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on International Trade |
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Issue of 2025–09–22
ten papers chosen by Nicola Daniele Coniglio, Università degli Studi di Bari “Aldo Moro” |
| By: | Lasha Chochua; Irene Iodice |
| Abstract: | Do countries gain more by liberalizing trade together than alone? To answer this question, we study the 2015 Phase II expansion of the Information Technology Agreement (ITA), which eliminated tariffs on products covering over 12% of world trade. Market access rose by 4–6%. Nearly half of this effect reflects coordination spillovers — the extra gains from simultaneous liberalization — outweighing the roles of direct tariff cuts and reduced policy uncertainty. Exploiting quasi-experimental variation in the number of countries liberalizing each product, we show spillovers are positive once coalitions span about two-thirds of world imports — below the commonly assumed 80% critical-mass benchmark for plurilaterals. These findings show that joint liberalization yields benefits beyond the sum of individual actions — evidence of the force of many |
| Keywords: | plurilateral agreements, MFN liberalization, trade policy uncertainty, coordination spillovers, critical mass, onformation technology agreement |
| JEL: | F13 F14 F15 F53 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12125 |
| By: | Noemi Walczak; Kenan Huremovi\'c; Armando Rungi |
| Abstract: | This paper examines the economic and environmental impacts of the European Carbon Border Adjustment Mechanism (CBAM). We develop a multi-country, multi-sector general equilibrium model with input-output linkages and characterise the general equilibrium response of trade flows, welfare and emissions. As far as we know, this is the first quantitative trade model that jointly endogenises the Emission Trading Scheme (ETS) allowances and CBAM prices. We find that the CBAM increases by 0.005\% the EU Gross National Expenditure (GNE), while trade shifts towards domestic cleaner production. Notably, emissions embodied in EU imports fall by 3\%, which is the result of a direct effect (-4.8\%) and a supply chain's upstream substitution effect (+1.8\%). The latter is a dampening effect that we can detect only by explicitly incorporating the production network. In contrast, extra-EU countries experience a slight decline in GNE (0.009\%) and emissions (0.11\%). |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2506.23341 |
| By: | Pinelopi Goldberg; Michele Ruta |
| Abstract: | This paper revisits the relationship between international trade, trade policy, and development in light of the structural, policy, and geopolitical shifts that have transformed globalization over the past decade. While trade has historically supported development through both static and dynamic channels, we argue that the latter—those inducing structural transformation and institutional change — have been far more consequential for long-run development. Through access to global markets, participation in global value chains, and knowledge and technology transfers, and by providing an anchor for reform, trade and trade agreements have contributed to productivity gains, technological progress, quality and skill upgrading, and institutional change in many low- and middle-income countries. Yet, the conditions that enabled these effects—technologically driven declines in transportation and communication costs, fragmentation of the production process, liberal trade regimes, multilateralism and geopolitical stability — are changing. Automation, digitization, climate change, the return of industrial policy in advanced economies, and the rise of geopolitical rivalry are reshaping the global trade environment. In this new context, the scope for replicating past export-led growth successes is unlikely as two key growth mechanisms, access to the lucrative markets of advanced economies and knowledge sharing, are under threat. We discuss whether trade in services or the green transition could provide alternative paths and emphasize that future development prospects will increasingly depend on the policy choices of large economies and the ability of developing countries to adapt to a more fragmented global system. |
| Keywords: | globalization, development, trade policy, multilaterism, geopolitics |
| JEL: | F1 O1 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12137 |
| By: | Albina, Iván; César, Andrés; Ciaschi, Matías; Falcone, Guillermo; Gasparini, Leonardo |
| Abstract: | This paper examines the causal effects of trade shocks on local labor markets (LLMs), with a focus on the rural–urban divide. In particular, it analyzes the impact of China’s integration into global trade on Chilean LLMs with varying degrees of rurality. The identification strategy exploits variation in pre-shock industrial specialization across LLMs and changes over time in global Chinese import penetration and industry-specific export demand. We study short-run effects (1996–2006) and medium run dynamics (through 2022). Urban LLMs, more exposed to import competition, experienced declines in income, increases in poverty and informality, and persistent schooling losses. Rural LLMs, linked to primary sectors benefiting from Chinese demand, saw sustained income growth and reductions in poverty and informality. These asymmetric effects likely contributed to narrowing regional disparities and underscore the importance of geographic exposure in shaping the distributional consequences of global trade integration. |
| Keywords: | Comercio internacional, Evaluación de impacto, China, Finanzas, Investigación social, Equidad e inclusión social, Ciudades, Pueblos nativos, |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:dbl:dblwop:2522 |
| By: | Stefano Carattini; Hanwei Huang; Frank Pisch; Tejendra Pratap Singh |
