Trade Flows Research Articles

The European Energy Crisis and the Consequences for the Global Natural Gas Market

The Russian invasion of Ukraine in February 2022 led to severe disruptions in the European gas market with significant repercussions on a global scale. The conflict caused a surge in energy prices, a major reshuffling of global natural gas flows, and a shift in the policy-makers’ agendas toward energy supply security. This paper provides a comprehensive review of the developments in the global gas market in the aftermath of the war in Ukraine, focusing in particular on the European gas market and on global LNG trade flows. We first review the characteristics of the gas market in terms of both pricing benchmarks and contractual terms. Next, we analyze the changes to LNG and natural gas production, consumption, and trade flows throughout the European energy crisis. Finally, we review the main policy response to the energy crisis and present some considerations on the gas market outlook. JEL Classification: L95, P28, Q35

Territory flows and trade flows between 1870 and 2008

Countries gain and lose territories over time, generating territory flows that represent the transfer of territorial sovereignty. Countries also export and import goods, creating trade flows that represent the transfer of merchandise ownership. We find a substitution between these two international flows during the years 1870 and 2008; that is, country pairs with greater trade flows have smaller territory flows. This indicates how international trade enhances international security: reciprocal goods transactions discourage irreciprocal territorial exchanges.

The Impact of the Russia-Ukraine Conflict on Global Economic Stability and Political Security

The conflict between Russia and Ukraine has emerged as a significant geopolitical tension, with far-reaching implications for global stability and security. This paper intends to study the impact of the war on the worlds and regional economic development and political stability, and achieve some findings that may trigger further policy considerations in mitigating challenges and issues imposed by the war. Through literature reviews and comparison analysis, the findings reveal economic, political, and security consequences of the conflict. The disruption of trade flows, economic sanctions, and uncertainty have impacted both Russia and Ukraine, as well as the wider region and the world. Energy security concerns and shifts in military alliances have added to the complexity of the conflict. The expansion of NATO and increased rivalries between Russia and Western countries have further heightened tensions. Based on the findings, the paper concludes that the Russia-Ukraine conflict poses a significant threat to global economic stability and political security. It emphasizes the need for a multilateral approach to address the conflict and promote peace and stability in the region. Ceasefire agreements, humanitarian assistance, and reconstruction efforts are crucial steps towards long-term peace and development. The paper highlights the importance of prioritizing diplomatic solutions over short-term gains from the conflict. In summary, this paper intends to explore the implications of the Russia-Ukraine conflict on global stability and security, with findings that underscore the need for international cooperation and concerted efforts to mitigate the consequences of the conflict and foster a peaceful resolution.

Development of russian-mongolian foreign trade relations in food industry

In the context of shifting trade emphasis to the East, Russia attaches great importance to the development of cooperation with the Asia-Pacific countries, where Mongolia is a key partner. The purpose of the article is to reveal global trade trends and identify key areas for the development of Russian-Mongolian foreign trade relations in the food industry. Having conducted a comprehensive analysis of the economic and political factors shaping bilateral trade, the article provides insights into the challenges and opportunities for expanding cooperation in the food sector. Global trend in the food market is that China a leader. China accounts for the largest share (35%) in Russia turnover also. Mongolian trade ties with Russia are becoming closer year by year. This was demonstrated by the official visit of Russian President Vladimir Putin to Mongolia in September 2024. We can observe that Mongolia closely cooperates with such a region of Russia as Buryatia. Through a detailed examination of trade patterns, regulatory frameworks, and market trends, the study uncovers areas of untapped potential and identifies barriers to optimal trade flow. Drawing on industry best practices and case studies from other global food trade partnerships, the paper offers a series of practical recommendations for stakeholders. These recommendations cover infrastructure development, promotion of cultural exchange, harmonization of legal and regulatory frameworks, absorption and use of technology to create a more robust and sustainable trade ecosystem.

