World Trade Patterns Research Articles

The Unseen Ripples: Examining the Links Between COVID-19-induced Disruptions and Trade Dynamics in Asia-Pacific Countries

The global COVID-19 epidemic and the strategies that were adopted to restrict its spread, such as lockdowns, had a significant impact on international trade. While the health crisis and the lockdown restrictions were linked, their repercussions on world trade patterns were distinct. This study examines trade data from 30 Asian-Pacific countries to examine how the COVID-19 pandemic affected their trading patterns. In addition, it looks at the effects of COVID-19-related policies on trade flows and explores the causality between changes in trade flows and policies induced by COVID-19. The cross-sectionally augmented autoregressive distributed lag (CS-ARDL) model, Juodis, Karavias, and Sarafidis (JKS) causality test and Dumitrescu–Hurlin causality test were employed to examine trade patterns of the Asia-Pacific amidst the COVID-19 pandemic. The results of CS-ARDL model showed that COVID-19 cases, deaths and policy-related indices induced a noteworthy and negative influence on export and import flows of Asia and Pacific both in the short- and long run. However, with few exceptions, on average, the impact of COVID-19-related measures is far bigger than that of COVID-19 deaths as well as cases in the long run. Further, the study found that the COVID-19 cases, deaths and COVID-19 policy-related measures have a Granger-causal relationship with exports and imports. Therefore, fostering regional cooperation, strengthening trade agreements and prudent management of COVID-19-induced policies will be essential in a crisis like COVID-19 to streamline trade processes and to achieve the optimum level of exports and imports.

The impact of trade on employment: New evidence from a global value chains perspective.

Given the magnitude impact of global value chains (GVCs) in reconstructing the pattern of world trade, its employment implications deserve thorough study. In this paper we explore the impact of GVCs position on employment across countries and its heterogeneous mechanisms. We perform an in-depth theoretical analysis followed by an empirical test using panel data for 56 industries in 42 countries from 2000 to 2014. The results show that enhancing the GVCs position will significantly increase employment, with a more pronounced effect in developing countries. Mechanical tests demonstrate a positive wage effect for developed countries. For developing countries, there is a positive demand effect and a negative factor substitution effect. Heterogeneity tests show that developed countries promote employment primarily by improving the forward GVCs position. Developing countries boost employment mainly by reducing the backward GVCs position. Further research has revealed that employment in developed countries has a clear preference for industries with higher GVCs, crowding out employment in other industries. This paper has enriched research on the employment implications of GVCs position and exploring the possible crowding effect during the evolution of the position of GVCs, which has been informative and insightful for countries in formulating GVCs participation and employment policies.

Research on China's International Political Economy based on International Regional Economic Cooperation

At present, the international economic situation has undergone profound changes. With the globalization of economy, risks are also globalized. At present, regional integration or regionalization has become an important phenomenon in international political economy. The deepening of regional interdependence and the growth of globalization have promoted the expansion of regionalism political and economic perspectives. The "the Belt and Road Initiative (B&R)" strategy is an important decision made by China to adapt to the new normal of economy and face the weak pattern of world economy and trade. In the future, this strategy will be an important supporting point for China's stable, open and efficient economic growth. Based on the new situation of international regional economic cooperation, this paper puts forward an international regional economic decision-making model based on artificial fish swarm algorithm (AFSA), and discusses the selection method of parameters in the model, so as to study the international regional economic cooperation and its effects under the "B&R" strategy. In order to solve it easily, it is transformed linearly and a new model with smaller scale is obtained. The experimental results show that the international regional economic intelligent decision-making model based on AFSA has high stability. The results show the feasibility of the proposed method. The research results have certain theoretical and practical significance for analyzing international political and economic issues, and have certain reference value for international and regional economic cooperation.

Higher Education in Post-Neoliberal Times: Building Human Capabilities in the Emergent Period of Uncertainty

This paper argues that the neoliberal consensus about education finance has broken down due to growing economic inequality. First, I use a comparative historical analysis of political alliances to examine patterns of world trade and nations’ policies for economic and educational development since World War II. The United States emphasized STEM-collegiate preparation for all students, while most countries continued the dual emphasis on technical-tertiary and higher education. Educational policy in the US and Pacific region also shifted towards a reliance on markets and student loans resulting in worsening economic inequality in access. Nations with dual technical and academic pathways in secondary and postsecondary education systems expand college enrollment rates more rapidly than the US. They also experience class conflict between the working–middle class and the new technological elite. Next, I examine how education policy shifted from national planning aligned with public funding to market-based incentives for institutional development, further exposing gaps in opportunity within nations. Finally, recognizing the variations in systemic causes of inequality, I argue that governments, education agencies, and civic activists can best promote equity by organizing to address barriers to opportunity for groups left behind in the wake of withering neoliberal education policy.

