The European Community (the correct legal term in trade matters, hereafter EC) is still a recent and ongoing process. Fifty years is a short time span for such an endeavour (Annex I lists the 17 Treaties that have formed its legal basis).3 It is strictly an economic process because a straight forward political unification of Europe was out of reach, then, now, and for the decades to come. This ambiguous relation between economics and politics explains why the EC commercial policy often received the status of a foreign policy instrument. This was the case in the EC relation with former colonies (during the 1960s), developing countries (the 1970s), the Central European countries formerly in the Soviet sphere (the 1990s), and neighbours or emerging economies (the 2000s).
First published in 1999, Dynamic Issues in Commercial Policy Analysis focuses on the explicit specification of dynamic mechanisms in the formal analytics of trade models. A wide range of modelling approaches is employed to investigate an even wider range of policy issues, with an overall objective of further extension of the basic conceptual framework of applied commercial policy analysis in the direction of dynamic issues and applications. Professors Baldwin and Francois and their contributors emphasise methods for the analysis of interactions between commercial policy and leading policy issues, including investment performance, economic growth and innovation, the location of industry, migration, and the environment
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Part I. Commercial policy : empirical facts, determinants and effects. The empirical landscape of trade policy / C.P. Brown, M.A. Crowley -- The political economy of commercial policy / J. McLaren -- The effects of trade policy / P.K. Goldberg, N. Pavcnik -- Quantitative models of commercial policy / R. Ossa -- part II. Trade agreements : legal background, purpose and design. Legal aspects of commercial policy rules / A.O. Sykes -- Dispute settlement in the WTO : mind over matter / P.C. Mavroidis -- The purpose of trade agreements / G.M Grossman -- The design of trade agreements / K. Bagwell, R.W. Staiger.
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The need for careful research on trade policy is particularly acute, and this volume empirically addresses these and many other important issues. The contributors offer studies which integrate the institutional details of current trade policy with creative economic analyses. Marked by a shift from a traditional reliance on simulation models, these papers take their inspiration from recent changes in the assumptions traditionally underlying research in international trade theory. No longer are government policies viewed as being somehow "given" to the researcher; in part 1, "Analyses with a Political Economy Perspective," four papers treat such policies as endogenous and explicable in terms of political economy. Neither are product and factor markets seen as perfectly competitive; instead, the three papers in part 2, "Trade Policy Effects under Imperfectly Competitive Market Conditions," assume that firms consider the actions of other companies when formulating their decisions. In part 3, "A New Measure of Trade Restrictiveness and Estimates of Trade Policy Effects with CGE Models," the first essay explores the quantitative restrictions on cheese to develop and implement a new model of restrictive trade. Two final contributions address problems for which simulation modeling is especially useful. The first considers the effectiveness of an import surcharge in reducing the U.S. trade deficit and the second treats the welfare effects of liberalization in South Korea where increasing returns to scale are significant These innovative studies focus on economic behavior that will provide valuable insights for policymakers, academic economists, and students
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