Export Controls Archives - WITA

Electoral Violence and Supply Chain Disruptions in Kenya’s Floriculture Industry

Jude Althagafi — Wed, 15 Sep 2021 16:19:40 +0000

Violent conflicts, particularly at election times in Africa, are a common cause of instability and economic disruption. This paper studies how firms react to electoral violence using the case of Kenyan flower exporters during the 2008 post-election violence as an example. The violence induced a large negative supply shock that reduced exports primarily through workers’ absence and had heterogeneous effects: larger firms and those with direct contractual relationships in export markets suffered smaller production and losses of workers. On the demand side, global buyers were not able to shift sourcing to Kenyan exporters located in areas not directly affected by the violence nor to neighboring Ethiopian suppliers. Consistent with difficulties in insuring against supply-chain risk disruptions caused by electoral violence, firms in direct contractual relationships ramp up shipments just before the subsequent 2013 presidential election to mitigate risk.

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To read the full report from the National Bureau of Economic Research, please click here.

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Annual Report on the EU’s Anti-Dumping, Anti-Subsidy and Safeguard activities and the Use of Trade Defence Instruments by Third Countries targeting the EU in 2020

Jake O'Keeffe — Mon, 30 Aug 2021 15:13:13 +0000

This 39th Report gives information on the EU’s anti-dumping, anti-subsidy and safeguard activities, as well as the trade defence activity of third countries against the EU in 2020, in line with the Commission’s reporting obligations.

The European Union is committed to open rules-based trade, supported by the tools to defend European industry against unfair trade practices. The Commission ensures that where industries are harmed because of unfair practices, such as dumped and subsidised imports, they can rely on the EU’s trade defence instruments to provide an effective response.

Ensuring fair trade conditions for European producers also means dealing with trade defence actions taken by third countries against the EU, which reached their highest level in 2020.

While 2020 presented new and unique challenges in global trade, the Commission adapted and responded to these challenges and those posed by existing and new unfair trade practices and continued its enforcement of the EU’s trade defence instruments.

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To read the full report from the European Commission, please click here.

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How economic ideas led to Taiwan’s shift to export promotion in the 1950s

Jude Althagafi — Sun, 15 Aug 2021 15:28:17 +0000

Taiwan was the first developing country to adopt an export-oriented trade strategy after World War II. The factors usually associated with big shifts in policy—a macroeconomic crisis, a change in political power or institutions, lobbying by export interests, pressure from international financial institutions—were not present; it was ideas that were key. In 1954, economist S. C. Tsiang proposed that Taiwan boost export earnings rather than squeeze import spending to deal with its chronic shortage of foreign exchange. He recommended a currency devaluation to establish a realistic exchange rate and a market-based system of foreign exchange allocation to end the inefficient rationing by the government. Four years later, a policymaker, K. Y. Yin, fought for the adoption of Tsiang’s proposal, helping clear the way for Taiwan’s phenomenal growth in trade.

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To read the full report from the Peterson Institute for International Economics, please click here.

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Proximity and Horizontal Policies: The Backbone of Export Diversification

Jude Althagafi — Fri, 05 Mar 2021 19:11:17 +0000

The lack of a clear link between general economic fundamentals and export diversification indicators in the literature has fueled the believe that industrial policies are an absolute requisite to diversify exports. This paper, however, does find a strong statistical connection between horizontal policies and diversification by making two novel changes to traditional methodologies: using export categories that lead to diversification (for example, manufactures) as dependent variables, and using a gravity-equation regression setting. Proximity to other economies explains about a third of cross-country heterogeneity in targeted exports, and four fifths together with horizontal policies. Australia, Chile, and New Zealand emerge as new role models for diversification policies.

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To read the full report from the International Monetary Fund, please click here.

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Export Controls: America’s Other National Security Threat

Ashley Singh — Fri, 01 May 2020 03:12:42 +0000

While the public was transfixed by the Trump administration’s policies alleging that imports were a threat to America’s national security during 2017–20, there was a concomitant and more quiet US policy shift on the export side. Addressing the national security threat presented by exports posed different economic and institutional challenges from those associated with import policy, including the acknowledgment that export controls for legitimate national security reasons can be the first-best policy to confront the problem at its source. Yet, export controls could also be misused as a beggar-thy-neighbor policy to redistribute economic well-being across countries, even from one ally to another.

This paper describes how US export control policy evolved over 2017–20, as well as the international institutions—first the Coordinating Committee for Multilateral Export Controls (COCOM), then the Wassenaar Arrangement—historically tasked with multilateralizing US export restrictions used to protect national security. With the potential for US export control policy to brush up more frequently against WTO rules designed to limit the use of export restrictions, the paper also highlights new challenges for the WTO’s system of resolving trade disputes. Overall, a US failure to strike the right balance for its export control policy would result in it being ineffective at addressing national security risks, costly for the economy, and problematic for trade and diplomatic relations.

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To read the full working paper from the Peterson Institute for International Economics (PIIE), please click here.

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