Foreign Trade, FDI, and Capital Flows Study

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    Building a Dataset for Non-Tariff Measures and its Usage: The Case of Indonesia and Applicability for Other Countries
    (World Bank, Washington, DC, 2023) Montfaucon, Angella Faith ; Cali, Massimiliano ; Agnimaruto, Bayu ; Silberring, Jana Mirjam ; Hasmand, Agnesia Adhissa ; Lakatos, Csilla ; Pasha, Mochamad
    As import tariffs have been declining over the past decades, non-tariff measures (NTMs) have become the most frequently used measures in trade policy. The increasing use of NTMs in global trade has highlighted the need for timely, high frequency and accurate data in order to better understand the implications that NTMs have on products, firms and the economy. This manual describes the first high-frequency panel dataset built by the World Bank on the universe of NTMs applied by a country, i.e. Indonesia. The manual includes a comprehensive overview of the purpose, building procedures and usage of the data for Indonesia. The dataset expands on and improves on existing data on Indonesian NTMs collected by other institutions (UNCTAD and ERIA) by covering a broader source base, customizing the data, and by increasing the frequency of updates. By documenting the data collection and transformation process, the manual hopes to facilitate the construction of similar datasets in other countries.
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    Vietnam: Deepening International Integration and Implementing the EVFTA
    (World Bank, Hanoi, 2020-05-01) World Bank
    Following from Vietnam’s ratification of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in late 2018 and its effectiveness from January 2019, and the European Parliament’s recent approval of the European Union-Vietnam Free Trade Agreement (EVFTA) and its subsequent planned ratification by the National Assembly in May 2020, Vietnam has further demonstrated its determination to be a modern, competitive, open economy. As the COVID-19 (Coronavirus) crisis has clearly shown, diversified markets and supply chains will be key in the future global context to managing the risk of disruptions in trade and in supply chains due to changing trade relationships, climate change, natural disasters, and disease outbreaks. In those regards, Vietnam is in a stronger position than most countries in the region. The benefits of globalization are increasingly being debated and questioned. However, in the case of Vietnam, the benefits have been clear in terms of high and consistent economic growth and a large reduction in poverty levels. As Vietnam moves to ratify and implement a new generation of free trade agreements (FTAs), such as the CPTPP and EVFTA, it is important to clearly demonstrate, in a transparent manner, the economic gains and distributional impacts (such as sectoral and poverty) from joining these FTAs. In the meantime, it is crucial to highlight the legal gaps that must be addressed to ensure that national laws and regulations are in compliance with Vietnam’s obligations under these FTAs. Readiness to implement this new generation of FTAs at both the national and subnational level is important to ensure that the country maximizes the full economic benefits in terms of trade and investment. This report explores the issues of globalization and the integration of Vietnam into the global economy, particularly through implementation of the EVFTA.
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    Actual and Potential Trade Agreements in the Asia-Pacific: Estimated Effects
    (World Bank, Washington, DC, 2019-10) Ferrantino, Michael J. ; Maliszewska, Maryla ; Taran, Svitlana
    This paper assesses and compares economic impacts of four actual and potential free trade agreements in the Asia-Pacific Region; Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP, sometimes also called TPP-11), the original Trans Pacific Partnership (TPP-12), the Regional Comprehensive Economic Partnership (RCEP), and the Free Trade Area of the Asia-Pacific (FTAAP). FTAs with a larger scale and wider membership are expected to produce higher aggregate gains in terms of increased GDP and trade flows. U.S. withdrawal from TPP-12 reduced estimated GDP gains for the TPP-11 countries by about half. For countries belonging to CPTPP and also negotiating RCEP, the potential gains from an agreement with both China and Korea are substantial, but not as large as if the United States were to re-join TPP-12. On a sectoral basis, significant structural shifts are observed for such sectors as food processing, wearing apparel, textiles, and transport equipment.
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    Opening for Business: Myanmar Diagnostic Trade Integration Study
    (World Bank, Washington, DC, 2016-06-30) World Bank Group
    As part of the Enhanced Integrated Framework (EIF) program for Trade-Related Assistance to Least Developed Countries (LCDs), which Myanmar joined in April 2013, the Government of Myanmar has asked the World Bank Group (WBG) to be the implementing agency for a Diagnostic Trade Integration Study (DTIS). The general objectives of a DTIS are: (i) to assist the government in mainstreaming trade and competitiveness in the country’s overall development strategy; (ii) to provide a diagnostic and analytical tool to prioritize and sequence key reforms in the area of trade and competitiveness; and (iii) to provide a platform for development partners to coordinate action and align trade related assistance with government priorities. This DTIS has identified a number of domestic and external constraints facing Myanmar as it strives to leverage regional and global integration for inclusive, export-led growth. Based on this, the current report provides analytical input on the linkages between trade and poverty, and highlights key steps to remove bottlenecks in terms of trade policy and trade facilitation.
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    A Comparative Overview of the Incidence of Non-Tariff Measures on Trade in Lao PDR
    (World Bank, Washington, DC, 2016-02-29) World Bank Group
    An efficient and transparent regulatory framework governing international trade is a necessary condition for countries to realize the benefits of international trade. Over the last decade, Lao PDR has been deepening its economic ties with the global economy through the formal accession to the WTO in 2013. At the regional level, the country is committed to be full member of the ASEAN Economic Community. These agreements entailed profound changes to Lao PDR’s regulatory framework governing international trade. This report provides an overview of the incidence on NTMs on import flows in Lao PDR before and after WTO accession and identifies lingering regulatory hurdles that may still hamper the ability of the country to reap the gains of a deeper integration. Employing detailed and comparable NTM information, this note characterizes the changes in the trade related regulatory framework in Lao PDR and compares the current scheme with that of other countries in Asia. The report also combines econometric estimations of Ad-Valorem Equivalents (AVEs) of NTMs with qualitative information collected through fieldwork to identify priority measure to streamline. This report is organized as follows. Section two discusses main conceptual issues and presents the data and metrics to examine the role of NTMs in import flows. Section three, describes the trade incidence of NTMs and compares it with similar countries and with the situation prior to WTO accession. Section four combines an econometric technique with qualitative information to discuss the stringency of NTMs. Section five presents some concluding remarks and provides some recommendation for reform.
