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on International Trade |
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Issue of 2026–04–06
fifteen papers chosen by Nicola Daniele Coniglio, Università degli Studi di Bari “Aldo Moro” |
| By: | Chochua, Lasha; Lake, James; Willmann, Gerald |
| Abstract: | We show that plurilateral agreements facilitate global tariff liberalization by creating an MFN-based margin of cooperation that leaves preferential access via preferential trade agreements (PTAs) unchanged. In a model of endogenous trade agreement formation with farsighted governments, PTAs become rigid once exclusion or freeriding incentives bind, constraining further PTA expansion. Plurilateral agreements relax these constraints by allowing countries to liberalize selectively in a differentiated goods sector without altering existing PTAs. As a result, the stable equilibrium trade network consists of the PTAs that would arise absent plurilaterals, augmented - but not replaced - by plurilateral MFN liberalization. This mechanism provides an explanation for the growing role of sectoral plurilateral agreements within the WTO as preferential liberalization becomes increasingly constrained. |
| Keywords: | Plurilateral Agreements, Preferential Trade Agreements, Global Free Trade, WTO |
| JEL: | F12 F13 F15 F18 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifwkwp:339613 |
| By: | Chochua, Lasha; Lake, James; Willmann, Gerald |
| Abstract: | • we analyze plurilateral trade agreements that liberalize trade in particular products among a range of countries • the Information Technology Agreement (ITA) covers around 12% of global trade • our theory shows that such agreements can be a way forward for multilateral liberalization in the context of the WTO • an empirical study shows that the 2nd phase of the ITA does have a positive impact on global trade in IT products |
| Abstract: | • wir analysieren multilateral Handelsabkommen, die den Handel mit bestimmten Produkten zwischen vielen Ländern liberalisieren • das Informationstechnologie-Abkommen (ITA) deckt ca. 12% des globalen Handels ab • unsere theoretische Analyse zeigt, dass solche Abkommen ein Weg nach vorne für multilaterale Liberalisierung im Rahmen der WTO sein kann • eine empirische Studie zeigt, dass die zweite Phase des ITA einen positiven Effekt auf den globalen Handel mit IT-Produkten hat |
| Keywords: | Plurilateral Agreements, Preferential Trade Agreements, Global Free Trade, WTO, Plurilaterale Abkommen, Präferenzielle Handelsabkommen, globaler Freihandel |
| JEL: | F12 F13 F15 F18 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifwkpb:339574 |
| By: | Junyuan Chen; Carlos Góes; Marc-Andreas Muendler; Fabian Trottner |
| Abstract: | Global trade flows and supply chains adjust gradually. Empirical estimates of the trade elasticity for the short run are a fraction of those for the long run and suggest that trade is subject to substantive dynamic frictions. We develop a tractable framework that provides microfoundations for trade adjustment and rationalizes estimation of a time-varying trade elasticity. The model features forward-looking firms facing sticky sourcing choices and nests a version of the Eaton-Kortum model as a limiting long-run case. We calibrate the model and quantify the impacts of two events: the 2004 EU Eastern enlargement (an anticipated change) and the 2018 US-China trade war (an arguably unanticipated change). Our findings suggest that sourcing frictions and anticipation effects alter the time pattern of specialization, can result in short-term welfare losses but long-term gains, and can drive marked trade adjustments before anticipated shocks occur. |
| Keywords: | international trade, estimation of the elasticity of trade, dynamic trade adjustment, staggered sourcing decision, 2004 EU enlargement, US-China trade war |
| JEL: | F11 F14 F17 C51 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12570 |
| By: | Sizhong Sun |
| Abstract: | This paper studies firms' optimal response to a trade liberalization shock in terms of export and product innovation both theoretically and empirically. We find that trade liberalization, namely China's WTO accession, reduces trade cost and promotes export, which in turn incentivizes firms to innovate as the marginal benefit of innovation for exporting firms is higher than that for non-exporting firms. In addition, as a firm starts to innovate, it predicts to have a higher probability of moving to a better productivity state and can save the entry cost of innovation in the future, resulting in additional dynamic benefits. Such an innovation-promotion effect is an unintended consequence of trade liberalization. |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2603.23825 |
| By: | Fabrice Defever; Emanuel Ornelas |
| Abstract: | We study how the end of the quota system for textiles and clothing products in the American and European markets on January 1, 2005, affected China's exports to third countries, where policy was unchanged. Using a difference-in-differences approach, we find that the number of Chinese firms exporting previously restricted products to third countries increased sharply after quota removal. The expansion involved many private firms that exported to neither US-EU markets before nor after 2005. This indicates that the policy shock enhanced China's role as an export base. Conversely, protectionist shifts in large economies would likely generate sizeable negative third-market effects. |
| Keywords: | import quotas, export entry, China |
