Post on 20-Jul-2020
The European Union and the Regulation of World Trade: Crisis and Protectionism
Faculty of Economic SciencesNational University of Córdoba
2010, March 18th
Pr. Jean-Marc SiroënUniversité Paris-Dauphine, LEDa
IRD, UMR 225 DIALwww;dauphine.fr/siroen
Plan IntroductionI. The European Union in World Trade ; crisis and tradeII. The European Trade policyIII. European Union and Trade AgreementsIV. Why the crisis was not accompanied by protectionism?
The European Union (27) in World Trade
Crisis and tradeAustria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Poland, Portugal, Romania, Slovak Republic, Slovenia, Spain, Sweden, The Netherlands, United Kingdom
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
Bill
ions
US
$
Crisis and Trade - Quarterly World Exports
OMC
-39%
An unprecedented decline of international tradeSource : WTO
Crisis and Trade.Monthly EU’s and Argentina’s Exports (billions US $)
-42%
-50%
0
100000
200000
300000
400000
500000
600000
2006
m120
06m3
2006
m520
06m7
2006
m920
06m1
120
07m1
2007
m320
07m5
2007
m720
07m9
2007
m11
2008
m120
08m3
2008
m520
08m7
2008
m920
08m1
120
09m1
2009
m320
09m5
2009
m720
09m9
2009
m11
EU (27)
0
1000
2000
3000
4000
5000
6000
7000
8000
2006
m120
06m3
2006
m520
06m7
2006
m920
06m1
120
07m1
2007
m320
07m5
2007
m720
07m9
2007
m11
2008
m120
08m3
2008
m520
08m7
2008
m920
08m1
120
09m1
2009
m320
09m5
2009
m720
09m9
2009
m11
Argentina
Source : WTO
Leading exporters and importers in world merchandise trade (excluding intra-EU (27) trade), 2008
6Source : WTO
16
12 11
6 4 4 3 3 3 3
18
9
17
6
2 3 3 3 3 1
UE
China
USA
Japan
Russia
Canada
Korea
H. K
.
Singapore
S. Arabia
Exporters Importers
EU : the first trade power in goods …
EU : the first trade power in goods …
Leading exporters and importers in world trade trade in commercial services (excluding intra-EU (27) trade), 2008
7 Source : WTO
…and services…and services27
19
5 5 43 3 3 3 2
24
14
6 6
3 23
14 3
EU USA
China
Japan
India
Hong Kong
Singapore
Switzerland
Korea
Canada
Exporters Importers
Intra-Export trade of regional trade arrangements,(2008 ; % of total exports)
WTO
UE is the most
integratedTrade zone
UE is the most
integratedTrade zone67
50
25
15
7
EU
NAFTA
ASEAN
Mercosur
Andean Community
AFTA ASEAN Free Trade Area Brunei Darussalam Cambodia Indonesia Laos Malaysia Myanmar Philippines Singapore Thailand Vietnam
CAN : Andean Community Bolivia Colombia Ecuador PeruVenezuela
9
The EU in world trade –10 major EU export partners (2008)
1. USA2. Russia3. Switzerland4. China5. Turkey6. Norway7. Japan8. United Arab Emirates9. India10. Brazil
19%8%8%6%4%3%3%2%2%2%
EU, DG Trade34. Argentina34. Argentina 0,5%0,5%
10
The EU in world trade –10 major EU import partners (2008)
1. China2. USA3. Russia4. Norway5. Switzerland6. Japan7. Turkey8. Korea9. Brazil10. Libya
16%12%11%6%5%5%3%3%2%2%
EU, DG Trade33. Argentina33. Argentina 0,7%0,7%
The EU Trade policy
A Common Trade Policy
A Common Trade Policy
• EU : Custom Union• Common trade policy for the 27 members : trade policy,
multilateral and bilateral negotiations, anti-dumping,…• Negotiations are driven by the EU Trade Commissioner
(Karel De Gucht, Belgium)• Each member countries + EU are WTO members
Tariffs in EU and elsewhere…. (2008)
TariffsImport duties /total imports (%)
Source : WTO
49
106 5 4
32 3125
13 106 5 4
12 136
32
16 1624
510
146
Average Final Bound
Average Applied tariffs
Average Applied tariffs in Agriculture
10,9
5,8
3,8 3,8
1,9 1,91,4 1,3 1,2
0In
dia
Ru
ssia
Arg
en
tina
Ch
ile
Ch
ina
Ko
rea
Jap
an
USA
EU
Sing
apo
re
Anti-dumping measures: by reporting (importing) Member (1995- 2008)
Source : WTO
386
268258
167124124108
90 86 81 75 66 51 45 34 28 25 25 22 21 19 17
Indi
a
US
EU
Arg
entin
a
S. A
fric
a
Turk
ey
Chin
a, P
.R.
