Theoretical concepts of trade policy development and analysis: Evolution and modern challenges in the context of the international trading system transformation

Study of the formation of trade policy in modern conditions of hyperglobalization and transformation of the global management system. The article provides an integrative review of research in leading foreign and Russian journals on international trade.

Рубрика Международные отношения и мировая экономика
Вид статья
Язык английский
Дата добавления 24.06.2021
Размер файла 311,6 K

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A more focused analysis on a wide range of problems is presented in articles published on the organization's website. The authors are both its staff and representatives of universities and research centers dealing with trade policy issues. A number of publications explore the impact of trade and trade policies on gender equality and the role of women in the economy, the protection of intellectual property rights, the regulation of trade in services, and various aspects of regional economic integration. Taking into account the current challenges of global regulation and the rise of trade wars, the relationship between trade and economic development is being addressed. Thus, E. Beckers and R. Teh simulate the development of trade conflict due to mutual increase of duties between some WTO members, originally initiated by the US and forecast a decline in world trade and world GDP [Bekkers, Teh, 2019]. In connection with the emergence of new economic sanctions, an attempt is made to assess their effectiveness against the countries to which they are directed [Smeets, 2018]. Most of these publications rely on the application of various economic and mathematical models.

Annual Trade and Development Reports and UNCTAD Research papers are consistent with general areas of study identified above. They have a special focus is on challenges facing by developing countries. The economic and social gap between North and South has remained virtually unchanged, so further study of contemporary challenges in international trade, such as the development of global value chains, digital trade, and increased transfers of intellectual property rights, etc. is necessaryUNCTAD (2019) From Development to Differentiation: Just how much has the world changed? Research Paper № 33. URL: https://unctad.org/en/PublicationsLibrary/ser-rp-2019d5_en.pdf (accessed: 01.01.2019).. Analysis of South-South trade, the development of regional trade agreements, export diversification opportunities, industrialization and, in general, the structural transformation of developing economies are viewed through the prism of classical, new and cutting-edge theory of international trade.

Whereas in previous journals, trade policy was mainly viewed from an economic point of view, through the prism of international trade theories and predominantly quantitative analyses, from a legal perspective, or through an analysis of international economic law and the architecture of global governance, the Review of International Political Economy publishes articles by experts in international relations and political scientists. The scope of study practically repeats the topics of journals discussed above: the development of the international trading system in line with WTO and regional trade relations, global value chains, trade relations between the United States, China and the EU, etc. The hallmarks of these articles are, first of all, the analysis of trade policy formation through the prism of political interests, political institutions, lobbying, and so on. M. Dallas and colleagues consider the concept of "strength" in global production systems on how different actors interact within their framework [Dallas, Ponte, Sturgeon, 2019].

Second, papers mainly use quantitative research methods, although there is a tendency to use quantitative methods more frequently. M. A. Madeira uses regression analysis to determine the extent of the company's involvement in lobbying interests in intra-industry trading [Madeira, 2016]. However, there are few interdisciplinary articles. According to Th. Oatley, 25 years of empirical research in the field economic policy of openness appear to have failed to significantly deepen our understanding of international trade policy [Oatley, 2017]. This is once again confirmed by the significant divergence in the Western scientific community between economists who conduct their research in the context of economics, and political economists, who are mainly engaged in the study of political processes at the heart of the economic policy. The former recognizes only quantitative methods of analysis, while the latter criticize them and say that trade policy analysis cannot be limited to theories of international trade and empirical calculations. This debate reflects the evolution of economic science in the context of social sciences. Currently, the economy is far from other social sciences in theoretical and methodological terms, although historically it has been taken precisely in cooperation with other sciences: philosophy, sociology, etc. [Milonakis, 2008]. As Russian economics has roots in the Soviet economic school and ideas of Karl Marx, who considered the economy in the context of political economy, Russian scholars are not yet so polarly divided in their research approaches.

In Russia, leading economic journals deal with a wide range of issues, one of which is international trade and trade policy. Russian journals trace the following distinctive trends in trade research. First, the bulk of articles, unsurprisingly, are aimed at Russia's trade policy and its economic relations with main partner countries. At the same time, a large number of recent studies consider the possibilities and limitations of an import substitution policy, which contradicts basic concepts of free trade in the foreign mainstream [Prilepskiy, 2017; Kheyfets, Chernova, 2019]. The experience of trade policy of foreign countries is also studied, but in recent years it has also been addressed through the prism of the import substitution assessment [Gubina, 2019; Zagashvili, 2016].

