Freer international trade and the consequences for EU rural areas
DOI:
https://doi.org/10.7201/earn.2006.12.04Keywords:
Trade liberalization, European Rural regions and rural development policiesAbstract
General equilibrium models estimated by various authors and institutions show that, although trade liberalization leads to aggregate welfare gains, there are winners and losers. The aim of this article is to determine to what extent rural regions have won or lost in the trade opening process that has been underway since the 1990s. The economic literature on international trade and regional development suggests the presence of opposing forces, making the global impact of international trade liberalization on rural areas ambiguous. Using a series of empirical studies, the author assesses the impact of trade opening on the European regions, observing a significant proportion of losers in the trade liberalization process among the rural regions of Europe. The article concludes with an analysis of the negative effects of welfare losses on the environment and territorial ordering in many rural regions, and suggests the need to address the problem by modifying current EU policies.Downloads
References
Alonso-Villar, O. (2001). «Spatial Distribution of Production and International Trade». Regional Science and Urban Economics, 29, 3:371-380. https://doi.org/10.1016/S0166-0462(98)00041-6
Behrens, K., Gaigné, C., Ottaviano, G.I.P and Thisse J.F. (2003). Interregional and International Trade: Seventy Yearas after Ohlin.Working paper, INRA CESAER Dijon.
Bernard, A. and Jensen, J.B. (1995). «Exporters, jobs, and wages in U.S. manufacturing: 1976-87». Brookings Papers on Economic Activity, 67-119. https://doi.org/10.2307/2534772
Bernard, A. and Jensen, J.B. (1997). «Exporters, skill-upgrading, and the wage gap». Journal of International Economics, 42:3-31. https://doi.org/10.1016/S0022-1996(96)01431-6
Bernard, A. and Jensen, J.B. (2000). «Understanding Increasing and Decreasing Wage Inequality », in Feenstra R. (Ed). The Impact of International Trade on Wages, pp. 227-267. National Bureau of Economic Research and University of Chicago Press, Chicago.
Blandford, D. (2003). Agricultural Trade Liberalization, Globalization and Rural Economies. Working Paper, Pennsylvania State University, Department of Agricultural Economics and Rural Sociology.
Bouët, A., Bureau, J.C., Decreux, Y. and Jean, S. (2005). «Multilateral Agricultural Trade Liberalization: The Contrasting Fortunes of Developing Countries in the Doha Round», The World Economy, 28 (9):1329-1354. https://doi.org/10.1111/j.1467-9701.2005.00736.x
Brulhart, M. (1998). «Economic Geography, Industry Location and Trade: the Evidence». World Economy, 21 (6):775-801. https://doi.org/10.1111/1467-9701.00163
Bryden, J. (2003). Rural Development Indicators and Diversity in the European Union. Proceedings, Salzburg Conference, European Commission.
Bryden, J. and Bollman, R. (2000). «Rural Employment in Industrialised Countries». Agricultural Economics, 22:185-197. https://doi.org/10.1111/j.1574-0862.2000.tb00017.x
Bryden, J.M. and Hart, J.K. (2003). Why Local Economies Differ? The Dynamics of Rural Areas in the European Union. The Edwin Mellon.
Bryden, J., Efstratoglou, S., Persson, L-O., Schrader, H., Atterton, J., Ceccato, V., Courtney, P., Efstratoglou, A., Hachmöller, G., Hart, K., Koch, B., Kouroussi, E., Masurek, L., Apostolos Papadopoulos, A. and Timm, A. (2001). Dynamics of Rural Areas. Final Report. December. Eurostat.
Cavailhes, J, Gaigne, C. and Thisse, J.F. (2004). Trade Costs versus Urban Costs Do jobs move to the suburbs or to the sticks?Working paper, CORE, Louvain. https://doi.org/10.2139/ssrn.975908
CJC (2002). Economic Evaluation of Agri-environment Schemes. CJC Consulting. Rapport au Department of Environment, Food and Rural Affairs, Londres.
