International trade

Matthieu Crozet, Julian Hinz, Amrei Stammann, Joschka Wanner, 05 March 2021

Sanctions are imposed on a target country to exert political and economic pressure. But there is little evidence on how exporting firms regard trade with the sanctioned country. This column uses detailed monthly customs data from French firms to investigate the extensive margin of trade in episodes of sanctions-use against Iran, Russia, Cuba, and Myanmar. It finds the impact of sanctions is heterogeneous along firm dimensions and advises caution in the use of a policy tool with imprecise and unpredictable results.

Cem Çakmaklı, Selva Demiralp, Sebnem Kalemli-Ozcan, Sevcan Yesiltas, Muhammed A. Yıldırım, 15 February 2021

Countries around the world are beginning to vaccinate their populations against Covid-19. This column calculates the global economic costs from the absence of an equitable distribution of vaccines, with a focus on international trade and production linkages. Under the scenario where advanced economies are vaccinated universally within four months in 2021 but only 50% of the population is vaccinated in emerging markets and developing economies by early 2022, it finds that the global economic costs might be as high as $3.8 trillion. Up to 49% of these costs are borne by advanced economies.

Samuel Delpeuch, Etienne Fize, Philippe Martin, 12 February 2021

How much can trade imbalances account for the rise in protectionism of the past ten years? This column reveals that both bilateral and multilateral trade imbalances are strong predictors of protectionist attacks, partly – but not entirely – driven by the US and the Trump years. Moreover, countries with more expansionary fiscal policies react to the ensuing trade imbalance by a more protectionist trade policy. A transatlantic gap in the fiscal response to the COVID crisis may therefore pave the way to renewed trade tensions.

Christian Bluth, 10 February 2021

Christian Bluth, author of a new CEPR Press eBook on Europe's trade strategy, tells Tim Phillips that nations are increasingly using global trade as a means of political arm-twisting. Should the EU do the same?

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Simon Evenett, Richard Baldwin, 10 February 2021

Following the appointment of its new Director-General, the World Trade Organization has the best opportunity in years to revive its fortunes. This column, written as an open letter to the incoming Director-General of the WTO, argues why and offers ideas on how.

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