| Date: | 2026–04–02 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepdps:dp2170 |
| By: | Chowdhry, Sonali; Heiland, Inga; Mahlkow, Hendrik |
| Abstract: | This paper highlights an underexplored margin of heterogeneity that shapes resilience to disruptions in global shipping - the differential reliance of countries and sectors on specific categories of vessels. We combine US bills of lading records with ship registry and AIS-based port call data to document new stylized facts on vessel deployment, including switching patterns across ships, country specialization in shipbuilding, and the composition of fleets serving different country pairs. Exploiting the 2016 Panama Canal expansion as a quasi-natural experiment, we further provide the first direct estimate for the elasticity of substitution between vessels across size classes. Building on the empirical evidence, we then introduce endogenous vessel choice into a quantitative general equilibrium trade model that features multiple transport modes and a global market for shipping services. The model allows us to quantify the trade and welfare effects of two recent policy proposals that target specific types, namely, fees for Chinese-built vessels entering US ports and the inclusion of the maritime transport sector in the EU Emission Trading System. |
| Keywords: | Maritime transport, Quantitative general equilibrium trade models, EU ETS, Port fees |
| JEL: | F13 F14 F52 R41 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifwkwp:339611 |
| By: | Bekkers, Eddy; Corong, Erwin L.; Smith, Donal; Yu, Roger So; Zhao, Danchen |
| Abstract: | This paper presents quantitative projections on the expected economic impact of the Investment Facilitation for Development (IFD) Agreement, which proceeds in three steps. First, we estimate the empirical impact of the host-economy investment facilitation environment on foreign affiliate sales. Second, we map the agreement's mandatory and soft obligations (including best-endeavour) into advalorem equivalent reductions in the costs of multinational production. Third, the economic effects of these policy shocks are projected with a multi-region, multi-sector economic model that explicitly incorporates affiliate sales, foreign direct investment (FDI) and input-output linkages. Our benchmark simulations project that implementation of the IFD Agreement's mandatory obligations would increase global real GDP by 0.8 per cent over the next ten years, driven by a substantial expansion in global FDI flows and foreign affiliate sales. The simulations indicate that developing and low-income economies are expected to see the largest increases in GDP, since they are expected to see the largest improvement in the investment facilitation environment. |
| Keywords: | Foreign Direct Investment, Foreign Affiliate Sales, Computable General Equilibrium |
| JEL: | C68 F21 F23 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:wtowps:339598 |
| By: | Escaith, Hubert |
| Abstract: | This is the second volume of our data−driven analysis of the evolution of productive structure of economies between 1995 and 2019. It complements a first part delineating the main stylised facts characterising structural changes in the geographical distribution of World industrial production and the implications for employment. With a special emphasis on deindustrialisation, the present volume looks inside the production functions themselves. It investigates whether the decline of manufacturing shares in developed and some developing economies results from a statistical reclassification of activities due to domestic outsourcing, offshore relocation due to international outsourcing, or increasing demand constraints on the domestic and the export markets. Data on the use and origin of intermediate inputs provide information on the evolution of business models for each industry and their insertion in global value chains. It reveals the extent of domestic and international outsourcing and provides information on the evolution of business models across countries. While outsourcing motivated the investigation, the empirical analysis progressively relegates it to a secondary or ambiguous role. In its quest for deindustrialisation drivers, the study analyses the role of the demand constraints. The empirical results conclude by distinguishing normal and pathologic deindustrialisation in both developed and developing countries. Five broad lessons emerge from the analysis: (1) Heterogeneity of deindustrialisation, as the phenomenon is multidimensional; (2) Role of effective–demand constraints, as industrial expansion depends as much on absorption capacity as on supply potential, (3) Dual impact of outsourcing, when domestic or international outsourcing often signals functional specialisation and efficiency gains (a “Porterian” type of outsourcing), but may denote, at a contrary, a weakness (a “Post–Porterian” strategy); (4) Importance of global value chain (GVC) integration in developing successful business strategies; and (5) Importance of the domestic value chain, as successful GVC−based industrialisation requires also developing a strong domestic supply chain, particularly between high and medium technology industries. |
| Keywords: | industrialisation; global manufacturing; employment; input−output analysis; tertiarization and servicification; regional integration |
| JEL: | C67 F14 F16 J16 L60 O14 O47 |
| Date: | 2026–03–16 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:128374 |
| By: | Emanuele Forlani (University of Pavia); Concetta Mendolicchio (University of Genova); Agnese Sechi (University of Genova) |
