CHRISTIAN JOERGES, European University Institute - Department of Law (LAW)
Email: joerges@eui.eu
POUL F. KJAER, Goethe University Frankfurt
Email: poul.kjaer@normativeorders.net

The present report contains the proceedings of the inter-disciplinary workshop ‘Transnational Standards of Social Protection: Contrasting European and International Governance’, which was jointly organised by the EU funded project Reconstituting Democracy in Europe (RECON) and the Collaborative Research Center 'Transformations of the State' at the University of Bremen.

The report contains 10 contributions concerned with different aspects of social regulation within the EU as well as within global structures such as the WTO.

DAMIANO SANDRI, International Monetary Fund (IMF) - Research Department
Email: dsandri@imf.org
EDUARDO BORENSZTEIN, International Monetary Fund (IMF) - Developing Country Studies Division
Email: EBORENSZTEIN@IMF.ORG
OLIVIER JEANNE, International Monetary Fund (IMF) - Research Department, Ecole Nationale des Ponts et Chaussees (ENPC), Centre for Economic Policy Research (CEPR)
Email: OJEANNE@IMF.ORG

This paper uses a dynamic optimization model to estimate the welfare gains of hedging against commodity price risk for commodity-exporting countries. The introduction of hedging instruments such as futures and options enhances domestic welfare through two channels. First, by reducing export income volatility and allowing for a smoother consumption path. Second, by reducing the country's need to hold foreign assets as precautionary savings (or by improving the country's ability to borrow against future export income). Under plausibly calibrated parameters, the second channel may lead to much larger welfare gains, amounting to several percentage points of annual consumption.

MIGUEL FUENTES, Pontifical Catholic University of Chile - Institute of Economics
Email: mfuentes@faceapuc.cl
PABLO IBARRARAN, Inter-American Development Bank (IADB)
Email: pibarraran@iadb.org

In this paper we study the effect of NAFTA on the responsiveness of Mexican economy to real exchange rate shocks. We argue that, by opening the U.S. and Canadian markets to Mexican goods, NAFTA made it easier for domestic producers to take advantage of the opportunities brought by the depreciation of the real exchange rate. To identify this mechanism, we use plant-level data and compare the behavior of employment, production and investment after two big real exchange rate shocks: the first observed in the mid 1980s, the second the Tequila Crisis of 1994-5. The evidence indicates that after passage of NAFTA exporting firms exhibited higher growth rates of employment, sales, and investment vis-á-vis non-exporters. We confirm our results by analyzing the behavior of a control group of firms, that had complete access to the U.S. market during both devaluations, and we show that they responded in a similar way in both events. Finally, we also provide direct evidence on the relationship between exports and tariff reductions brought by NAFTA. Our results support the view that NAFTA has allowed Mexican producers to respond more quickly to real exchange shocks.

IVAN DIAZ-RAINEY, European University Institute, Robert Schuman Centre for Advanced Studies & Florence School of Regulation
Email: Ivan.DIAZ-RAINEY@eui.eu
DIONISIA TZAVARA, European University Institute - Robert Schuman Centre for Advanced Studies (RSCAS), University of Peloponnese
Email: Dionisia.Tzavara@EUI.eu

This paper develops a 'Diffusion Model of an Induced Environmental Consumer Market' in an attempt to link the willingness to pay literature with the established innovation diffusion literature. This concern arises from an attempt to reconcile the large disparities that have been observed between actual adoption of green energy tariffs and willingness to pay for such tariffs. These disparities have often been attributed to upward response bias and the free rider problem. However, empirical research indicates that other factors have hindered the development of green energy markets, including supply side problems and poor regulation. In sum, by linking willingness to pay to the concept of innovation diffusion and actual observed adoption levels, the model provides a framework with which to conceptualize the various factors (upward response bias, the free rider problem and market imperfections) that can explain differences between actual take-up and willingness to pay. These distinctions should help policymakers make more accurate assessments of the role that green energy markets can play in the funding of new renewable investments over time.

ANITA REGMI, U.S. Department of Agriculture (USDA) - Economic Research Service (ERS)
Email: aregmi@ers.usda.gov
HIROYUKI TAKESHIMA, affiliation not provided to SSRN
LAURIAN J. UNNEVEHR, affiliation not provided to SSRN

Using food expenditures and food sales data over 1990-2004, this report examines whether food consumption and delivery trends are converging across 47 high- and middle-income countries. Middle-income countries, such as China and Mexico, appear to be following trends in high-income countries, measured across several dimensions of food system growth and change. Convergence is apparent in most important food expenditure categories and in indicators of food system modernization such as supermarket and fast-food sales.

TESHAGER WORKU DAGNE, University of Dalhousie
Email: ts640468@dal.ca

This article analyses the issue of environmentally motivated unilateral trade measures in the World Trade Organization from the perspective of the developing countries. It is argued that environmentally motivated unilateral trade measures, as applied currently, risk defeating the environmental purpose for which they are sought and threaten the core values embedded in the trading system. The article critically analyses the different approaches tabled in the World Trade Organization for the reconciliation of the conflict between trade and environment and suggests a technique by which the permissible scope of unilateral trade measures may further be clarified.

ABIOLA ABIKE INNISS, affiliation not provided to SSRN
Email: abiinniss@gmail.com

The African, Caribbean and Pacific Groups have been signatories to agreements for the sale of goods, in particular sugar, which would have seen economic stability and growth over a long term. In keeping with its own protectionist scheme the European Union in1996 introduced a revised scheme which cut the price of sugar from developing countries. This essay takes a look at how the EU protectionism scheme works

SARBAJIT CHAUDHURI, University of Calcutta
Email: sceco@caluniv.ac.in

This note introduces labour market imperfection in an otherwise Heckscher-Ohlin-Samuelson (HOS) model and provides a theory of unionized wage formation. It demonstrates that this framework satisfies the Stolper-Samuelson theorem and the magnification effect and that it is capable of producing certain results which are contrary to the standard HOS and the Corden and Findlay (1975) results.