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P. Montalbano - Sapienza Università di Roma
EU TRADE POLICY FOR DEVELOPMENT
AA 2018-2019
DOCENTEPIERLUIGI MONTALBANO
pierluigi.montalbano@uniroma1.it
JEAN MONNET CHAIR -
RETHINKING THE EU TRADE
POLICY FOR DEVELOPMENT/
REUTRADE
P. Montalbano - Sapienza Università di Roma
International Economic Policy and Development
AA 2018-2019 CFU 9
Teacher: Prof. Pierluigi Montalbano email: pierluigi.montalbano@uniroma1.it
Website: https://sites.google.com/a/uniroma1.it/pierluigimontalbano-eng/
http://www.coris.uniroma1.it/cattedra/21538
JEAN MONNET CHAIR - RETHINKING THE EU TRADE POLICY FOR DEVELOPMENT/
REUTRADE
P. Montalbano - Sapienza Università di Roma
Aims
Knowledge: to acquire knowledge on international economic policy, with a
focus on trade, economic performance, and living conditions in developing
countries.
Debates: to understand contemporary debates in development (e.g., trade
and poverty, trade and vulnerability, trade and GVCs; aid effectiveness,
etc.), the theoretical underpinnings of the different positions, and their
policy implications.
Tools: to be equipped with the tools necessary to practice as a working
economist, especially as they apply to the problems of low-income countries.
Data: to be able to collect and interpret data on developing countries.
Presentations: to be able to present arguments and information on the topic
in both written and verbal form.
P. Montalbano - Sapienza Università di Roma
Contents
The course is articulated in three different modules:
The first module (24h) is devoted to the basic notions of the most important
theoretical and technical background about trade policy.
The second module (24h) introduces the students to the EU trade policy for
development, such as: its evolution over time; multilateral negotiations; preferential
vs non preferential agreements; regional and intra-regional development agreements;
the Economic Partnership Agreeements; the Euro-Med free trade area; the European
Neighborhood Policy; the Everything but arms initiative, the EU Policy Coherence
for Development, etc..
The third module (24h) focuses on some selected challenges for the EU Trade and
development agenda, such as the new patterns of vertical integration and global
value chains; firms’ heterogeneity; the global imbalances and the role of emerging
economies; the preference erosion of developing countries; the stalemate of
multilateral and bilateral negotiations; climate change, poverty traps and
vulnerability to trade openness; trade policy and food and nutrition security;
inclusive growth and social innovation, etc..
P. Montalbano - Sapienza Università di Roma
Handouts
Tools: Lectures; readings; in-class presentations; open discussion.
Reference Books:
• Feenstra R.C., Taylor A.M., International Trade. Third or Fourth Ed., Worth
MacMIllan.
• Yannick Bineau and Pierluigi Montalbano Selected developmental aspects of
international trade and trade policies: a literature review, downloadable
open access from here:
http://trade.ec.europa.eu/doclib/docs/2012/june/tradoc_149606.pdf
Additional teaching materials: articles, ppt presentations, reports, EC
communications, etc will be distributed to the students during classes.
All the material will be posted as open access on the Sapienza web chair
system of the MSc Program in Economics for Development:
http://www.coris.uniroma1.it/cattedra/21538
P. Montalbano - Sapienza Università di Roma
Master’s Dissertation
To foster additional research on the subject of the EU trade and development
agenda, REUTRADE strongly encourages students to carry out Master’s
dissertations on the topic and will provide mentoring and assistance.
Taking advantage of the existing MoU with FAO at
least one of the Master dissertation each year will be
dedicated to the topic of the relationship between trade
and food and nutrition security.
Taking advantage of the Erasmus+ agreement with the
UK Trade Policy Observatory at University of Sussex
(UK) at least one of the Master dissertation each year
will be dedicated to the topic of the consequences of
Brexit for EU trade policy.
Each of these dissertations will benefit for additional mentoring and co-supervision activities by one
member of FAO and/or UKTPO. This will enhance the quality of the research thanks to the concrete
interaction with scholars actively involved in carrying out policies and related research activities on
these topics.
P. Montalbano - Sapienza Università di Roma
10
Fonte: De Benedictis et al., (GEJ, 2014)
The Global trade network
P. Montalbano - Sapienza Università di Roma
1860: a key date for International Trade
• Signature of the Cobden-Chevalier Treaty by France and UK
• Thanks to the MFN clause the CC Treaty determined a decisive shift toward a
«trade network» (i.e., about 50 PTAs)
P. Montalbano - Sapienza Università di Roma
The Treaty was announced by Napoleon III in a
letter published by Le Moniteur, on January 5.