Cana
da
Braz
il
Mex
ico
Aus
tral
ia
Kore
a
Egyp
t
Peru
Indo
nesi
a
Thai
land
Mal
aysi
a
Vene
zuel
a
New
Zea
l.
Colo
mbi
a
Isra
el
Paki
stan
Anti-dumping measures: EU & Latin America (1995- 2008)EU vs Latin America(total 258)
Latin America vs EU(total : 440)
Argentina :0 Brazil :4 Mexico : 3
Brazil : 3 (/86) Mexico 1 (/81)
Latin America vs EU Countries(total : 440)
Argentina :23 (/167) Brazil :16 (/86) Mexico : 6 (/81)
Colombia :1 (/21) Peru :1 (/45) Venezuela : 1 (/25)
Source : WTO
Does Economic crisis imply more antidumping ?
AD Measures per year (1995 to 2008)
0
50
100
150
200
250
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Source : WTO
Other MeasuresCountervailing duties(30/06/2009)
Safeguard Initiations (31/12/2009)
2
2
1
1
1
1
1
1
Argentina
Brazil
Bulgaria
Chile
China
Croatia
Czech Republic
Ecuador
7
3
1
United States
Canada
Brazil
Source : WTO
Disputes at WTORespondent
Complainant USA EU MercosurOther Latin
AmericaOther Total
Argentina 3 4 1 7 15Brazil 10 6 2 2 4 24Chile 2 2 2 4 0 10Colombia 1 1 3 0 5Costa Rica 1 3 4Ecuador 1 1 1 3Guatemala 3 3 1 7Honduras 3 3 6Mexico 9 3 6 3 21Nicaragua 3 2 5Panama 3 2 5Peru 2 2Uruguay 1 1Venezuela 1 1EU 31 11 6 33 81
European Union and Trade Agreements
What about EU-Mercosur ?
European Trade AgreementsConcluded Ongoing FTAs
Custom Unions : Andorra, Turkey, San Marino
FTA : Mediterranean, other European (Norway, Switzerland,
Iceland, ex-Yugoslavia), South Africa FTA : African Carribean,
Pacific (CARIFORUM, Ivory Coast,
Cameroon) + Economic Partnership Agreements (EPAs) under negotiation
FTA : Latin America (Mexico, Chile)
Asia (India, Korea, Singapore, ASEAN)
Ukraine America (Canada, Colombia &
Peru, Central America, Mercosur)
Candidate countries
Turkey, Croatia, Macedonia
+ GSP (Generalized System of Preferences)
EU-Mercosur negotiations The negotiation stalled in September 2004. No negotiation round
is scheduled for the moment The Mercosur-EU FTA should cover, trade in goods and services,
investment, intellectual property rights (IPR) aspects including protection of geographical indications, government procurement, technical barriers to trade and sanitary and phytosanitary issues.
EU-Mercosur negotiations are linked to the WTO Doha world trade talks and in particular to the question of market access for agriculture and industrial goods and services.
Both the EU and Mercosur recognise that greater clarity on the outcome of the Doha talks is necessary before an EU-Mercosur agreement can proceed to a conclusion.
