|
on International Trade |
|
Issue of 2026–02–23
twelve papers chosen by Nicola Daniele Coniglio, Università degli Studi di Bari “Aldo Moro” |
| By: | Quimba, Francis Mark A.; Barral, Mark Anthony A. |
| Abstract: | This study develops a multidimensional Geoeconomic Fragmentation (GEF) Index and applies structural gravity modeling to quantify how rising geopolitical tensions, sanctions, and supply chain disruptions reshape ASEAN and Philippine commodity trade. Using dyad–product–year data (2000–2024), the GEF index integrates political distance, sanctions exposure, tariff barriers, trade intensity, and import volatility. A suite of Poisson Pseudo-Maximum Likelihood (PPML) models—including baseline, structural, and bloc-interaction specifications—captures how fragmentation and global shocks (such as the trade war, COVID-19, the Russia–Ukraine war, and the chip and shipping crises) differentially affect trade with China, the EU, the US, and the rest of the world. Results show that fragmentation reroutes rather than reduces trade, generating asymmetric losses across commodities and identifying highly vulnerable export and import lines for ASEAN and the Philippines. Comments to this paper are welcome within 60 days from the date of posting. Email publications@pids.gov.ph. |
| Keywords: | ASEAN trade, commodity vulnerability, geoeconomic fragmentation, gravity model, international trade, political distance, sanctions, supply-chain shocks, tariff barriers, trade diversion, trade intensity |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:phd:dpaper:dp_2025-49 |
| By: | Won Bok Lee (Korea Institute for Industrial Economics and Trade) |
| Abstract: | This study utilizes the Asian Development Bank (ADB) Multi-Regional Input-Output Database (MRIO) to analyze export flows of cross-border intermediate goods and indirectly estimate value-added exports. The findings of the analysis show that South Korea’s value-added exports to the United States are directly exposed to the impacts of the second Trump administration’s tariff policies. This vulnerability arises because the top transit countries for US-bound value-added exports overlap with the countries with which America’s trade deficits are the largest, making them particularly sensitive to US policy changes. Accordingly, Korea should pursue a flexible response to US efforts to restructure global supply chains around its interests, enhance risk mitigation, and diversify key production and processing hubs. |
| Keywords: | value-added; exports; tariffs; global value chains; GVCs; protectionism; global trade; South Korea; United States |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ris:kieter:022204 |
| By: | Giannoulakis, Stelios; Kanas, Angelos; Spaliara, Marina-Eliza; Tsoukalas, John |
| Abstract: | We examine the effects of the 2018-2019 U.S. tariffs on Greek goods exports using industry- and firm-level data within a difference-in-differences framework. The results reveal considerable heterogeneity: eight out of seventeen products experienced declines in exports, six saw increases, and the rest showed no significant change. Firm-level analysis confirms part of this heterogeneity. While many export-oriented firms were resilient, some in specific industries experienced either export and sales declines or gains. A notable case is the aluminum sector, where firms experienced substantial increases in exports, pointing to potential sector-specific advantages. We also find modest evidence of export market substitution as a mitigating strategy. Our findings highlight the nuanced, sector-dependent effects of trade policy shifts. Policymakers should design support for affected firms through targeted trade promotion, market diversification incentives, and streamlined export procedures to enhance resilience against trade shocks. |
| Keywords: | U.S. tariffs; Greek exports; difference-in-difference; export market substitution; export support schemes |
| JEL: | F14 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:137249 |
| By: | Zou, Tao |
| Abstract: | In recent decades, global value chains (GVCs) have come to dominate much of world trade. Participation in GVCs is widely regarded as a key driver of development by enabling countries to climb the value‐added ladder. However, tighter governance structures within GVCs can make these benefits uncertain. This paper investigates the dynamic impact of GVC participation on economic upgrading using a semiparametric smooth coefficient model with panel data from 62 countries over 1995–2018. We uncover a novel N‐shaped nonlinear relationship between GVC participation and economic upgrading, extending beyond the linear or U‐shaped patterns found in earlier research. This relationship reveals three stages: initial learning with rising upgrading effects, an intermediate ‘upgrading trap’ with declining effects, and an advanced breakthrough stage with renewed rise. Decomposing transmission mechanisms shows that while GVC participation imposes output efficiency costs, it enhances upgrading by improving input factor productivities. Critically, forward linkage participation proves more effective than backward linkage for escaping the upgrading trap. Middle‐income countries exhibit the strongest internal input factor efficiency gains from GVC participation alongside the highest dispersion in overall outcomes. These findings offer policy insights for designing openness and industry policies tailored to a country's development stage and GVC position. |