Cline, W. (1997). Trade and Income Distribution. Institute for International Economics, Washington, DC.
Cline, W. (2001). «Trade, immigration, and wage distribution». In: F. Welch (Ed.) The Causes and Consequences of Increasing Inequality, pp. 241-261. University of Chicago Press, Chicago.
Crozet, M. and Koenig-Soubeyran, P. (2002). Trade Liberalization and the International Geography of Countrie. Working Paper, INSEE, Paris.
European Commission (2004). Overview of the implementation of rural policy 2000-2006. Brussels.
Eurostat (2005). Regions: Statistical Yearbook, 2004, 146 pp. ISBN 92-894-7148-4, Feenstra and Hanson (1996). «Globalization, outsourcing, and wage inequality». American Economic Association Papers and Proceedings, 86:240-245.
Forslid, R., Haaland, J., Midelfart-Knarvik, KH. (2002). «A U-shaped Europe? A Simulation Study of Industrial Location». Journal of International Economics, 57 (2):273-297. https://doi.org/10.1016/S0022-1996(01)00155-6
Fuellhart, K. (1999). «Localization and the Use of Information. The Case of the Carpet Industry ». European Urban and regional Studies, 6:39-58. https://doi.org/10.1177/096977649900600104
Gaigné, C. (2002). Économie géographique et localisation industrielle rurale versus urbaine. INRA Dijon.
Gaigné, C. and Goffette-Nagot, F. (2003). Localisation rurale des activités insustrielles: Que nous enseigne l’économie géographique.Working Paper, INRA CESAER, Dijon.
Gaigné, C., Goffette-Nagot, F. and Schmitt, B. (2000). «Localisation des activités industrielles en zone rurale : le rôle du marché du travail et du marché foncier». In : P.-Ph.Combes et I. Thomas (eds.), Les forces d’agglomération dans la métropolisation de l’économie, Bruxelles: CIFOP.
Glasmeier, A. K. and Leichenko, R. M. (1996). «From free market rhetoric to free market reality: The future of the U.S. South in an era of globalization», International Journal of Urban and Regional Research, 20:601-615. https://doi.org/10.1111/j.1468-2427.1996.tb00338.x
Greenaway, D., Hine, R.C. and Wright, P. (1998). An Empirical Assessment of the Impact of Trade on Employment in the United Kingdom. Research Paper 98/3, GLM, University of Nottingham. https://doi.org/10.1016/S0176-2680(99)00023-3
Hanson, G. (1998). «Regional Adjustment to Trade Liberalization». Regional Science and Urban Economics, 28:419-444. https://doi.org/10.1016/S0166-0462(98)00006-4
Head, K. and Mayer, T. (2004). The Empirics of Aglomeration and Trade. Forthcoming in Handbook of Regional and Urban Economics. https://doi.org/10.1016/S1574-0080(04)80016-6
Hertel, T, Ivanic, M., Preckel, P.V. et Cranfiled, J.A.L (2004). Trade Liberalization and the Structure of Poverty in Developing Countries. The World Bank.
Iranzo, S. (2004). Trade Liberalization, Agglomeration and Public Policies: the Case of the European Regional Policies. Paper presented at the 2004 Ecomod Conference, Paris, June 2004.
Jean, S. and Laborde, D. (2004). The Impact of Multilateral Liberalisation on European Regions: A CGE assessment. Working Paper, Cepii, Paris, forthcoming.
Kaminsky, B. (2002). How Accession to the European Union Has Affected External Trade and Foreign Direct Investment in Central European Economies. Working Paper, University of Maryland. https://doi.org/10.1596/1813-9450-2578
Kilkenny, M. (1998). «Transport costs and rural development». Journal of Regional Science 38-2:293-312. https://doi.org/10.1111/1467-9787.00093
Krugman, P. (1991). «Increasing Returns and Economic Geography». Journal of Political Economy, 99 (3):483-499. https://doi.org/10.1086/261763
Krugman, P. (1993). Geography and Trade. MIT Press, Cambridge, MA.
