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on International Trade |
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Issue of 2026–03–30
sixteen papers chosen by Nicola Daniele Coniglio, Università degli Studi di Bari “Aldo Moro” |
| By: | Piñeiro, Valeria; Gianatiempo, Juan Pablo; Rueda, Jorge Armando; Glauber, Joseph W. |
| Abstract: | This paper examines how the recent shift in United States tariff policy could reshape global agricultural trade and influence the stability of food systems worldwide. Using the MIRAGRODEP computable general equilibrium model, the analysis evaluates three policy scenarios that reflect the current trajectory of trade tensions: the North America scenario, the Liberation Day tariff package, and a renewed U.S.–China tariff confrontation. The scenario results reveal distinct lessons. The North America scenario shows that deeply integrated regional markets are extremely sensitive to tariff shocks, and even moderate tariff increases within North America lead to significant disruptions in agricultural trade and measurable welfare losses for Canada and Mexico. The Liberation Day scenario demonstrates that unilateral tariff escalation reduces U.S. competitiveness across a wide range of agricultural products and triggers substantial trade diversion toward countries with preferential access, particularly Mexico, which becomes the primary beneficiary of redirected U.S. import demand. The China scenario highlights that renewed U.S.–China tariff escalation produces severe distortions, especially in oilseed markets, as prohibitive tariffs drive China to shift its purchases almost entirely toward South American suppliers, sharply lowering U.S. export prices and fragmenting global supply chains. Across all scenarios, global agricultural trade contracts, supply chains become less efficient, and food systems become more exposed to climate and geopolitical shocks. These findings underscore the need for predictable and coordinated trade policies that limit uncertainty rather than amplify it. Strengthening trade diversification, investing in supply chain resilience, and aligning economic and geopolitical objectives remain essential for safeguarding global food security in an increasingly unstable trade environment. |
| Keywords: | trade; tariffs; food security; food prices; computable general equilibrium models; United States; Northern America |
| Date: | 2025–11–25 |
| URL: | https://d.repec.org/n?u=RePEc:fpr:gsspwp:178193 |
| By: | Jan Baran; Patryk Czechowski; Jakub Mućk |
| Abstract: | In this paper we examine the role of the electromobility transformation for exports of the automotive sector. To do so, we propose a novel mapping of granular codes of automotive products into three categories: (i) combustion-specific, (ii) neutral, and (iii) electric-specific. We estimate a standard gravity model of the trade flows of automotive products, comparing the three categories with each other. We demonstrate that key drivers of export of the electric-specific products are similar to the combustion-specific ones. However, exports related to electric vehicles are more technologically intensive and supported by either a domestic R&D potential or international knowledge spillovers through FDI. In particular, export-oriented production of electric-specific intermediates proves to be to a large extent R&D intensive. Our results also suggest that the ongoing structural change in the automotive industry leads rather to intra-industry reorganization than to more fundamental restructuring of existing Global Value Chains. |
| Keywords: | automotive industry, international trade, gravity model of trade, structural change, electric vehicles, electromobility, Global Value Chains |
| JEL: | F14 L16 L62 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:sgh:kaewps:2026122 |
| By: | Lasha Chochua; James Lake; Gerald Willmann |
| 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 free-riding 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:ces:ceswps:_12564 |
| By: | Fabio Artuso; Julian L. Clarke; Lionel Fontagné; Mahdi Ghodsi (The Vienna Institute for International Economic Studies, wiiw); Gianluca Santoni |
| Abstract: | Non-tariff measures (NTMs), especially sanitary and phytosanitary (SPS) measures and technical barriers to trade (TBTs), have become crucial components of climate, industrial, and regulatory policy, impacting the majority of global trade. However, quantifying their effects on trade is challenging because NTMs are usually non-discriminatory and challenging to identify in standard gravity frameworks. Using a multi-stage structural gravity estimation strategy combined with a control-function correction for endogeneity, we estimate the trade elasticities and ad valorem equivalents of NTMs at the HS6 level for over 5, 000 products. Our results reveal significant heterogeneity in NTM trade costs, especially in environmentally relevant sectors, such as clean technologies and electric vehicles. These estimates can inform regulatory impact assessments and general-equilibrium analyses of climate-aligned trade policies. |
| Keywords: | Non-tariff measures: Ad valorem equivalents; Environmental goods; Critical minerals |
| JEL: | F14 F13 F18 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:wii:wpaper:273 |
| By: | Tadashi ITO; Kiyoyasu TANAKA |
