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Published online: 17 February 2021 This paper analyses a prominent dimension of the initial policy response to the COVID-19 pandemic observed in many countries: the imposition of export restrictions and actions to facilitate imports. Using weekly data on the use of trade policy instruments during the first seven months of the COVID-19 pandemic (January–July, 2020), we assess the relationship between the use of trade policy instruments and attributes of pre-crisis public procurement regulation. Controlling for country size, government effectiveness and economic factors, we find that use of export restrictions targeting medical products is strongly positively correlated with the total number of steps and average time required to complete procurement processes in the pre-crisis period. Membership of trade agreements encompassing public procurement disciplines is associated with actions to facilitate trade in medical products. These findings suggest future empirical assessments of the drivers of trade policy during the pandemic should consider public procurement systems.

This article explores linkages between migration, international trade and investment from both economics and legal perspectives. The literature review reveals that the migration-investmenttrade triangle shows complex interdependencies, both in terms of substitution and complementarities, though its components remain largely separated both institutionally and legally. The 2018 Global Compact for Safe, Orderly and Regular Migration addresses a number of trade and investment-related issues. Recent treaty developments also encourage considering the three in a more integrated manner. The article suggests undertaking such an integration effort under the emerging principle of Common Concern of Humankind and sets out a number of preliminary ideas suggesting ways in which migration could be addressed in policies on international trade regulation and in the field of investment protection. Migration, trade, investment, Global Compact, Common Concern of Humankind

First published online: October 2020 Existing literature has examined factors underlying the formation of goods trade agreements (GTA) and bilateral investment treaties but not the determinants of services trade agreement (STA) membership. This paper bridges the gap by studying the economic and political determinants of STA membership. Its main contribution lies in providing an economic explanation of unilateral services regulatory provisions, embodied in the World Bank's Services Trade Restrictiveness Index (Borchert et al. in World Bank Econ Rev 28 : 162-188, 2014), and their interaction with services preferentialism. The authors find that unilateral services provisions are closely associated with economic determinants. They also find that countries' participation in STAs is correlated with the similarity of their unilateral services trade restrictiveness, a finding not observed for "goods-only" trade agreements. While geographical and cultural determinants are found to be broadly similar for GTAs and STAs, association with economic size of partners, factor endowments and services cost shares in GDP comes through more strongly for goods-only agreements.

First published online: 19 August 2020 Controlling for endogeneity-induced biases and accounting for the source of heterogeneity may both matter for the proper empirical estimation of the effect of heterogeneous standards on trade. However, existing literature on the trade effects of heterogeneity in pesticides maximum residue levels (MRLs) does not directly address the problem of endogeneity in the standards-trade relationship. Using pesticides MRL data for 53 countries over 2005-14, we thus re-examine the trade effects of stricter (than partner) standards accounting for endogeneity using panel data methods. We find that the direction of the estimated trade effects gets reversed, thereby underlining the greater demand-enhancing effect of more stringent regulation. We also discuss why endogeneity may bias the estimates downwards. In another original contribution, we examine the standards-trade relationship by the direction of imposition of stricter standards for a large panel. Our results suggest that stricter standards do not impede trade, irrespective of who imposes them.

Published online: 17 February 2021 This paper presents new high-frequency data on trade policy changes targeting medical and food products since the beginning of the COVID-19 pandemic, documenting how countries used trade policy instruments in response to the health crisis on a week-by-week basis. The data set reveals a rapid increase in trade policy activism in February and March 2020 in tandem with the rise in COVID-19 cases but also uncovers extensive heterogeneity across countries in both their use of trade policy and the types of measures used. Some countries acted to restrict exports and facilitate imports, others targeted only one of these margins, and many did not use trade policy at all. The observed heterogeneity suggests numerous research questions on the drivers of trade policy responses to COVID-19, on the effects of these measures on trade and prices of critical products, and on the role of trade agreements in influencing the use of trade policy.