1860.Le Moniteur (5 gennaio 1860)
P. Montalbano - Sapienza Università di RomaFonte: De Benedictis L. & Nenci S. (2014) su dati Accominotti & Flandreau (2008) e Phare (2008)
P. Montalbano - Sapienza Università di RomaFonte: De Benedictis L. & Nenci S. (2014) su dati Accominotti & Flandreau (2008) e Phare (2008)
P. Montalbano - Sapienza Università di Roma
Fonte: De Benedictis L. & Nenci S. (2014) su dati Accominotti & Flandreau (2008) e Phare (2008)
P. Montalbano - Sapienza Università di Roma
Globalisation waves
Fonte: WB (2002)
Note! The term «globalized quota» first
appears in 1959 in The Economist in reference
to quotas on car imports to Italy.
P. Montalbano - Sapienza Università di Roma
The Volume of World Trade, 1850-2010
(in log scale)
Sources: Irwin & O’Rourke, 2011
P. Montalbano - Sapienza Università di Roma
What do we export today?
Source: WTO, 2013
The types of goods traded have changed drastically over the last decades
P. Montalbano - Sapienza Università di Roma
World Trade Flows:
players and destinations
Figure 1.2 World Trade in Goods, 2006 ($ billions)
Feenstra and Taylor: International Economics, Second EditionCopyright © 2011 by Worth Publishers
The amount of
trade is illustrated
by the width of the
lines
Main trends:
1. the leading role of Europe in world trade (31%); possible
reasons?
2. the large amount of trade flows at regional level (within
Europe, within the Americas (11%) and between Asian
countries);
3. a relevant trade link between the United States and Europe
(about 37%); why?
4. the important share of world trade coming from Asia; why?
5. the marginal position of Africa (that accounts for only 2.5%
of World trade), and its close relationship with European
countries.
P. Montalbano - Sapienza Università di Roma
Barriers to trade
All factors that influence (restrict) the amount of goods
and services shippped across international borders
Main barriers are:
• Tariffs: A tax on a good coming into a country
• Quotas: Physical restriction on the number of goods
coming into a country
• Non-Tariff Barriers: Any methods not covered by a tariff,
most usually (ex: standards on fuel emissions from cars;
documentation required to sell drugs in different countries,
ingredients in products ; etc)• Rules
• Regulations
• Voluntary Export Restraints (VERs)
• Legislation
• Exacting Standards or Specifications
P. Montalbano - Sapienza Università di Roma
Figure 1.4 Average Worldwide Tariffs, 1860–2000
Feenstra and Taylor: International Economics, Second EditionCopyright © 2011 by Worth Publishers
Average Worldwide Tariffs, 1860–2000
P. Montalbano - Sapienza Università di Roma
The EU, USA and China account for
almost half of world trade in goods
P. Montalbano - Sapienza Università di Roma
https://www.youtube.com/watch?v=KMkJu8S8ztE
Made in…The World
P. Montalbano - Sapienza Università di RomaBEC – World Trade Network of Trade in Intermediates, 2012
P. Montalbano - Sapienza Università di Roma
The evolution of international trade:
let’s wrap up International trade has grown tremendously in the last 30 years, much
faster than global output
• World merchandise and commercial services trade have increased by
about 7 per cent per year on average
New players have risen to prominence in world trade, most notably large
developing countries and rapidly industrializing Asian economies
The composition of trade has changed (i.e. the product breakdown of
merchandise trade and the relative importance of commercial services
trade)
Countries have become less specialized over time in terms of their exports
and therefore more similar in terms of their export composition.
Trade has tended to become more regionalized since 1990, particularly in
Asia, but intra-regional trade shares in Europe and North America have
remained steady or declined.
P. Montalbano - Sapienza Università di Roma
Trade is essentially a North-North phenomenon (60-70%)
Countries trade also in similar goods
Trade is not only between producers and final consumers:
• Intra-firm trade (30%), intermediate products (35%), final products
(35%), according to WTO’s estimates
Countries do not trade, firms do. But very few of them do it.
The evolution of international trade:
wrap up -2
P. Montalbano - Sapienza Università di Roma
Data: Eurostat Comext and Electoral Commission UK. Figure: Piero
Stanig and Italo Colantone.
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