| Abstract: | This paper examines whether the EU’s 2022 embargo on Russian crude and refined oil unintentionally encouraged “oil laundering” through third‑country refiners. After the ban, Russian crude prices fell, creating strong incentives for countries such as China, India, Turkey, Singapore, and the UAE to purchase discounted Russian oil, refine it, and legally re‑export the resulting petroleum products to the EU. Using a gravity‑model framework and event‑study analysis, we show sharp and synchronized shifts in trade flows: Russian crude exports to laundromat countries surged dramatically after 2022, while EU imports of refined products from these same countries rose significantly in 2023 and 2024. These patterns suggest that Russian oil entered the EU indirectly through third‑country refining. China and India appear to be the primary intermediaries. In contrast, other sanctioning countries such as the U.S., Canada, Australia, and Japan show no similar increase, and EU members exempt from the embargo also display no laundering‑related import changes. |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:eti:dpaper:26024 |
| By: | Gianmarco Daniele; Adam Soliman; Juan Vargas |
| Abstract: | We study how a sharp expansion in Colombian cocaine production propagated internationally through global trade networks, generating substantial social costs. In Colombia, the production surge increased homicide rates by 41% in port areas and by 26% in cocaine producing municipalities. Violence then spilled across the border into Ecuador, a transit hub with negligible cocaine production but dense maritime trade links, contributing to a nearly five-fold increase in homicide rates. The shock travelled through criminal supply chains that exploit legitimate perishable export routes, notably bananas, concentrating activity at maritime chokepoints. In Europe, countries with stronger pre-shock trade ties to Colombia and Ecuador experienced sharp increases in cocaine seizures linked to these origins, lower retail prices, a 60% rise in cocaine consumption in port cities, and 7% higher violent crime in port provinces. Together, these results show that shocks in illicit markets propagate internationally through the same trade networks as legal trade shocks, concentrating violence at contested logistical bottlenecks and expanding downstream drug markets. |
| Keywords: | illicit trade, international spillovers, violence, trade networks, crime |
| Date: | 2026–03–20 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepdps:dp2167 |
| By: | James Giesecke; Robert Waschik |
| Abstract: | This paper examines the consistency between Armington and Melitz trade specifications in computable general equilibrium (CGE) models, focusing on the parameterisation of Melitz elasticities for the motor vehicle sector. Using the framework developed by Dixon, Jerie and Rimmer (2018), we first restrict the Melitz parameter space by imposing bounds derived from theoretical constraints and potentially observable industry characteristics. We then assess whether any admissible Melitz parameterisation can reproduce the import response generated by a standard Armington specification in GTAP-FIN for a 25 per cent U.S. tariff on motor vehicle imports. We find that no such parameter combination exists. This incompatibility raises a parameterisation dilemma: when Melitz parameters are constrained to generate empirically plausible industry characteristics, the implied import responses substantially exceed those produced under conventional Armington elasticities. We therefore reverse the calibration exercise and identify the range of Armington elasticities required to match the import responses generated by the restricted Melitz model. The implied Armington elasticities are considerably larger than values identified in the literature. One interpretation is that conventional Armington parameterisations understate trade responsiveness in sectors characterised by firm-level heterogeneity. Another is that alternative representations of heterogeneity, such as small group monopolistic competition, may warrant further investigation. |
| Keywords: | Melitz model, Armington elasticities, tariffs, motor vehicles, computable general equilibrium |
| JEL: | F12 C68 F17 F47 D58 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:cop:wpaper:g-365 |
| By: | Márta Bisztray (ELTE Centre for Economic and Regional Studies); Gábor Békés (CEU; ELTE Centre for Economic and Regional Studies; CEPR); Alexandros Charos (WIFO); Klaus Friesenbichler (WIFO; ASCII); Miklós Koren (CEU; ELTE Centre for Economic and Regional Studies; CEPR; CESifo); Agnes Kügler (WIFO; ASCII); Balázs Lengyel (ELTE Centre for Economic and Regional Studies; Corvinus University Budapest); Amanda De Pirro (USI); Birgit Meyer (WIFO; ASCII) |
| Abstract: | Recent events have posed considerable challenges to supply chain, as demonstrated by trade data. Yet, firm-level information on the recent challenges remains scarce. The Supply Chain Disruption Survey addresses this gap by generating insights into firms’ experiences and expectations regarding their supplier relationships, with a special focus on the role of intangibles and changes over time. Conducted as part of the RETHINK-GSC Horizon research project, the survey was carried out in Austria, Denmark, Germany, and Hungary between mid-2023 and spring 2024. The survey focused on medium-sized and large firms operating in various manufacturing industries. This paper has two main objectives: first, it provides information about the survey's background, design, questionnaire, and implementation; and second, it presents the key patterns visible in the survey. The results indicate that sourcing remains anchored in Europe but is diversified. Experiencing disruption was nearly universal between 2020 and 2023, mostly due to COVID-19, but also due to the war in Ukraine and trade policy changes. Despite the perception of the disruptions being of temporary nature, the anticipation of risk increased. Firms adopted different risk mitigation strategies, including diversifying their supplier portfolio and information sharing with suppliers. |
