Academic literature on the topic 'Quantitative Trade Restrictions'

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Journal articles on the topic "Quantitative Trade Restrictions"

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Zhao, Laixum. "Quantitative Trade Restrictions in Unionized Economies." International Economy 1999, no. 50 (1999): 79. http://dx.doi.org/10.5652/kokusaikeizai.1999.79.

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Zhao, Laixun. "Quantitative Trade Restrictions in Unionized Economies." Review of International Economics 9, no. 1 (2001): 81–93. http://dx.doi.org/10.1111/1467-9396.00265.

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Dewi, Yetty, and Mikaila Jessy Azzahra. "Re-examining Indonesia’s Nickel Export Ban: Does it Violate the Prohibition to Quantitative Restriction?" Padjadjaran Journal of International Law 6, no. 2 (2022): 180–200. http://dx.doi.org/10.23920/pjil.v6i2.797.

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The fundamental principles adopted by the WTO are free trade and trade liberalization, realized through the reduction of trade barriers like quantitative restrictions. This paper examines the parameters of a measure that can be construed as a quantitative restriction in violation of WTO law. It also examines whether Indonesia’s measures in prohibiting the export of nickel ores and imposing domestic processing requirements violate WTO law. The statutory and case study approaches were used to determine and analyze Indonesia’s measures. The parameter for quantitative restriction is imposed in Article XI: I of the GATT 1994. The parameter warrants that a measure shall be in the form of prohibitions or restrictions apart from duties, taxes, or charges. The measure must also be enacted through quotas, import or export licenses, or other measures such as import or export prohibitions. Finally, the nature of the measure must be limited in amounts. However, a measure that fulfills such parameters may not violate WTO law if it is justified under exclusionary articles under the GATT 1994. The paper concludes that Indonesia’s measures above constitute quantitative restrictions, as they fulfill the parameters above. However, there is a possibility that the measures may not violate WTO law. This is because the measures also fulfil the parameters of justifications under Article XX (g) of the GATT 1994 on general exceptions and to a lesser extent under Article XI: (2)(a) of the GATT 1994 on the exception to quantitative restrictions.
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Siahaan, Doan Mauli Tua, Ibrahim Sagio, and Evi Purwanti. "Export Restrictions of Indonesian Nickel Ore Based on the Perspective of Quantitative Restriction Principles in General Agreement on Tariffs and Trade." Jurnal Penelitian Hukum De Jure 21, no. 3 (2021): 409. http://dx.doi.org/10.30641/dejure.2021.v21.409-418.

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This study aims to determine whether Indonesia’s nickel ore export restriction policy is in accordance with the principles of international economic law. It is because Indonesia’s actions in implementing quantitative restrictions on the export of nickel ore are deemed to have violated one of the principles in the General Agreement on Tariffs and Trade, namely the principle of prohibiting quantitative restrictions. This principle is contained in Article XI: 1 GATT. Data was collected through library research techniques. Namely by collecting and analyzing writings and literatures that are closely related to the problems that are being researched by the author, and analyzing data with descriptive analytical techniques, so that Indonesia can analyze their export restriction policies with juridical provisions in international trade law. The results shows that Indonesia’s action is in accordance with Article XI: 2 (a), which regulates the exception to Article XI: 1, with certain conditions which is a dispensation from the principle of quantitative restriction. Indonesia’s nickel ore export restrictions were also implemented to protect the environment in order to prevent scarcity and to encourage the battery industry in Indonesia to improve the economy. So that Indonesian policy is valid and can be justified by international law.
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Kaempfer, William H., Stephen V. Marks, and Thomas D. Willett. "Why Do Large Countries Prefer Quantitative Trade Restrictions?" Kyklos 41, no. 4 (1988): 625–46. http://dx.doi.org/10.1111/j.1467-6435.1988.tb02733.x.

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Lahiri, Sajal, and Pascalis Raimondos. "Welfare effects of aid under quantitative trade restrictions." Journal of International Economics 39, no. 3-4 (1995): 297–315. http://dx.doi.org/10.1016/0022-1996(95)01374-2.

