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Europe's economic performance has deteriorated continuously over the last two decades both in terms of its unemployment and its labor force participation rate; more recently its productivity has declined relative to the United States. This is due to a complex interaction between the how these welfare states are designed, the institutions created by the European Union, idiosyncratic factors resulting from linguistic differences, population dynamics and other cultural factors, and an increasing emphasis on non-economic objectives. Although structural reforms can provide a solution, it will be a long, difficult and costly process. A more successful approach involves a redesign of the macroeconomic framework in Europe. Aggregate demand stimulation should be given priority since it will not only increase employment directly, but, by slightly raising inflation, will allow negative real interest rates and separate real wages movements from nominal wages. More generally, EU institutions appear to have been designed assuming a perfect world; instead these need to be designed around existing national institutions and cultural practices.

Progressively liberalizing trade and FDI regime underpinned market-led profit-motivated regionalization in the high-performing Asian economies. The market expansion and regional integration that took place in Asia was both vertical and horizontal. First the NIAEs and then the other emerging-market economies of Asia developed tiers of complex trade and manufacturing hierarchies. This occurred in association with the large flows of intra-regional investment into Southeast Asia and China. Over the preceding quarter century, Japan, Taiwan and Korea provided massive amounts of FDI to Southeast Asian economies and China, and in the process increased their commitments in these markets.During the 1970s, a triangular production relationship had developed between Japan, the NIAEs and the US, bringing the former two sets of economies closer together. After the Plaza Accord in 1985, the currency value configuration changed. Changes in currency value configuration and economic complementaries buttressed regionalization. Gradually production locus shifted from the firms to networks of regional production. Asian firms skillfully sliced the value chain, consequently production networks soon became a significant force driving the process of economic integration further in the region. Private sector firms and TNCs played a proactive role in this endeavor.

Large dollar reserves in Asian EMEs accompany large U.S. fiscal and current account deficits. Analysis of strategic sales by Asian EMEs suggests that an attack on the dollar is not certain but is possible. A unique equilibrium where Asian EMEs sell their reserves does not exist but there are multiple Nash equilibria. Therefore action, which includes adjustment, is required to coordinate to the better equilibrium. There is evidence that more flexibility in Asian exchange rates will reduce risk for Asian EMEs, but the flexibility will have to be limited, and it depends on more flexibility in the renminbi. Moreover, limits to adjustment in wages put limits on realignments between US and Asian exchange rates. Therefore while a gradual adjustment strategy is feasible it will require both expenditure switching and expenditure reduction with the latter moderated by the maintenance of robust global growth.

Since the end of Communist rule, the countries of Eastern Europe and the former Soviet Union have been forced to restructure their formerly centrally planned economies. Among the dilemmas they have faced is how open they should be to international trade. Using multiple regression, the openness of these economies to trade is empirically determined while controlling for the effects of both population and wealth. Residuals from the regression equations are then examined in order to identify how much more or less open to trade each country has been. Analysis of the residuals for six distinct regions of the former Communist world presents no definitive answers but does suggest some preliminary conclusions. A country’s degree of political openness is found to be most important in determining relative openness to trade; close behind that are its geographic proximity to important world markets and its prospects for future accession to the European Union.

The aim of this paper is to present some aspects related to the Multilateral Trade Regulations and transnational and national environmental programs, from the point of view of their implications for foreign trade in environmental products. It should be noted that the elimination of trade barriers increases the efficiency of the world economic system by enabling countries to specialize in those sectors in which they possess economic advantages, which includes those sectors in which they possess favorable natural environmental conditions. In the latter half of the 1990’s one could observe a rapid and dynamic increase in the environmental protection industry’s share in the world economy. The overall global value of production in the environmental protection industry was estimated at 550 billion USD in the year 2001. In relative terms, this environmental market is not as large as the steel or agriculture markets, but roughly the same size as the pharmaceuticals and information technology markets.The environmental policy in the “old” and also “new” EU countries contributes to the achievement of the main goals of the global sustainable development strategy via the development of cleaner production and by the support for foreign trade in environmental friendly goods. The results of the empirical foreign trade analysis of trade in environmental products which are presented in the paper cover 11 countries of the OECD, including the USA, seven “old” EU member states, and one “new” member state - Poland . It is based on an international comparable database for environmental friendly goods, calculated by the author according to the OECD requirements (OECD-EUROSTAT, WTO, 1999). The analysis enables the author to present some important trends in foreign trade affecting the main exporters and importers of environmental goods in the USA and the EU. The analysis is also related to some regulations issued by the Committee for Trade and Environment of the WTO, with special reference to the conclusions of the Fourth and Fifth Ministerial Conferences in Doha and Cancun. The paper will also examine the effects of environmental measures on market access within the multilateral liberalization process.

The African Growth and Opportunity Act (AGOA) is a preferential trade agreement between the United States and approved African countries, allowing duty-free and quota-free access to the U.S. market. Following AGOA’s implementation in 2000, several African countries experienced a dramatic increase in exports to the United States. Nevertheless, AGOA exports, employment, and other benefits may prove to be short-term gains. As a form of temporary trade diversion from Asian countries, the increased exports may arise less from competitive advantages than from trade preferences that will erode over time.This paper focuses on garment exports from the African countries most affected by the preferential access with the United States under AGOA. An analysis based on ten-digit HS trade categories shows that African apparel enters the United States at sharply lower unit prices than similar products from China and India. Given Africa’s higher costs, it is believed that this disparity results from specialized production in low-quality garments.We argue that export value and growth, often used to gauge the success of preferential trade agreements like AGOA, can be misleading. To assess the local contribution to the African economy of AGOA benefits, our paper examines value added in Kenya. Given information for each investment in Kenyan EPZs, we calculate local inputs as a percentage of sales and other measures. The results suggest that the real benefits of AGOA in apparel may be smaller than commonly believed.