Krugman, P. (1995). Growing world trade: Causes and consequences, Brookings Papers on Economic Activity, 25th Anniversary Issue, 327-362. https://doi.org/10.2307/2534577
Krugman, P. and Livas Elizondo, R. (1996). «Trade Policy and Third World Metropolis». Journal of Development Economics, 49, 1:137-150. https://doi.org/10.1016/0304-3878(95)00055-0
Leichenko, R. and Silva, J. (2003). Employment International Trade, Employment and Earnings: Evidence from US Rural Counties.Working Paper, Rutgers University, May. https://doi.org/10.1080/03434002000213897
Mahé, L-P. and Ortalo-Magné, F. (2001). Politique agricole, un modèle européen. Presses de Sciences-Po, Paris, 167 p.
Markusen, A.R., Noponen, H. and Driessen, K. (1991). «International trade, productivity, and U.S. regional job growth: A shift-share interpretation». International Regional Science Review, 14:15-39. https://doi.org/10.1177/016001769101400102
Montfort, P. and Nicolini R. (2000). «Regional Convergence and International Integration». Journal of Urban Economics, 48, 2:857-880. https://doi.org/10.1006/juec.1999.2167
Noponen, H., Markusen, A. and Driessen, K. (1997). «Trade and American cities: Who has the comparative advantage?» Economic Development Quarterly, 11: 67-87. https://doi.org/10.1177/089124249701100106
Ottaviano, G. and Thisse, J. (2002). «Integration, Agglomeration and the Political Economics of Factor Mobility». Journal of Public Economics, 83 (3):429-456. https://doi.org/10.1016/S0047-2727(00)00166-3
Ottaviano, G. and Thisse, J.F. (2003). Agglomeration and Economic Geography. Paper 3838, CEPR.
Ottaviano, G., Tabuchi, T. and Thisse, J.F. (2002). «Agglomeration and Trade Revisited». International Economic Review, 43(2):409–436. https://doi.org/10.1111/1468-2354.t01-1-00021
Paluzie, E. (2001). «Trade Policies and Regional Inequalities». Papers in Regional Science, 80:67-85. https://doi.org/10.1007/PL00011492
Rodrik, D. (1997). Has Globalization Gone Too Far? Institute for International Economics, Washington, DC. https://doi.org/10.2307/41165897
Schmitt, B. and Henry, M.S. (2000). «Size and Growth of Urban Centers in French Labor Market Areas: Consequences for Rural Population and Employment». Regional Science & Urban Economics, 30(1):1-21. https://doi.org/10.1016/S0166-0462(99)00036-8
Schmitt, B., Piguet, V., Perrier-Cornet, P. and Hilal, M. (2002). Actualisation du zonage en aires urbaines et de son complément rural. Commissariat Général au Plan, INRA Dijon.
Terluin, I. and Post, J.H. (2003). Differences in Economic Development in Rural Regions of Advanced Countries: A Review of Theories. Agricultural Economics Research Institute, The Hague.
Terluin, I., Post, J.H., Sjostrom, A. eds (1999). Comparative analysis of employment dynamics in leading and lagging rural regions of the EU, 1980-1997. Agricultural Economics Research Institute (LEI), The Hague. https://doi.org/10.1016/S0743-0167(02)00071-2
Terluin, I.J. (2001). Rural regions in the EU: Exploring differences in economic development. Utrecht/Groningen, Netherlands Geographical Studies 289.
Terluin, I.J. and Post, J.H. eds. (2000). Employment dynamics in rural Europe. Wallingford, Oxon: CABI Publishing. https://doi.org/10.1079/9780851994994.0000
Wood, A. (1994). North-South Trade, Employment and Inequality: Changing Fortunes in a Skill-Driven World. Clarendon Press, Oxford. https://doi.org/10.1093/0198290152.001.0001
Wood, A. (1998). «Globalisation and the rise in labour market inequalities». The Economic Journal, 108:1463-1482. https://doi.org/10.1111/1468-0297.00354
Downloads
Published
Issue
Section
License
This journal is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License