US policy spillover(?) – China’s accession to the WTO and rising exports to the EU

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractThe paper offers a novel explanation for China's manufacturing exports performance after WTO entry. Building on stylized facts about low-wage country exporters, a theoretical model is developed to analyze reduced trade policy uncertainty. A global (non-destination specific) component of exporting fixed costs facilitates transmission of bilateral policy changes to multilateral export performance. The empirical analysis exploits the removal of US tariff uncertainty in conjunction with China's WTO accession, and examines its effect on China's exports to the EU. The results reveal that: (i) the structure of China's export boom to the EU conforms to the pattern of US tariff uncertainty; (ii) the adjustment takes place at the extensive margin; and (iii) the effect phases out after a few years. These findings have implications for the scope of international policy negotiations and provide suggestive evidence on the nature of fixed costs manufacturing firms in low-wage countries must overcome.JEL-Classification: F13, F14, D84, O24

Importing under trade policy uncertainty: Evidence from China

“…2 Mau (2017) shows that a reduction in US tariff uncertainty following China's WTO accession also positively affected China's exports to the European Union. 3 Pierce and Schott (2016) already provide some evidence, amongst other results, that a reduction in domestic TPU can determine an increase in the number of importing firms at home, in addition to an increase in the number of exporting firms abroad.…”

When Time Matters: Eastern Europe's Response to Chinese Competition

“…One such policy change was China's transition to permanent normal trade relations (PNTR) with the US, which entailed a lower threat of sudden tariff increases and an expansion of Chinese exports (Pierce and Schott, 2016;Handley and Limão, 2017;Feng et al, 2017). 15 Mau (2017) shows that the 15 Uncertainty arose from the fact that MFN rates were granted only for one year and were subject to review and approval by the US Congress before being renewed. While the US never actually applied these higher rates on Chinese products, a potential negative decision would have entailed Chinese exporters facing transition to US PNTR also triggered an acceleration of China's exports to the EU15 and other large high-income destinations.…”

“…Indeed, studies employing this measure typically rely on aggregate sector-level data. Since we attempt to evaluate competition effects between countries exporting to the same third market, we are confident that import market shares are an appropriate measure for the purposes of our analysis.12 Preference shifts in a large destination market could have implications for China's multilateral trade performance (e.g Mau, 2017)…”

Can Exchange Rate Volatility Influence the Export Positively? Evidence from Turkey Under the Regime Shifts

“…Some services or manufactured commodities might have some inferiority characteristics. Or some determinants might have an inferior role for manufacturing exporters as depicted in Mau (2017). Mau (2017) reveals that the global fixed costs are significantly relevant for services trade and that, according to some firm-level studies, global fixed costs might play an inferior role for manufacturing exporters.…”

“…Or some determinants might have an inferior role for manufacturing exporters as depicted in Mau (2017). Mau (2017) reveals that the global fixed costs are significantly relevant for services trade and that, according to some firm-level studies, global fixed costs might play an inferior role for manufacturing exporters. The Turkish manufacture sector covers the food products, beverages, tobacco products, textiles, wearing apparel, leather and related products, wood and products of wood and cork (except furniture), paper and paper products, coke and refined petroleum products, chemicals and chemical products, rubber and plastic products, fabricated metal products, electrical equipment, machinery and equipment n.e.c., motor vehicles, trailers and semi-trailers, furniture and other products.…”