Economic interdependence and international interactions: the impact of country size on political conflict and cooperation

The trade–conflict model claims that one state, designated as the ‘actor’, is deterred from initiating conflict against a trading partner, designated as the ‘target’, for fear of losing the welfare gains associated with trade. This article extends the trade–conflict model to examine the effect of country size on the trade gains among countries. We derive three propositions with regard to international interactions that pertain to the links between trade, conflict and country size. These hypotheses all imply that a country with an improvement in its terms of trade with a large country will decrease conflict more than it would with an improvement in its terms of trade with a small country. A 30‐country sample from the Conflict and Peace Data Bank (COPDAB) is used for empirical tests. The empirical analyses support the derived hypotheses. The model predicts that a country's ability to influence domestic consumption in a trading partner is an important determinant of international interactions.     

European Union External Trade Policy: Multilevel Principal–Agent Relationships

This article examines the potential political influences on European Union (EU) external trade policymaking. Given the EU's volume of international trade and its extensive involvement in bilateral and multilateral trade arrangements, a better understanding of how the EU makes external trade policy is increasingly important. It is an extremely complex process—involving the EU public, the 25 member states' parliaments and governments, and the institutions of the EU, including the Council of Ministers, the European Parliament, and the European Commission. It is a system of multilevel governance with overlapping jurisdictions with numerous potential access points for societal interests to influence European external trade policy. In this article, we evaluate the probable political channels that societal interests could use to influence EU external trade policy. We employ the principal–agent (P–A) framework to examine five of the more important P–A relationships that are likely to influence EU external trade policymaking. We conclude that EU policymaking as it pertains to external trade is quite insulated from general public pressures. The primary institutions involved in external trade policymaking are the EU Council of Ministers and the Commission—both of which are largely insulated from the public. Future empirical work should focus on this relationship between the Council of Ministers and the Commission.     

Exotica in Context: Reconfiguring Prestige,Power and Wealth in the Southern African Iron Age

Prestige goods, in various combinations and permutations, feature prominently in anthropological and archaeological templates of the emergence of social inequality and early state formation in premodern societies. In Africa, discussion of the contribution of prestige goods to the evolution of cultural behaviours such as class distinction and statehood has been conducted primarily through theoretical lenses that allocate significant weight to the proceeds of external long distance trade. The major outcome is that archaeologists have rarely paused to evaluate not just the definition of prestige goods but also the congruity between global ‘universals’ and African ‘particularities’. Using empirical evidence from the southern African historical and archaeological records, this paper seeks to evaluate the concept of prestige goods and to assess their contribution to the evolution of Iron Age (AD 200–1900) communities of different time periods, from locally centred positions. It reveals that the distribution, use and deposition of exotic imports in southern Africa is not compatible with the pattern suggested by the prestige goods model, and points towards their valuation as embedded within situational contexts of meaning. In fact, hinterland elites controlled neither the source nor the distribution of exotic goods from producer regions, making them a volatile source of power and prestige. While local elites used exotic imports when available, and imposed taxes on their citizens—payable in both local and external goods—land, cattle, religion and individual entrepreneurship were far more predictable and stable sources of prestige, wealth and power. This provides the basis for reassessing the development of complexity in the region and potentially contributes towards global debates on the impact of long-distance trade in the development of complex states.     

Rethinking the International Confederation of Free Trade Unions and its Inter‐American Regional Organization

In responding to the impact of corporate globalization on the working class, the trade union movement needs not only to rethink its strategies, but also to review its international organization. This article highlights changes in the labour market such as the increase in unemployment, deregulation, informality, the stronger presence of women, and the issue of child labour. In this context, the article goes on to consider the growing social movements that might form alliances with trade unions for social change. The present international confederations of trade unions—the International Confederation of Free Trade Unions (ICFTU), the World Confederation of Labor (WCL), and the World Federation of Trade Unions (WFTU)—were profoundly engaged in the cold war. Their structure today, particularly that of the ICFTU, is the same as 50 years ago. The ICFTU's structure mirrors the Leninist model of centralized direction practiced by its traditional opponent, the WFTU. Many national confederations resisted this East‐West pressure during the Cold War, and chose to stay outside all of the international confederations. Post‐Cold War, most have elected to become members of the ICFTU, believing it to be a democratic space for an open political debate, and in the hope of reform. However, expected change has been slow to materialize. This paper explores the way in which changes already made in the Organización Regional Interamericana de Trabajadores (ORIT) might shape ongoing discussions in the ICFTU.     

