Rita Cappariello, Michele Mancini, Filippo Vergara Caffarelli, 22 March 2019

EU and the UK production networks are highly integrated, and Brexit poses a threat to supply and demand linkages between the two economies. This column describes how the effect of tariffs will be magnified due to back-and-forth trade across the Channel. This will increase production costs in the UK and, to a lesser extent, in the EU.

Jaime de Melo, Jean-Marc Solleder, 13 March 2019

Developing countries have not participated in the WTO-led negotiations aimed at bringing down barriers to trade in environmental goods. If negotiations conclude, would the win for trade and for the environment be extended to a win for developing countries? This column draws insights from a newly assembled comprehensive dataset on barriers to trade in environmental goods and provides evidence that tariffs and non-tariff barriers are still an impediment to trade while similar regulations stimulate it. A larger list of environmental goods would entice developing-country participation, but this will also require protecting developing countries from challenges at the WTO.

Meredith Crowley, Oliver Exton, Lu Han, 21 January 2019

Uncertainty over the future of the world trading system is at its highest since the introduction of GATT in 1947. The US-China trade war and suggestions that President Trump intends to withdraw the US from the WTO have significantly raised uncertainty in the global economy. Meanwhile, uncertainty over the future of the UK-EU trading relationship spiked on 15 January when the UK parliament overwhelmingly rejected the negotiated terms of the UK’s withdrawal from the EU. This column documents that an earlier period of heightened trade policy uncertainty for the UK – the period following the Brexit referendum in June 2016 – depressed the UK’s international trading activity, with some UK businesses choosing to not enter the EU market while others chose to exit. 

Emanuel Ornelas, Marcos Ritel, 08 November 2018

Generalised System of Preferences programmes, a form of nonreciprocal tariff cuts, have proliferated since the 1970s. Using a well-documented dataset of international trade agreements, this column studies the effectiveness of the system on beneficiaries’ aggregate exports. It finds that nonreciprocal tariff preferences can have a strong positive effect on the exports of least-developed countries, provided that they are WTO members. Conversely, other developing economies enjoying nonreciprocal preferences are able to increase exports only if they are not WTO members. 

Eric Bond, Mario Crucini, Tristan Potter, Joel Rodrigue, 27 September 2018

The Trump administration’s recent tariff increases have prompted comparisons to interwar tariff history. This column investigates tariffs during this period, drawing out lessons on their macroeconomic impacts for the US and its trade partners. The recessionary impact of recent tariffs is likely to be smaller and less widespread than those imposed during the interwar period, provided that tariff levels don’t escalate too dramatically through retaliation.

Edith Laget, Alberto Osnago, Nadia Rocha, Michele Ruta, 14 July 2018

The making and unmaking of trade agreements affects global production. This column reveals how deeper agreements have boosted countries’ participation in global value chains and helped them integrate in industries with higher levels of value added. Investment and competition now drive global value chain participation in North-South relationships, while removing traditional barriers remains important for South-South relationships.

Kyle Bagwell, Robert Staiger, Ali Yurukoglu, 17 May 2018

It is widely accepted that the most-favoured nation rule – a fundamental feature of WTO negotiations – has both advantages and disadvantages. This column considers the empirical outcomes of tariff bargaining under the most-favoured nation rule versus outcomes where this rule is abandoned. It finds that the rule substantially increases welfare at the global level.

Alessandro Nicita, Marcelo Olarreaga, Peri da Silva, 05 April 2018

There are growing signs that a trade war is possible, and that the multilateral trading system may not be able to prevent it. This column asks what would happen with tariffs around the world if countries were to move from cooperative tariff setting within the WTO to non-cooperative tariff setting outside the WTO. It argues that that the resulting trade war with countries exploiting their market power would lead to a 32-percentage point increase in the tariff protection faced by the average world exporter.