Correction to: Extended Producer Responsibility and Trade Flows in Waste: The Case of Batteries

Correction to: Extended Producer Responsibility and Trade Flows in Waste: The Case of Batteries

Russian-Croatian trade relations in current environment of sanctions

Aim. To assess the impact of Western European sanctions on Russian-Croatian trade relations in 2020-2023 and Croatian tourism sector.Objectives. To analyze the dynamics of key indicators of trade between the Russian Federation (RF) and Croatia under sanctions; to identify the main commodity groups in the structure of their trade; to determine the importance of Russia for the tourism sector of the Republic of Croatia.Methods. The author used such research methods as statistical analysis, generalization, description and graphical modeling.Results. The results obtained in the process of the analysis indicate a sharp decline in the volume of mutual trade of the Russian Federation with Croatia in the conditions of numerous trade restrictions from the European Union. In 2023, the commodity structure of Russian exports to the Republic of Croatia has changed significantly, the basis of Russian exports is now made up of finished goods and goods of the chemical industry. The flow of tourists from Russia occupies an insignificant share in the total tourist flow of Croatia and has little impact on the tourism sector of the Republic. Under the conditions of the sanctions regime, Croatian companies have begun to cease economic activities in the territory of the Russian Federation.Conclusions. The current situation on the world stage has determined the dynamism of mutual trade interaction between Russia and Croatia. Thus, the sanctions imposed by the countries of the collective West have a negative impact on Russian-Croatian relations both in trade and tourism. The tendencies of reduction of mutual trade and tourist flows have a long-term character and negative dynamics of interaction between the two countries. Normalization of trade relations between Russia and Croatia in the geopolitical situation today seems unlikely.

Trade Policy Ppace, Aid for Trade and, Intra-African and External African Manufactured Exports

Boosting intra-African manufactured exports is a critical objective of African leaders. The present analysis examines whether trade policy space and Aid for Trade (AfT) flows can contribute to achieving this objective. The analysis covers an unbalanced sample of 36 African countries over the period from 2004 to 2020, and uses estimators that allow obtaining the short-term (i.e., within-country effect) and long-term (i.e., between-country effect) effects of each regressor. The estimators are the combination of the feasible generalized least squares estimator on the one hand, and the Seemingly Unrelated Regression on the other hand, in the context of a hybrid model. The findings indicate that both trade policy space and AfT flows can help promote - including in a complementary way - African manufactured exports, especially intra-African manufactured exports. In this regard, trade policy space and AfT flows are instrumental in meeting African leaders’ objectives of promoting intra-African trade. The implications of the findings are discussed.

Competition or complementarity? Assessing the interaction effects of RCEP and CPTPP on agricultural and non-agricultural trade flows

Competition or complementarity? Assessing the interaction effects of RCEP and CPTPP on agricultural and non-agricultural trade flows

Celebrating the research career of Douglas Nelson

AbstractThis special issue celebrates Prof. Douglas Nelson's body of research. It comprises articles by many of his co‐authors, colleagues and students. They address two broad themes: the interplay between trade and investment flows and employment and equity on the one hand and the interaction between trade‐related policies and patterns of trade and investment on the other.

Population structure and bilateral trade flows in ECOWAS countries

Population structure and bilateral trade flows in ECOWAS countries

Development of the global competitiveness of Russian regions: the concept and configuration of the "smart" complementarity

Purpose: is to work out the scientifically sound theoretical and methodical framework for the «smart» complementarity of trade flows, aimed at selecting and substantiating potential commodity niches in trade of Russian regions with foreign countries.Methods: the general methodological basis of the study is the critical analysis of the scientific literature that forms the theoretical and methodological basis for the global competitiveness of individual regions of a country presented in the theories of regional and spatial economy. The study has been carried out by methods of system, structural-logical and abstract-logical analysis.Results: the research resulted in some fundamental scientific novelties such as: the scientifically grounded theoretical concept of “smart” complementarity, which makes it possible to identify the presence of specific foreign trade niches in a geographical (country, region) and commodity contexts, based on an analysis of the complementarity of trade flows at the level of a Russian region and a foreign country, and assessment of the global competitiveness of the regional economy, as well as “fine” criteria that determine the activity of participants in foreign economic activity. The applied results included a specific configuration of "smart" complementarity – the algorithm for determining promising economic specializations of the region, allowing to combine trade statistics of a foreign country with data regional statistics, indicating the presence of foreign trade potential, taking into account regional economic specializations. The developed algorithm is intended for the use in an information and analytical system to support management decisions in the field of foreign economic activity of the region.Conclusions and Relevance: the concept and configuration of «smart» complementarity in their practical implementation in the form of an information and analytical system are proposed in the article to provide the participants of foreign economic activity with data on promising export groups for selected countries in Asia, Africa and Latin America. This approach allows moving the «center of gravity» of building trade and economic relations with foreign countries from the federal to the regional level.