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    Services and Manufacturing Linkages: An Empirical Analysis for Lao PDR
    (World Bank, Washington, DC, 2016-02) World Bank Group
    This report seeks to shed light on the ways in which the services sector has contributed to Lao PDR’s competitiveness and integration into the global marketplace. It focuses on two complementary roles that the services sector plays: first, as an avenue for export diversification and growth and, second,by providing inputs into other productive sectors of the economy, such as the manufacturing sector. As economies grow, the importance of the services sector generally increases, but its role as an enabler of other sectors of the economy in moving up the value chain is frequently overlooked. However, the services sector is critical in raising competitiveness of these other sectors to boost growth and create better quality jobs. The main policy recommendations that emerge from this report are aimed at increasing competition in the services sector, reducing distortive regulations, and opening up the sector to foreign participation, building up skills, both at the individual and at the firm level, and investing in hard and soft infrastructure to promote the development of the sector.
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    The Labor Impact of Lao Export Growth
    (World Bank, Washington, DC, 2016-02) Ruppert Bulmer, Elizabeth ; Hollweg, Claire H.
    As countries become increasingly integrated into the global economy, increased trade links with other countries translate into increased access to better or cheaper imports and increased demand for exports. Both can have an impact on consumers, producers and workers through household consumption, household production, and labor incentives. The channels through which increased trade integration can affect labor include: (i) the consumption channel, typically leading to an increase in purchasing power and therefore higher real wages, and (ii) the employment effect due to increased labor demand. The extent of these gains to trade will depend on the incidence of trade policies or trade shocks; in other words, the impact will depend on which products become less expensive, which sectors increase demand for skilled or unskilled labor, and which workers can access these new jobs. This report utilizes a range of methodologies and datasets that implicitly link trade and jobs; by using these complementary analytical approaches, we generate multiple perspectives on Lao PDR’s recent labor market outcomes, and their implications for Lao PDR’s current and future trade competitiveness.
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    Indonesia Current Account Assessment
    (World Bank Group, Washington, DC, 2015-07-01) Nedeljkovic, Milan ; Varela, Gonzalo ; Savini Zangrandi, Michele
    The analysis presented in this report suggests that Indonesia’s recent current account deficit results from the interaction of short, medium and long run factors that can be grouped into four blocks: external shocks, domestic policies, international integration, and stage of development and demographics.
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    Cambodia Services Trade : Performance and Regulatory Framework Assessment
    (Phnom Penh, 2014-07) World Bank Group
    As a result of a determined regulatory reform process and an economic modernization process over the past two decades, Cambodia has experienced extraordinary economic growth. In 2004, Cambodia became the first low-income country to join the World Trade Organization (WTO). Since then, Cambodia has grown to become one of East Asia s most open economies, especially in the services sector. Cambodia s impressive economic growth owes much of its driving force to the boom in services trade. Services exports grew more than 20 percent a year for most of the past decade led by a rapid expansion in tourism. Foreign direct investment (FDI) particularly in tourism, construction, infrastructure, agro-processing, and telecommunications also supported the expansion of services trade, not only by attracting foreign capital and expanding employment into Cambodia, but also by improving domestic technology and enhancing domestic skills. Cambodia is quickly becoming a sophisticated economy that needs to move beyond the pillars of textiles and tourism exports by diversifying into the export of modern services. Cambodian firms are already tentatively exporting some niche services such as computer-based animation. Modern services exports to other East Asian countries, including information technology (IT)-related services, are likely to play a more important role in Cambodia as a source of employment, revenue, and investment. In the regional context, Cambodia stands to benefit from its chairmanship of the Association of Southeast Asian Nations (ASEAN), by showcasing its economic reform and modernization process, and increasing the potential to attract investments from services firms interested in serving the region as whole. Cambodia should act quickly to address potential competition from other least-developed (LDC) and developing countries across the regions that are also expanding their services industries.
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    Reaping Benefits of FDI and Reshaping Shanghai's Economic Landscape
    (Washington, DC, 2011-01) World Bank
    Foreign Direct Investment (FDI) has played a significant and positive role in driving economic growth and upgrading economic structure in Shanghai. The shift in the pattern of FDI over the last decade towards services has been particularly crucial. Given its importance, Shanghai municipal government may continue to devote efforts to attract FDI and have foreign funded enterprises help reshape Shanghai's economic landscape. The main importance of FDI to Shanghai lies less in its capital finance, and more in the extent to which foreign funded enterprises (FFEs) help move the city up the value chain and generate high-end jobs. In the post-financial crisis era, developing countries will take a much larger role in leading world growth while enhanced competition will accelerate the pace of service revolution. Possessing strong geographic advantages, Shanghai has the potential to become an international business and financial hub and to have the high-tech industries and services being the driving force of the growth. Shanghai has strong potential in reaping the benefits of FDI and reshaping its economic landscape in 12th Five Year Plan period. In terms of the three conditions to succeed good opportunity, favorable geographic location and harmonious society, Shanghai is already in a good position. This note seeks to provide insights to help the Shanghai government make the right decisions and trade-offs to better reap the benefits of FDI in the context of a changing global context.