| Keywords: | survey, questionnaire, supply chain, empirical research |
| JEL: | F14 D22 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:has:discpr:2517 |
| By: | KUMANOMIDO, Hiroshi |
| Abstract: | Large exchange rate appreciations pose a fundamental challenge for open economies: they compress export margins, weaken competitiveness, and force firms and regions to adjust their production and employment structures. However, evidence on how such adjustments unfold over the long run remains limited. This paper studies these mechanisms using Japan’s sharp yen appreciation following the 1985 Plaza Accord. Combining a firm-level panel data from 1980 to 1999 with industry-level shock exposure, I estimate how appreciation affected firms’ employment, sales, and labor productivity. The results show sharp declines in sales and productivity but modest employment losses, reflecting Japan’s rigid labor practices. Industries more exposed to export shocks expanded FDI in Asia without inducing additional domestic employment adjustment, but leading to a sharper decline in measured labor productivity. At the regional level, labor reallocation from manufacturing to services occurred in shock-exposed regions, suggesting that the yen appreciation led to gradual structural transformation. |
| Keywords: | Exchange rate, Trade policy, Firm, Plaza Accord, Structural Transformation |
| JEL: | F14 F31 F68 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:hit:tdbcdp:e-2025-04 |
| By: | Niccolo Marco Eugenio Consonni; Glenn Magerman |
| Abstract: | We develop a Strategic Dependency Index (SDI) to quantify the welfare cost of product-levelimport price shocks. Unlike existing empirical indicators based on concentration metrics and ad hocthresholds, the SDI is derived from a structural cost-of-living framework, and allows for additivedecomposability across products, source countries and destination countries. We apply the SDIto the EU27, and estimate trade elasticities, love-for-variety parameters, and origin-destinationspecific taste shifters using highly disaggregated 8-digit product-level trade data over 2002–2021, instrumenting for prices and expenditure shares to address endogeneity. Three sets of findingsemerge. First, the products generating the largest welfare losses are petroleum oils, liquefied naturalgas, iron ores, and selected basic metals. Their strategic relevance stems from the interaction of bothlow substitutability across sources and large expenditure shares. Second, strategic dependencyvaries sharply across EU member states even for the same product, driven by fundamentallydifferent channels — high substitution elasticities in some countries versus large expenditure sharesin others — implying that uniform EU-wide policy responses may fail to address the heterogeneoussources of vulnerability. Third, the suppliers contributing most to aggregate welfare exposuredo not coincide with the geopolitical rivals dominating policy discourse: China, the USA, andRussia do not lead the SDI ranking. The SDI provides a tractable, theory-consistent framework forevaluating targeted policy interventions aimed at reducing strategic trade exposure. |
| Keywords: | strategic trade dependence; import vulnerability; welfare costs |
| JEL: | F11 F13 F14 D12 D60 |
| Date: | 2026–03–23 |
| URL: | https://d.repec.org/n?u=RePEc:eca:wpaper:2013/404702 |
| By: | Ferrari Minesso, Massimo; Lebastard, Laura; Bagur, Olga Triay |
| Abstract: | This paper provides the first causal estimate of the economic impact of interlinking payment systems across countries. We exploit a new dataset of payment systems interlinking initiatives, which identifies over 2, 000 connections, and employ standard gravity methods to estimate their impact on trade flows. Consistent with trade costs theory, we find that inter-connected countries have around 4% higher trade volumes, roughly half the effect of a trade agreement and a quarter of the effect of a common currency area. Our results isolate the average effect on trade, of directly connecting fast payment systems, net of country pairs already accessing the correspondent banking network. The estimated impact is larger for payment systems that allow wholesale transactions, those that link small countries, which, typically, are less connected to the correspondent banking network, and for geographical areas that face high cross-border payment costs. This suggests that the benefits from interlinking are derived from reduced cross-border trade costs. Our findings are causal – proved by parametric and semi-parametric estimators – and robust to numerous additional controls, including exclusion of the largest interlinked country group, the euro area. JEL Classification: E42, F15, F30 |
| Keywords: | fast payment systems, interlinking, trade |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbwps:20263202 |
| By: | Utamawati, Herlina; Yusuf, Alia |
| Abstract: | Indonesia is abundant in the transition-critical mineral nickel. In 2020 the government banned exports of raw nickel to capitalise on its value at home and in global supply chains as it transitions to a low-carbon, climate-resilient economy. But the country also faces environmental and social trade-offs in the exploitation of this mineral. Lessons can be drawn from the Indonesian example in other countries facing similar resource and sustainable growth dilemmas. |
