Research on the spatial aspects of economic activity has flourished over the past decade due to the emergence of new theory, new data, and an intense interest on the part of policymakers, especially ...in Europe but increasingly in North America and elsewhere as well. However, these efforts--collectively known as the "new economic geography"--have devoted little attention to the policy implications of the new theory.
When the General Agreement on Tariffs and Trade was signed by 23 nations in 1947, the goal was to establish a rules-based world trading system and to facilitate mutually advantageous trade ...liberalization. As the GATT evolved over time and morphed into the World Trade Organization in 1993, both goals have largely been achieved. The WTO presides over a rule-based trading system based on norms that are almost universally accepted and respected by its 163 members. Tariffs today are below 5 percent on most trade, and zero for a very large share of imports. Despite its manifest success, the WTO is widely regarded as suffering from a deep malaise. The main reason is that the latest WTO negotiation, the Doha Round, has staggered between failures, flops, and false dawns since it was launched in 2001. But the Doha logjam has not inhibited tariff liberalization—far from it. During the last 15 years, most WTO members have massively lowered barriers to trade, investment, and services bilaterally, regionally, and unilaterally—indeed, everywhere except through the WTO. For today's offshoring-linked international commerce, the trade rules that matter are less about tariffs and more about protection of investments and intellectual property, along with legal and regulatory steps to assure that the two-way flows of goods, services, investment, and people will not be impeded. It’s possible to imagine a hypothetical WTO that would incorporate these rules. But the most likely outcome for the future governance of international trade is a two-pillar structure in which the WTO continues to govern with its 1994-era rules while the new rules for international production networks are set by a decentralized process of sometimes overlapping and inconsistent mega-regional agreements.
The trade associated with international production networks – supply‐chain trade for short – is associated with some of the most momentous global economic changes in the last 100 years. It has ...transformative implications for the world economy. This paper presents a portrait of the global pattern of supply‐chain trade and how it has evolved since 1995.
Digital technology is reshaping workplaces by enabling spatial separation of offices, known as telework, or remote intelligence (RI) and by facilitating automation of service sector tasks via ...artificial intelligence (AI). This paper is the first attempt to empirically investigate whether AI and RI are complements or substitutes in the service sector. It uses a worker‐level panel of surveys collected from around 10,000 workers from pre‐COVID‐19 pandemic to late 2022. We find preliminary evidence that suggests that AI and RI are complements rather than substitutes. The evidence comes first from the positive correlation of investments in AI‐promoting and RI‐promoting software at the firm and worker level, and second from the positive correlation of workers' expectations regarding telework and software automation. The evidence is far from definitive but suggests that the complement‐substitution question is a fruitful line for future research.
Bilateral, product-level data exhibit a number of strong patterns that can be used to evaluate international trade theories, notably the spatial incidence of "export zeros" (correlated with distance ...and importer size), and of export unit values (positively related to distance). We show that leading theoretical trade models fail to explain at least some of these facts, and propose a variant of the Melitz model that can account for all the facts. In our model, high quality firms are the most competitive, with heterogeneous quality increasing with firms' heterogeneous cost.
This paper addresses the final steps to global free trade – what they might look like, what sort of political economy forces might drive them, and what the WTO might do to help. Two facts form the ...point of departure: (1) Regionalism is here to stay; world trade is regulated by a motley assortment of unilateral, bilateral and multilateral trade agreements; (2) this motley assortment is not the best way to organise world trade. Moving to global duty‐free trade will require a multilateralisation of regionalism. This paper presents the political economy logic of trade liberalisation and uses it to structure a narrative of world trade liberalisation since 1947. The logic is then used to project the world tariff map in 2010, arguing that the pattern will be marked by fractals – fuzzy, leaky trade blocs made up of fuzzy, leaky sub‐blocs (fuzzy since the proliferation of FTAs makes it impossible to draw sharp lines around the Big‐3 trade blocs, and leaky since some FTAs create free trade ‘canals’ linking the Big‐3 blocs). The paper then presents a novel political economy mechanism – spaghetti bowls as building blocs – whereby offshoring creates a force that encourages the multilateralisation of regionalism. Finally, the paper suggests three things the WTO might do to help multilateralise regionalism.
Are Free Trade Agreements contagious? Baldwin, Richard; Jaimovich, Dany
Journal of international economics,
09/2012, Letnik:
88, Številka:
1
Journal Article
Recenzirano
Odprti dostop
This paper tests the hypothesis that the domino-like spread of regionalism is partly driven by ‘defensive’ FTAs, i.e. FTAs signed to reduce discrimination created by third-nation FTAs. A theory-based ...measure is used to test contagion against alternative determinants of regionalism. The main finding is that contagion is present in our data and robust to various econometric specifications, samples, and inclusions of various economic and political controls including the Baier–Bergstrand controls. Some support is found for political theories that stress ‘political distance’ but none for those that stress ‘slow multilateralism’.
A dramatic disordering of global manufacturing has been seen in recent years. Production processes have fragmented, and many production stages have been offshored to developing nations. Organization ...of this new global supply chain has evolved into what are often called global value chains (GVCs). Less studied, but no less important, is the shift in the sectoral source of value added in manufactured exports. This phenomenon, often called the “smile curve,” involves a swing in the share of value added in manufactured exports that is generated in the manufacturing sector itself instead of, for example, in the pre‐ and post‐fabrication stages. Our paper presents new evidence quantifying the magnitude of the smile curve notion. Using international input–output databases, we find evidence supporting the smile curve at the aggregate level. Specifically, for almost all exporting sectors and nations, we find that the value added to exports has shifted decisively from the manufacturing sector to service sectors. We also find that developing countries reduced their own‐sourcing service value‐added share, while developed countries maintained their relatively high levels of own‐sourcing service value‐added share.
Résumé
Courbe du sourire : évolution des sources de valeur ajoutée dans le secteur manufacturier. Depuis quelques années, nous observons une réorganisation importante de l'outil industriel mondial. Les processus de production se sont fragmentés, et de nombreuses étapes ont été délocalisées vers des nations en voie de développement. L'organisation de cette nouvelle chaîne logistique mondiale s'est transformée en ce que l'on appelle fréquemment des « chaînes de valeur mondiale ». Un phénomène moins étudié, mais tout aussi important, réside dans la mutation de l'origine sectorielle de la valeur ajoutée des exportations de produits manufacturés. Ce phénomène, souvent appelé « courbe du sourire », résulte d'un glissement de la part de la valeur ajoutée des exportations de produits manufacturés, engendrée par le secteur manufacturier lui‐même, vers les étapes en amont et en aval du processus de production. Notre article présente de nouveaux éléments pour mesurer l'ampleur de cette « courbe du sourire ». D'un point de vue global, et en nous appuyant sur des bases de données entrées‐sorties internationales, nous avons découvert des éléments corroborant la théorie de la courbe du sourire. D'un point de vue plus spécifique, et pour presque tous les secteurs d'exportations de toutes les nations confondues, nous constatons que la valeur ajoutée des exportations s'est très nettement déplacée du secteur manufacturier vers le secteur des services. Nous constatons également qu'en matière de fourniture nationale de services, les pays en voie de développement ont réduit leur part de valeur ajoutée, tandis que les pays développés ont maintenu des niveaux de valeur ajoutée assez élevés.
From 1820 to 1990 the share of world income going to today's wealthy nations soared from 20% to 70%. That share has recently plummeted. Richard Baldwin shows how the combination of high tech with low ...wages propelled industrialization in developing nations, deindustrialization in developed nations, and a commodity supercycle that is petering out.
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