Individual Project- International Trade

The notion of frontiers as in-between spaces that define particular transactions

can be encompassed in many contexts, three of which are detailed in Hirschs paper
(2009): agricultural frontiers, peri-urban frontiers and national frontiers. Nevertheless,
the main concern will be national frontiers.
Even though at the beginning of times national borders were seen as peripheral
spatially, economically and geopolitically, a source of threat because of the
neighbouring countries, today the optics have changed. As the dark wars (World Wars
and Cold War) that have put their mark upon civilisation have long ended, nations have
understood the immense potential some of their neighbouring countries have and
decided to seize it. Frontiers open new opportunities for capital, trade and many
resources which otherwise may be insufficient, inexistent or more expensive (Konrad,
2006). Hirsch (2009) analyzes the case of Thailand on one hand and Burma, Laos and
Cambodia. Many such examples have been discussed in literature, which will be
discussed each at a time.
Open borders can be beneficial for both countries on the side of the barricade as long
as cooperation on different levels exists. In his article Schoon (2013) analyzes how
institutional structures influence cross-border coordination across a range of issues in a
transboundary park, having as case study the Kgalagadi Transfrontier Park-with a
bottom-up origin and the Great Limpopo Transfrontier Park with a top-down origin.
These origins reflect in how the two institutional structures deal with problems. Even
though in his interviews Schoon found out the 2 parks faced mostly the same problems,
due to their institutional structures not both of them were able to cope with them

as

well. He came to the conclusion that bottom-up institutional arrangements generate

more operational collaboration, leading in turn to more institutional robustness. He
agrees with Cumming et al. (2006) who states that decisions should be made at a level
matching the scale of the problem. Therefore, in order to achieve the best results
possible, some issues should be governed jointly at an international level, others at a
national level, and still others at a local level.

Ulimwengu1 and Sanyal (2013) have discussed the case of agriculture in the SubSaharan African (SSA) countries, where it is generally agreed that smallholder farmers
and other small and medium enterprises in the rural non-farm economy cannot compete
alone in global markets which is why they need to cooperate with other large agro-business enterprises so as to achieve competitiveness through cluster development.
Nevertheless, aligning agricultural policies, therefore achieving common agricultural
policies bears costs, as member countries lose part of their sovereignty while engaging
in the process of setting common policies and strategies. Still, positive spillovers will
take place through higher supply, better planning cycles and limited exposure to
fluctuations in international markets. The authours research points out that countries
lagging in terms of per capita agricultural growth are catching up with the leading
countries.
Jailly (2011) discusses about economic restructuring, economic integration, and crossborder economic regions in North America and Europe. While the European Union has
higher bodies and binding treaties, there is an absence of such

government like

institutions and supra-national organizations in North America; instead, functional and

policy networks are more typical forms of North American cross-border links. The
author argues that free trade and the continental economic integration has led
progressively to the transformation of the regional economies of the cross-border
regions.
In contrast, Cnossen (2003, pp. 226-233) discusses in his article a problem that arises
from the elimination of borders and cross-border investment, which is Corporation tax.
He analyzes the shortcomings of the Bolkestein Report (2001) and also comes up with
some steps that should be followed in order to overcome these shortcomings, one of
which would the the dual taxation system which was successfully introduced in the 90s
in the Baltic Countries (Sorensen, 1998).
On the other hand, Silvers (2000) has analyzed the case of the U.S.Mexico border
and implications of the Maquiladora Program and NAFTA. Both parts win, Arizona

gains because it pays lower wages -wages are paid in pesos and not in dollars , while
Sonora gains by wages paid to workers. Nevertheless, the relation of the two cannot be
described as truly interdependent, as the trade multiplier shows a dollar of income from
Arizona generates far less income in Sonora than the reverse.
Nevertheless, Anderson (2011, pp. 942-944) notes that even if under NAFTA virtually
all tariffs have been eliminated, Canada and the US are not part of a customs union,
which means they have independent tariffs, quotas and other restrictions on goods from
third countries. Therefore, each shipment that crosses the Canada-US border must
undergo customs clearance, which takes time and costs a lot of money. Still, custom
clearance is viewed as paramount in the light of the 9/11 events.
Furthermore, Arndt (2006) considers that certain weaknesses of NAFTA have become
apparent, including those associated with dispute settlement procedures and rules of
origin. As far as a monetary union is concerned, he considers that many of the basic
pre-conditions for currency union are met and that most empirical studies see gains
from monetary integration. Nevertheless he also mentions that gains are more easily
measurable than costs, especially the costs associated with the loss of monetary
policy independence.
According to Tyre and Hippel (1997), over the last decade the Canada-US border policy
has been characterized by adaptive learning, mainly policy innovation resulting from
past experiences in a given issue area. Canada-US deliberations on border policy show
that a good working relationship translates into greater policy adaptability, but that this
flexibility can also be an impediment to effective implementation (Hlatky, 2012). Also,
there is a number of factors can improve or offset the effectiveness of cooperation
between the two countries, such as the number of actors involved, resources deployed,
timing, and issue salience (Milner, 1997).

References:

1. Cumming, G., D. Cumming, and Redman C. 2006. Scale mismatches in

social- ecological systems: causes, consequences, and solutions. Ecology and
Society 11(1): 14.
2. Schoon, M., 2013, Governance in Transboundary Conservation: How
Institutional Structure and Path Dependence Matter
3. Ulimwengu, J., Prabuddha Sanyal, Is Agricultural Production Spillover
the Rationale behind CAADP Framework? Spatial Panel Model Approach
p. 392
4. Emmanuel Brunet-Jailly In the increasingly global economy, are
borderland regions public management instruments?
5. Konrad, V. , Holding the Line: Borders in a Global World (2006)
6. Anderson, W., (2011),
region

Public policy in a cross-border economic

7. Arndt, S., (2006) Regional currency arrangements in North America

8.

Milner, V., 1997, Interests, Institutions, and Information: Domestic

Politics and International Relations (Princeton: Princeton University
Press, 1997).

9. Adam, D.J., 2003. Stakeholder analysis today. Royal Journal of

Management, 42(7), pp.34-66.