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Richards, Timothy J., Ignacio Molina, and Osman Hussein. "Welfare Impacts of the Mexico Potato Quarantine." Journal of Agricultural and Applied Economics 41, no. 3 (2009): 761–76. http://dx.doi.org/10.1017/s1074070800003205.

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Under the North American Free Trade Agreement (NAFTA) tariffs on U.S. potato imports to Mexico were phased out by 1993. Citing phytosanitary issues, in 1996, the Mexican government placed quantitative restrictions on U.S. potato imports and restricted their import only to designated border areas. This article estimates the welfare cost of restricting U.S. potato imports into Mexico. We find that removing trade restrictions may lead to over 1.8 million tons of new imports into Mexico, a gain of consumer surplus of 4.0 billion pesos per year, and a loss of 2.9 billion pesos of producer surplus.
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Zhiryaeva, Elena V., Veronika I. Murina, and Ilona L. Shandakova. "Wartime Trade Policy Measures in Comparison of the Historical Periods of the First World War and the Special Military Operation." Administrative Consulting, no. 1 (181) (June 7, 2024): 109–28. https://doi.org/10.22394/1726-1139-2024-1-109-128.

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With the beginning of the special military operation (SMO), a new type of foreign trade policy is forming, based on restrictions. History shows that the practice of restrictions on trade operations is not new. The article compares Russia’s trade policy measures introduced during the First World War of 2014–2018 and the SMO, which began in 2022. The goal is to identify tools that are not currently used. Restrictions on exports and imports, measures to stimulate imports, and measures to build new trade routes are considered. Even before the start of the SMO, from the moment of political aggravation, Russia limited the export of wood and fertilizers, which contradicted the Protocol on Accession to the WTO and the refusal of quantitative restrictions. Unfriendly countries that applied preventive sanctions against Russia, with the beginning of the SMO, denied Russia most favored nation treatment. As during the First World War, grains, flour and sugar were among the food products subject to government export restrictions. Both periods were characterized by measures to stimulate imports in an effort to provide industry with raw materials and equipment. Import restriction measures in the first period applied to luxury goods, in the second they took the form of sanctions against unfriendly countries. The war period was characterized by growing interest in the northern sea routes. Compared with World War I, modern export restriction policies were more varied in terms of product coverage, but lacked the specific details by export directions that were developed a century ago. Many of the modern measures allow exemptions only in relation toEAEU countries. In our opinion, exemptions from restrictions on the export of humanitarian goods could be made for the developing countries which are most in need of grain or fertilizers.
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Winters, L. Alan, and Paul A. Brenton. "Modelling quantitative trade restrictions: Rationing in the Rotterdam model." De Economist 141, no. 1 (1993): 112–26. http://dx.doi.org/10.1007/bf01144780.

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Dellas, Harris, Ana Fernandes, and Klaus Neusser. "On the equivalence of quantitative trade restrictions and tariffs." Economics Letters 96, no. 3 (2007): 331–36. http://dx.doi.org/10.1016/j.econlet.2007.02.003.

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Dissertations / Theses on the topic "Quantitative Trade Restrictions"

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Voldřichová, Jana. "Nástroje obchodní politiky uplatňované v mezinárodním obchodě s textilem." Master's thesis, Vysoká škola ekonomická v Praze, 2009. http://www.nusl.cz/ntk/nusl-16519.

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The goal of this thesis is to describe the most important trade policy instruments that have been used in international trade in textiles since the second half of the 20th century, and to deduce the implications of the instruments on the textile sector, mainly the European one. The thesis introduces the classification of instruments in the trade policy used in the international trade in textiles and economic consequences of chosen instruments; brief characteristics of evolution of international trade in textiles since the second half of the 20th century, change in localization and sector structure of the textiles and clothing industry and main trends in its evolution. There are described most important multilateral agreements concerning the trade in textiles: Short-Term Arrangement regarding International Trade in Cotton Textiles, Long-Term Arrangement regarding International Trade in Cotton Textiles, Multifibre Arrangement, Agreement on Textiles and Clothing and current trends in contractual instruments followed by autonomous instruments such as anti-dumping and anti-subsidy measures and particular cases. The thesis includes consequences of the instruments mentioned above. In the last chapter, the trends in the evolution of instruments are summarized and the reflection on possible solutions for the European, and thus also Czech textile and clothing industry, is mentioned.
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Mukucha, Ephraim. "The regulation and impact of non-tariff barriers to trade in SADC free trade area." Diss., 2012. http://hdl.handle.net/2263/30054.

