International trade

Banu Demir, Beata Javorcik, 20 April 2018

Firms have responded to increased competitive pressures due to globalisation in various ways. This column suggests another margin of adjustment – provision of trade credit. It shows that extending trade credit attenuates the price response to increased competition. Ignoring the trade credit channel leads to an underestimation of the full effects of changes in market competition on exporters.

Koen De Backer, Sébastien Miroudot, Davide Rigo, 19 April 2018

Multinational enterprises that produce goods rely on services to organise their value chain, so barriers to investment in services are likely to affect their production. The column uses a new and comprehensive OECD database to measure the share of services in the exports of multinational enterprises, and also in the output of their foreign affiliates. The results suggest that policymakers may need to focus more on the services that support manufacturing industries.

Stefan Legge, Piotr Lukaszuk, Simon Evenett, 17 April 2018

While the Trump administration’s proposed tariff increases on Chinese imports have grabbed the headlines, few realise that other trading partners have also raised tariffs on Chinese trade. This column examines the effects of the EU removing China from its General System of Preferences in 2012. As a result of the move, $242 billion worth of EU imports from China were subject to higher tariffs, raising EU customs revenue by an estimated $4 billion.

Naomitsu Yashiro, Konstantins Benkovskis, Jaan Masso, Olegs Tkacevs, Priit Vahter, 13 April 2018

Participation in global value chains provides emerging economies with opportunities for fast-track development and technological upgrading. This column argues that countries need to diversify their exports into knowledge-intensive products and services that generate high value added to make the most out of learning by exporting. Countries that specialise in standardised, generic products or services may not enjoy sufficient improvements in productivity, even if such exports channel knowledge transfer.

Grégory Claeys, André Sapir, 11 April 2018

It is only in the last decade that the EU has had an active policy to reintegrate workers who lost their jobs as a result of globalisation, through the European Globalisation Adjustment Fund. This column assesses the performance of the Fund and makes three recommendations to improve its effectiveness. To be more successful, the Fund should improve its monitoring and widen the scope of its usage.

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