NCCR Trade Regulation: From Fragmentation to Coherence
The National Centre of Competence in Research (NCCR) is a multidisciplinary network of researchers working on international trade regulation. It seeks to promote greater coherence in international trade regulation by developing innovative and concrete policy recommendations to improve the balance between economic and other regulatory objectives in global governance.
The project, launched in 2005, is premised on the idea that academia can and should play an increasingly important role in identifying, analysing and offering innovative policy- and rule-making solutions to key challenges in modern trade diplomacy. It has entered its second 4-year phase in 2009. The project consists by the following 6 work packages.
Work Package 1: Trade Governance
This work package studies challenges to governing the international trading system, both in the public and private realm. Research addresses governance issues in a multi-layered system. The sub-projects build upon and complement findings of the research conducted in Phase I of the NCCR trade regulation. Phase II focuses on two major areas of research not explicitly addressed so far: judicial governance and the role of private actors in international trade disputes, in law-making and standard setting, in particular with regard to human rights and responsible governance. The WP tackles the traditional conceptual dichotomy of state-led and private-led governance and works within a framework that bridges both public and private elements of trade governance.
Work Package 2: Preferential Trade
The theme of regionalism (or preferentialism) is arguably at the very heart of the debate between fragmentation and coherence in trade regulation. The dual-facetted
nature of regionalism, which the protracted state of the Doha Development Agenda has without doubt fuelled, has confirmed in the minds of many NCCR researchers
the analytical need to deepen our understanding of the economic, legal and political motivations behind preferential trade agreements (PTAs), their contrasting and
evolving substantive nature, the extent to – and nature in - which PTAs have pushed the envelopes of rule-making and market opening beyond what exists or is contemplated at the WTO, their effects on trade and investment activity and the systemic impacts that the continued spread of PTAs may exert on the future of international trade regulation. The research proposals advanced for Work Package 2 aim at investigating these questions through a pluri-disciplinary lens.
Work Package 3: Innovation and Creativity in International Trade
While economists generally advocate the dismantling of government-imposed restrictions towards international trade, there continues to be a strong need for government action to address failures of private markets to provide for an efficient allocation of resources. One area where such action is crucial is in giving appropriate incentives for investments in inventive and creative activities. The projects in this package address a few particular challenges in the context of innovation and creativity in international trade stemming from the emergence of new technologies and business models, the changing composition of the world economy, novel innovation needs and the evolving overall governance structure for international trade that is fragmented and increasingly involves bilateral, regional and plurilateral approaches next to the multilateral model.
Work Package 4: Trade, Development and Migration
Trade liberalization generates important welfare gains. If ineffectively regulated, trade liberalization can lead to unequal distribution of wealth. Divergences between rich and poor countries, risk deepening if no regulatory framework is in place at the multilateral, regional and national levels to address the challenge of unequal distribution of production factors, capital and labour. Economic globalization has lead to an increasing mobility of the production factors labour and capital to the effect that labour migration and foreign direct investment complement, rather than substitute for trade in goods and services. And yet, capacity constraints in developing and least developed countries prevent these from effectively participating in the WTO multilateral trading system, so that attracting foreign capital while sending surplus labour to foreign markets still seems to substitute for access to product and services markets. The questions this work package addresses are twofold: a first one will deal with the unequal distribution of production factors and how to make the best out of the non-reciprocal interests in migration and capital transfers within the WTO trading system based on reciprocity. A second set of questions will seek to discuss proposals for more effective Special and Differential Treatment Regime for developing and least developed countries and how to build capacities for global trade, whether this be by stimulating more South-South trade, for instance by re-designing the Enabling Clause or by mobilizing through tax breaks, foreign investors to transfer technologies within a North-South dimension.
Work Package 5: Trade and Climate Change
Climate change poses particular challenges to international trade regulation; they will be addressed jointly with NCCR Climate with a view to promoting the kinds of crossdisciplinary approaches and solutions needed in this complex area. This WP will deal with issues of climate mitigation, such as emissions trading, and EGS negotiations. It will address climate change adaptation focusing, essentially, on agricultural trade policies and trade in water. Also, this WP will focus on industrial subsidies and PPMs and seek to determine to what extent current WTO rules are favourable to climate change mitigation and adaptation. The problems are addressed both from the angle of economics and law, in particular regulations in WTO law.
Work Package 6: Impact Assessment in International Trade
Trade regulation continues to lack appropriate tools for assessing the impact of planned or existing policies and norms. A broad range of impact-assessment
techniques will be developed and applied in order to shed light on the issue of how policy affects outcome variables. The focus of the individual projects is on the impact of trade on wages and the localisation of economic activity; the impact of institutional arrangements on policy quality; the impact of preferential trade arrangements on firm behaviour and performance; the identification of outcome variables capable of generating policy-relevant classifications of countries and products; the impact of financial regulation on the capacity of financial systems to distribute the gains and losses from trade, and; the impact of trade on individual perceptions.
