|
on International Trade |
|
Issue of 2026–11–02
fifteen papers chosen by Nicola Daniele Coniglio, Università degli Studi di Bari “Aldo Moro” |
| By: | Cindy Justo; Antonio Navas; Enrico Vanino |
| Abstract: | This paper studies the heterogeneous effects of trade in services barriers on firm-level exports, focusing on the consequences of the UK withdrawal from the European Union and the introduction of the EU–UK Trade and Cooperation Agreement (TCA). Using detailed firm-level transaction data on UK services exports combined with sectoral measures of regulatory restrictiveness, we show that UK services exports to the EU declined significantly following both the Brexit referendum and the implementation of the TCA, with substantially larger effects after regulatory barriers were formally reintroduced. The effects are highly heterogeneous across firms, following an inverted U-shaped pattern with small and large firms more negatively affected, and are particularly pronounced for foreign-owned firms using the UK as an export platform. Crucially, we show that barriers related to foreign entry are the primary drivers of the observed decline, while other regulatory dimensions play a limited role. These findings highlight the importance of firm heterogeneity and regulatory alignment in shaping services trade outcomes. |
| Keywords: | trade in services, Brexit, trade and cooperation agreement, firm heterogeneity, services trade barriers, trade policy uncertainty |
| JEL: | D22 F13 F14 F15 F23 L80 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_13084 |
| By: | Duong, K. T.; Huynh, L. D. T.; Lastauskas, P.; Vu, N. T. |
| Abstract: | Using firm-level panel data on cross-border sales for 27 African economies (2002-2022), we study how the African Continental Free Trade Area (AfCFTA) reshaped firms’ international trade. Guided by a heterogeneous-firm model with two short-run channels, export-network history and capital-adjustment frictions, linked through goods-services input linkages, we document that the 2018 signing raised the ratio of international to total sales by 2.7 percentage points (pp) by 2022. The gains were uneven: firms with prior export experience outside Africa gained 2.8 pp, versus 1.2 pp for Africa-only exporters, and goods-producing firms and those facing lower adjustment frictions responded most. Network history and adjustment frictions thus shape who benefits from continental integration and how gains propagate across the goods-services linkage, so that an intra-continental agreement disproportionately rewards extra-continental traders. |
| Keywords: | Adjustment Costs, Africa, Export Experience, Goods and Services Sectors, Ownership Structure, Trade Agreement |
| JEL: | F13 F14 F18 F63 |
| Date: | 2026–10–01 |
| URL: | https://d.repec.org/n?u=RePEc:cam:camdae:2680 |
| By: | Maria Cipollina; Luca De Benedictis |
| Abstract: | Most-favored-nation (MFN) tariff increases do more than raise trade costs. By changing the relative tariff treatment of competing exporters, they increase the value of existing trade preferences, reshaping relative market access and trade allocation. While the trade-reducing effects of higher tariffs are well established, much less is known about this mechanism. We investigate whether higher MFN tariffs amplify the competitive advantage of preferential partners, generating trade diversion. Using domestic and international trade data, we estimate a structural gravity model with CES-consistent bilateral tariff margins and examine recent changes in US trade policy as an empirical application. We find that higher MFN protection simultaneously reduces imports and redirects trade toward preferential exporters. These effects are highly heterogeneous across sectors and regions, with the largest losses concentrated in intermediate and capital goods, highlighting the role of MFN tariffs in reshaping relative market access and global trade patterns. |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2610.35986 |
| By: | Mario Larch; Yoto V. Yotov |
| Abstract: | Non-reciprocal preferential trade arrangements (PTAs), such as the Generalized System of Preferences (GSP), are the main trade policy instrument for developing countries. Yet, existing data track changes in eligibility only coarsely and evidence on their effects is mixed. We introduce a database of 38 schemes (1950–2025) coding graduations, suspensions, and lapses. Structural gravity analysis finds no significant average effect, and none for beneficiaries other than least developed countries (LDCs). For LDCs, preferences raise exports to grantors by 34 percent, and GSP preferences by 88 percent. These gains concentrate in apparel and footwear and are not captured by tariffs. |
| Keywords: | non-reciprocal trade preferences, generalized system of preferences, least developed countries, graduation, tariffs, structural gravity |
| JEL: | F13 F14 F15 O19 O24 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_13091 |
| By: | Maria Cipollina; Luca De Benedictis |
| Abstract: | After decades of trade liberalization, the 2020s mark a profound shift in the globalization narrative, with tariffs once again becoming a central instrument of trade policy. This reversal also challenges how the effects of trade policy are evaluated. Much of the empirical literature has been developed to assess bilateral tariff reductions or elimination and the associated erosion of preferential advantages. Rising multilateral tariffs pose a different question: they alter not only the trade costs faced by directly affected exporters but also the relative market access of all competing suppliers, potentially reinforcing existing preferences. This paper develops a practical framework for translating tariff changes into trade effects in this new policy environment. We argue that liberalization and protectionism should not be treated as symmetric policy experiments: their effects operate through different changes in relative market access and therefore require careful consideration of how tariff shocks are measured and incorporated into empirical trade models and counterfactual evaluations. |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2610.36171 |