Disputes Latin America-EURespondent
Complainant USA EU MercosurOther Latin
AmericaOther Total
Argentina 3 4 1 7 15Brazil 10 6 2 2 4 24Chile 2 2 2 4 0 10Colombia 1 1 3 0 5Costa Rica 1 3 4Ecuador 1 1 1 3Guatemala 3 3 1 7Honduras 3 3 6Mexico 9 3 6 3 21Nicaragua 3 2 5Panama 3 2 5Peru 2 2Uruguay 1 1Venezuela 1 1EU 31 11 6 33 81
European imports from Argentina & Brazil
Argentina Brazil
SITC Codes SITC Sections Share of
Total (%)
Share of total EU Imports
Share of Total (%)
Share of total EU Imports
Total
SITC 0 Food and live animals 66,4% 9,6% 23,8% 11,7% 21,3%
SITC 2 Crude materials, inedible, exceptfuels 9,2% 1,4% 32,8% 17,3% 18,7%
SITC 4 Animal and vegetable oils, fats and waxes 7,2% 9,6% 1,4% 6,2% 15,8%
SITC 1 Beverages and tobacco 1,9% 3,1% 1,4% 7,7% 10,8%
SITC 6 Manufactured goods classified chiefly by material 4,5% 0,3% 12,6% 2,5% 2,8%
SITC 5 Chemicals and related prod, n.e.s. 3,0% 0,3% 5,4% 1,6% 1,8%
SITC 9 Commodities and transactions n.c.e. 0,2% 0,1% 1,4% 1,4% 1,4%
SITC 7 Machinery and transport equipment 5,2% 0,1% 10,5% 0,9% 1,0%
SITC 8 Miscellaneous manufacturedarticles 0,6% 0,0% 3,0% 0,6% 0,6%
SITC 3 Mineral fuels, lubricants and related materials 0,6% 0,0% 6,0% 0,5% 0,5%
European Commission, DG Trade
European exports to Argentina & Brazil
Argentina Brazil
SITC Codes SITC Sections Share of Total (%)
Share of total EU Exports
Share of Total (%)
Share of total EU Exports
Total
SITC 4 Animal and vegetable oils, fats and waxes 0,1% 0,2% 0,6% 4,8% 5,0%
SITC 5 Chemicals and related prod, n.e.s. 20,1% 0,6% 19,4% 2,5% 3,1%
SITC 7 Machinery and transport equipment 48,6% 0,5% 51,6% 2,4% 2,9%
SITC 6 Manufactured goods classified chiefly by material 12,9% 0,4% 12,7% 1,9% 2,3%
SITC 8 Miscellaneous manufacturedarticles 7,1% 0,3% 5,9% 1,1% 1,5%
SITC 9 Commodities and transactions n.c.e. 3,8% 0,6% 0,9% 0,7% 1,3%
SITC 2 Crude materials, inedible, exceptfuels 1,1% 0,2% 1,1% 1,0% 1,2%
SITC 1 Beverages and tobacco 0,4% 0,1% 0,7% 1,0% 1,1%
SITC 0 Food and live animals 1,0% 0,1% 1,6% 0,9% 1,0%
SITC 3 Mineral fuels, lubricants and related materials 2,5% 0,2% 2,1% 0,7% 0,9%
European Commission, DG Trade
The European « Common Agricultural Policy » (CAP) and Doha Round
market access —
domestic support —(subsidies and other instruments, including those that raise or guarantee prices and farmers’ incomes)
export subsidies
market access —
domestic support —(subsidies and other instruments, including those that raise or guarantee prices and farmers’ incomes)
export subsidies
High tariffs and other barriers
Partial withdrawal of trade-distorting supports thanks to successive CAP reforms (move from “amber” or “blue” box to “green” box)
Full elimination in 2013
High tariffs and other barriers
Partial withdrawal of trade-distorting supports thanks to successive CAP reforms (move from “amber” or “blue” box to “green” box)
Full elimination in 2013
Why the crisis was not accompanied by protectionism?
Why the crisis was not accompanied by protectionism?
Global Governance more cooperative? WTO, G20 (London Summit)
Flexibility of central banks and massive recovery plans “Leadership” (Kindleberger) from United States and China
playing a function of “locomotive” Other kinds of adjustment : competitive devaluations
Cyclical explanations
27
Evolution of exchange ratesin regard with euro
Maximum variation between 2008, July 1 and 2009; March, 30From European Central Bank28
33,022,1
-9,5-16,9 -17,9
-24,9 -26,8 -28,8 -33,6 -37,0 -38,7 -43,9-52,2
Japan
USA
Switzerland
China
Canada
Rom
ania
UK
Australia
Turkey
Russia
Hungary
Brazil
Poland
Why the crisis was not accompanied by protectionism?
Passage from a “ final” product specialization (cars, wheat,…) to "vertical" specialization in term of step in the production process.
For firms located downstream protectionism implies a higher price for semi-processed goods and a loss of competitiveness for exports
Structural explanations
29
Conclusion The common trade policy is a novel and specific experience at this
scale The objective of the protectionist CAP being to guarantee a minimum
level of income, higher world prices should help to open the EU agricultural market.
The crisis had a severe effect on international trade. It is not due to protectionism, but to the downturn of world prices, a lack of export credits, destocking and the higher multiplier effect of income on trade due to the international fragmentation of production processes.
This moderation might change in case of extended crisis, global imbalances and misalignment of currencies (Yuan ?)
30
Thank you,…
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