Since 2016, two of the world’s largest economies – those of the US and the UK – have made major shifts away from global economic integration. First, the British electorate voted to leave the EU. Since then, the Trump administration has sparked a global trade war which currently shows no signs of dissipating, with tariffs having already been imposed […]
Arctic ice cover has been shrinking as a result of global warming. Besides the important and critical environmental and economic effects of melting ice caps, a side effect is to open the northern sea route for high volume commercial traffic. This shipping route will connect East Asia – Japan, South Korea, Taiwan and China – with North-western Europe through […]
In a recent article for LSE Business Review, I introduced the classification of “trade policy 3.0” and the emergent “internet of rules” (IoR): a networked repository of executable forms of rules written in computer language. The distinctive character of trade policy 3.0 is that, in addition to “writing down the rules” of trade in natural language (trade policy 1.0) […]
Trade policy has reemerged in the headlines. Politicians and activists from the right and the left of the political spectrum challenge the idea that free trade benefits everyone. Negotiations about new trade agreements fail and existing agreements are suspended. It even seems like trade policy might develop into a wedge issue in national politics and international relations. This raises […]
There is a widespread belief that many of the problems that have recently plagued the EU steel industry can be resolved, or at least alleviated, by increased market concentration. Aligned with this conviction, many analysts and industry executives have positively welcomed the recent merger of the European operations of Germany’s ThyssenKrupp and India’s Tata Steel. The thinking goes that concentrating […]
Businesses, especially micro, small and medium-sized enterprises (MSMEs), face many challenges in understanding and complying with international commercial rules and regulations. Research also indicates low utilisation of eligible tariff preferences, or favourable tax rules, by traders. In other words, many businesses do not always effectively benefit from their negotiated market advantages. Unfortunately, the current “version history” (or stage in the […]
Italy is an anomalous case. It posted the lowest growth rates among the developed countries for about a quarter of a century. This anomaly can help to understand why the anti-establishment forces, which have also reaped successes almost everywhere in the Western world, gained a majority in the latest Italian elections. It also helps to understand the economic policy […]
Last Thursday President Trump acted to impose 25 per cent tariffs on steel and 10 per cent tariffs on aluminium. This action followed an investigation under Section 232 of the 1962 US Trade Expansion Act by the US Commerce Department of whether imports were endangering US national security. The European Union’s response to this action, and that of other […]
The past two weeks of the Brexit cycle has once again seen Ireland at the centre of the Brexit debate following key publications and speeches from both the UK and the EU.
On Wednesday 28 February, the EU stirred debate with the publication of its draft Withdrawal Agreement. This 120-page text aims to provide a legal underpinning to what was […]
Recent research has shown that international trade can lead to job losses in some sectors and areas within a country and gains in others, and it can also affect the countrywide level of wage inequality across workers. These side effects of globalisation have fuelled populist responses in Europe and the United States, with political leaders promising to stop global […]
The decision by the Trump administration to protect the US steel industry is by no means new. The Obama White House followed previous administrations in imposing anti-dumping duties to protect US steel against ‘unfair’ import competition from certain suppliers for certain products. In 2002 the Bush government introduced temporary safeguard measures to protect US steel from all imports of […]
Adam S. Posen has worked for central banks on both sides of the Atlantic – the US Federal Reserve and the Bank of England – and has written extensively about fiscal and monetary policies, Japan, the Eurozone and the US. Since 2013 Mr Posen has been the president of the think-tank Peterson Institute for International Economics (PIIE.) He is currently concerned […]
President Trump on the campaign trail promised to ‘renegotiate or rip up’ the North American Free Trade Agreement. As the US signals its intention to renegotiate this free trade agreement with Canada and Mexico, Trump’s tweets have focused on the Canadian dairy sector, where a stand-off between politicians on both sides of the border highlights the continued importance of the agricultural […]
The advantage of being in a trade area like the European Union is that a company can sell its products and services to a larger pool of customers. These are the usual gains from trade: each company/country specializes in what it does best, and by doing so, increases consumer welfare. By selling to a larger pool of customers, companies […]
In an apparent break with its past practices, the IMF’s policy advice shifted towards being more open to fiscal stimulus packages during the global financial crisis in 2008-2009, especially for large economies that are systemically important as growth engines for the world economy. There was evidence of an incremental change underway in the IMF’s policy paradigm and how staff […]
No matter which statistics we look at, real growth in trade or trade to GDP ratios, there is little doubt that over the last 20-25 years we’ve seen unprecedented growth in global trade flows. The only exception was the period of the global financial crisis when global trade plummeted but even then recovery was very swift and global trade […]
Both in the run up to the referendum, and since the UK voted to leave the EU, there has been a good deal of speculation over the likely impact on inward FDI into the UK. In a timely recent piece for Columbia FDI Perspective, Laza Kekic suggested that UK inward investment will remain robust post Brexit. We beg to differ.
Japanese […]
Rana Plaza, an eight-story building in Bangladesh that housed garment factories employing approximately 5000 workers, collapsed on April 24, 2013. The resulting fatalities (over 1100) and injuries (over 2400) made it one of the worst industrial accidents in history. The scale of this tragedy and subsequent widespread press coverage put a spotlight on the risks and costs of sourcing […]
“In the long run we are all dead,” and firms and industries are no exception. America, Europe, and Japan once dominated the manufacturing of computers and electronics, but these activities had all gone to low-cost countries by the end of the 20th century. Should we ban offshoring and stop “shipping jobs overseas”? Many voters and politicians seem to think […]
In 1999 lovastatin, a blockbuster cholesterol drug with annual peak sales of more than $1 billion in the U.S., became commercially available in Egypt — twelve years after it was first approved for sale by the U.S. Food and Drug Administration. Our research shows that this is not exceptional — long launch lags are common and 45 per cent […]
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