Published online: 24 September 2022 Despite the importance of services trade and “servicification” of economic activity, “Mode 4” accounted for only 2.9% of total services trade in 2017. While existing literature has estimated services trade costs, effects of barriers to Mode 4 trade have not yet been quantified. We contribute by constructing a composite index to quantify regulatory barriers to the movement of service suppliers, using qualitative information embedded in OECD data on services trade restrictions, and examining its relationship with services trade. Structural gravity estimates suggest that a one standard deviation rise in Mode 4 restrictiveness reduces bilateral services exports by 8%; the adverse effects are even larger for intermediate services exports. Results using aggregate data show that the constructed index is negatively correlated with services imports delivered non-digitally alluding to complementarities between modes of supply and cross-modal “effects”. Moreover, there is considerable heterogeneity in the results across services sectors in both aggregate and bilateral analysis. This article was published Open Access with the support from the EUI Library through the CRUI - Springer Transformative Agreement (2020-2024)

First published:16 September 2019 This paper investigates the factors driving manufacturing growth accelerations in a sample of 134 developing countries over the period 1970 to 2014. We first identify growth acceleration episodes of manufacturing value added (MVA) by their year of initiation and according to a country's income classification. We then estimate a probit model to explain what factors predict these MVA growth accelerations. Our results show that human capital and institutions represent contextual factors that favor the growth of manufacturing, together with macroeconomic policies related to investment, and openness to foreign trade and capital. We also find that most of these factors not only foster episodic accelerations of industry, but they contribute as well to a sustained process of industrialization that characterized the process of economic growth of a few successful countries over the period 1970 to 2014. Government of Japan through the Development Cooperation Trust Fund

Given the importance of services for economic activity in general and the salience of reducing service link costs for overcoming the economic and health challenges emanating from COVID-19, we examine the effect of the pandemic on services trade in the original group of ASEAN+6 countries that began negotiating the RCEP agreement. Stylised facts show that ASEAN+6 commercial services' exports and imports declined by 19.7% and 22.1%, respectively, on a YoY basis during 2020, with considerable heterogeneity across countries and sectors. ASEAN+6 announced greenfield investment in services also fell by a third during 2020, with the intra-ASEAN+6 decline being more severe at 41.8%. Meanwhile, structural gravity estimates suggest that the stringency of containment measures imposed in the wake of the pandemic may have reduced ASEAN+6 services exports by 61.6%.

First published:17 April 2019 This article offers novel insights into the modal and sectoral characteristics of trade in services that may exert an influence on the redistributive properties of liberalization in service trade and investment. It uses descriptive statistics, and econometric analysis to examine the labour market effects of unilateral service regimes, drawing on data from the OECD's Services Trade Restrictiveness Index for a sample of 44 OECD and non-OECD countries and 22 sectors over the period 2014-16. Whereas the findings suggest that the unilateral liberalization of services is not associated with net labour displacement effects, the authors call for empirical evidence, based on improved data sources, for a fuller understanding of this issue.

Este estudio de caracter exploratorio se basa en estadisticos descriptivos y en un analisis econometrico para examinar los efectos en el empleo de los regimenes unilaterales aplicados al comercio de servicios, con datos del Indice de Restriccion del Comercio de Servicios de la OCDE para 44 paises miembros y no miembros de la OCDE y 22 subsectores durante el periodo 2014-2016. Los resultados sugieren que la liberalizacion unilateral de los servicios no esta asociada a efectos netos de desplazamiento de la mano de obra. Sin embargo, seran necesarias fuentes de datos mejoradas para una comprension mas completa de esta cuestion.

China's Belt and Road Initiative (BRI) is a mechanism through which countries can upgrade connectivity-related infrastructure, including through cross-border projects, complementing traditional sources of finance. An overarching goal of the BRI is to reduce trade costs between China and partner countries, in part by helping to integrate regional markets. The large-scale borrowing associated with BRI projects has given rise to potential debt servicing and sustainability concerns. The rate of return of BRI regional infrastructure projects depends in part on the integrity of public procurement processes and realizing value-for-money objectives. To date BRI projects financed by Chinese institutions have been largely awarded to Chinese companies. Enhancing transparency of BRI procurement processes and international cooperation among countries participating in the BRI would help achieve value for money goals and support the integration of BRI countries.

