1887

International Trade Working Paper

The International Trade Working Paper series promptly documents and disseminates reviews, analytical work and think-pieces to facilitate the exchange of ideas and to stimulate debates and discussions on issues that are of interest to developing countries in general and Commonwealth members in particular. The issues considered in the papers may be evolving in nature, leading to further work and refinement at a later stage.

English

Trade Governance and Intra-Commonwealth Trade

This paper focuses on twenty-first century trade governance patterns within Commonwealth countries. The specific research questions it explores are: first, what is the distinction between the ‘trade governance’ and ‘good governance’ agendas? Second, what indicators exist for measuring trade governance and how its use can foster trade gains for the Commonwealth countries? Third, what policies can promote trade governance and enhance the Commonwealth Advantage – that is, higher intra-Commonwealth trade and investment and lower trade costs. Using an augmented gravity model, we examine the relationship between Commonwealth countries’ exports and trade governance, foreign direct investment, intellectual property rights, trade facilitation and contract enforcement. Results show a complementary relationship between exports and governance indicators. We find a positive correlation between Commonwealth countries’ exports and foreign direct investment flows, intellectual property rights and trade facilitation variables, while efficient contract enforcement is important for intra-Commonwealth trade.

English

Keywords: trade policy, intra-Commonwealth trade, trade governance, foreign direct investment
JEL: F13: International Economics / Trade / Trade Policy; International Trade Organizations; O24: Economic Development, Innovation, Technological Change, and Growth / Development Planning and Policy / Development Planning and Policy: Trade Policy; Factor Movement; Foreign Exchange Policy; F14: International Economics / Trade / Empirical Studies of Trade
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