| Keywords: | upgrading trap; nonlinearity; forward and backward linkages; global value chains |
| JEL: | L81 N0 |
| Date: | 2026–02–16 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:137389 |
| By: | Dae-Young Koh (Korea Institute for Industrial Economics and Trade); Chun Kon Kim (Korea Institute for Industrial Economics and Trade) |
| Abstract: | Despite the rapid expansion of trade in services, especially digital services, few studies have attempted to quantitatively assess the competitiveness of service exports. The main purpose of this study is to analyze the export competitiveness of South Korea’s service sectors and to derive policy implications from the empirical findings. This study utilizes the World Trade Organization (WTO)’s Trade in Services by Mode of Supply (TiSMoS) dataset in addition to various indicators derived from a Universal Space Model (USM) that encompasses both manufacturing and services.<p> The results of the analysis show that the level of South Korea’s service specialization (particularly in high-value-added digital services) is very low compared to global leaders, and its export specialization structure remains concentrated in high-value-added manufacturing. This highlights the need for substantial policy efforts to build core capabilities and enhance national competitiveness. The findings also reveal specific service sector segments that Korea should make a priority, namely, intellectual property licensing and research and development (R&D) services. |
| Keywords: | service industry; trade in services; service exports; digital trade; digital exports; export competitiveness; universal space model; TiSMoS; intellectual property licensing |
| JEL: | F14 F23 F21 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ris:kieter:022205 |
| By: | Hüseyin A. Özer (Gebze Technical University); Taner Turan (Gebze Technical University); Halit Yanikkaya (Gebze Technical University) |
| Abstract: | Despite extensive research on Global Value Chains (GVCs), there remains a notable lack of empirical studies examining their impact on economic upgrading. Our study addresses this gap by investigating how different forms of GVC participation influence economic upgrading across industries. Our findings indicate that GVC participation plays a pivotal role in both product and process upgrading across all industries. For MENA region, both forward and backward GVC participation significantly and positively contribute to process and product upgrading in agriculture industry. On the other hand, while the fuels- minerals and manufacturing sectors exhibit product upgrading but these sectors do not demonstrate any improvement for process upgrading by GVC participation. |
| Date: | 2024–12–20 |
| URL: | https://d.repec.org/n?u=RePEc:erg:wpaper:1760 |
| By: | Kevin Hjortshøj O'Rourke (CNRS - Centre National de la Recherche Scientifique, ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, CEPR - Center for Economic Policy Research) |
| Abstract: | It is much too soon to speculate about the long-run impact of the second Trump administration's trade policy, since we don't know what it will be next week, let alone four years from now. But what we do know is that 2 April 2025 marked a brutal rupture with 90 years of American foreign economic policy that have shaped the world we live in. The symbolism was stark. By awarding each trading partner its own "reciprocal" tariff, the government of the US was tearing up the central foundational principle of the GATT and its successor organisation, the WTO, namely, the principle of non-discrimination enshrined in Article 1 of the GATT. Since it was the US itself that had been the great promoter of non-discrimination in trade – a position it had held since the 1930s – the events of 2 April marked the end of an era. |
| Keywords: | second Trump administration’s trade policy, American foreign economic policy, US government |
| Date: | 2025–12–01 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05509165 |
| By: | Rok Spruk |
| Abstract: | This paper studies the long-run economic and institutional consequences of Iran's confrontation with the West, treating the 2006-2007 strategic shift as the onset of a sustained confrontation regime rather than a discrete sanctions episode. Using synthetic control and generalized synthetic control methods, I construct transparent counterfactuals for Iran's post-confrontation trajectory from a donor pool of countries with continuously normalized relations with the West. I find large, persistent losses in real GDP and GDP per capita, accompanied by sharp declines in foreign direct investment, trade integration, and non-oil exports. These economic effects coincide with substantial and durable deterioration in political stability, rule of law, and control of corruption. Magnitude calculations imply cumulative output losses comparable to civil-war settings, despite the absence of internal armed conflict. The results highlight confrontation as a deep and persistent economic and institutional shock, extending the literature beyond short-run sanctions effects to sustained geopolitical isolation. |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2602.03231 |
| By: | Ambrogio Cesa-Bianchi; Andrea Ferrero; Luca Fornaro; Martin Wolf |
