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Begin New Search Topic International Trade and Finance Political Geography Global Focus

81. Does Participation in Global Value Chains Increase Productivity? An Analysis of Trade in Value Added Data

Author:
Shujiro Urata and Youngmin Baek
Publication Date:
11-2019
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This paper examines the impact of global value chain (GVC) participation on productivity by considering both backward and forward participation. Conducting a panel estimation covering 47 countries and 13 manufacturing sectors for 1995–2011, we found that both backward and forward GVC participation contributes to an increase in the productivity of the countries involved in GVCs. In particular, benefits in the form of improved productivity are larger in cases where developing countries procure intermediate goods from developed countries, or backward participation. Our analysis indicates the importance of GVC participation for improving productivity. We argue that, in order for a country to increase GVC participation, an open, free, and transparent trade and foreign direct investment environment (which is provided by regional trade agreements); well-developed soft infrastructure (e.g. educational and legal systems); hard infrastructure (e.g. transportation and communication systems); and the availability of capable human resources are important.
Topic:
International Trade and Finance, Foreign Direct Investment, and Global Value Chains
Political Geography:
Global Focus

82. The WTO at a Crossroad

Author:
Jack Caporal, William Alan Reinsch, Madeleine Waddoups, and Catherine Tassin de Montaigu
Publication Date:
09-2019
Content Type:
Working Paper
Institution:
Center for Strategic and International Studies (CSIS)
Abstract:
The World Trade Organization (WTO) is at a crossroad. Each of WTO’s three main functions—monitoring and transparency, negotiation, and dispute settlement—is under stress. There is no single source for that stress. Some pressure flows from individual members, and other pressure flows from members’ inability to reach consensus on long-standing irritants. Pressure has also come from the rise of China and its state-driven economy, the rapid pace of technological change and its impact on the global economy, persistent economic inequality, and a recent tilt towards nationalism in the recent decade in countries that have otherwise consistently advocated for free trade. How will this essential institution navigate these challenges? In its latest report, the CSIS Scholl Chair in International Business provides a roadmap of three possible future scenarios for the WTO—continuation of status quo gridlock, U.S. withdrawal from the WTO, and successful reform—and examines what happens to the global trading order in each. In addition to the report, the Scholl Chair has assembled two resources to chart the future of the WTO: a database to track WTO reform proposals and a series of flowcharts that map future scenarios for the WTO
Topic:
International Cooperation, International Trade and Finance, Trade Policy, and WTO
Political Geography:
Global Focus

83. The Economic Losses from Ending the WTO Moratorium on Electronic Transmissions

Author:
Hosuk Lee-Makiyama and Badri Narayanan Gopalakrishnan
Publication Date:
08-2019
Content Type:
Policy Brief
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
This paper is co-authored with Badri Narayanan, PhD, Associate Professor at University of Washington, Consultant at McKinsey Global Institute, UN ESCWA, FAO, Commonwealth Secretariat and GTAP Research Centre. Since 1998, the WTO Members have applied a moratorium against tariffs on international electronic transmissions (commonly referred to as the WTO ‘E-Commerce’ Moratorium). However, some WTO Members have recently debated whether the moratorium remains in their economic interest, given the potential revenues that might be generated by imposing tariffs on electronic transmissions. The study examines the impact on India, Indonesia, South Africa and China (and the general case for developing countries) and concludes that imposing such tariffs would be fiscally counter-productive. Putting aside any legal questions, a country that opted out of the moratorium may apply tariffs affecting a wide range of cross-border business activities. Our research shows that if countries ceased to uphold the moratorium and levied import duties on digital goods and services, they would suffer negative economic consequences in the form of higher prices and reduced consumption, which would in turn slow GDP growth and shrink tax revenues. Yet our research indicates that the payoff in tariff revenues would ultimately be minimal relative to the scale of economic damage that would result from import duties on electronic transmissions.
Topic:
Globalization, International Political Economy, International Trade and Finance, Digital Economy, Tariffs, Trade, and WTO
Political Geography:
Europe and Global Focus

84. Are Your Labor Shares Set in Beijing? The View through the Lens of Global Value Chains

Author:
Ariell Reshef and Gianluca Santoni
Publication Date:
12-2019
Content Type:
Working Paper
Institution:
Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
Abstract:
We study the evolution of labor shares in 1995-2014 while taking into account international trade based on value added concepts. On average, the decline in labor shares (starting around 1980) accelerates in 2001-2007, after which labor shares recover somewhat. In contrast, skilled labor shares consistently increase. The acceleration in the decline in labor shares is associated with increased intensity of intermediate input exporting; this manifests in a sharp increase in the foreign component in upstreamness of industries and countries in global value chains (GVCs). China's global integration accounts for much of this. Declines in the price of investment together with capital-skill complementarity can explain both the consistent increase in skilled labor shares and the reversal of trend in overall labor shares. Compared to shares in GDP, labor shares in gross national product (GNP) are higher in countries with positive net FDI positions; the uneven spread of multinational activity contributes to greater inequality through this channel.
Topic:
Economics, International Political Economy, International Trade and Finance, Labor Issues, Trade, Global Value Chains, and Skilled Labor
Political Geography:
China and Global Focus

85. Are global value chains receding? The jury is still out. Key findings from the analysis of deflated world trade in parts and components

