International trade

Richard Pomfret, Patricia Sourdin, 23 September 2016

Joining a customs union is supposed to reduce trade with third countries. But after 2004, the largest EU accession countries actually increased their trade with Australia, especially their exports. This column argues that new regional value chains made accession country industries more competitive, especially in the auto industry. Trade with Australia has also been facilitated by a drop in the costs of bilateral international trade.

Michel Fouquin, Jules Hugot, 17 September 2016

Historians and economists generally identify two periods of trade globalisation, the first beginning around 1870 and the second during the 1970s. The column argues that new data from 1827 onwards shows globalisation beginning as trade barriers were lowered around 1840, and that both periods of globalisation were surprisingly fuelled by a regionalisation of world trade. If globalisation continues to grow in future, regionalisation may decline.

Chad Bown, Patricia Tovar, 17 September 2016

Argentina and Brazil began to open their markets to the world significantly – but only partially – in the 1990s. Yet these countries’ efforts to liberalise beyond their Latin American trading partners have stalled since 1995. This column re-examines the 1990s MERCOSUR experience and raises questions over just how much trade policy cooperation these two countries have undertaken. This lack of coordination also has implications for the ‘building blocks’ versus ‘stumbling blocks’ debate in trade policy.

Douglas Campbell, Lester Lusher, 08 September 2016

Growing inequality has been one of the most pressing political issues since the Great Recession. However, there is a relative lack of consensus on the significant drivers of this trend. This column investigates the contribution of globalisation, via international trade, to US inequality. Although trade is found to have had important effects on certain parts of the US labour market in the early 2000s, the growth in US inequality since 1980 can be traced back to Reagan-era tax cuts.

Mario Crucini, Gregor Smith, 05 September 2016

Commodity price convergence is often seen as the best way to measure the integration of markets that defines globalisation. This column reviews research on historical prices and also presents intranational evidence from Sweden from 1732 to 1914. Price convergence appears to date to the 18th century, well before the adoption of the telegraph or the railway. For emerging economies today, intranational price convergence arising from declining internal distance effects may be a precursor to globalisation.

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