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This paper critically evaluate the effectiveness of the non -tariff barriers legal framework under the SADC Protocol on Trade. In the same vein it identifies and discus a list of non-tariff barriers to trade that are still prevalent in the SADC region despite the prohibition for their use under the Protocol. The list of these NTBs is made up of quantitative restrictions, customs procedures and administrative requirements, technical standards, sanitary and phytosanitary measures, government participation in trade, lack of infrastructure, restrictive rules of origin and anti-dumping measures. Their impact is also addressed using some case studies based on the experience of businesses and people trading in the region. The paper concluded that the widespread and continued existence of NTBs in the region is as a result of a weak regulatory framework aimed at addressing them. To this end the paper single out the provisions relating to the granting of derogations from complying with the Protocol, the rules of origin, antidumping provisions and rules relating to the protection of infant industries as some of the weak points in the Protocol. To assess the compatibility of the rules regulating NTBs under the Protocol with the WTO rules one of the chapter is dedicated to a discussion on the WTO legal framework for NTBs. The paper also gives the reader an opportunity to have a grasp of the progress made in the SADC Free Trade Area by providing a section which focuses on the NTBs Monitoring and Elimination Mechanism. Problems associated with the mechanism are also clearly laid down in this paper. Recommendations are made at the end of the paper as way of providing solutions to some of the issues identified as weaknesses on the NTBs legal framework.<br>Dissertation (LLM)--University of Pretoria, 2013.<br>Centre for Human Rights<br>unrestricted
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Books on the topic "Quantitative Trade Restrictions"

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Takacs, Wendy E. Alternative transitional measures to liberalize quantitative trade restrictions: Implications for developing countries. Trade Policy Division, World Bank, 1989.

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Homewood, Matthew J. 5. Free movement of goods. Oxford University Press, 2018. http://dx.doi.org/10.1093/he/9780198815181.003.0005.

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This chapter discusses the law on the free movement of goods in the EU. Free movement of goods is one of the four ‘freedoms’ of the internal market. Obstacles to free movement comprise tariff barriers to trade (customs duties and charges having equivalent effect), non-tariff barriers to trade (quantitative restrictions and measures having equivalent effect), and discriminatory national taxation. The Treaty on the Functioning of the European Union (TFEU) prohibits all kinds of restrictions on trade between Member States. Article 30 (ex Article 25 EC) prohibits customs duties and charges having equivalent effect; Article 34 (ex Article 28 EC) prohibits quantitative restrictions and all measures having equivalent effect; and Article 110 (ex Article 90 EC) prohibits discriminatory national taxation.
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Fiorini, Matteo, and Bernard Hoekman. Services Market Liberalization, Economic Governance, and Trade Agreements. Oxford University Press, 2018. http://dx.doi.org/10.1093/oso/9780198821878.003.0010.

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Recent research on the interaction between services trade and investment restrictions and the quality of economic regulation has shown that the productivity growth benefits from liberalization depend importantly on the quality of economic governance. We provide quantitative estimates of the extent of potential downstream productivity gains from services liberalization for EU countries and how these are conditional on domestic economic governance performance; we discuss several dimensions of the state of play in the EU with respect to implementation of the Services Directive and realization of the Single Market objective. We argue that more attention should be given to the design of services trade agreements in improving economic governance, and make several suggestions how this could be done.
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Munro, James. A Taxonomy of Prima Facie Violations of International Economic Law. Oxford University Press, 2018. http://dx.doi.org/10.1093/oso/9780198828709.003.0008.