Published online: 08 February 2021 Existing research generally finds weak positive effects of aid for trade (AfT) on aggregate merchandise trade of recipients once endogeneity in the AfT-trade relationship is accounted for. In this paper, we confirm weak findings for both aggregate merchandise and services trade of recipients, using GMM and IV estimations. Moreover, estimates lose statistical significance if non-AfT explanatory variables are treated as endogenous in estimation suggesting identification issues may not have been adequately addressed in extant work. We then examine an alternative proposition: that effects of AfT and different categories of AfT may be observed along the conditional distributions of exports and imports. Our findings confirm this hypothesis. AfT allocated to economic infrastructure, productive capacity building in services and trade policies and regulation is more effective for smaller trading economies, especially in services. We also observe considerable heterogeneity in the trade effects of AfT allocated to individual services sectors, indicating the importance of country-specific diagnostics in targeting AfT allocation.

This International Trade Working Paper examines the effect of the pandemic on the services trade of Commonwealth countries using both descriptive statistics and qualitative analysis. It finds that at least 40 per cent of Commonwealth services exports and more than 45 per cent of its imports could be compromised by COVID-19. Caribbean and Pacific Commonwealth countries are likely to be most severely impacted, while African and Asian Commonwealth countries are likely to be less vulnerable. Delayed recovery in services trade will affect both services and manufacturing sector activity in Commonwealth member countries, given their increasing ‘servicification’ of economic activity and exports.

This paper examines the effect of Commonwealth membership on greenfield investment, using bilateral data in a structural gravity model. Estimates suggest that Commonwealth membership is associated with 19 per cent more greenfield investment, but this study finds this is effect to be only weakly significant. It finds that the presence of common legal origins is a statistically significant determinant of both intra- and extra-Commonwealth greenfield investment, along with membership of goods trade agreements and common colonial antecedents for the latter: meanwhile, geography has a negative bearing on both. No single factor consistently explains the Commonwealth's greenfield investment into the rest of the world, though the effect of geography and bilateral investment treaties is negative.

The growing importance of services trade for countries across the world is well-documented in the services and trade literatures. At the same time, regulatory and administrative barriers to the movement of service suppliers to deliver services internationally have resulted in very low shares of"Mode 4"trade in total services trade. Against this background, this paper conceptualizes an agenda for trade facilitation in services as it would apply to the movement of natural persons. It also provides descriptive statistical evidence from the Organisation for Economic Co-operation and Development's Services Trade Restrictiveness Index database. The paper differentiates between regulatory measures that may improve transparency or facilitate access for service providers and those measures that impede Mode 4 trade as well as the administrative, financial, and economic costs of compliance with such measures.

Using difference-in-difference analysis, we examine how trade in GVC-based products may have responded to two previous health shocks - SARS and MERS. Our identification strategy exploits differences in the time period of severe incidence of each disease and in the coverage of trading partners that were more adversely affected than others. While we find no evidence for “reshoring” in response to each of these virus outbreaks, there is some evidence for “near-shoring” in the stylized facts on SARS. Empirical analysis also suggests geographical diversification of value chains - import shares from China and UAE declined during each outbreak, while MERS was accompanied by a fall in import concentration; these effects persisted over time for SARS suggesting that the associated value-chains were not resilient to these health shocks. The findings are observed at both the intensive (import value) and extensive (number of HS-6 products and export destinations) margins. The SARS effects are driven by lower-middle-income importers that were more integrated in GVCs, received more investment, were more competitive and were more reliant on the severely affected partners. We expect similar disruptions to GVC-trade from COVID-19, especially diversification away from China.

This paper presents new high frequency data on trade policy changes targeting medical and food products since the beginning of the COVID-19 pandemic, documenting how countries used trade policy instruments in response to the health crisis on a week-by-week basis. The dataset reveals a rapid increase in trade policy activism in February and March 2020 in tandem with the rise in COVID-19 cases, but also uncovers extensive heterogeneity across countries in both their use of trade policy and the types of measures used. Some countries acted to restrict exports and facilitate imports, others targeted only one of these margins, and many did not use trade policy at all. The observed heterogeneity suggests numerous research questions on the drivers of trade policy responses to COVID-19, on the effects of these measures on trade and prices of critical products, and on the role of trade agreements in influencing the use of trade policy.