Assessing the impact of the European Union-Vietnam free trade agreement on labor market and employment in Vietnam

PurposeThis study investigates the impact of the European Union-Vietnam Free Trade Agreement (EVFTA) on Vietnam’s labor market and employment outcomes, considering the potential distributional consequences across various groups of workers and regions.Design/methodology/approachA comprehensive quantitative framework is employed, combining the gravity model of trade to estimate the EVFTA’s effects on trade flows, the CISAF_M1 model to simulate sectoral employment impacts and econometric models to analyze the effects on wages and decent work. The analysis draws upon a rich dataset spanning the period before and after the EVFTA’s implementation.FindingsThe EVFTA has significantly boosted Vietnam’s exports to the EU, leading to substantial job creation in labor-intensive sectors such as textiles, apparel and footwear. The agreement has also contributed to wage growth and improved access to social insurance for workers in export-oriented industries. However, the impact on other aspects of job quality is less clear. The distributional analysis reveals that the EVFTA’s employment effects have been relatively balanced across gender but have favored younger and less skilled workers as well as those in rural areas.Originality/valueThis study provides a comprehensive and nuanced assessment of the EVFTA’s impact on Vietnam’s labor market, addressing a gap in the literature on the employment effects of new-generation free trade agreements in developing countries. The findings highlight the importance of considering distributional aspects when evaluating the socioeconomic implications of trade liberalization and offer valuable insights for policymakers aiming to promote inclusive growth in the context of deepening international economic integration.Peer reviewThe peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-03-2024-0236

Resolving complexity: Material flow analysis of a national wood flow system integrating the versatility of wood

AbstractA systemic understanding of the use of wood resources is required to defossilize society and promote bio‐based developments. This study provides a novel approach to represent a comprehensive material flow analysis (MFA) spanning the entire wood value chain; encompassing wood harvest to products, use in society, collection, reuse, recycle, energy generation, and trade. By recognizing wood as a complex material, with changing properties throughout its lifespan, we developed a method where we employed a color‐coded system for processes (27 boxes) and 110 flows to symbolize distinct life stages and the dynamic characteristics, including 23 different trade flows. The wood processes and flows are categorized (11 categories) into different wood types (e.g., softwood and hardwood) and harmonized to include all available data on each single step of the wood life cycle, improving data traceability and visualization, and allowing for replicable analysis with respective data noted for each process and flow. Methodological obstacles due to different units, uncertainty of flows, and discrepancies in data are addressed and adjustments proposed. Switzerland was chosen as a case study as a large number of various types of data were available to perform the analysis. The categorized and harmonized flows of woody biomass mapped and analyzed in the MFA provide a comprehensive basis to identify and recommend avenues to increase cascading use of wood as a carbon sink, by considering relevant aspects like the network of flows and processes, the quality and availability of the woody biomass, and the organization of the industry.

Possible Contours of Developing International Trade in the Perimeter of Global Value Chains under the Conditions of New Reality

The transition from hyperglobalization to slowgbalization that began after the 2008 global financial crisis has increased skepticism about the future of globalization and motivation to adjust the architecture of international trade. The subsequent series of global shocks – the aggravation of the US-Chinese trade relations, the COVID-19 pandemic, the events in Ukraine in 2022-2023 – aggravated the situation, exacerbating the problem of stopping the negative consequences of the disruption of supply chains of goods and services. The purpose of the article is to clarify the contours of restructuring and outlooks for the development of cross-border trade in the context of new reality: the imposition of global shocks, increasing geopolitical uncertainty and increasing fragmentation of the world economy. The object of the study is the international trade in the perimeter of global value chains (GVCs), whose share in world trade increased from 34.93% in 1995 to 45.24% in 2007 and, after falling to 43.49% in 2020, quickly recovered and increased to 49.38% in 2022. The analysis of quantitative and structural shifts in GVC-trade was based on the methodology of structuring exports in the categories of value added by A. Borin and M. Mancini. The prospects for GVC-trade were assessed using the methods of identifying the “risk iness” of goods in the export-import turnover of S. Majune and V. Stolzenburg, the frequency of cross-border bilateral interactions of S. Liang, the agglomeration to global trade of K. Baris. The characteristics of the four main options for strengthening the resistance of GVCs in modern conditions are given – reshoring, diversification, regionalization and replication. The working hypothesis has been confirmed: all 4 considered trajectories are not mutually exclusive and none of them presupposes complete autarky of the country. The main conclusion is made, according to which the negative events in the global economy of the last decade reconfigured trade flows, accelerated the processes of regionalization of the global economy, but did not become a trigger for deglobalization.