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Having determined that carbon units are, to varying extents, subject to international economic law, Chapter 8 assesses the consistency of emissions trading schemes and their rules affecting carbon units with that body of law. In particular, Chapter 8 identifies and evaluates the rules in emissions trading schemes affecting the trade, use, and value of carbon units that constitute prima facie violations of that body of law. It considers: (i) the differential treatment of carbon units that engages disciplines on non-discrimination; (ii) the quantitative restrictions on external carbon units that engage disciplines on market access; and (iii) the kinds of governmental interference in carbon markets that engage disciplines on investment. Chapter 8 thereby identifies and catalogues numerous prima facie breaches embedded in the rules of most emissions trading schemes.
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Besson, Samantha. Human Rights in Relation. Oxford University Press, 2017. http://dx.doi.org/10.1093/oso/9780198795957.003.0002.

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Human rights must sometimes be restricted to further social interests or the rights of others. Yet, we like to think that human rights are not reducible to interests like security and cannot be weighed and balanced against them. This position holds a middle ground between Kantian absolutism and prioritization of rights and utilitarian consequentialism and weighing and balancing of rights. It reflects the sheer theoretical difficulty of accounting for moral trade-offs that are not quantitative. This ambivalence is also echoed in the case law of the European Court of Human Rights (ECtHR): restrictions to human rights are usually hard to justify or even excluded in some cases. This chapter proposes an interpretation that comes close to a form of qualitative balancing of human rights by reference to their egalitarian dimension. It also accounts for seemingly contradictory elements in the ECtHR’s reasoning: the ‘proportionality’ test and the reference to ‘absolute’ rights.
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Pieter Jan, Kuijper. 5 Obligations of International Organizations, 5.1 Case 21-24/72, International Fruit Company v Produktschap voor Siergewassen , Court of Justice of the EC, [1972] ECR 1219. Oxford University Press, 2016. http://dx.doi.org/10.1093/law/9780198743620.003.0025.

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The International Fruit Company case is rightly famous for two reasons: (1) the succession of the European Community to its member states in the General Agreement on Tariffs and Trade (GATT) and (2) the lack of direct effect of art. XI (the prohibition of quantitative restrictions) and of the GATT in general. On point (2) the case has largely lost its initial relevance, since the Court of Justice (ECJ), though still of the same view with respect to the GATT’s successor, the WTO, has considerably developed and refined its initial reasoning. It is on point (1) that the case has continued importance, because it sheds light on the comparable, but different situation in which the EU effectively follows the rules of international organizations or of treaty bodies, to which all member states are parties, but without the possibility for the EU to accede to these organizations and treaty bodies.
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Book chapters on the topic "Quantitative Trade Restrictions"

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Ajibo, Collins C. "Tariffs and Quantitative Restrictions." In The African Continental Free Trade Area Agreement. Routledge, 2024. http://dx.doi.org/10.4324/9781003472513-6.

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Frey, Christopher. "Quantitative Import and Export Restrictions." In World Trade Law and the Emergence of International Electricity Markets. Springer International Publishing, 2022. http://dx.doi.org/10.1007/978-3-031-04756-5_11.

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Budak, Türkan Gülce. "Legality of the Climate Club Scheme." In Beyond Treaties: Rethinking Legal Mechanisms for International Climate Governance. Springer Nature Switzerland, 2025. https://doi.org/10.1007/978-3-031-86022-5_6.