A trade balance: litigation and negotiation in the World Trade Organization's dispute settlement system

The establishment of the World Trade Organization (WTO) has been widely accepted as representing the legalisation of world trading rules. However, it is important to reflect on the limits of this legalisation thesis in terms of the interface between international and domestic policy processes. By locating trading disputes in a political analysis of policy implementation, it is argued that it is difficult to establish conceptually how the WTO dispute settlement system could have authority separate from and above the conventional international politics of trade policy relations. Instead, the article argues that case outcomes should be expected to be largely the product of domestic political institutions and policy processes, and how these intersect with developments in the WTO dispute settlement system. Brief studies of the Australian government's dispute settlement strategy and two high-profile WTO disputes—the US upland cotton and European Union sugar cases—serve to suggest that the authority of international trade law is not as significant as assumed by the legalisation thesis. Rather, domestic politics and institutions have an important impact on the outcome of trade disputes.     

The Institute’s seventieth volume: the journal,its origins and its engagement with foreign policy debate

Australian Outlook, published initially in 1947, was Australia’s first journal devoted exclusively to the analysis of Australia’s foreign relations and of international affairs. It emerged from a context where nationalist and internationalist sentiments were taking on new prominence and in a time of heightened public awareness of global issues. The journal came to provide a unique venue for academic and expert commentary, especially on the international politics of Australia’s region, as well as on a wide range of topics from defence and trade to great-power dynamics. Early contributions demonstrated a generally sound—and sometimes remarkably prescient—grasp of regional and international trends. The journal built on earlier Australian Institute of International Affairs publications—notably, the Austral-Asiatic Bulletin, inaugurated in 1937.     

30年来国际“贸易-交通-旅游”(3T)互动的统计分析

经济全球化背景下,国际"贸易-交通-旅游"(3T)互动日益增强。采用1982-2011年时间序列数据,分析国际贸易、交通和旅游总量的发展历程,从进、出口分量视角考察三者相关关系,运用最小二乘法构建回归方程。结果发现:①30年来国际贸易、交通和旅游的发展呈持续增长态势。国际贸易和旅游日益重要。②国际贸易、交通和旅游增长过程具有同步性,表现为波动周期同涨同落。③所构建的回归方程决断系数R²均在0.99以上,国际贸易、交通和旅游存在显著相关性。国际货运与国际贸易,国际客运与国际旅游之间具有确定、直接的因果关系;国际贸易与国际旅游的因果性尚待探究。     

A Geographical Product Differentiation Model of Trade Competition in Third Markets

Product differentiation trade models have been developed in order to account for some contemporary patterns of international trade that are inexplicable under the theory of comparative advantage. This paper presents the case for the geographical differentiation of products. A generalized geographical product differentiation model of trade competition in industrial third markets is outlined within a discrete choice framework. The model treats product price and quality, as determined by country of origin, as distinct variables in export competition. An indirect empirical test of the model's validity, using the cases of export competition between the United States and the Federal Republic of Germany and the United States and Japan, indicates that the generalized model is worthwhile in its ability to account for successful trade competition.     

日韩东盟8国入境我国旅游与进出口贸易关系的研究

国际旅游与国际贸易是相互联系的,旅游引发贸易、贸易推动旅游。本文在前期研究工作的基础上,提出了一个旅游与贸易互动的三阶段模型,即旅游引发贸易、贸易推动旅游和偏好-容量限制3个阶段。以日韩东盟8国为例,选用1986年-2009年统计数据,分析了8国入境我国旅游与进出口贸易的关系,构建了入境客流量与进口贸易、出口贸易和进出口贸易3组24个推拉方程。在此基础上,以1992年和2002年为分界点,分析了各阶段入境客流量与进口贸易、出口贸易增长率的变化及弧弹性;依据每万人次入境旅游引发的进出口贸易强度,将日韩东盟8国划分为四种类型,分析了近10年来旅游引起进出口贸易强度的变化,为通过旅游拉动贸易或通过贸易推动入境旅游发展提供了科学依据。     

The Return of Zipf: Towards a Further Understanding of the Rank-Size Distribution

We offer a general-equilibrium economic approach to Zipf's Law or, more generally, the rank-size distribution—the striking empirical regularity concerning the size distribution of cities. We provide some further understanding of Zipf's Law by incorporating negative feedbacks (congestion) in a popular model of economic geography and international trade. This model allows the powers of agglomeration and spreading to be in long-run equilibrium, which enhances our understanding of the existence of a rank-size distribution of cities.     

