by Xieshu Wang and Marta Marson, University of Turin and OEET
Newsletter n. 13| December 2019 - Download PDF
This issue of Emerging Economies and the next will include some main contributions presented at the 5th Workshop organized by OEET and AISSEC at the Department of Economics and Statistics “Cognetti de Martiis” of the University of Turin on 3rd and 4th of October 2019, around the topic of “Trade Wars and Global Crises: The Outlook for Emerging and Advanced Countries”.
In light of the escalating trade war between US and China, the workshop invited scholars and practitioners to reflect on how the changing geopolitical dynamics are impacting the trend of international exchanges, the structure of global value chains, and the economic outlooks of both developed and developing economies. This issue presents four contributions on changing trade paradigms in the new wave of protectionism, and particularly regarding US duties against China and the EU.
We start with a historical review by P. Della Posta of the different phases of globalization, dating from the IX Century, and its moments of crisis, including the period between the two world wars and the current phase of de-globalization accentuated by the election of Donald Trump, the Brexit and the spreading of neo-nationalism and populism worldwide. Della Posta distinguishes two waves of criticism on globalization since the end of the 1990s, reflecting concerns from different social groups, and concludes on the importance of international cooperation.
G. Graziani discusses the direct consequences of the on-going US-China trade war on emerging economies. The analysis is based on a framework of four direct effects of tariffs: trade volume reduction (among contenders), export re-direction, switch of supply and crowding out. By comparing trade data of 2018 and 2019, he shows which emerging countries could be defined as “winners” or “losers” in terms of increases/decreases of export flows to the US and China in the short-term.
C. Mulas-Granados provides an analysis of the effects of the potential introduction of US duties on European economies, with an illustrating case of the Czech Republic’s cars export. He shows how the notion of value-added export, rather than gross export, is better suited to capture the distributional impacts transmitted on the exporting economies via global value chains (GVCs).
Last, Lengo, from the Piemonte Agency for Investments, Export and Tourism, discusses the potential consequences of the import duties announced in October by the US against European countries, in particular the impact on the export performances of Piedmont firms. He argues that the agri-food, mechanics and transport sectors will be the most affected in the region, to the advantage of foreign competitors, including imitators of Made in Italy/Piedmont, whose prices are not affected by duties. While he remains optimistic on the capacity of Piedmont firms to cope with the challenge, he also calls for complementary interventions at the European level.
