We also assume that the new trade agreement prohibits employment aid. The reason is that, as we show Grossman et al. (2019), either a consumer subsidy or employment assistance could be used to offset market power, but employment aid does not have the same desirable quality as consumer subsidies. In other words, even under national treatment, governments would not unilaterally put such subsidies at their optimum level at the global level, without a provision of the agreement asking as much. A simple new trade agreement could ban the use of employment aid and give countries the freedom to choose their best consumer subsidies. TOKYO (Reuters) – An agreement between the United States and Japan to start new trade talks avoids breaking the bilateral trade deficit of its allies for now, but any deal would likely add little to reducing the U.S. trade deficit that angers U.S. President Donald Trump. A recently published draft free trade agreement between Mercosur and the EU has made slight improvements to the intellectual property chapter. It seems that the unnecessary and unjustified 20-year extension of the copyright period is now being removed from the agreement, and the parties have introduced some flexibility for users to circumvent technical safeguards in order to … Read more “Copyright in the Mercosur-EU trade agreement: a little better, but more often worse” The British and South Korean governments agreed on 10 June on an agreement in principle on “commercial continuity”.
Although there is no official information on its content or duration, Dr Liam Fox, The Secretary of State for International Trade, tweeted that the UK`s departure from the EU would provide a basis for “an ambitious future free trade agreement.” If so, what are the options for such a free trade agreement? And to what extent are these ambitions realistic? (more…) Tags: China, free trade, protectionism, tariffs, trade agreements, trade dispute, Trump, U.S. and U.K. Trade and Investment Working Group, U.S. If external (negative) effects are taken into account, the new optimal trade agreement has positive tariffs and a consumer subsidy that compensates for both externality and monopoly distortions. Moreover, the optimal standards are no longer the same as those that companies that would maximize profits themselves would be designed. In the absence of regulation, companies in both countries do not have sufficient incentives to differentiate local and export-oriented versions of their brands. The new optimal trade agreement provides standards that push all companies to design products closer to ideal in target markets compared to what they would choose if they were not required to maximize profits. It is interesting to note that effective import standards are more lenient than local products, reflecting the different costs to which different companies are subject to strict rules.
Dispute settlement systems (DMS) sleep in many trade agreements because countries preferred to use the World Trade Organization (WTO) with their appeal mechanisms as an international dispute settlement forum. This could change in the coming years as the confidence and reliability of the WTO is slowly paralyzed by the disruptive attitude of the United States. The question is whether the use of EU dispute settlement mechanisms offers a faster and clearer approach to dispute resolution and could serve as a model for future regional trade agreements. (more…) Many economists argue that it makes little sense to focus on trade deficits in a bilateral context, given the broader global economic factors. What would be the impact of different versions of Brexit on the UK economy? Are some parts of the economy likely more affected than others? Will trade agreements with the rest of the world support the loss of UK access to EU markets? This is quest