| JEL: | L81 N0 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:137796 |
| By: | Alvarez Vilanova, Juan; Crescenzi, Riccardo; Mager, Lee |
| Abstract: | Foreign direct investment (FDI) finances and diffuses the capital, skills and know-how needed for the low-carbon transition, yet ‘green FDI’ remains systematically under-measured. Sector proxies – typically renewable energy and waste remediation – miss green activities embedded within other industries, yielding a partial and geographically-biased picture. Here we combine Large Language Models with the EU Taxonomy for Sustainable Activities to classify investment projects against sector-specific green criteria. Applying this taxonomy-guided framework to 109, 084 inward greenfield FDI projects into the European Union and the United Kingdom (2013– 2024), we identify 15.7% of FDI value as green – around twice the share captured by traditional measures. We show that sector metrics miss large volumes in manufacturing and services, and that beyond-energy green FDI is more strongly linked to extra-European investors, implying distinct geopolitical dependencies. Blinded human coding and robustness tests confirm high accuracy and reproducibility. Together, these results enable scalable monitoring of investment alignment with climate objectives. |
| Keywords: | green FDI; EU taxonomy; large language models; greenfield investment; decarbonisation; green transition |
| JEL: | F21 Q55 Q56 C88 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:137671 |
| By: | Marina Dodlova; Justyna Jantos; Krisztina Kis-Katos; Anna Kochanova |
| Abstract: | This paper examines the impact of floods on regional import dynamics in South Africa. Floods can disrupt firms' production activities and thereby hinder their participation in import markets. At the same time, firms may increase imports to compensate for disruptions in domestic supply networks. We study these opposing adjustment mechanisms using administrative firm-level data combined with detailed customs transactions records from South Africa. |
| Keywords: | Climate change, Flood, Import, Customs data, South Africa |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:unu:wpaper:wp-2026-28 |
| By: | Baffes, John; Nagle, Peter; Streifel, Shane S. |
| Abstract: | Commodity price volatility—along with energy and food security concerns—has renewed interest in supply- and demand-management schemes. This paper revisits experiences of international commodity agreements. Historically, agreements covering non-oil commodities involved both producers and consumers and employed various policy tools such as inventory and trade flow management. While some initially stabilized prices, all eventually failed or disbanded, often amplifying price volatility. In contrast, the Organization of the Petroleum Exporting Countries, a producer-only arrangement, has endured longer but faces challenges from the energy transition, alternative sources of oil, and consumer responses including energy diversification, efficiency gains, policy coordination, and strategic reserves under the auspices of the International Energy Agency. These experiences offer cautionary lessons for current proposals advocating industrial commodity cartels or global food inventory management. Nonetheless, international coordination, particularly in energy conservation, food aid, and information sharing, remains relevant. During periods of severe market disruption, collaboration on inventory management and trade flow regulations may still offer benefits. |
| Date: | 2026–03–20 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:11340 |
| By: | Asjad Naqvi (WIFO) |
| Abstract: | This paper introduces a framework that integrates Quadratic Almost Ideal Demand System (QUAIDS) elasticities with the ADB Multi-Region Input-Output (MRIO) database to evaluate the direct and indirect impacts of tariffs on Value Added at the country-sector level. Using the data on USA tariffs imposed in September 2025, results reveal a broad-based contraction in global value added by –0.52 percent, with indirect effects roughly twice as large as direct ones. While, direct effects are concentrated in traded manufacturing sectors such as textiles, chemicals, and machinery, the majority of total losses arise from indirect spillovers into services and infrastructure, including transport, telecommunications, finance, and public spending. Losses are widespread, where more than 90 percent of countries experience declines, with South Asia and North America the most affected, while Europe and East Asia show greater resilience. India (–5.8 percent) and the United States (–3.2 percent) face strong contractions, while China’s large domestic market cushions much of the shock. These findings highlight the systemic nature of tariff shocks and their asymmetric propagation across countries and sectors that factors in structural dependence across the global economy. By embedding non-linear demand responses within a structural MRIO framework, the study provides a transparent, policy-relevant tool for evaluating shocks to global production networks. |
| Keywords: | Quadratic Almost Ideal Demand System (QUAIDS), Multi-Regional Input-Output (MRIO), Tariffs, Production networks, Indirect impacts |
| Date: | 2026–03–18 |
| URL: | https://d.repec.org/n?u=RePEc:wfo:wpaper:y:2026:i:723 |