Author:
Guillaume Gaulier, Aude Sztulman, and Deniz Ünal
Publication Date:
01-2019
Content Type:
Working Paper
Institution:
Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
Abstract:
In this article, we examine the dynamics of Global Value Chains (GVCs) since the 2000s. Did it show a marked expansion up to the Great Recession and did GVCs begin a downturn in the 2010s? To better understand the evolution of GVCs at the world level, we use very detailed trade data for 2000 to 2016, which distinguishes different production stages along the GVC. In particular, among intermediate goods, we focus on Parts and Components (P&C) rather than semi-finished products since the manufacture of P&C corresponds to activities more embedded in GVCs. We control, also, for the global business cycle and price effects using an original production stages deflator based on detailed bilateral trade unit-values. This new GVC indicator shows moderate growth over the study period with no trend reversal. In the electronics sector, where GVCs are particularly well-developed, we observe contrasting effects: the share in P&C trade for office machinery and computers has decreased, while it has increased in the case of telecommunications equipment, the flagship IT revolution industry. Also, counts of clients or suppliers by stages of production indicate higher and growing geographical diversity for P&C.
Topic:
Economics, International Political Economy, International Trade and Finance, and Global Value Chains
Political Geography:
Global Focus

86. Assessing Global Financial Stability

Author:
Tobias Adrian
Publication Date:
06-2019
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
In the decade since the global financial crisis, there has understandably been great concern about potential threats to global financial stability, and policymakers have wisely remained vigilant in watching for warning signs of possible economic risk. At the International Monetary Fund (IMF), we remain committed to providing our 189 member countries with farsighted analyses of trends in the financial markets, thus guiding them toward sound policy choices that help maintain economic stability.
Topic:
International Trade and Finance, Global Recession, Financial Crisis, Economy, Economic Growth, Risk, IMF, and Financial Stability
Political Geography:
Global Focus

87. Deeper Regional Integration and Global Value Chains

Author:
Nakgyoon Choi
Publication Date:
07-2019
Content Type:
Working Paper
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
Recently, international trade has become regional rather than global. This paper aims to test if deeper regional integration contributes to the organization of global value chains along the regional clusters including Asia, Europe, and America. We estimate the impacts of deep regional integrations on global value chains by region, investigating the implications of mega FTAs for global value chains by scenario. We use not only data on trade in value added but also global value chains participation indexes which reflect the global value chains better than domestic value added in goods and services exports. The estimation results reveal that a deep regional trade agreement has heterogeneous effects on global value chains depending on the regional clusters. In particular, Asia turns out to import more intermediate goods than Europe and America while RTA member countries tend to import more intermediate goods from Europe than Asia and America.
Topic:
International Trade and Finance, Regional Integration, Economic Policy, and Exports
Political Geography:
Europe, Asia, Global Focus, and North America

88. World Trade Organization 2.0: Reforming Multilateral Trade Rules for the Digital Age

Author:
Dan Ciuriak
Publication Date:
07-2019
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation (CIGI)
Abstract:
The rules-based framework, as instantiated in rules established under the World Trade Organization (WTO), is not equipped to address the issues that are emerging under the technological conditions generated by the digital transformation. The emerging knowledge-based and data-driven economy features incentives for strategic trade and investment policy and a confluence of factors contributing to market failure at a global scale; digital social media and platform business models have raised concerns with calls for regulation affecting cross-border data flows; and newfound security issues raised by the vulnerabilities in the infrastructure of the digitized economy have precipitated a potential decoupling of global production networks along geopolitical fault lines. To date, the response has been fragmented, incomplete and, in large part, conducted outside the WTO. A new WTO digital round is required to create a multilateral framework that is fit for purpose for the digital age.
Topic:
International Trade and Finance, World Trade Organization, Digital Economy, and Multilateralism
Political Geography:
Global Focus

89. What Is a Climate Response Measure? Breaking the Trade Taboo in Confronting Climate Change

Author:
James Bacchus
Publication Date:
07-2019
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation (CIGI)
Abstract:
Trade has become a taboo topic in climate negotiations on the implementation of the Paris climate agreement. This must change. The nexus between trade and climate change must be addressed in the climate regime. In particular, a definition is needed that will clarify the meaning of a climate “response measure.” Without a definition provided by climate negotiators, the task of defining which national climate measures are permissible and which are not when they restrict trade while pursuing climate mitigation and adaptation will be left to the judges of the World Trade Organization. To avoid a collision between the climate and trade regimes that will potentially be harmful to both, the ongoing deliberation on response measures in the climate regime must be reframed by ending the climate taboo on trade.
Topic:
Climate Change, Environment, International Trade and Finance, and World Trade Organization
Political Geography:
Global Focus

90. CIGI Expert Consultation on WTO Reform

Author:
Centre for International Governance Innovation
Publication Date:
09-2019
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation (CIGI)
Abstract:
The Centre for International Governance Innovation conducted consultations in the spring of 2019 with trade experts and stakeholders about options for modernizing the trade rules and strengthening the World Trade Organization (WTO). The consultations focused on the three themes of improving the WTO through monitoring of existing rules, strengthening and safeguarding the dispute settlement function, and modernizing the trade rules for the twenty-first century. This report synthesizes the results of the consultations.
Topic:
International Cooperation, International Trade and Finance, World Trade Organization, and Modernization
Political Geography:
Global Focus