| By: | James E. Anderson; Mario Larch; Yoto V. Yotov |
| Abstract: | We invert structural gravity to recover trade cost changes delivering targeted outcomes. For attainable welfare targets, one instrument per target yields a unique solution. At unchanged producer prices and to first order, each instrument must change by the welfare target divided by its own expenditure share; the required domestic change is about the size of the target, while the import change is several times larger. Inverting observed trade flows gives a separate trade cost change for each of the two directions in which a pair of countries trades. Applications to NAFTA and world trade illustrate the benefits of our approach. |
| JEL: | F10 F13 F14 |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35897 |
| By: | Anna Maria Mayda; Lindsay Oldenski; Walter Steingress |
| Abstract: | This paper studies the impact of offshoring by US firms on voting patterns in the US. Using county-level voting data combined with industry-level offshoring data from 2000 to 2020, we ask whether an increase in employment at foreign affiliates of US multinational firms in vertically oriented industries is associated with an increase in the vote share for the incumbent party candidate in Presidential, House, and Senate elections. We find that offshoring leads to a significant increase in the incumbent vote share for counties with higher shares of college educated workers, and a significant decrease for counties with higher shares of workers in the manufacturing sector and in occupations that are more easily relocated abroad. These results are consistent with the labor market literature on offshoring and our own findings, which show that offshoring has heterogeneous effects on workers’ employment based on skill and occupational tasks. This suggests that voters respond to the economic effects of offshoring by rewarding or punishing incumbent party candidates. |
| Keywords: | Models and tools; Economic models; Structural challenges; International trade, finance and competitiveness |
| JEL: | D D7 D72 F F2 F23 F6 F60 |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:bca:bocawp:26-37 |
| By: | Manova, Kalina; Moxnes, Andreas; Perello, Oscar |
| Abstract: | This paper examines intermediation in production networks to unpack the firm attributes and matching costs that govern firm-to-firm networks and the gains from trade. Exploiting rich customs data for Chile, we show that exporters of all sizes use intermediaries, mix trade modes across buyers, and set lower prices on intermediated flows. We rationalize these facts in a model of network formation with suppliers of heterogeneous productivity and matchability, buyers of heterogeneous productivity, and intermediaries that reduce matching costs for a brokerage fee. Empirical evidence on trade activity across firms and countries corroborates the model, and informs how geographic distance, logistics and customs efficiency, formal institutions, and cultural-linguistic similarity shape network costs. Model estimation reveals that sellers' attributes are negatively correlated, such that intermediaries enable highly productive sellers with low matchability to reach smaller buyers. This amplifies the welfare gains from intermediation due to wider and deeper network connectivity. |
| Keywords: | production networks;intermediation;productivity;matching costs |
| JEL: | F10 F12 F14 F23 L11 L14 L81 |
| Date: | 2025–03–03 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:141747 |
| By: | Philip Bodenschatz; Peter H. Egger; Arne Nagengast |
| Abstract: | China’s export expansion increasingly challenges advanced-economy exporters in third markets. Using confidential German exporter data, we generalize the canonical China-shock instrument to multiple destinations, exploiting Chinese gains in products across similar markets. Within firms, export growth falls in destination-product markets where Chinese market shares rise, through weaker growth among continuing relationships and market exit. Growth in estimated quality and unit values also declines, while stronger quality, price, product, and destination advantages cushion losses. Market exit and weaker entry account for more than half of aggregate adjustment. Structural-gravity evidence attributes China’s gains mainly to quantity expansion and rising exporter-product competitiveness. |
| Keywords: | China shock, export competition, firm heterogeneity, German exporters, China-shock instrument |
| JEL: | F14 F12 L25 C26 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_13079 |
| By: | Stephanie Schmitt-Grohé; Martín Uribe |
| Abstract: | Using a panel of U.S. imports and customs duties at the HS 6-digit level, we document that in a typical quarter about 20 percent of tariffs rise, 20 percent fall, and 60 percent remain unchanged. Motivated by these facts, we develop a model of staggered tariff setting and embed it in a dynamic open-economy framework. Staggering changes the dynamics of the cross-sectional mean tariff, generating hump-shaped macroeconomic responses to tariff shocks. Staggering also overturns the Razin–Svensson trade- balance neutrality result for permanent tariff increases, because the gradual adjustment of the mean tariff creates an anticipation effect that induces agents to front-load net imports. Inherited tariff dispersion has first-order macroeconomic effects, allowing tariff harmonization to be studied with linear approximation methods. We find that eliminating tariff dispersion while holding the mean tariff unchanged has effects akin to a transitory tariff cut in an economy without staggering. |
| JEL: | F41 E52 E31 F13 |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35957 |
| By: | Xiao Ma; Natalia Ramondo |
