still true. If global output goes down by 1%, global trade goes down by 3% to 4%.
  • What Europe needs to do:
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  • These countries have to do what they need to do. There’s no question there has to be fiscal consolidation. We can discuss the pace, but it has to happen. The other is competitiveness, which I see as much tougher of the two.
  • It has to be through a combination of structural reforms, hoping they will work, and nominal wage adjustments, although one cannot be incredibly optimistic about the scope there. We know that that’s going to take a while.
  • Take the big two, Italy and Spain. You can always dream of more, but I think they’re serious about doing it, both on the fiscal front and the structural-reforms front. I think it may well be that even if they do everything they can, and do it right, it’s still not enough. They have to have help — I would say when needed rather than if needed.
  • The banks have to be recapped, and they have to be recapped not using sovereign money. I think that is really very, very high on the agenda. I don’t think they can make it without help to the banks.
  • If the banks were healthier, I think they would lend at lower rates
  • And the sovereigns have to be able to borrow at reasonable rates. As long as they behave and they do all the things they’re asked to do, they have to be able to borrow at lower rates than they currently do. Some way has to be found to do it.
  • It’s not that I don’t care about the way it’s done. But I care about the result. These countries, if they’re doing the right things, they have to be able to finance themselves.
  • Some people say a euro depreciation would help Europe a lot. I think there is an argument for it, even in a multilateral context. You have to depreciate vis-a-vis somebody, so somebody has to appreciate. My sense is we would like most of the depreciation to be vis-a-vis emerging-market countries. Even if there was a depreciation vis-a-vis the dollar, I still think it would be a good thing.
  • We’ve done simulations. Other people have done simulations as well. 10% real depreciation would lead to a 1.4% increase in growth for a year — which at this stage, given the numbers, would be nice. The footnote, and it’s a very big footnote, is that … how much you benefit depends on how big your exports are related to your GDP and where you export — whether you export in the euro zone or outside. Unfortunately the countries that benefit the most are the countries that really don’t need it — Germany, the Netherlands. The countries that benefit the least are Greece, Portugal, Italy, Spain
  • There’s no question, the periphery countries have to improve their competitiveness. That’s not something even monetary policy at the level of the euro or fiscal policy can do. This they have to do through productivity improvements or nominal wage adjustments.
  • It is no secret that they have tended to respond to crises rather than be much more proactive.
  • And now there’s a sense in which they’re thinking about the full architecture.
  • At this stage I think there is a genuine commitment to thinking about the whole beast. That’s why these words — fiscal union, banking union — have come in.
  • Where I think there is still a problem is that all these things will take a lot of time. And some of these things may not happen because they’re unpopular. And meanwhile, there is a fire in the house. So they have to be willing to do more in the short term.
Gene Ellis

Trade: In my backyard | The Economist - 0 views

www.economist.com/...-way-regional-ones-my-backyard

multilateral trade regional

shared by Gene Ellis on 09 Jan 14 - No Cached
  • Multilateral trade pacts are increasingly giving way to regional ones
Gene Ellis

Labor's Might Seen in Failure of Trade Deal as Unions Allied to Thwart It - NYTimes.com - 0 views

www.nytimes.com/...nions-allied-to-thwart-it.html

trade deal failure unions

shared by Gene Ellis on 14 Jun 15 - No Cached
  • Labor’s Might Seen in Failure of Trade Deal as Unions Allied to Thwart It
Gene Ellis

The problem with TTIP | vox - 0 views

www.voxeu.org/...problem-ttip

shared by Gene Ellis on 05 Feb 15 - No Cached
  • The problem with TTIP
  • The TPP is a deep international integration arrangement between the US and 11 other Pacific states, which would cover 40% of world GDP and over 30% of world trade. It seeks to address as series of issues that 21st century commerce, but arguably its most obvious feature is that it excludes China – the world’s largest international trader and before long the world’s largest economy. There are, of course, the ritual genuflections towards ‘open regionalism’ – China can join if only it will agree to the necessary policy requirements – but this is about as much use as saying the Chief Rabbi can dine with you while insisting that the menu contains pork.
  • By signing TTIP Europe would be tying itself to a static rather than a dynamic part of the world economy and substantially reinforcing the US’s exclusionary policies.
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  • In the areas that are sound, it is mainly that TPP members will probably have to approach the US norms faster than desirable, and possibly faster than they can effectively administer. But there are also areas in which the TPP is not in the interests of most non-US members.
  • However, it is generally accepted that TTIP is more important to Europe than to the US, which greatly strengthens the US’s hand in negotiations.
  • it is widely accepted that the deeper intra-European integration fostered by the Single Market initiative was a major contributor to European prosperity between 1992 and 2007
  • he US has strongly promoted Investor-State Dispute Arbitration in which foreign-owned private firms can seek settlements against governments for taking actions that are not prohibited by the agreements but which reduce the value of investments that the firms have made in member countries.
  • For states that do not have a lot of, say, social or environmental legislation at the time TPP is signed, Investor-State Arbitration threatens to make progress in these dimensions difficult.
  • f China, India or Brazil felt that these disciplines were too arduous or just did not fit, the world trading system would be effectively be split with arguably the most dynamic areas excluded. And given that the TPP would be attractive to smaller economies and that the latter would probably be offered quite accommodating terms, the split would probably deepen rather than the opposite.
  • This reads very much like an agreement to cooperate to make sure that outcomes in the trading system are as the US and EU want them – and with around half of world GDP between them and a further 15% in the rest of TPP, it suggests that the choice facing other will be capitulation vs. exclusion. I fear the latter.
  • Champions of the multilateral system must be much more explicit about its virtues and value – and among these I include Europe (middle-sized countries with a strong belief in negotiated outcomes and order) and China (which has been a massive beneficiary of open markets and non-discrimination to date).
  • urope had better get on with an internally driven liberalisation, especially of services and utilities markets, to stimulate the recovery quite independent of the outside pressures of a trade negotiation;
Gene Ellis