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Abstract This chapter evaluates the legality of the climate club scheme, focusing on its alignment with the Paris Agreement and WTO norms. Through an analysis of Article 6 of the Paris Agreement, the chapter underscores how the club scheme complements and amplifies international climate governance, emphasizing its potential to foster heightened ambition and cooperation among countries. The Climate Club Initiative introduced at COP 28 exemplifies the practical application of this framework, highlighting its role in industrial decarbonization and advancing global climate goals. The chapter also addresses the compatibility of climate club linkages of extra carbon tariffs, import requirements leading to bans or quotas for high carbon emitted products, or surrender of emission allowance certificates for certain imports’ implications on WTO norms. The examination of the schedule of concessions, tariff deconsolidation, and the general elimination of quantitative restrictions has highlighted the intricate legal considerations involved in reconciling climate-related trade instruments with WTO law. The climate club scheme mitigates potential trade disputes and fosters a global market for green goods by proposing shared standards, carbon pricing mechanisms, and mutual recognition of emissions allowances. The integration of environmental and trade policies, leveraging legal flexibilities and multilateral negotiations, emerges as key to aligning climate action with sustainable trade practices. With dual legitimacy under the Paris Agreement and WTO law, the climate club framework offers an innovative and cooperative model for addressing the multifaceted challenges of climate change. Its evolution will be pivotal in advancing international climate governance and achieving the ambitious goals set by the Paris Agreement.
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Costea, Andreea, Amy Zhu, Nadia Polikarpova, and Ilya Sergey. "Concise Read-Only Specifications for Better Synthesis of Programs with Pointers." In Programming Languages and Systems. Springer International Publishing, 2020. http://dx.doi.org/10.1007/978-3-030-44914-8_6.

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AbstractIn program synthesis there is a well-known trade-off between concise and strong specifications: if a specification is too verbose, it might be harder to write than the program; if it is too weak, the synthesised program might not match the user’s intent. In this work we explore the use of annotations for restricting memory access permissions in program synthesis, and show that they can make specifications much stronger while remaining surprisingly concise. Specifically, we enhance Synthetic Separation Logic (SSL), a framework for synthesis of heap-manipulating programs, with the logical mechanism of read-only borrows.We observe that this minimalistic and conservative SSL extension benefits the synthesis in several ways, making it more (a) expressive (stronger correctness guarantees are achieved with a modest annotation overhead), (b) effective (it produces more concise and easier-to-read programs), (c) efficient (faster synthesis), and (d) robust (synthesis efficiency is less affected by the choice of the search heuristic). We explain the intuition and provide formal treatment for read-only borrows. We substantiate the claims (a)–(d) by describing our quantitative evaluation of the borrowing-aware synthesis implementation on a series of standard benchmark specifications for various heap-manipulating programs.
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"Quantitative Restrictions." In The Regulation of International Trade. The MIT Press, 2015. http://dx.doi.org/10.7551/mitpress/10465.003.0004.

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Mavroidis, Petros C. "Quantitative Restrictions." In The Regulation of International Trade. The MIT Press, 2016. http://dx.doi.org/10.7551/mitpress/9780262029841.003.0002.

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"Quantitative Trade Restrictions and Safeguards." In International Trade Policy. Routledge, 2006. http://dx.doi.org/10.4324/9780203027882-8.

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Sykes, Alan. "Tariffs and quantitative restrictions." In The Law and Economics of International Trade Agreements. Edward Elgar Publishing, 2023. http://dx.doi.org/10.4337/9781802209747.00012.

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"Article XI. General Elimination Of Quantitative Restrictions." In WTO - Trade in Goods. Brill | Nijhoff, 2009. http://dx.doi.org/10.1163/ej.9789004145665.i-1228.105.

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"Article XIII. Non-Discriminatory Administration Of Quantitative Restrictions." In WTO - Trade in Goods. Brill | Nijhoff, 2009. http://dx.doi.org/10.1163/ej.9789004145665.i-1228.122.

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Conference papers on the topic "Quantitative Trade Restrictions"

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Potorac, Doina. "The role of DCFTA in the development of the national economy of the Republic of Moldova." In Simpozion stiintific al tinerilor cercetatori, editia 20. Academy of Economic Studies of Moldova, 2023. http://dx.doi.org/10.53486/9789975359023.05.

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Moldova-EU free trade agreement implies gradual liberalization (up to 10 years from signing) of trade in goods and services, free movement of labor, reduction of customs duties, technical and non-tariff barriers, abolition of quantitative restrictions and harmonization of EU acquisitions. Thus, the DCFTA (Deep and Comprehensive Free Trade Area between the Republic of Moldova and the European Union) is part of the European Association Agreement and brings additional economic benefits to the Republic of Moldova.
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Önden, Ismail, Bilal Özer, and Alper Karaağaç. "Interrelation Between Sectoral Growth Rates." In International Conference on Eurasian Economies. Eurasian Economists Association, 2010. http://dx.doi.org/10.36880/c01.00126.