Evaluating accession decisions in customs unions: a dynamic machine learning approach

Previous work in the literature on regional economic integration has proposed the use of machine learning algorithms to evaluate the composition of customs unions, specifically, to estimate the degree to which customs unions match “natural markets” arising from trade flow data or appear to be driven by other factors such as political considerations. This paper expands upon the static approaches used in previous studies to develop a dynamic framework that allows to evaluate not only the composition of customs unions at a given point in time, but also changes in the composition over time resulting from accessions of new member states. We then apply the dynamic algorithm to evaluate the evolution of the global landscape of customs unions using data on bilateral trade flows of 200 countries from 1958 to 2018. A key finding is that there is considerable variation across different accession rounds of the European Union as to the extent to which these are aligned with the structure of “natural markets,” with some accession rounds following more strongly a commercial logic than others. Similar results are also found for other customs unions in the world, complementing the insights obtained from static analyses.

ANALYZING THE IMPACT OF FREIGHT TRANSPORT, GDP, AND PESO – BAHT EXCHANGE RATE ON PHILIPPINE TRADE IN DESICCATED COCONUT USING THE GRAVITY MODEL OF INTERNATIONAL TRADE

Objective: The objective of this study is to investigate the impact of freight transport, Gross Domestic Product (GDP), and the Peso-Baht exchange rate on the trade of desiccated coconut between the Philippines and Thailand, utilizing the Gravity Model of International Trade. The primary aim is to understand the significant factors influencing the trade flow and to identify areas for improvement in international competitiveness. Theoretical Framework: The research is grounded in international trade theories, focusing on the Gravity Model, which emphasizes the roles of economic mass and geographical distance in determining trade flows. Method: This study made use of the ADF - Unit Root Test, Durbin – Watson Test, Jarque – Bera Test, Variance Inflationary Factor (VIF), Chow Breakpoint Test, Ramsey’s RESET, and Johansen Cointegration, to test the relationship between variables. Results and Discussion: The results of this study highlights the positive, yet insignificant effect of Thailand, and Philippines’ GDP on the trade in desiccated coconut. The exchange rate, and freight transport negatively impacts the trade, however, it is notable that only freight transport having a significant effect. Research Implications: The study provides insights into the logistical and economic challenges in the desiccated coconut trade, suggesting that addressing transportation inefficiencies and stabilizing exchange rates could enhance trade performance. Originality/Value: This study contributes to the literature by applying an innovative approach to desiccated coconut, revealing how logistical inefficiencies and economic variables affect trade flows and influence policy decisions. This research aids in enhancing trade efficiency between agricultural-exporting nations like the Philippines and Thailand.

Targeted opportunities to mitigate water scarcity, inequality, and inequity embedded in international food trade for vulnerable countries