U.S. Pressure Rises to End Bangladesh Trade Status - NYTimes.com - 0 views

www.nytimes.com/...d-bangladesh-trade-status.html

u s pressure bangladesh trade status nytimes

shared by Gene Ellis on 10 Jan 14 - No Cached
  • Bangladesh’s garment sector represents roughly $19 billion in annual revenue and employs nearly four million workers, most of them women. It sells more than $4.5 billion worth of goods to the United States each year. 
Gene Ellis

The tragedy of Argentina: A century of decline | The Economist - 0 views

www.economist.com/...hat-went-wrong-century-decline

shared by Gene Ellis on 19 Feb 14 - No Cached
  • The tragedy of Argentina A century of decline
  • In the 43 years leading up to 1914, GDP had grown at an annual rate of 6%, the fastest recorded in the world.
  • The country ranked among the ten richest in the world, after the likes of Australia, Britain and the United States, but ahead of France, Germany and Italy.
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  • Its income per head was 92% of the average of 16 rich economies
  • Its income per head is now 43% of those same 16 rich economies; it trails Chile and Uruguay in its own back yard.
  • The election of 1989 marked the first time in more than 60 years that a civilian president had handed power to an elected successor.
  • the repeated recessions of the 1970s and 1980s, the hyperinflation of 1989-90, the economic crisis of 2001 and now the possibility of another crisis to come.
  • But three deep-lying explanations help to illuminate the country’s diminishment. Firstly, Argentina may have been rich 100 years ago but it was not modern. That made adjustment hard when external shocks hit. The second theory stresses the role of trade policy. Third, when it needed to change, Argentina lacked the institutions to create successful policies.
  • Railways transformed the economics of agriculture and refrigerated shipping made it possible to export meat on an unprecedented scale: between 1900 and 1916 Argentine exports of frozen beef rose from 26,000 tonnes to 411,000 tonnes a year. But Argentina mainly consumed technology from abroad rather than inventing its own.
  • External shocks duly materialised, which leads to the second theory for Argentine decline: trade policy.
  • Argentina raised import tariffs from an average of 16.7% in 1930 to 28.7% in 1933. Reliance on Britain, another country in decline, backfired as Argentina’s favoured export market signed preferential deals with Commonwealth countries.
  • an existing policy of import substitution deepened; the share of trade as a percentage of GDP continued to fall.
  • High food prices meant big profits for farmers but empty stomachs for ordinary Argentines. Open borders increased farmers’ takings but sharpened competition from abroad for domestic industry.
  • “One-third of the country—the commodities industry, engineers and regional industries like wine and tourism—is ready to compete,” says Sergio Berensztein, a political analyst. “Two-thirds are not.”
  • Property rights are insecure
  • Statistics cannot be trusted: Argentina was due this week to unveil new inflation data in a bid to avoid censure from the IMF for its wildly undercooked previous estimates.
  • hort-termism is embedded in the system
  • “We have spent 50 years thinking about maintaining government spending, not about investing to grow,” says Fernando de la Rúa, a former president who resigned during the 2001 crisis.
  • The country’s Vaca Muerta (“Dead Cow”) shale-oil and gasfield is estimated to be the world’s third-largest. If Argentina can attract foreign capital, the money could start flowing within a decade.
Gene Ellis