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The concept of globalization has arisen from a combination of those developments together with certain political and cultural issues. Economically the term globalization refers to the decrease of borders between states since goods and services, capital, and labour flows from one state to each other easily. This flow makes economic sectors and markets more integrated to each other, and as a result the interaction between them gains significance.&#x0D; &#x0D; With the emergence of the globalization process, commercial borders such as tariffs, restrictions and heavy duties have been cut out or lightened, since the new integrated economic system requires the border-less flow of factors of production. In such a globalized economic system, the growth or contraction of a specific sector in one country can have an effect on another, since markets are inter-connected and world trade is at its highest levels. Similarly, financial crises affect different sectors of different countries at changing levels, as in the case of the recent world financial crisis.&#x0D; &#x0D; Within this context the aim of this study is to observe in what degree the global sectors are in interaction with each other. The first part of the study is constituted of specifying the sectors that are going to be observed such as agriculture, manufacturing, services and finance. Secondary and quantitative sectoral data of the major world economic powers and Turkey have been collected. In the next step the classified sectoral data for different countries or country groups is compared and analysed to represent the sectoral interaction.
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Soto, Mario, C. M. Sanchez, R. Y. Pagan, P. A. Sundaram, and N. Diffoot-Carlo. "Qualitative and Quantitative Analysis of Cell Proliferation Restriction Due to Metal Trace Elements Released from Oxidized Ti Alloys." In 2013 29th Southern Biomedical Engineering Conference (SBEC 2013). IEEE, 2013. http://dx.doi.org/10.1109/sbec.2013.45.

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Saşco, Elena. "Screening of wheat genotypes response under drought controlled conditions." In Scientific International Symposium “Advanced Biotechnologies - Achievements and Prospects” (VIth Edition). Institute of Genetics, Physiology and Plant Protection, 2022. http://dx.doi.org/10.53040/abap6.2022.75.

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The present study was carried out to estimate the response of native wheat genotypes (Tri-ticum aestivum L.) Moldova 614, Moldova 66 and the Selania/Accent line to water stress in the early stages of growth and to use sources with a high level of adaptability in resistance improve-ment programs to drought. The effect of osmotic stress on early growth stages was evaluated un-der temperature conditions of 15oC and 25oC, using polyethylene glycol (PEG 6000) treatment at concentrations of 10% and 20% d/v. In the conditions of water restrictions produced by PEG 6000 in the 10% concentration both at the optimal temperature of 25oC, but also at the suboptimal one of 15oC, the investigated indices showed the response of tolerance, but also of high resistance. When administering the osmotic in the concentration of 20% at a temperature of 25oC, both the average resistance and the sensitivity of the investigated characters were attested. Moldova 614 recorded the lowest reduction of 23.7% for plant vigor index, while L Selania/Accent recorded a massive reduction of 72.8% for seed vigor index. In the conditions of interaction of major stress factors (PEG 20% x 15oC) the genotypes responded with a severe decrease of the inves-tigated parameters. More advantageous PVI was attested only in the Moldova 614 genotype. The variance analysis revealed the temperature factor with the highest weight in the variability of the root and stem length characters (85.7% and 72.2%). The water deficit explained respec-tively 12.0% and 22.5% of the variance of the characters, while the significant interactions of the stress factors attested advanced weight for the length of the stem in relation to the length of the root. This phenomenon indicates the increased vulnerability of the stem, a phenomenon also highlighted by the phenotypic character of the root/stem ratio. Purpose.Wheat contributes to global consumption with 55% of carbohydrates, but also 20% of food calories, maintaining an important position in the international grain trade [3]. Abiotic stress extremes such as drought, temperature, salinity, and nutrient imbalance represent major challenges to the grain industry. Drought affects plant growth from germination to matu-rity, causing morphological, biological, physiological, and molecular changes. More likely to be affected are the stages of early vegetation and reproduction [3]. Tolerance to water deficit as well as thermal stress is a difficult, polygenic quantitative characteristic [2, 3]. In efficient and repeatable phenotypic expression of drought tolerance, it is necessary to use simple early scre-ening methods [2, 4]. One of the sources of improving wheat drought tolerance is presented by the introgression of resistances from the wild gene pool as well as local ones [3]. Anticipating testing in field conditions, targeted are the tolerance indices in the early growth phase under artificially stressful conditions [2, 4]. The present study aimed to select local wheat genotypes, well adapted to the induction of water stress by the osmotic PEG 6000 under different tempe-rature conditions.
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Reports on the topic "Quantitative Trade Restrictions"