| Abstract: | Although the environmental impact of trade has been a long-standing concern, there is still only scant evidence on the channels through which international market access affects pollution. In this paper, we exploit the unique episode of China’s world market integration in the early 2000s to provide direct empirical evidence on three such mechanisms. We combine granular satellite data on air pollution with detailed information on manufacturing firms and coal power plants, and leverage exogenous foreign demand shocks for identification. Three main findings emerge: exporting firms reduce local pollution (scope-1); pollution levels around coal power plants rise due to regional export shocks (scope-2); and upstream suppliers reduce pollution in the face of export demand shocks to downstream firms (scope-3). Our findings point to China’s reliance on coal power plants to fuel its export-driven growth as one of the main drivers of the rise in pollution. |
| Keywords: | trade, pollution, satellite, supply chain, coal power plants, electricity |
| JEL: | D22 F18 F64 Q53 Q56 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12119 |
| By: | Reto Foellmi; Björn Hartmann; Josef Zweimüller |
| Abstract: | We develop a two-country model of international trade featuring non-homothetic preferences and income inequality, generating a price schedule where cheap necessities coexist with expensive luxury goods. A central mechanism driving price differences is firm's ability to shift fixed costs between countries, shaping trade patterns and welfare. In a North-South setting, poor consumers in the rich country are most negatively affected by this fixed cost shifting, leading to a Manhattan effect. Following mean-preserving redistribution, import volumes rise in the unequal country, and fall in the more equal one. |
| Keywords: | trade, income inequality, nonhomothetic preferences, pricing-to-market |
| JEL: | L11 F12 F60 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12107 |
| By: | Artuc, Erhan; Falcone, Guillermo Enrique; Porto, Guido; Rijkers, Bob |
| Abstract: | This paper analyzes the welfare impacts of import bans in Nigeria, and how these are shaped by evasion. Bans were not effectively enforced, and contributed to informal trade. The imposition of bans nonetheless increased consumer prices by 5.8% on average. However, price increases are substantially attenuated for goods for which trade policy is harder to enforce. Import bans disproportionately hurt the rich: the benefits of evasion are regressive. |
| Date: | 2025–09–02 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:11195 |
| By: | Luna, Luis Aguilar; Winkler, Deborah Elisabeth |
| Abstract: | Using a cross-section of more than 33, 000 services firms in 104 low- and middle-income countries from the World Bank’s Enterprise Surveys, this paper examines whether the female labor share premium of international firms relative to non-international firms in manufacturing also holds for services firms. Unlike the manufacturing sector, the paper finds a negative relationship between exporting and global value chain participation and the female labor share for services firms, while no relationship is found for importing or foreign ownership status, controlling for firm output, productivity, technology intensity, and fixed effects. The female labor share gap for exporters was larger before COVID-19, and the gap for global value chain participants is no longer significant after COVID-19. Controlling for sectoral relative wages between men and women does not change the findings in a smaller subsample of economies. Controlling for female top management and ownership reveals a female labor share gap for exporters, global value chain participants, and importers. Using an alternative estimator and data set confirms the female labor share gap in services firms. This may be attributed to the sectoral segregation between women and men, with women tending to pursue work opportunities in less skill- and export-intensive services sectors compared to men. |
| Date: | 2025–09–03 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:11198 |
| By: | Neil Mehrotra; Michael E. Waugh |
| Abstract: | What are the effects of tariff changes and trade conflicts on the natural rate of interest? This article investigates this question, using a multicountry, heterogeneous-agent trade model in which the natural rate of interest is determined by firms’ demand for capital and households’ supply of assets through their savings behavior. We analyze how the equilibrium interest rate evolves during the transition to higher unilateral tariffs and a global trade war. In the short run, tariffs reduce capital demand, and so the natural rate of interest must fall for households’ asset supply to line up with capital demand. In the long run, both asset supply and capital demand fall by similar amounts, which leads to little change in the long-run natural rate of interest. |
| JEL: | E0 E40 F0 F10 F40 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34206 |
| By: | Kenta YAMANOUCHI; Kaoru HOSONO; Miho TAKIZAWA |
| Abstract: | We examine how the global market power of multinational firms has evolved and what factors have driven this evolution. To this end, we estimate the markups of foreign subsidiaries and their parent firms using a matched subsidiary-parent dataset of Japanese multinational firms covering the period from 2001 to 2018. Our main findings are as follows. First, the markups of foreign subsidiaries did not exhibit a long-run upward trend. Second, sales growth among foreign subsidiaries tended to be concentrated in firms with lower markups, contributing to a decline in the aggregate markup. Third, the parent firms’ markups had a sizable positive effect on the markups of their foreign subsidiaries. Fourth, certain host-country characteristics, such as GDP and the rule of law, were also associated with subsidiaries’ markups. |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:eti:dpaper:25082 |