Do we need more economics in Australian economic diplomacy?

ABSTRACT

Economic diplomacy—that is, informal and formal processes and links between states and non-state actors on international economic issues—is a current focus of Australian foreign policy. The Department of Foreign Affairs and Trade’s stated economy diplomacy aims are liberalising trade, boosting economic growth, encouraging investment and assisting business. If Australia is to embrace a genuine and effective notion of economic diplomacy there are two problems to be overcome. First, DFAT’s economic diplomacy framework is incomplete and misses the bigger economic picture, particularly the role of Australia’s key economic agencies, Treasury and the Reserve Bank of Australia. Second, DFAT does not consistently apply economic principles to foreign affairs issues including trade, foreign aid and the global investment agenda. Going forward, Australia should abandon the focus on the four narrow pillars and instead focus on developing a clear, coordinated international economic strategy that articulates Australia’s core international economic objectives and priorities.     

Broccoli and Desire

Abstract: Tracing the commodity chain of broccoli from Nashville, Tennessee supermarkets to Maya farmers in highland Guatemala, this paper examines relations of desire and political economic power. We argue that the global broccoli trade is shot through with desires—desires of Western consumers to eat healthy foods as well as desires for Maya farmers to get ahead economically. Such desires simultaneously subvert and sustain the hegemonic constellations that anchor crucial nodes in the international broccoli trade.     

URBAN‐TO‐RURAL POPULATION GROWTH LINKAGES: EVIDENCE FROM OECD TL3 REGIONS*

The objective of this paper is to understand, from an international comparative perspective, how population growth in rural regions is affected by the relationship with their nearby urban centers. By means of a cross‐sectional analysis on OECD small regions (Territorial Level 3), the paper distinguishes spread effects—positive spillovers arising from urban growth—from the net effect of distance to nonrural places. The results show that spread effects outweigh backwash effects, so that rural regions benefit from growth in urban places. A rural region's distance from urban and intermediate regions has a negative effect on its population growth rate. Nevertheless, both the strength of this effect and the growth spillovers decline with distance, and this occurs relatively faster in Europe. The results further suggest that proximity to large urban areas has a higher positive influence than proximity to intermediate areas, but only outside Europe.     

China and East Asia: An Appraisal of Regional Economic Integration

Three Taiwan-based economists evaluate regional economic integration in East Asia, using trade indicators to analyze the degree of trade concentration among East Asian nations, and employing the gravity model to identify key factors influencing bilateral trade flows among them. China is expected to play a key role in East Asia's economic development, and empirical analysis for the period 1990-2005 indicates that East Asia has already evolved into a trading block, expected to become one of three dominant blocks in the global economy. The study, which highlights the key role played by geographical distance and market size, suggests that the impact of the Association of Southeast Asian Nations (ASEAN) for East Asian trade will remain limited in the future. Journal of Economic Literature, Classification Numbers: F15, F31, O53, P33. 7 tables, 41 references.     

Myth of the Triad? The Geography of Trade and Investment 'Blocs'

The notion that the world is increasingly divided into a triad of economic regions based on North America, the European Union and Japan has become a form of conventional wisdom across a range of disciplines. However, despite the near ubiquitous use of the idea of a triadized world, it remains a somewhat normative assertion, the empirical existence of which has yet to be demonstrated. By using the intramax method to analyze the intensity of international trade and foreign direct investment flows during 1985 and 1995, we examine the changing shape of trade and investment 'blocs' globally. We find that while international trade is increasingly organized around fewer world regions, the presumed outcome of a triad-based world economy remains questionable. We further show that investment intensity patterns do not currently conform to any bloc-like formation, but exhibit instead, globally diffused network regions.     