| Abstract: | This paper investigates the gendered effects of trade liberalization on local labor markets in Italy, a country marked by low female labor force participation. Building on recent evidence that trade shocks can exacerbate or mitigate gender inequalities depending on labor market segmentation and institutional context, we examine how exposure to Chinese and Eastern European import competition has affected the labor market in Italy, with a focus on the gender discrepancies. We construct a shift-share measure of import exposure, exploiting variation in pre-existing industry specialization across provinces. Using labor-force survey and trade data with detailed labor market indicators, we assess whether observed gender gaps result from asymmetric dynamics between women and men, and how these patterns vary by sector, contract type, and skills. By providing new empirical evidence and a theoretical framework to interpret these patterns, our findings indicate that trade shocks tend to reinforce existing gender disparities in Italy, with effects concentrated in sectors characterized by high female employment shares and precarious job arrangements. |
| Keywords: | Import competition, labour market, gender inequality |
| JEL: | F14 J21 J16 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:pav:demwpp:demwp0233 |
| By: | Michele Imbruno (UNIROMA - Università degli Studi di Roma "La Sapienza" = Sapienza University [Rome], Nottingham Center for Research on Globalisation and Economic Policy (GEP)); Joël Cariolle (FERDI - Fondation pour les Etudes et Recherches sur le Développement International, CERDI - Centre d'Études et de Recherches sur le Développement International - IRD - Institut de Recherche pour le Développement - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne); Jaime de Melo (UNIGE - Université de Genève = University of Geneva, FERDI - Fondation pour les Etudes et Recherches sur le Développement International) |
| Abstract: | This paper studies how the bilateral digital connectivity resulting from the deployment of telecommunications SubMarine Cable (SMC) affects firm participation in export markets. Based on a heterogeneous firm model and using an unbalanced panel of bilateral trade data across 48 countries during the period 1997-2014, we find that an SMC connection between two countries is associated with an increase in the number of bilateral exporters in developed countries, together with a reduction in the number of bilateral exporters in developing countries. This negative association between bilateral connectivity and firm participation in export markets appears to be stronger in the poorest developing areas, where firms have lower digital absorptive capacity: Middle East & North Africa and Sub-Saharan Africa. The growth in world connectivity spurred by SMCs deployment has therefore had a heterogeneous effect on firms' decision to export, pushing more firms from high-income countries to enter export markets and some incumbent exporters from lower-income countries to exit them. |
| Keywords: | Export behavior, Submarine cables, ICT, Internet connectivity |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05570207 |
| By: | Mayara Felix |
| Abstract: | I estimate the effect of trade on local labor market concentration and its implications for wages using employer-employee linked data and tariff shocks from Brazil’s trade liberalization. Trade increased concentration by 7%, an effect driven by firm exit and worker flows to surviving import-competing firms. Increased concentration reduced wage take-home shares—estimated at 50 cents on the dollar pre-shock—enough to offset small wage gains from reallocation, but did not meaningfully reduce wages on net. Most of the wage declines attributed to Brazil's trade liberalization resulted instead from reductions in the marginal revenue product of labor. Incorporating informality reveals substantial regional heterogeneity. |
| JEL: | F16 O1 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35018 |
| By: | Escaith, Hubert |
| Abstract: | This volume is the first part of a two−volumes background paper prepared from the perspective of a wider research project on deindustrialisation. It aims at contributing to the empirical analysis of manufacturing industries in the course of economic maturing, searching for the salient features that accompanied the most recent wave of globali-sation. In particular, we search for tipping points in industrial output and employment, with a special attention to the role of trade and outsourcing in an international context. In addition, we contribute also to the literature on truncated industrialisation and premature deindustrialisation in developing countries. Our findings highlight three stylised facts: deindustrialisation is structural but uneven across regions; its gendered impacts are significant; and outsourcing alters the composition of industrial output and labour without halting their overall relative decline. Heterogeneity dominates at regional level; the process is global in its drivers yet local in its manifestations. An implication of the “global village” created by hyper−globalisation is that, for many aspects except employment, the industrial economy functions like a world–wide closed economy. With two implications in terms of deindustrialisation: creative destruction may not happen anymore in the same national territory; the old issue of effective demand may return as a limiting factor, squeezed as it is between amazing productivity improvement and a demand for manufactured goods that remains largely constrained. This volume identifies stylised facts and patterns at aggregate and sectoral production and employment levels; it is completed by a second volume that looks inside the pro-duction process itself and its sub–systems. |