| Abstract: | We study how regional specialization patterns and welfare are affected by uncertainty and economies of scale in an open economy. We use a spatial equilibrium model with sectoral economies of scale, aggregate uncertainty, and irreversible mobility decisions made by heterogenous workers. We analytically characterize how the interactions between comparative advantage, both of workers and firms, economies of scale, and uncertainty shape specialization patterns and, hence, the gains from trade. We find empirical support for the model predictions by documenting the impact of aggregate changes in volatility of sectoral productivity on U.S. regional economies. We calibrate the model using detailed data on U.S. commuting zones and international trade, and extending hat-algebra methods to accommodate uncertainty. Quantitatively, we find that uncertainty shifts employment away from riskier sectors and locations, relative to a deterministic benchmark, lowering the U.S. aggregate gains from trade by around 20 percent. The interaction between uncertainty and scale economies brings down the benefits of specialization. For regions that would otherwise lose from trade, the presence of agglomeration forces and a more elastic labor supply mitigates those losses. |
| JEL: | F1 F2 |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35942 |
| By: | Christopher Clayton; Matteo Maggiori; Jesse Schreger |
| Abstract: | We build a model of two hegemons that have valuable trading relationships with each other and at the same time compete in exerting geoeconomic power over countries in the rest of the world. When the hegemons trade with each other, their optimal policy is shaped both by classic economic considerations - the profitability of that specific trade - and by geoeconomic competition - how the trade affects the power of each hegemon vis-a-vis the rest of the world. We show that containment, a policy mix in which a hegemon limits sales of its inputs to the rival hegemon and uses its power to demand that the rest of the world shift away from sourcing from the rival, arises when the two hegemons offer relatively substitutable exports, are less interdependent with each other, and have more direct geopolitical rivalry. Countries in the rest of the world benefit, all else equal, from hegemons containing each other since they partially squander their power with offsetting demands. However, containment policy can also worsen the efficiency of global production, leaving the rest of the world worse off. |
| JEL: | E0 F0 L0 N0 P0 F10 F30 F40 F50 N40 |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35952 |
| By: | Barattieri, Alessandro; Chen, Jessica Yang; Li, Bingjing; Mattoo, Aaditya |
| Abstract: | China’s export performance is characterized by two striking features: a steady rise in export sophistication and the continued prominence of less sophisticated products. This paper proposes the “Many Chinas” hypothesis, that China’s provinces differ in their comparative advantage and in how this comparative advantage has evolved over time. Using detailed Chinese customs export data from 1995 to 2023, this paper investigates the provincial underpinnings of China’s export performance. Three main findings emerge. First, export similarity between Chinese provinces and the advanced economies increased over time, initially more rapidly in the eastern provinces. Second, despite this increased export similarity with the advanced countries, there remained significant heterogeneity across provinces in 2023. In their export structure, provinces such as Shanghai and Jiangsu resemble most closely the Republic of Korea while Guangdong and Shanxi resemble Viet Nam and the Philippines, respectively. Third, this paper identifies a novel pattern: during the first decade after China’s World Trade Organization accession in 2001, the export sophistication of the country’s eastern provinces increased much faster than that of other provinces, but since about 2010, there has been remarkable convergence in sophistication across all provinces. |
| Date: | 2026–09–28 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:11469 |
| By: | Marisol Rodríguez Chatruc; Ernesto Stein; Razvan Vlaicu; Victor Zuluaga |
| Abstract: | International trade increases aggregate welfare but also creates winners and losers, making it politically contentious. Recent research has established that individuals are more sensitive to anti-trade information about employment loss than to pro-trade information about lower prices or greater variety. This paper studies how individual attitudes and beliefs change in response to information about employment losses (in import-competing sectors), gains (in export-oriented sectors), and the possibility of compensation for displaced workers. To this end, a large-scale survey experiment was implemented in 18 Latin American countries using nationally representative samples. The results suggest that anti-trade information reduces support for trade even when compensation is mentioned, while pro-trade messages increase support only when they emphasize employment gains. Belief updating about trade's employment effects seems to be a relevant mechanism. |
| Keywords: | International trade;Attitudes;Employment;Survey experiment;Latin America |
| JEL: | F13 D72 |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:bdm:wpaper:2026-08 |
| By: | Ernest Liu; Stephen J. Redding; Bennett Smith-Worthington; David Y. Yang |
| Abstract: | We develop a tractable framework for analyzing geopolitics as a network of coordination and strategic influence. Countries choose geopolitical actions that trade off domestic interests against incentives to align with connected countries. They can exert costly bilateral influence to affect one another’s actions. We characterize equilibrium actions and bilateral influence in closed form. Cross-country differences in domestic interests decompose into latent geopolitical cleavages, each of which the network transmits into geopolitical actions independently of the others. The cross-country covariance matrices of domestic interests and of geopolitical actions identify the cleavages and their importance, from which we recover the network. We implement the framework using data on United Nations voting and democratic orientation. The inferred network is well approximated by a few dimensions, aligns with external measures of geopolitical ties, and recovers well-known historical cleavages. We undertake counterfactuals for domestic interests and network connections and quantify three notions of geopolitical power |
| JEL: | C72 D85 F15 F52 F68 |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35951 |