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Rodrik, Dani. Trade Policy Reform as Institutional Reform. Inter-American Development Bank, 2000. http://dx.doi.org/10.18235/0011003.

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Economists are trained to think about trade policy reform in terms of changes in the levels of tariffs and quantitative restrictions and the shifts in relative prices brought about by these alterations.
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Belser, Patrick. Does Latin American and Caribbean Unemployment Depend on Asian Labor Standards? Inter-American Development Bank, 1998. http://dx.doi.org/10.18235/0011553.

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Many Latin American nations have recently implemented liberal trade regimes, often as part of a larger set of market-oriented reforms, and have abandoned their industrialization policies based on import substitution. In the 1980s, Chile, Mexico, and Bolivia were among the continent's first nations to slash tariff rates and virtually eliminate quantitative restrictions on imports. They were followed by many others, including Argentina, Brazil, Colombia, Jamaica, Peru, Uruguay, Venezuela, and Trinidad and Tobago. All these countries are now much more exposed to international competition than ever before. But is this a good idea? Are labor rights really more restricted in export-oriented Asian nations than they are in Latin America? And if so, are Latin American workers prejudiced by Asia's lower standards?
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Hertel, Thomas, David Hummels, Maros Ivanic, and Roman Keeney. How Confident Can We Be in CGE-Based Assessments of Free Trade Agreements? GTAP Working Paper, 2003. http://dx.doi.org/10.21642/gtap.wp26.