International food trade reshapes regional water scarcity through virtual water transfers (VWT), influencing water use equality and equity. This study examines eight populous yet impoverished countries in Africa and Asia, representing 30 % of the global poor population and contributing 20 % to agricultural VWT. Despite their significant role, these countries have been understudied due to a lack of data or attention. By integrating multiple datasets and models, we assess how international food trade impacts water scarcity, inequality, and inequity within these countries and identify the driving factors. Our findings reveal varied outcomes: Uganda and Ethiopia benefit from reduced water scarcity (∼40 % and ∼7 %) and improved equality and equity (∼90 % and ∼68 %), while India and Pakistan face exacerbated scarcity (∼4 % and ∼2 %) and widening inequality and inequity (∼4 % and ∼7 %). The effects are largely driven by critical trade flows of staple and cash crops like rice, sugar cane, and cotton among developing countries, propelled by comparative advantages in agricultural production, econo-geography, food demand, and water endowment between importers and exporters. Addressing these water challenges involves diversifying import channels to reduce reliance on detrimental trade flows, such as India's rice exports to Iran, while promoting beneficial flows, like Bangladesh's cotton imports from India, through trade agreements. Additionally, implementing pro-poor water policies (e.g., providing water subsidies) and water-saving techniques (e.g., adopting drip irrigation) is crucial, though caution is needed to avoid unintendedly marginalizing vulnerable groups through large-scale water projects.

Hydrocarbon trade deflection and supply‑chain trade restructuring under sanctions imposed during theRussia–Ukraine conflict

In response to international sanctions, Russia has restructured its hydrocarbon commerce through trade deflection, redirecting exports from sanctioning to non-sanctioning countries. Theresearch aimed to analyze hydrocarbon trade deflection under theRussia–Ukraine conflict within thecontext of theChina–Russia Strategic Partnership and BRICS, and to assess therestructuring of Russia’s crude oil and natural gas supply chains from 2020 to 2023. Two questions were addressed: Whether trade deflection shifted towards non-sanctioning countries, including China and other BRICS countries; whether Russia’s oil and gas supply chains were restructured towards these regions? Design incorporates themethod developed by theauthor which generates and utilizes an integrated database of Bill of Lading and export data to analyze supply-chain trade restructuring, identifying specific shifts in trade flows by product, country, and enterprises. Findings reflected that after sanctions were imposed in early 2022, Russian hydrocarbon exports to sanctioning countries declined sharply, while exports to non-sanctioning countries, particularly China and India, increased significantly. Findings demonstrate theeffectiveness of trade deflection as a strategic response to sanctions. This strategy has mitigated theadverse impacts on Russian oil and gas industry, with significant increases in exports to China and India. TheComprehensive Strategic Partnership with China has helped secure a substantial market for Russian crude oil and increased China’s energy security. This study enhances understanding of trade deflection mechanisms and provides a framework for analyzing theinterplay between international trade, geopolitical strategies, and economic resilience. Geopolitical alliances and trade partnerships have ensured ­resilience and continuity in global trade. This shift indicates strategic diversification towards Asian markets and increased Central Asian involvement. BRICS engagement has provided Russia with a platform to advocate for energy security and challenge Western dominance in global energy governance. Future research should explore other supply-chain components and analyze trade within theBRICS+ group and Russia–China bilateral trade.

Russian counter-sanctions and smuggling: Forensics with structural gravity estimation

Trade and other economic sanctions are a common foreign policy instrument, but their imposition may induce smuggling. We develop and implement procedures to study smuggling after the food embargo imposed by Russia on Western countries after the annexation of Crimea in 2014. We construct predicted trade flows for the post-sanctions period using an estimated structural general equilibrium gravity model with many industry sectors and compare those predictions with actual trade flows. We identify a substantial value of suspicious trade flows which we associate with smuggling; especially importing banned goods through third countries such as Belarus. The structural gravity model systematically under-predicts trade volumes for country-product combinations used as channels for smuggling of the banned goods. We identify a quantity of smuggling equivalent to approximately 11 to 17 percent of the pre-embargo trade flows.

Trade under lockdown

To curb the effect of the Covid-19 pandemic on public health, many countries around the world introduced lockdown policies in 2020. This paper estimates the effect of these lockdowns on international trade flows using a rich dataset of monthly bilateral trade flows covering over 80% of world trade. We first document that both exporter and importer lockdowns significantly reduced trade flows, that this effect differed substantially across sectors, and has been declining over time. We then decompose this total effect into a direct effect of lockdowns on trade, and an indirect effect that is mediated by a decline in economic activity. Our results indicate that lockdowns reduced trade also conditional on economic activity, suggesting an important increase in trade costs due to lockdowns. A quantification exercise shows that the welfare consequences of these trade costs were sizable, amounting to about one sixth of the welfare loss under a complete return to autarky.