Notes Trade Policy and economic integration, pre-recorded lectures.
Video 2: Brexit.
Left: adopt own trade policy,
o No longer in EU single market.
o Zero tariff exports EU not guaranteed
o Possibly lower tariffs on imports from non-EU.
Northern Ireland:
o Good Friday agreement.
o No visible border.
o special status Northern Ireland,
o Trade with NI should follow EU regulations.
o New situation; border checks NI.
Video 3: consequences sanctions against Russia.
o Important countries with sanctions: EU27, US, UK, Japan.
o Four elements.
o Ban imports from Russia and Belarus
Not modelled as zero import quota but extremely high tariffs rates.
o Ban exports into Russia and Belarus
Modelled as exceptionally high export tariffs rates
o 50% withdrawal FDI headquartered companies form Russia
As negative shoch to productivity in Russian industries
o Side effect: higher trade costs (shipping, finance, insurance, short reserves
foreign currencies)
Using system of export subsidies and import tariffs.
Important: according to model results, Russian retaliation will hit Russia harder than others.
,Video 4: gender wage gap.
Major determinants gap:
o Difference earnings, same job, qualifications and experience
o Difference type of jobs
International trade could have impact on second determinant.
Trade leads to specialization, some sectors will, others decline.
Woman are better represented in some sectors than others no reason that specialization
is gender neutral.
Trade liberalization can lead to gender wage gap narrower.
o After NAFTA, Mexico modernization and therefore mechanization, machines
take over physical demand woman could join export related jobs; wages
and employment increased.
Trade liberalization can lead to gender wage gap wider.
o Exports require flexibility in answering questions and monitoring activities.
Woman less flexible (Norway low gender inequality).
Finding: Gender wage gaps white collar workers higher in exporting than non-
exporting firms. Larger distance customers and firm, larger wage gap.
Trade can have different outcomes for gender wage gap.
Video 5: EU carbon border adjustment mechanism (CBAM).
Paris agreement; reduce greenhouse gas emission such an extent that global temperature
rise would be limited to 2 degrees (compared to pre industrial levels).
European commission: Green deal, emission to be reduced 55% in 2030 relative to 1990.
European trading system (ETS), 2005, permits distributed.
o Price permit X. Firms with low incur costs will reduce gasses, ‘cleanify’ (spending less
than X) and sell to others firms. market emerges.
o Problem; too many permits, some for free to strategic industries. Price low
and therefore limited ‘cleanifying’.
o Prices to low, need to be about 75 euros
per ton to see effect.
Problem further price increase: “Carbon
leakage”. Price to high Firms move
production to other countries.
July 2021; proposal “Carbon adjustment border
mechanism”: importers in EU need to pay ETS
, price for emissions related to products of which production is polluting. (Aluminium, steel,
electricity, fertilizers, cement).
Countries hardest hit by CBAM:
CBAM can be seen as variable tariff (dirty exporters pay more).
WTO rules:
o Lead to emission reduction outside EU.
o Not level playing field between EU producers and others.
o EU exporters now exporting to Brazil disadvantage relative to Japanese
selling in Brazil.
o Non-EU exporters not export steel to EU, metal product of it to avoid CBAM
tariff.
Video 6: welfare gains European integration:
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