Textiles and apparel in NAFTA : a case of constrained liberalization

The authors examine the changes that Mexico's textile and clothing industry is likely to face under the North American Free Trade Agreement (NAFTA). They compare pre-NAFTA and probable post-NAFTA scenarios for Mexican exports. The U.S. clothing and textile industry is likely to remain among the most protected of U.S. industries, so this is essentially a comparison of two protectionist situations, not of protection and free trade. The authors trace how current quota and tariff restrictions on U.S. imports from Mexico will be replaced by rules of origin designed to protect U.S. industry. Mexican textile and clothing exports will enjoy greater access to the U.S. market if most inputs originate in North America. Under the triple transformation requirements, for example, a cotton shirt would have to be made in the NAFTA region from yarn and fabric of NAFTA origin. Mexican compliance with this rule would not prove onerous. Proximity and long-standing production-sharing arrangements have made Mexico heavily dependent on U.S. inputs. Roughly 53 percent of Mexican textile and apparel exports to the United States fall under production-sharing programs, with an average 69 percent of value added of U.S. origin. Only 15 percent of input requirements for the other 47 percent of trade is imported into Mexico - only 8 percent from non-NAFTA countries. What about future trade? The authors estimate that these Mexican exports to the United States will increase only modestly - partly because of the low level of protection already associated with production-sharing arrangements. Rules oforigin under the NAFTA are small. How much investment from outside North America will be attracted to Mexico under stringent input-sourcing requirements is open to question. The competitiveness of Mexico's apparel industry in non-NAFTA markets will depend to some extent on the international competitiveness of the U.S. textile industry.TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT,Economic Theory&Research,Environmental Economics&Policies,Textiles, Apparel&Leather Industry,Trade Policy

Nontariff measures and developing countries : has the Uruguay Round leveled the playing field?

In the policy environment prevailing before implementation of the Uruguay Round results, exports from developing countries face significant nontariff measures in industrial countries. Based on 1992 trade flows, the import coverage ratio of nontariff measures on this trade was more than 18 percent, compared with less than 11 percent for trade among industrial countries. Trade liberalization measures agreed to in the Uruguay Round will dramatically reduce the incidence of nontariff measures on developing country exports: the coverage ratio will drop to less than 4 percent on nonoil exports. This change has the dual effect of increasing export market opportunities for developing countries and of substantially reducing - if not eradicating - the relatively negative bias against developing country exports. These impressive results from the Uruguay Round are attributed to"tariffication"in agriculture, the abolition of the Multi-Fibre Arrangement (MFA), and the elimination of voluntary export restraints (VERs) under the safeguards agreement. But all these aspects of liberalization will not happen instantaneously when the Uruguay Round results come into force. Agricultural tariffication will occur immediately, but the MFA will be phased out over ten years and VERs will be eliminated over four years. Considering the extent of the liberalization presaged by these policy changes, the authors speculate about likely sources of pressure for measures to mitigate the effects of removing nontariff measures. They conclude that the greatest risks will probably come from safeguards and antidumping. The new safeguards agreement permits the use of quantitative restrictions to stem the flow of injurious imports, and although the agreement tightens existing GATT rules in some respects, it loosens them in others. The antidumping instrument has been used with increasing frequency by an increasing number of countries in the past two decades or more. The efforts of several governments in the Uruguay Round to impose additional controls on antidumping met with little success, and antidumping continues to offer considerable scope for imposing protectionist trade measures.Trade Policy,Globalization and Financial Integration,TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT,Environmental Economics&Policies,Economic Theory&Research

Reform in basic telecommunications and the WTO negotiations: The Asian experience

This paper examines liberalization of the basic telecommunications sector in a number of Asian countries and the role of the General Agreement on Trade in Services (GATS) in this process. It begins by explaining the working of the GATS as a mechanism for multilateral liberalization efforts. It then presents a description of the reforms taking place in the telecom regimes of selected Asian countries, and of the commitments these countries made in the recent GATS negotiations. The paper explores the reasons why governments have taken advantage of the GATS negotiations to make multilateral market-opening commitments, even though they were not pursuing export interests. The paper also considers the limits to what was achieved by way of liberalization commitments in the negotiations. Allowing greater foreign equity participation without liberalizing the conditions of entry may raise national welfare concerns. Furthermore, certain governments could have taken greater advantage of the opportunity under GATS to precommit to future liberalization

Gaussian Process Planning with Lipschitz Continuous Reward Functions: Towards Unifying Bayesian Optimization, Active Learning, and Beyond

This paper presents a novel nonmyopic adaptive Gaussian process planning (GPP) framework endowed with a general class of Lipschitz continuous reward functions that can unify some active learning/sensing and Bayesian optimization criteria and offer practitioners some flexibility to specify their desired choices for defining new tasks/problems. In particular, it utilizes a principled Bayesian sequential decision problem framework for jointly and naturally optimizing the exploration-exploitation trade-off. In general, the resulting induced GPP policy cannot be derived exactly due to an uncountable set of candidate observations. A key contribution of our work here thus lies in exploiting the Lipschitz continuity of the reward functions to solve for a nonmyopic adaptive epsilon-optimal GPP (epsilon-GPP) policy. To plan in real time, we further propose an asymptotically optimal, branch-and-bound anytime variant of epsilon-GPP with performance guarantee. We empirically demonstrate the effectiveness of our epsilon-GPP policy and its anytime variant in Bayesian optimization and an energy harvesting task.Comment: 30th AAAI Conference on Artificial Intelligence (AAAI 2016), Extended version with proofs, 17 page

Does globalization cause a higher concentration of international trade and investment flows?