As Prime Russian Trading Partner, Germany Appears Crucial to Ending Crisis - NYTimes.com - 0 views

www.nytimes.com/...-crucial-to-ending-crisis.html

shared by Gene Ellis on 04 Mar 14 - No Cached
  • As Prime Russian Trading Partner, Germany Appears Crucial to Ending Crisis
  • Germany is now heavily reliant on Russia for its energy needs, importing more natural gas from Russia than any other country in Europe
  • the German chancellor has called for a more diplomatic solution, preferring more limited actions like many of her European counterparts.
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  • Germany is the second-largest foreign investor in Ukraine behind Cyprus, which is a transit point for Russian money.
  • About three-quarters of the gas and oil that Germany imported in 2013 came from Russia. The country also acts as a major gas transit hub for countries like France.
  • “Germany in particular is dependent on Russian gas,”
Gene Ellis

RealTime Economic Issues Watch | Transatlantic Economic Sanctions Against Russia - 0 views

blogs.piie.com/realtime

shared by Gene Ellis on 25 Apr 14 - No Cached
  • Transatlantic Economic Sanctions Against Russia
  • First, I have recommended to government officials that US and EU negotiators give priority to energy cooperation and promotion of US exports of liquefied natural gas to Europe during the fourth round of talks on the Transatlantic Trade and Investment Partnership (TTIP) that start on March 10 in Brussels. Efforts should be made to conclude this part of the agreement quickly and immediately implement the obligations on a provisional basis
  • Second, the United States and the European Union should call for special consultations in the International Energy Agency (IEA) to review current oil and gas supply arrangements and reserves in Europe. The IEA should also be called on to assess the implications of the crisis in Ukraine for member and nonmember countries and their options for dealing with potential supply disruptions. Ukraine participates in consultations with IEA members on a regular basis anyway and clearly should be doing so now.
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  • they would help inoculate European economies against the adverse effects of energy disruptions in the medium term.
  • Consideration should be given to invoking GATT Article XXI, which provides exceptions for national security reasons from rights and obligations under the World Trade Organization (WTO), for example. Invoking this WTO exception would allow across-the-board actions against Russia without prior notification or even justification. The national security exception of Article XXI is that broad. In brief, the United States and the European Union could remove in one step all the WTO benefits they accorded Russia when it acceded to the WTO in August 2012. Doing so would disrupt bilateral trade and investment, possibly kicking tariffs back up to Smoot-Hawley levels of the 1930s.
Gene Ellis

Ukraine and Russia: Trading insults | The Economist - 0 views

www.economist.com/...re-intensifies-trading-insults

shared by Gene Ellis on 02 Nov 13 - No Cached
  • Russia is making increasing efforts to deter the biggest country in its former empire from looking west and to prod it into joining the rival, Kremlin-led Eurasian Customs Union instead.
Gene Ellis

Those Depressing Germans - NYTimes.com - 0 views

www.nytimes.com/...-those-depressing-germans.html

shared by Gene Ellis on 04 Nov 13 - No Cached
  • Last year Germany, not China, ran the world’s biggest current account surplus. And measured as a share of G.D.P., Germany’s surplus was more than twice as large as China’s.
  • Now, it’s true that Germany has been running big surpluses for almost a decade. At first, however, these surpluses were matched by large deficits in southern Europe, financed by large inflows of German capital. Europe as a whole continued to have roughly balanced trade.
  • Instead, however, Germany failed to make any adjustment at all; deficits in Spain, Greece and elsewhere shrank, but Germany’s surplus didn’t.
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  • a country that runs a trade surplus is, to use the old phrase, beggaring its neighbors.
  • It shares a currency with its neighbors, greatly benefiting German exporters, who get to price their goods in a weak euro instead of what would surely have been a soaring Deutsche mark. Yet Germany has failed to deliver on its side of the bargain: To avoid a European depression, it needed to spend more as its neighbors were forced to spend less, and it hasn’t done that.
  • They consider their country a shining role model, to be emulated by all, and the awkward fact that we can’t all run gigantic trade surpluses simply doesn’t register.
Gene Ellis

The Politics of Trade: The Top U.S. Negotiator Answers 10 Questions - NYTimes.com - 0 views

www.nytimes.com/...t-obamas-trade-negotiator.html

shared by Gene Ellis on 07 Feb 15 - No Cached
  • The Politics of Trade: The Top U.S. Negotiator Answers 10 Questions
Gene Ellis

Solar Rises in Malaysia During Trade Wars Over Panels - NYTimes.com - 0 views

www.nytimes.com/...ng-trade-wars-over-panels.html

shared by Gene Ellis on 05 Feb 15 - No Cached
  • Solar Rises in Malaysia During Trade Wars Over Panels
Gene Ellis

Growth in Global Trade Is in Ideas, Not Stuff - NYTimes.com - 0 views

www.nytimes.com/...ade-is-in-ideas-not-stuff.html

shared by Gene Ellis on 19 Feb 15 - No Cached
  • Growth in Global Trade Is in Ideas, Not Stuff
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