Marion Jansen, Joost Pauwelyn, Theresa Carpenter, 31 January 2018

International economic dispute settlement is under increased scrutiny. How are decisions made about the ‘fairness’ of national or foreign policies? How are damages to be paid by governments to private investors calculated? This column introduces a book with contributions from academics and practitioners that explore whether economists can be of use in addressing these and other contentious questions in international trade and investor–state disputes.

Céline Carrère, Marcelo Olarreaga, Damian Raess, 15 December 2017

Protecting workers through the inclusion of labour clauses in trade agreements has become more common since the first such causes were included in NAFTA, but some argue that by increasing labour costs in developing countries, they represent a form of protectionism. This column uses new data to argue that there is no evidence for adverse effects on trade from labour clauses. When such clauses are strong, and if they emphasise cooperation in their implementation, they have a positive effect on the commercial interests of developing countries.

Dalia Marin, 07 September 2017

Previous research has shown that China's entry into the WTO in 2001 has had a profound impact on jobs and wages of low-skilled workers in the US in sectors exposed to Chinese imports. The same is not true for Germany. This column argues this is because the import-side trade adjustment to low-cost competition had already happened before the rise of China, because the rise of Eastern Europe offered new export opportunities for German firms, and because China’s love for product quality found a perfect match in German products.

Hugo Erken, Philip Marey, Maartje Wijffelaars, 15 August 2017

Since taking office, US President Donald Trump has been an increasingly vocal proponent of protectionist measures. This column presents five reasons why he is unlikely to resort to full-blown protectionism: political motivations, WTO membership, the possibility of retaliation, the existence of global value chain integration and revenue streams, and the fact that automation rather than trade has caused most job losses in the US. If Trump does resort to protectionism, however, and other countries retaliate, US GDP could face cumulative losses of up to 4.5% over two years.

Mary Amiti, Mi Dai, Robert Feenstra, John Romalis, 28 June 2017

China has become the world’s largest exporter, with a rapid rise in its world trade share just after it joined the WTO in 2001. This column finds that China’s WTO entry reduced the US manufacturing price index by 7.6% between 2000 and 2006, with most of this effect arising from China reducing its own import tariffs. US consumers gained because they paid less for manufactured goods and because they had access to more varieties of goods.

Scott Baier, Yoto Yotov, Thomas Zylkin, 28 April 2017

There is a large empirical literature examining the effects of free trade agreements. However, most studies to date have focused on a common average effect across all agreements or have assumed that the effects are common across similar types of agreements. This column examines heterogeneity in the effects of free trade agreements. Along with across-agreement heterogeneity, substantial within-agreement heterogeneity is observed. The effects of a specific agreement can be starkly different for two trading partners.

Aksel Erbahar, Yuan Zi, 10 October 2016

With the US presidential debates, talk of trade protectionism is on the rise. This is worrisome for economists, who generally argue that protection hurts consumers by raising final good prices, particularly in a world with increasingly integrated global value chains. This column presents new evidence for ‘cascading protection’, showing that US protection of inputs has increased the probability of petitions for protection by their downstream users.

Gary Hufbauer, Euijin Jung, 29 September 2016

Donald Trump has consistently made headlines with unusual and potentially dangerous economic policy proposals, including threatening to pull out of the WTO, renegotiating trade agreements, and imposing tariffs on imports from Mexico and China. This column explores the legal and economic dimensions of these proposals. Old and modern legal statutes could allow a US president to implement such policies, and the repercussions for the US economy could be severely negative.

Ricardo Meléndez-Ortiz, 26 July 2016

Trade ministries, just as other parts of government, need to respond to calls from the public and from global leaders for action on major issues. This column argues that armed with potential policy options identified through the E15Initiative, the WTO is equipped to contribute to solutions in many areas. Purposeful efforts over the coming months and years could help to boost the WTO’s essential and valuable place in ensuring a responsive and inclusive furtherance of globalisation and trade and investment integration that delivers sustainable development outcomes for all.    

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