Trade policies, macroeconomic adjustment, and manufactured exports : the Latin American experience

The author examines the relationship between trade policies and macroeconomic adjustment in six Latin American countries: Argentina, Brazil, Chile, Colombia, Costa Rica and Mexico. For the period 1965-94, the six countries experienced 26 trade policy episodes: 11 tightening, and 15 loosening of trade policies. For the analysis, the author worked with four periods that coincided with diffreent prevailing exchange rate regimes: 1965-73, 1974-79, 1980-83 and 1984-04. Using a probit model, he examined the relationship between tightening and loosening trade policies and the current account balance, the exchange rate, and the growth in manufactured exports. His main conclusions: 1) experience in these six countries for 1965-94 confirmed the hypothesis that trade restrictions cannot solve current account problems; 2) for trade liberalization to work, there must be real devaluation either before or during liberalization. Reluctance to devalue, for one reason or another, may lead to trade restrictions. There is evidence that trade restrictions were used in lieu of devaluations during 1965-83. In 1984-94, however, the reluctance to devalue was overcome; 3) growth in manufactured exports helps maintain trade reform and release the economy from foreign exchange constraints. As expected, trade liberalization improved exports (liberalization reduces the bias against exports) while trade tightening hurt them; and 4) The impact of trade reform on the fiscal system cannot be predicted because tax revenues can go in either direction depending on initial conditions, the elasticity of supply in importable and exportable sectors, and the economy's growth rate.Environmental Economics&Policies,Economic Theory&Research,Trade Policy,Payment Systems&Infrastructure,Rules of Origin,TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT,Economic Theory&Research,Environmental Economics&Policies,Trade Policy,Economic Stabilization

The evolution of trade treaties and trade creation : lessons for Latin America

The author examines the main distinction between trade liberalization under the General Agreement on Tariffs andTrade (GATT) and under regional trading agreements. Under the GATT, trade liberalization is based on the most-favored-nation principle. Under regional trade agreements, it is based on preferential trade. Establishing regional trade agreements does not necessarily lead to greater regional integration. The European Economic Community has been an exception, and with greater integration, regional trade has grown steadily. The Association of South East Asian Nations (ASEAN) has been a weak association, but trade among ASEAN members has increased rapidly because member countries have undertaken multilateral trade liberalization. The efforts of Latin American countries to create regional trade associations in the 1960s, based on protectionist policies, reduced trade not only regionally, but with the rest of the world. In contrast, the Latin American regional trading agreements of the 1980s and 1990s have liberalized trade among the groups. Proper regional trading agreements must conform to Article XXIV of the GATT, but nearly all the countries that have created regional integration schemes have not followed it. These regional trading agreements have not increased protection, but neither has there been across-the-board trade liberalization. Regional trading agreements carry with them the danger of trade diversion (when imports that used to come from third countries at lower prices become costlier because of preferential access granted to a higher-cost regional source). How can Latin American countries reduce trade diversion in their regional trading agreements? : 1) keep protection low in the first place; 2) have open regional trade associations (so that it is easy for new partners to join); 3) continue liberalizing trade with the rest of the world, following the most-favored-nation principle; 4) establish common markets rather than free trade areas (because rules of origin create new barriers, including bureaucracies); 5) coordinate regulatory and competition policies (eliminate laws that limit competition and adopt common external tariffs); and 6) improve roads, ports, and means of communications.TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT,Trade and Regional Integration,Trade Policy,Economic Theory&Research,Environmental Economics&Policies

Crashworthiness assessment considering the dynamic damage and failure of a dual phase automotive steel

Analyzing crash worthiness of the automotive parts has been posing a great challenge in the sheet metal and automotive industry since several decades. The present contribution will focus on one of the most urging challenges of the crash worthiness simulations, namely, an enhanced constitutive formulation to predict the failure and cracking of structural parts made from high strength steel sheets under impact. A hybrid extended Modified Bai Wierzbicki damage plasticity model is devised to this end. The material model calibrated using the experimental data covering high strain rate deformation, damage and failure successfully predicted the instability and subsequent response of the crash box under impact. Simulation results provide the deformation shape and deformation energy in order to predict and evaluate the vehicle crashworthiness. The simulations further helped in discovering the irrefutable impact of strain rate and stress state on the impact response of the auto-body structure. The strain rate is found to adequately affect the energy absorption capacity of the crash box structure both in terms of impact load and fold formation whereas the complex stress state has a direct association to the development of instability within the structure and early damage appearance within the folds

Trade Compatibility Between India And Asean Countries

The post WTO world trading system is witnessing proliferation of large number of Regional Trade Agreements (RTAs). The slow pace of multilateral negotiations and lack of consensus among members on major trade issues is undermining the role of WTO and hastening the regionalism process. Realising the importance of East Asia in the emerging global economic order, India signed a FTA with ASEAN which will come in to force from 1st January 2010. For any Regional Trade Agreement (RTA) to be successful, it is imperative on partner countries to have favourable trade structure between them. In this context, the paper looked in to the trade structure of India and ASEAN countries to identify complementary sectors and product groups for enhanced trade cooperation. Trade indices such as Trade Intensity Index (TII) and Revealed Comparative Index (RCA) are constructed at product group, HS-2 and HS-4 levels to get trade complementarity and Similarity. From the analysis it is revealed that there are complementary sectors and products available between India and ASEAN for greater cooperation.Regional Trade Agreement, Revealed Comparative Advantage, India, ASEAN