Second, a very limited number of publications is devoted to global trends. However, over the past few years their number has begun to increase [Gnidchenko, 2018; Nazarov et al., 2019]. Third, recently there has been an increase in the number of articles on global value chains [Kondratyev, 2019; Lukyanov, Drapkin, 2017], on regional trade agreements, mainly on the EAEU, and on the digitization of trade [Smirnov, 2019]. A number of papers examine the global architecture of the international trading system and the prospects for the development of the WTO [Obolensky, 2019; Zagashvili, 2019]. The prospects and implications of Russia's participation in this organization are also of great interest [Su- tyrin, Kolesov, 2017]. Many articles are devoted to the analysis of trade of the BRICS countries [Leksyutina, 2017; Bragina, 2018]. At the same time, it is worth paying attention to the fact that the BRICS theme is not in demand for the foreign journals mentioned above.

It is worth noting that there are articles dedicated to individual instruments of trade policy [Koval, Sutyrin, Trofimenko, 2014; Bohanes, Markitanova, 2015; Savel'ev, Khetagurova, 2016; Bohanes, Markitanova, 2015]. There are quite a few articles about sanctions and their impact on Russia's foreign trade, although there are not many publications on non-tariff regulatory methods of trade [Koval, Mogucheva, 2018; Ponomareva, 2019], and trade disputes [Trofimenko, 2008]. There are very few articles on trade in services [Shakhova, Sycheva, 2019], as well as on the relationship between trade and environmental issues, labor standards, gender issues, etc. This can be explained by the fact that these issues are not currently key to Russia's economic development.

In addition, there are very few articles on the latest theory of trade of heterogeneous firms, but they are just beginning to appear in the Russian journals [Fedyunina, Averyanova, 2018]. Moreover, studies using quantitative analysis methods in international trade, seem to gain more and more popularity only in the last few years [Kadochnikov, Fedyunina, 2017]. The gravity model is very rarely used [Shumilov, 2017], while network analysis has not yet been presented in selected Russian journals. In general, most of the articles in Russian journals do not contain deep econometric analyses.

Conclusion

The study of trade policy is inextricably linked with the theories of international trade, on the one hand, and with the current trends of the international trading system transformation, on the other. Today the classic trade theory by A. Smith and D. Ricardo predetermines the direction of trade policy towards liberalization. A new theory of intra-industry trade by P. Krugman and more recently by M. Melitz [Krugman, 1998; Melitz, 2003] add to the existing paradigm. It is obvious that increasing protectionism of recent years suggests the need for a theoretical rethinking, although this has not been undertaken. This may be so because, first, of divergences between the academic community and policy-makers: some are increasingly delving into the simulation of real-world situations, while the latter are aimed at solving practical issues with all stakeholders in mind. Secondy, globalization has affected the scholarly environment, and most academic economists conduct their research within the general mainstream, which reflects the almost complete absence of heated debate and discussions on the pages of leading foreign journals.

The major focus of research is now on the study of the export-import activities of heterogeneous firms and the formation of global value chains, as they determine the trajectory of international trade. More articles are devoted to micro-level trade relations, while trade policy remains essentially a macroeconomic concept.

In leading foreign universities and research centers there is a clear division of labor between economists who study economics using predominantly quantitative research methods, and economists and political scientists who study political economy and conduct mostly qualitative analyses. Empirical analysis in economic research is becoming increasingly, not only dealing with results of constructed econometric or economic and mathematical models, but also studying the formation of trade policies of states or certain predictions. To improve the way trade policy is studied it is necessary to apply a stronger interdisciplinary approach to its analysis, a deeper mix of legal and economic analysis, as well as economic and political analysis.

The trade policy analysis one could note the "fashionable" trends associated with the prevailing views in society. These include the impact of trade liberalization on women's employment and wages, and attempts to convey to developing countries the idea that strengthening the protection of intellectual property rights will contribute to their economic growth, and the link between trade and poverty, as well as the development of e-commerce. In addition, recent studies have addressed regionalization and there have been attempts to address major issues outside multilateral regulation, and through agreements with a limited number of participants. This raises questions about the future of the World Trade Organization and the need to reform it.

Foreign journals specialize in individual problems or approaches to their analysis, in specific trade policy instruments or certain aspects of trade development in individual countries. However, for the most part there is a clear bias towards the study of the Asian region, primarily China, as well as the current problems of trade between the United States and the EU. In the leading foreign periodicals, Russia's trade policy accounts for a very limited number of articles, mostly published by non-Russian authors. This demonstrates the need for greater integration of Russian scientists into the international scientific community.

Russian research on international trade is somewhat different from the foreign mainstream. Many articles explore an alternative development strategy, import substitution, which essentially implies protectionist trade policies that run counter to the generally accepted theoretical concept of free trade. However, economic and mathematical modeling is not often used in these studies. It seems that quantitative analysis needs to be deepened. The development of micro-level research into international trade is also relevant to strengthen integration into the international economic community. The study of modern aspects related to trade should be expanded, as well as an interdisciplinary approach should be used in analyzing Russia's trade policy in line with the interaction between economics and political economy.

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