Derailing the EU-Japan trade talks?As the EU member states now take stock of the EU-Japan trade talks ahead of a coming summit, Patrick Messerlin looks at one of its most difficult issues: Government procurement and the railway sector. The Japanese railway sector is organized in a radically different manner than in the EU: The three major Japanese passenger rail companies are totally privatized, and not operating under government licenses like in Europe. Still, the EU rail equipment industry argues that the Japanese companies should be covered by government procurement rules, which would set a dangerous precedence and open for similar claims against Europe's unbundled former monopolies, e.g. telecom operators. The FTA negotiations are complicated - but if they are done right, they also offer more opportunities for both Japanese and EU railway companies in a global world.
Investing in Obesity Treatment would Reduce Healthcare SpendingThe obesity rate is growing fast – in Europe and around the world – and no government has effective policies for preventing obesity to increase healthcare expenditures. Yet while governments have been slow to react, medical scientists have now a good view of “what works” and “what doesn’t work” in policies to reduce obesity. A new study by ECIPE economists estimates that European countries stand to make huge savings in future healthcare expenditures if they use effective lifestyle weight management programmes to treat obesity today. If governments invest in smart obesity treatment, the UK and Spain could reduce healthcare expenditures related to obesity in 2030 by 10 and 12 percent. Germany could save around 6 percent while Sweden could “save” as much as 55 percent of future healthcare expenditures related to obesity.
How Can Europe Respond to an Authoritarian Russia?Russia’s invasion of Crimea has sent shock waves through the international community but is not surprising in light of the Kremlin’s authoritarian and imperialistic ideology. As was shown in two papers by Fredrik Erixon and Iana Dreyer, Russia has been building military and economic statecraft on the back of its energy riches – and the EU has been far too weak to diminish its economic dependency on Russia. Broad economic sanctions by the EU is therefore highly unlikely, even if Russia’s investment in and export to Europe is so big that sanctions could put Russia Inc out of business. As Hosuk Lee-Makiyama has argued, economic sanctions usually do not work. And what it is important now for the EU, in addition to shaping a response to the Crimean occupation, is to reshape its approach to Russia with the effect of cutting its dependency on an authoritarian regime.
Immigration and Labour-market IntegrationWhile the debate about immigration in Europe is heating up immigration is likely to continue its growth because of low birth rates and increased longevity. But what could be done to boost labour-market participation among immigrants? In a new study examining possible factors behind the difference in rates of participation on the labour market between immigrants and native-born people, economist Andreas Bergh finds two patterns of statistical significance. First, welfare state generosity keeps immigrants away from the labour force. Second, given that immigrants enter the labour force, collective bargaining agreements explain higher incidence of immigrant unemployment.
Ill fares the ITA. Again.Another attempt to update the Information Technology Agreement (ITA) seems to have failed after China declaring almost half of the new product list as politically sensitive and requested exemptions or lengthy phase-out periods. Hosuk Lee-Makiyama with Lisa Brandt read a funeral litany over the negotiations and ask the question whether China is ready for the free trade agreements it wants, and what modern trade agreements entail in terms of concessions and managing domestic protectionist interests.
Who’s Afraid of China’s High-Tech Challenge?Over the last 30 years, the speed and scale of China’s economic rise have stunned the world. Now its government has mapped out bold plans for the next phase of the nation’s development. China’s ambitions and the government’s central role have evoked mixed responses elsewhere. In his new paper, Guy de Jonquières examines China’s policies and its current level of industrial development. As for China, the evidence to date suggests that it is trying move too far too fast and probably in the wrong direction. The kind of dramatic breakthroughs that its state planners yearn for almost certainly exceed the current capacity of its industries to deliver and risk being frustrated by constraints on creativity.