TRANSPORTATION COSTS IN REGIONAI,MODELS OF FOREIGN TRADE: AN APPLICATION TO CANADA-U.S. TRADE*

ABSTRACT. This paper outlines some arguments about the role of transportation costs in determining the welfare consequences of trade restrictions. The analysis uses a computable general equilibrium (CGE) model and presents the relevant features for trade analysis. The model has two alternative spatial formulations. In the first, all production and trade occur at one point, while in the second the regions are separated by distance. The calculated effects of a unilateral tariff increase are compared using the CGE model with the “point” and “distance” formulation. While the presence of transportation costs is crucial to some sectoral trade and production results, most welfare results are relatively insensitive to the spatial structure of the model.     

TNC Strategies and Variations in Intra-firm Trade: The Case of Foreign Manufacturing Affiliates in Sweden

The aim of this paper is to contribute to the understanding of the forms and determinants of intra-firm trade, i.e. international trade between different units under common TNC ownership, this being a major indication of 'deep economic integration' between developed countries in the 1990s. Theoretically, intra-firm trade can be explained by the existence of economies of common governance and are often found to be associated with R&D-intensive industries and economies of scale. In empirical studies, intra-firm trade is often found to consist of intermediate inputs goods, resulting in vertically integrated production chains. The study is based on detailed firm-level data from around 300 foreign majority-owned affiliates (MOFAs) in manufacturing, in Sweden in 1993. The results show that intra-firm sales by MOFAs in Sweden are as high as those found in studies of manufacturing affiliates of US TNCs. Almost all of MOFAs' intra-firm exports are finished products, while intra-firm imports consist of material inputs and finished products for resale. This suggests that these MOFAs are only marginal involved in vertically integrated production chains, especially in terms of exports. The results of a regression analysis complement earlier studies by showing that the level and composition of intra-firm trade is significantly affected by the international strategy applied by TNCs when operating foreign manufacturing affiliates. Intra-firm exports of finished products and material inputs are positively associated with efficiency-seeking FDI, e.g. affiliates engaged in rationalised production. Market-seeking FDI is associated with intra-firm imports of complementary finished products for resale. By contrast, resource-seeking and strategic asset-seeking FDI was negatively associated with intra-firm trade.     

The abandonment of procurement-linked strategic activism in Australia: standing still with room to move

In this paper I examine the extent to which preferential trade agreements (PTAs) limit the Australian government's ability to use public procurement for local industry development ends. I do so not only by examining Australia's PTA obligations, but also by examining how other governments with similar obligations—such as Korea—are using public purchasing policies to promote local industrial advancement. I find that the PTA obligations of the Australian and Korean governments leave them both significant scope to use public purchasing strategically. Interestingly, however, Australian policymakers have been standing still in the room that remains, and even abandoning PTA-compliant procurement-linked development policies. South Korean policymakers on the other hand have been capitalising on every inch of space left open to them—and even experimenting with new forms of strategic public purchasing that nonetheless comply with their international obligations. I conclude by offering some suggestions as to how we might explain these countries’ radically different approaches to procurement policy, despite their very similar international obligations.     

Compensation modes of border effects in cross‐border regions

Both international and regional economics discuss borders as barriers to economic growth. They hamper trade flows between areas sharing an international border (a demand effect), as well as causing firms’ inefficiency because of the increase in production costs (supply side). In the theoretical and empirical discussions, no question has been raised on whether regional economies are able to set up compensation mechanisms, by replacing low endowments with high efficiency in the use of existing assets, or by compensating an inefficient use of internal assets with an efficient use of external ones. The reply to this question has normative implications. Empirical evidence on the universe of 1,398 European NUTS3 regions is presented and policy suggestions elaborated.     

ON PITCHFORKS AND TOMAHAWKS*

ABSTRACT The core‐periphery model of the new economic geography has two “dramatic” implications: catastrophic agglomeration and locational hysteresis around the symmetry breaking level of trade freeness. In this note, we study a generalized version of this model with constant elasticity of substitution (CES) instead of Cobb‐Douglas upper tier preferences. The possibility of a continuous and easily reversible transition from symmetry to agglomeration now arises. One of the most prominent results of the new economic geography literature—the catastrophic consequences of small parameter changes—therefore, hinges crucially on specific functional forms for consumer preferences.