Existing research generally finds weak positive effects of aid for trade (AfT) on aggregate merchandise trade of recipients once endogeneity in the AfT-trade relationship is accounted for. In this paper, we confirm weak findings for both aggregate merchandise and services trade of recipients, using GMM and IV estimations. Moreover, estimates lose statistical significance if non-AfT explanatory variables are treated as endogenous in estimation suggesting identification issues may not have been adequately addressed in extant work. We then examine an alternative proposition: that effects of AfT and different categories of AfT may be observed along the conditional distributions of exports and imports. Our findings confirm this hypothesis. AfT allocated to economic infrastructure, productive capacity building in services and trade policies and regulation is more effective for smaller trading economies, especially in services. We also observe considerable heterogeneity in the trade effects of AfT allocated to individual services sectors, indicating the importance of country-specific diagnostics in targeting AfT allocation.

Using difference-in-difference analysis in a gravity model, we examine the response of GVC-trade to two previous health shocks, SARS and MERS. Our baseline estimates suggest a decline in GVC-trade, both gross and value-added, from SARS, emanating from supply and demand shocks, though a similar effect is not observed for MERS. There is some evidence for “reshoring” and “near-shoring” in the stylized facts on SARS while empirical analysis also suggests geographical diversification of value chains due to MERS and their non-resilience to SARS in particular. The findings are observed at both the intensive (value) and extensive (number of products) margins and for both intermediate and final goods. The SARS effects are driven by non-OECD countries that were also more integrated and downstream in GVCs, and by products that were less capital- and technology-intensive. We expect similar disruptions to GVC-trade from COVID-19.

The importance of services trade and “servicification” of economic activity has grown in countries overtime. However, regulatory and administrative barriers to the movement of service suppliers have meant that “Mode 4” accounted for only 2.1% of total services trade in 2005 and 2.9% in 2017. While trade costs for services have been computed in the literature, barriers specific to Mode 4 services trade have not yet been quantified. We contribute by constructing an index to quantify regulatory barriers to the movement of service suppliers, using qualitative information embedded in OECD data on services trade restrictions, and estimate its effects on the four “modes” of services supply. Results show that the Mode 4 restrictiveness index is negatively correlated with services imports in three of the four modes of services delivery that require proximity between buyers and sellers. These findings underline the need for countries to refrain from imposing prohibitive restrictions on service suppliers in the wake of Covid-19.

First published online:26 November 2019 The empirical literature on aid for trade (AfT) mainly considers its effects on merchandise trade and investment. In this paper, we provide an in-depth analysis of the relationship between AfT and trade in services using both aggregate and bilateral data. We find a statistically weak effect of AfT on both goods and services trade in our aggregate analysis once we account for endogeneity in the AfT-trade relationship. In contrast, the bilateral analysis suggests that AfT, in particular that allocated to services activities, especially economic infrastructure, has a positive effect on recipients' merchandise exports to donor countries. This novel finding is robust across different lag structures and provides evidence of complementarities between services AfT and goods trade. European Union's Horizon 2020 research and innovation programme

This paper summarises the principal findings of the data collection efforts by the independent Global Trade Alert team on public procurement policy changes undertaken since November 2008. A particular focus is on policy changes that alter the relative treatment of domestic firms vis - a - vis foreign rivals. The ultimate goal of this paper i s to inform other, ongoing data collection efforts, public policy deliberations on crisis - era pol icy response in particular as th ey relate to state purchasing policy, and discussions on the relative merits of strengthening disciplines on public procurement matters in trade agreements.

Literature examining WTO+ commitments in services trade agreements (STAs) has not considered the role of services regulation. We bridge this gap using a sample of 15 South/South-East Asian countries, given the burgeoning trend of Asian economies towards services preferentialism and the largely WTO+ nature of their preferential services commitments. Our empirical findings suggest that Asian trading dyads with regulatory frameworks that are more similar and more trade restrictive tend to undertake higher levels of WTO+ commitments in their STAs. There is also evidence in our results, including by modes of supply, for WTO+ commitments in Asian STAs being driven by goods trade complementarities, alluding to supply chain dynamics in the region. Such results support the hypothesis that the heightened “servicification” of production generates a demand to lower services input costs arising from regulatory incidence and heterogeneity.