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With the proliferation of Free Trade Agreements (FTAs) over the past decade, demand for quantitative analysis of their likely impacts has surged. The main quantitative tool for performing such analysis is Computable General Equilibrium (CGE) modeling. Yet these models have been widely criticized for performing poorly (Kehoe, 2002) and having weak econometric foundations (McKitrick, 1998; Jorgenson, 1984). FTA results have been shown to be particularly sensitive to the trade elasticities, with small trade elasticities generating large terms of trade effects and relatively modest efficiency gains, whereas large trade elasticities lead to the opposite result. Critics are understandably wary of results being determined largely by the authors’ choice of trade elasticities. Where do these trade elasticities come from? CGE modelers typically draw these elasticities from econometric work that uses time series price variation to identify an elasticity of substitution between domestic goods and composite imports (Alaouze, 1977; Alaouze, et al., 1977; Stern et al., 1976; Gallaway, McDaniel and Rivera, 2003). This approach has three problems: the use of point estimates as “truth”, the magnitude of the point estimates, and estimating the relevant elasticity. First, modelers take point estimates drawn from the econometric literature, while ignoring the precision of these estimates. As we will make clear below, the confidence one has in various CGE conclusions depends critically on the size of the confidence interval around parameter estimates. Standard “robustness checks” such as systematically raising or lowering the substitution parameters does not properly address this problem because it ignores information about which parameters we know with some precision and which we do not. A second problem with most existing studies derives from the use of import price series to identify home vs. foreign substitution, for example, tends to systematically understate the true elasticity. This is because these estimates take price variation as exogenous when estimating the import demand functions, and ignore quality variation. When quality is high, import demand and prices will be jointly high. This biases estimated elasticities toward zero. A related point is that the fixed-weight import price series used by most authors are theoretically inappropriate for estimating the elasticities of interest. CGE modelers generally examine a nested utility structure, with domestic production substitution for a CES composite import bundle. The appropriate price series is then the corresponding CES price index among foreign varieties. Constructing such an index requires knowledge of the elasticity of substitution among foreign varieties (see below). By using a fixed-weight import price series, previous estimates place too much weight on high foreign prices, and too small a weight on low foreign prices. In other words, they overstate the degree of price variation that exists, relative to a CES price index. Reconciling small trade volume movements with large import price series movements requires a small elasticity of substitution. This problem, and that of unmeasured quality variation, helps explain why typical estimated elasticities are very small. The third problem with the existing literature is that estimates taken from other researchers’ studies typically employ different levels of aggregation, and exploit different sources of price variation, from what policy modelers have in mind. Employment of elasticities in experiments ill-matched to their original estimation can be problematic. For example, estimates may be calculated at a higher or lower level of aggregation than the level of analysis than the modeler wants to examine. Estimating substitutability across sources for paddy rice gives one a quite different answer than estimates that look at agriculture as a whole. When analyzing Free Trade Agreements, the principle policy experiment is a change in relative prices among foreign suppliers caused by lowering tariffs within the FTA. Understanding the substitution this will induce across those suppliers is critical to gauging the FTA’s real effects. Using home v. foreign elasticities rather than elasticities of substitution among imports supplied from different countries may be quite misleading. Moreover, these “sourcing” elasticities are critical for constructing composite import price series to appropriate estimate home v. foreign substitutability. In summary, the history of estimating the substitution elasticities governing trade flows in CGE models has been checkered at best. Clearly there is a need for improved econometric estimation of these trade elasticities that is well-integrated into the CGE modeling framework. This paper provides such estimation and integration, and has several significant merits. First, we choose our experiment carefully. Our CGE analysis focuses on the prospective Free Trade Agreement of the Americas (FTAA) currently under negotiation. This is one of the most important FTAs currently “in play” in international negotiations. It also fits nicely with the source data used to estimate the trade elasticities, which is largely based on imports into North and South America. Our assessment is done in a perfectly competitive, comparative static setting in order to emphasize the role of the trade elasticities in determining the conventional gains/losses from such an FTA. This type of model is still widely used by government agencies for the evaluation of such agreements. Extensions to incorporate imperfect competition are straightforward, but involve the introduction of additional parameters (markups, extent of unexploited scale economies) as well as structural assumptions (entry/no-entry, nature of inter-firm rivalry) that introduce further uncertainty. Since our focus is on the effects of a PTA we estimate elasticities of substitution across multiple foreign supply sources. We do not use cross-exporter variation in prices or tariffs alone. Exporter price series exhibit a high degree of multicolinearity, and in any case, would be subject to unmeasured quality variation as described previously. Similarly, tariff variation by itself is typically unhelpful because by their very nature, Most Favored Nation (MFN) tariffs are non-discriminatory in nature, affecting all suppliers in the same way. Tariff preferences, where they exist, are often difficult to measure – sometimes being confounded by quantitative barriers, restrictive rules of origin, and other restrictions. Instead we employ a unique methodology and data set drawing on not only tariffs, but also bilateral transportation costs for goods traded internationally (Hummels, 1999). Transportation costs vary much more widely than do tariffs, allowing much more precise estimation of the trade elasticities that are central to CGE analysis of FTAs. We have highly disaggregated commodity trade flow data, and are therefore able to provide estimates that precisely match the commodity aggregation scheme employed in the subsequent CGE model. We follow the GTAP Version 5.0 aggregation scheme which includes 42 merchandise trade commodities covering food products, natural resources and manufactured goods. With the exception of two primary commodities that are not traded, we are able to estimate trade elasticities for all merchandise commodities that are significantly different form zero at the 95% confidence level. Rather than producing point estimates of the resulting welfare, export and employment effects, we report confidence intervals instead. These are based on repeated solution of the model, drawing from a distribution of trade elasticity estimates constructed based on the econometrically estimated standard errors. There is now a long history of CGE studies based on SSA: Systematic Sensitivity Analysis (Harrison and Vinod, 1992; Wigle, 1991; Pagon and Shannon, 1987) Ho
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