It has sometimes been argued that globalization benefits only a small number of countries, and that this leads to greater marginalization of excluded countries. This paper argues that globalization is not necessarily biased towards greater concentration in international trade and investment flows. Marginalization is more likely to be explained by domestic policies in relatively closed countries. The paper shows that among relatively open economies, the concentration of international trade and investment flows has declined over the last two decades, whereas the opposite is true among relatively closed economies. Thus, marginalization is not intrinsic to globalization

Non-reciprocal preference erosion arising from MFN liberalitzation in agriculture: What are the risks?

This paper estimates the risk of preference erosion for non-reciprocal preference recipients in the agricultural sector as a consequence of MFN tariff cuts. It is based on a simulation of a single tariff-cutting scenario. The measure of preference erosion risk is the difference in preference margins enjoyed by individual suppliers to the QUAD (Canada, EU, Japan, United States) markets before and after a MFN tariff reduction, multiplied by the associated trade flow. The paper does not attempt to determine how losses in preference margins translate into trade outcomes, but it does highlight which products and which non-reciprocal preference beneficiaries are the most vulnerable to erosion effects in the major developed country markets. Overall, the paper finds that the risk of preference erosion is small, but some countries are strongly affected in particular product lines (notably sugar and bananas)

The future of Global Trade and the WTO Jean-Pierre Cling 1

The global governance of trade is in a deadlock and the WTO is suffering from a long standing crisis of legitimacy. This is confirmed by the eventual failure of the Doha Round of multilateral trade negotiations in 2011. This paper shows the connection between this crisis and the restructuring of world trade which has been going on for the last few decades, and which is set to continue. New emerging powers (China, India, etc.) are increasing their share of world trade which corresponds to new forms of globalization. This process calls for a reform of world trade governance, especially of the missions of WTO within a renovated economic world order. In order to identify the key channels through which international trade integration will impact the world economy, this paper presents four scenarios of world trade governance from now until 2030

Gaussian Process Planning with Lipschitz Continuous Reward Functions

This paper presents a novel nonmyopic adaptive Gaussian process planning (GPP) framework endowed with a general class of Lipschitz continuous reward functions that can unify some active learning/sensing and Bayesian optimization criteria and offer practitioners some flexibility to specify their desired choices for defining new tasks/problems. In particular, it utilizes a principled Bayesian sequential decision problem framework for jointly and naturally optimizing the exploration-exploitation trade-off. In general, the resulting induced GPP policy cannot be derived exactly due to an uncountable set of candidate observations. A key contribution of our work here thus lies in exploiting the Lipschitz continuity of the reward functions to solve for a nonmyopic adaptive ε-optimal GPP (ε-GPP) policy. To plan in real time, we further propose an asymptotically optimal, branch-and-bound anytime variant of ε-GPP with performance guarantee. We empirically demonstrate the effectiveness of our ε-GPP policy and its anytime variant in Bayesian optimization and an energy harvesting task.Singapore-MIT Alliance for Research and Technology (SMART) (52 R-252-000-550-592

Decentralized Data Fusion and Active Sensing with Mobile Sensors for Modeling and Predicting Spatiotemporal Traffic Phenomena

The problem of modeling and predicting spatiotemporal traffic phenomena over an urban road network is important to many traffic applications such as detecting and forecasting congestion hotspots. This paper presents a decentralized data fusion and active sensing (D2FAS) algorithm for mobile sensors to actively explore the road network to gather and assimilate the most informative data for predicting the traffic phenomenon. We analyze the time and communication complexity of D2FAS and demonstrate that it can scale well with a large number of observations and sensors. We provide a theoretical guarantee on its predictive performance to be equivalent to that of a sophisticated centralized sparse approximation for the Gaussian process (GP) model: The computation of such a sparse approximate GP model can thus be parallelized and distributed among the mobile sensors (in a Google-like MapReduce paradigm), thereby achieving efficient and scalable prediction. We also theoretically guarantee its active sensing performance that improves under various practical environmental conditions. Empirical evaluation on real-world urban road network data shows that our D2FAS algorithm is significantly more time-efficient and scalable than state-of-the-art centralized algorithms while achieving comparable predictive performance.Comment: 28th Conference on Uncertainty in Artificial Intelligence (UAI 2012), Extended version with proofs, 13 page