China’s Belt and Road Initiative (BRI) is a mechanism through which countries can upgrade connectivity-related infrastructure, including through cross-border projects, complementing traditional sources of finance. An overarching goal of the BRI is to reduce trade costs between China and partner countries, in part by helping to integrate regional markets. The large-scale borrowing associated with BRI projects has given rise to potential debt servicing and sustainability concerns. The rate of return of BRI regional infrastructure projects depends in part on the integrity of public procurement processes and realizing value for money objectives. To date BRI projects financed by Chinese institutions have been largely awarded to Chinese companies. In this paper, we discuss good practices and policy options to enhance transparency of BRI procurement processes and achieve value for money, including through international cooperation among countries participating in the BRI.

China’s “Belt and Road Initiative” (BRI) includes major infrastructure investment projects – roads, ports, railways – that aim to improve connectivity along a number of transport corridors spanning 71 countries. In this paper we find that notwithstanding the large scale of the initiative, relatively little systematic data exists on the practices being followed by the different, primarily Chinese, entities that finance BRI-related contracts and how firms are being selected to execute projects. The limited available data however indicate that Chinese companies account for the majority of BRI-procurement, even in light of their high share of total infrastructure projects in developing countries. We discuss the limited publicly available evidence on the procurement of BRI projects and specific dimensions of the institutional features pertaining to public procurement regimes of BRI countries, including China, both as embedded in domestic regulations and in international agreements that countries may be part of. Finally, we discuss the efforts that BRI countries can take -individually or as part of an international agreement- to improve procurement practices for BRI projects.

Recent work on labour market effects of globalization has generated both academic and populist interests. However, this work has focussed exclusively on the manufacturing sector. Moreover, general equilibrium effects of globalization have received little attention. This study contributes to filling both these gaps by examining the general equilibrium effects of external exposure on the labor market in Switzerland. We exploit exogenous exchange rate movements to identify trade-induced shocks across all sectors of the Swiss economy and transpose industry-level exposure to the municipal level, using detailed employment data on the entirety of Swiss firms. We find strong evidence for three channels of employment effects of currency appreciation - negative employment growth induced by increasing export uncompetitiveness and higher import competition, and positive employment growth induced by cheaper availability of foreign inputs. The combined average effect of the three channels on employment is found to be negative in our preferred results, with significant heterogeneity across municipalities.

Since about a decade, we have seen a surge in interest as well as in the use of services preferentialism and unilateral services regulations. This paper provides an economic explanation of services regulation and services preferentialism, including their interaction. The paper derives hypotheses based on a numerical welfare analysis where tradable services are treated as a secondary (produced) input in the production of tradable goods. Apart from hypotheses on the emergence of services trade agreements (STAs), the paper derives ones on the stringency of unilateral services provision- a general services trade restrictiveness. For instance, one of the hypotheses is that services trade restrictiveness is endogenous, and it is aligned with economic fundamentals. Another hypothesis suggests that countries are more likely to participate in STAs if the partners' general, unilateral services trade restrictiveness is more similar to theirs. These and other hypotheses are supported by data.

The extent of discrimination in government procurement and its impact on economic efficiency has attracted both theoretical and analytical work, but little econometric evidence. We bridge this gap by building a new sector-level dataset on domestic and foreign purchases by Japanese and Swiss governments over 1990–2003 to undertake “new” econometric analyses. Unlike previous work, we explain home-bias using variables inspired by the political economy, trade-macroeconomic and procurement literatures. We also provide “new” econometric evidence for previous theoretical predictions. Our results reveal the importance of domestic-foreign productivity differences in governments’ cross-border purchases and also support previous theoretical predictions. However, Membership of the World Trade Organizations's Agreement on Government Procurement is not found to increase market access.