| Keywords: | industrialisation; global manufacturing; employment; input−output analysis; tertiarization and servicification; regional integration |
| JEL: | C67 F14 F16 J16 L60 O14 O47 |
| Date: | 2026–03–16 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:128371 |
| By: | DiGiuseppe, Matthew (Leiden University); Fu, Xuelong; Flynn, Michael E (Kansas State University) |
| Abstract: | Trade data are available at a high level of disaggregation, allowing scholars to examine flows of highly specific goods. Yet the sheer number of goods classifications (5, 000+) makes it difficult to analyze trade flows and tariff policy at a mid-level of aggregation beyond a few existing categorizations. Here, we outline a method that can scale---not merely classify---traded goods on researcher-defined dimensions that are orthogonal to existing classification schemes. We propose that the embedded knowledge in large language models (LLMs) can be used to conduct pairwise comparisons (PWCs) of Harmonized System (HS) product descriptions by determining their relative proximity to a specific concept. A Bayesian Bradley--Terry model then uses these PWCs to place individual items on a latent scale of interest. These estimates and their associated uncertainty can then be used for downstream descriptive or causal analysis. |
| Date: | 2026–03–27 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:t8wdg_v1 |
| By: | Hinz, Julian; Mahlkow, Hendrik; Sogalla, Robin; Willmann, Gerald |
| Abstract: | • In March 2026, the Strait of Hormuz is closed. The shutdown blocks roughly one-fifth of the world's oil and one-quarter of its liquefied natural gas, triggering severe welfare losses in energy-dependent developing countries worldwide. • Standard trade models underestimate the impact because they miss the bottleneck mechanism: energy disruptions cascade through chemicals and fertilizer production into food prices, amplifying losses for the world's poorest countries. • Developing countries that depend on imported energy and fertilizers-particularly in South Asia, sub-Saharan Africa, and the Middle East-face the steepest food price increases and welfare losses. The aggregate global costs are moderate, but the burden falls disproportionately on the world's poorest: the USA loses just -0.07%, while countries in South Asia and Africa face losses 10-20 times larger. • A prolonged closure allows some market adjustment, but structural damage persists-and the timing during peak Northern hemisphere planting season compounds the food security risk. |
| Abstract: | • Im März 2026 ist die Straße von Hormuz geschlossen. Die Sperrung blockiert rund ein Fünftel des weltweiten Öls und ein Viertel des Flüssiggases, mit schweren Wohlfahrtsverlusten für energieabhängige Entwicklungsländer weltweit. • Standardmodelle unterschätzen die Auswirkungen, weil sie den Engpassmechanismus übersehen: Energiestörungen pflanzen sich über die Chemie- und Düngemittelproduktion in die Lebensmittelpreise fort und verstärken die Verluste der ärmsten Länder. • Entwicklungsländer, die auf importierte Energie und Düngemittel angewiesen sind-insbesondere in Südasien, Subsahara-Afrika und dem Nahen Osten-sind am stärksten von Nahrungsmittelpreissteigerungen betroffen. Die globalen Kosten sind moderat, doch die Last trifft die ärmsten Länder überproportional: Die USA verlieren nur -0, 07%, während Länder in Südasien und Afrika 10- bis 20-mal höhere Verluste erleiden. • Eine längerfristige Sperrung ermöglicht gewisse Marktanpassungen, doch die strukturellen Schäden bleiben bestehen-und der Zeitpunkt während der Hauptaussaatzeit auf der Nordhalbkugel verschärft das Ernährungssicherheitsrisiko. |
| Keywords: | Strait of Hormuz, Energy Security, Food Prices, Critical Inputs, Bottleneck Effects, Trade Disruption, Straße von Hormus, Energiesicherheit, Lebensmittelpreise, kritische Vorleistungen Engpass-Effekte, Handelsstörungen |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifwkpb:339604 |
| By: | Ulrich Eydam (University of Potsdam, CEPA); Florian Leupold (University of Potsdam, CEPA) |
| Abstract: | Geopolitical conflicts generate macroeconomic spillovers that extend beyond directly affected countries through trade and commodity linkages. This paper quantifies these effects for Germany, France, Italy, and Spain using a monthly Trade-Related Conflict Exposure (TRCE) index for 2009–2023 within an external-instrument Structural Vector Autoregression (SVAR) framework. We find that conflict shocks transmitted via import channels significantly affect industrial production and inflation. Headline inflation responds in a hump-shaped pattern, with peak effects of around 0.30 percentage points in Germany and 0.18 percentage points in France. Energy prices react immediately and strongly, food prices more gradually, and core inflation rises persistently in Germany, France, and Spain, indicating broader second-round effects. Historical decompositions show that conflict shocks account for a substantial share of the 2022–2023 inflation surge. Overall, the results highlight the importance of trade integration and commodity-specific exposure in shaping asymmetric inflation dynamics within the Euro Area. |
| Keywords: | inflation, military conflicts, spillover effects, structural vector autoregression, trade |
| JEL: | E00 E31 H56 F50 F51 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:pot:cepadp:98 |