| Abstract: | We provide a framework that connects industrial policies to global imbalances and technological hegemony, and describe some empirical facts consistent with our model. We study the international spillovers triggered by industrial policies promoting high-tech sectors. Since high-tech goods and services are typically traded internationally, these policies boost the supply of tradable goods. Moreover, industrial policies lead to trade surpluses if the government pursues an unbalanced policy mix, such that domestic demand does not rise as much as supply. These surpluses are absorbed by the rest of the world, which in response runs trade deficits. Absent policy interventions, trade deficits reduce the competitiveness of the domestic tradable sector, stifling innovation and productivity growth. Innovation policies can help the rest of the world to mitigate these negative spillovers. |
| Keywords: | trade imbalances, productivity, international spillovers, tariffs, innovation, high-tech, China shock, endogenous growth, capital flows |
| JEL: | E21 E22 E23 E44 F32 F43 O31 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:upf:upfgen:1939 |
| By: | Quimba, Francis Mark A.; Barral, Mark Anthony A.; Salazar, Alliah Mae C. |
| Abstract: | The ASEAN Economic Community (AEC) Blueprint 2025, aimed at fostering deeper regional integration, competitiveness, and economic resilience, has recently been adopted. This paper provides an updated assessment of the AEC and the Philippines' progress over the last five years, considering recent developments such as the implementation of the Regional Comprehensive Economic Partnership (RCEP), advancements in the ASEAN Digital Economy Framework Agreement (DEFA), and evolving trade and investment patterns. Using the latest data, the study benchmarks the Philippines against its ASEAN counterparts, analyzing performance in trade, investment, financial integration, innovation, digital economy, connectivity, and sustainability. In addition, the paper explores the impacts of global economic disruptions, supply chain realignments, and emerging sustainability initiatives on the country’s integration into the regional economy. It identifies key challenges, including disparities in economic readiness, regulatory bottlenecks, and gaps in digital transformation, while also outlining strategic policy recommendations to enhance the Philippines’ role in ASEAN’s economic landscape. Comments to this paper are welcome within 60 days from the date of posting. Email publications@pids.gov.ph. |
| Keywords: | AEC, ASEAN, ASEAN centrality, DEFA, digital economy, economic integration, ESG, FDI, financial integration, innovation and technology, MSME, RCEP, supply chain, sustainable development, tariff and non-tariff measures, trade in services agreement, value chains |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:phd:dpaper:dp_2025-51 |
| By: | Joyce, Joseph |
| Abstract: | The current accounts of most emerging economies include primary income deficits, which in turn largely consist of investment income payments on foreign direct investment earnings. For these countries, the persistent deficits have become a structural component of the current account. In addition, for some countries secondary income, which includes personal transfers from workers who are abroad, is also crucial. These surpluses partly offset the deficits in trade and primary income. We examine the response of the trade balance, primary income and secondary income balances to macroeconomic factors in a sample of 24 emerging markets economics over the period of 1990 – 2022. We use seemingly unrelated regressions models with random effects to account for correlated errors across the three equations and compare these results with the results of an estimate of the current account. The responses of the three sub-balances to policy and control variables varies widely, which can complicate efforts to lower a current account deficit. We examine the response of the three sub-balances to financial crises, which increase the current and trade accounts. We also discuss the use of retained earnings to finance new FDI. |
| Keywords: | trade account, primary account, investment income, secondary income, remittances |
| JEL: | F21 F23 F24 F32 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:127327 |
| By: | Étienne Lavenant; Bertrand Pluyaud |
| Abstract: | Since 2021, the gap between the Chinese trade surplus as measured by customs and the figure published in the balance of payments has widened markedly, raising questions over the reliability of the data. The divergence can be attributed to a change in the data sources used in the balance of payments, to take better account of international production arrangements. However, the change does not appear to have been applied to the years prior to 2021. <p> Depuis 2021, l’écart entre le solde commercial chinois mesuré par les douanes et celui publié dans la balance des paiements s’est sensiblement accru, ce qui a suscité des interrogations sur la fiabilité des données. Cet écart peut s’expliquer par un changement dans les sources utilisées en balance des paiements, afin de mieux prendre en compte les arrangements internationaux de fabrication. Mais ce changement ne semble pas avoir été appliqué sur les années antérieures à 2021. |
| Date: | 2026–01–16 |
| URL: | https://d.repec.org/n?u=RePEc:bfr:econot:427 |