This article addresses a potential role that tariff policy can play in encouraging countries to take part in a multilateral effort to mitigate climate change: it complements discussions on border tax adjustment which in law is limited to domestic taxation. It assesses whether increasing tariffs on products from polluting industries amounts to a violation of World Trade Organization (WTO) rules and whether protectionism in this case can be differentiated from genuine environmental concerns. It argues that while lowering tariffs on environmental goods may serve as a carrot to promote dissemination of cleaner technologies, tariff deconsolidation is a legitimate stick to encourage polluting countries to move towards an international climate agreement. The article further explores this view by undertaking a partial equilibrium analysis to examine the impact of a unilateral 5% tariff increase on the most carbon-intensive imports from countries not committed to climate polices. Our results, however, suggest that plurilateral action would be more effective than countries pursuing tariff policy in isolation, with the former leading to an average 1.4% net reduction in carbon-intensive imports from a 5% increase in their tariffs.

The empirical literature on aid for trade (AfT) mainly considers its effects on merchandise trade and investment. In this paper we examine the relationship between AfT and trade in services as well as trade in goods over 2002-2015 in both aggregate and bilateral analysis. We observe complementarities between services AfT and merchandise trade, reflecting the fact that most AfT is aid allocated to services sectors that are important inputs into production and trade in goods. The analysis suggests that most categories of AfT are not associated with greater trade in services. Only AfT directed towards economic infrastructure, notably transport and energy, is robustly associated with higher volumes of services trade. Given the importance of services for many low-income countries and the growing potential to harness new technologies to expand services trade, the results suggest a greater focus on disaggregated analysis of different categories of AfT to better understand how AfT can do more to support trade in services. Of particular note is that AfT to bolster productive capacity is strongly associated with greater merchandise trade whereas no such relationship is observed for services trade, suggesting AfT efforts do more to target capacity weaknesses that constrain growth in services trade.

India's success story in services is well documented at the national level, but similar literature does not exist for India's states. We bridge this gap by studying India's services growth at the sub-national level. Contrary to earlier commentary on the unsustainability of India's services growth process, our findings suggest that per capita services may be converging across Indian states (this is not true of per capita income); unlike previous studies on India, evidence is provided using both traditional sigma and beta-convergence measures and advanced panel unit root tests from the recent econometrics literature. A disaggregated analysis of services sectors reveals convergence in railways, public administration and financial services. Finally, a Jensen and Kletzer approach to determine tradability and an additional original methodology provide evidence of most services being ‘traded’ across India's states, suggesting the role of such trade in the services growth story even at the sub-national level.

The proliferation of preferential trade agreements in services (STAs) and improved availability of data on bilateral services trade flows has resulted in a growing literature on the theoretical and empirical assessment of services trade effects. However, this literature has not considered the different types of provisions found in STAs while estimating the trade effects. We address this issue taking into account the heterogeneity of provisions found in STAs using the Design of Trade Agreements (DESTA) database (Dur et.al, 2014). Our results suggest that not accounting for this heterogeneity lends an upward bias to the magnitudes of the estimated trade effects. This finding is robust to estimations involving only positive and those incorporating zero trade flows as well as to sample coverage (all, EU, non-EU, North-North, North-South).

This paper summarises the principal findings of the data collection efforts by the independent Global Trade Alert team on public procurement policy changes undertaken since November 2008. A particular focus is on policy changes that alter the relative treatment of domestic firms vis-à-vis foreign rivals. The ultimate goal of this paper is to inform other, ongoing data collection efforts, public policy deliberations on crisis-era policy response in particular as they relate to state purchasing policy, and discussions on the relative merits of strengthening disciplines on public procurement matters in trade agreements.

This study assembles data on bilateral goods and services trade flows for 242 countries over the period 1995–2010 and uses both descriptive statistics and sophisticated econometric techniques to understand the nature and structure of intra-Commonwealth trade, its determinants, and the trade effect of being a part of the Commonwealth. The existing econometric studies examining the trade effect of Commonwealth membership do not account for the presence of zero trade flows between bilateral trading partners, unobserved heterogeneity, endogeneity of preferential trading agreements (PTA) membership and multilateral resistance in estimation, leading to biased estimates. Our analyses are an improvement on all these fronts. The existing econometric studies only look at trade in merchandise goods, while we also include services trade in our analyses. We also assemble a much larger sample of bilateral trading partners (242 countries each) than in the existing literature. Commonwealth membership is found to increase goods exports by 14.5–33.2 per cent and services exports by 42.8 per cent in our results, ceteris paribus and on average.