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This paper set out to examine Japan's trade policies towards developing countries by reference to actual trade flows and by utilizing information obtained from the governments of countries of the pacific area as regards Japanese trade practices. Section I of the paper presents empirical evidence for the year 1973 on the extent of Japanese imports of manufactured goods from developing countries in relation to the imports of the other industrial nations from these countries. Section II reviews changes in Japanese imports from the developing countries during the 1973-83 period, placing it again in the context of the industrial country experience. In Section III, Japanese trade practices affecting imports from Pacific area developing countries are described, drawing largely on communications received from official sources in Hong Kong, Korea, Singapore, and Taiwan. In the conclusions, the available evidence is brought together in evaluating Japanese trade policies towards developing countries in general and towards the countries of the Pacific area in particular.
In the 2001 Doha Development Round ministerial declaration, countries committed themselves “to the objective of duty-free, quota-free market access for products originating from LDCs.” In this light, this paper investigates the current tariff barriers put in place and preferences granted by the Triad countries regarding products from LDCs. It first investigates preferences in policy-the simple average tariffs faced by LDCs-and then looks at barriers in practice, analyzing the extent to which LDCs have been able to take advantage of the variety of preferences granted. It also explores the LDC tariff barriers against goods from other countries. It finds that Triad tariff barriers against LDC products have fallen dramatically and are especially low in the EU. However, barriers remain against certain products in which LDCs specialize, so that U.S. import-weighted tariffs for LDC goods are actually higher than U.S. import-weighted tariffs for goods of countries subject to MFN tariffs. Furthermore, the LDCs themselves tend to favor goods from the advanced industrial countries. These results indicate that there is still much room for tariff reductions for LDC goods, especially in the United States, and that such reductions must take account of LDC production capabilities.
If South Asia and Sub-Saharan Africa are to become constructively engaged in the next attempt by World Trade Organization (WTO) members to liberalize trade multilaterally, they need to be convinced that there will be sufficient gains from trade reform to warrant the inevitable costs of negotiation and adjustment. This paper provides new estimates of the likely economic effects on their economies of further liberalizing world trade post-Uruguay Round. The results show that the developing countries of South Asia and Sub-Saharan Africa have much to gain from taking part in the next round. However, those gains will be far greater the more those countries are willing to embrace reform at home so as to enable their firms to take greatest advantage of the opportunities provided by the opening up of markets abroad.
This paper re-examines Yoshida`s analysis (1993 and 1996) and draws further aspects of economic welfare within Bond and Chen`s framework (1987). We show that an increase in fine that a firm pays could be a better policy than an intensification of internal inspection enforcement from a welfare point of view. We also show that, in the case where capital is internationally mobile, if technologies are different between countries and labor-capital intensity is larger in the home country than in the foreign, the impact of an increase in enforcement on the factor prices is opposite to that of Bond and Chen (1987). We also enlarge the welfare effect of an increase in enforcement more precisely in the case of capital movement.
A signalling game involving three parties: a developing country, the WTO and a developed country is outlined. The developing country might be tempted to renege or deviate from free trade. Although the costs of reneging from free trade result in a loss of credibility, the costs come in the future and are discounted. Short-term gains include revenues from import taxes that are important to the public finances of low-income countries. Membership of a rules based organisation such as the WTO can act as a credible commitment device. In these circumstances, however, the South`s commitment to free trade depends upon a clear signal from the North that it too is committed to free trade. Otherwise the South will continue to deviate from optimal and freer trade policies.
The model developed in this article leads to a reduced form that synthesizes the relevant determinants of job creation in a small open economy. Among these factors, we stress the role of competitiveness that is measured by an indicator taking into account the foreign price sensitiveness of domestic exporters. Our model shows that the stronger the price setting power of domestic firms, the greater the impact of competitiveness on employment is. The model is used to empirically estimate the determinants of job creation over the period 1970-1998, in Luxembourg, a small economy, where employment expanded dramatically during the last decades.
The paper purports to examine the implications of a free education policy and trade liberalization on the child and adult labour markets in the set-up of a Harris-Todaro type general equilibrium model. It has been found that a hike in the education subsidy or an inflow of foreign capital may produce counterproductive results on the supply of child labour in the urban area. Moreover, these policies may raise the level of urban unemployment of adult labour even when two types of labour are not substitutes to each other. The average income of the urban poor families may also decrease as a consequence.
Conventional wisdom on capital structure choices has been by and large confined to the United States and a few advanced countries having institutional similarities. In this paper we make an attempt to provide some insight into the capital structure choice of developing countries through a case study of the Indian corporate sector. We develop a dynamic panel data model that explicitly takes into account the possibility of adjustment cost to reach optimal capital structure. The results suggest that restructuring cost is important in adjustment towards an optimal capital structure. We identify the key determinants of the speed of adjustment towards optimal capital structure and also highlight important differences across cohorts formed on the basis of firm-specific attributes.
The aim of this paper is to analyse how a process of economic integration between two adjacent countries with different transport costs (different levels of development) affects firms` decisions on location and prices. Considering the situation where one firm is located in each country and manufactures a product that is imported by the more developed country, we find that when there are barriers to trade one of the firms tends to locate on the common frontier and the other at the far extreme. By contrast, with full economic integration, both firms tend to maximise differentiation, locating themselves at the non-neighbouring extremes, which leads to higher prices and profits. Therefore, the firm located in the more developed country increases its market share.
This paper investigates the effects of export processing zones (EPZs) on factor rewards, national income and the output of the domestic intermediate good producing sector (backward linkage effect) in surpluslabor developing countries. It is shown that if the intermediate good is internationally traded, an increase in foreign capital investment in the EPZs will not change factor rewards and then national income irrespective of the existence of unemployment. It is also shown that, contrary to the conventional wisdom, an increase in foreign capital investment decreases production of the intermediate good and increases unemployment. The effects of factor accumulation on outputs and unemployment are also examined.