Changing Pattern of World Trade and Role of Global Supply Chains: Evidences from Recent Literature

Recent developments in the world economy have substantially increased interdependence among nations, due to which no nation can isolate itself completely from the rest of the world. Internationalization of production has resulted to mutual exchange of goods, services, technologies, people and investment, generally called as supply-chain trade. These processes have dramatically influence structure of production networks in global economy. Traditional domestic production networks have been replaced by much modernized global ones. The trade that is taking place through international networks is associated with momentous of global economic changes. These global supply networks have several economic and non economic effects particularly on the business organization involved and generally on the economies/nations as a whole. Trading pattern of world economy has also experiencing changes under the influence on these supply chains. This paper highlights the role of recent global supply chains in changing pattern of world trade. Evidences from literature reveal that recent global supply chains have had a significant effect on pattern of world trade as Newly Emerging Economies (EMEs) are emerging as manufacturing trading partners which was not even dreamt about few years back during 1970s and 1980s. Role of supply chain to make these changes incidental is multidimensional and immense. Paper also highlights role of transnational corporations (TNCs) in coordinating global trade through creation of global supply chains and importance of these chains as instrument of trade policies for firms in developing nations.

Perkembangan Ekspor dan Impor Sumatera Utara pada Tatanan Hidup Baru

The level of a province can be seen from its economic growth, seen from the aspect of the value of exports and imports which have an influence on a trade between provinces. After the occurrence of covid-19 which had a major impact on Indonesian trade and the global economy. As a result of the pandemic, there have been major changes in world trade patterns, such as the lockdown system implemented in Indonesia. This study aims to determine the development of exports and imports of North Sumatra Province through indicators of export and import values. The data analysis technique in this research is descriptive data analysis. The source of data in this study is secondary data taken in (2016/2020) which is downloaded via www.bps.go.id, especially export and import data during the development of a new economic life order in North Sumatra Province. The results show that there is an increase that can be seen from the increase in the volume and value of imports and exports in a province, a decrease in the volume and value of imports and exports of imports, the development of a new economic order of life. With good economic growth, it will increase national income, the community will be prosperous in terms of the economy. In the last decade, exports continued to increase in 2021 to reach Rp. 13 trillion. Many studies have stated that in the past year, export-import cases have fluctuated during the COVID-19 period. And this pandemic has taught us the need to encourage export and import diversification, diversification of supplying countries and product destinations. produced in order to develop in a new life order.
 Keywords: Export, Import, New Era, Economic Growth

Estimating the Impact of Technical Barriers to Trade in WTO Regime: The Case of Pakistan

Technical Barriers to Trade (TBT) forwarded by World Trade Organisation (WTO) has obstructed world trade patterns; generally, it is conceptualized as non-tariff barrier which impedes trade. In this study, impact of TBT on imports of Pakistan has been estimated. This paper explores how TBT affects import of Pakistan from its trade partner using PPML estimation method to handle zero trade flows and overdispersion of data of Pakistan’s import, based on gravity model. The findings depict that GDP of Pakistan and partners, exchange rate, tariff, distance, and contiguity are vital factors; along with TBT cases initiated by Pakistan have also impacted import from WTO members. The results suggest that Pakistan-initiated TBT and tariff have experienced lower import volume, hence they can be used to administer its ever-increasing trade deficit. The study also presents comparative analysis of TBT and tariff impacts on imports from high income, upper middle, lower middle, and lower income countries as classified by the World Bank.

Study application of the domestic freight logistics system in Indonesia

With the geographic conditions of Indonesia, the availability and need for commodities in each province are different, the fluctuations and disparities in the prices of basic goods between regions are quite high, are driving factors for inter-island trade. inter-island trade has an important role in the economic sectors of society. The geographic condition of Indonesia with 62.89% sea area, means that the modes of transportation that can be selected in inter-island trade are sea transportation and air transportation. The choice of transportation mode is closely related to the 9R of logistics principles, namely: Right Way, Right Product, Right Quantity, Right Quality, Right Place, Right Time, Right Customer, Right Cost. The development of the digital era that has penetrated all aspects of human life has also influenced the patterns of world trade which have begun to change since the presence of e-commerce. This study will try to potray how the current inter-island trade logistics system in Indonesia is conduct and how electronic commerce (e-commerce) affect the logistics business. This research aim to provide the right input for business actors in choosing the mode of inter-island trade transportation.

COVID-19 Pandemic and World Trade: Some Analytical Notes

The globalization of COVID-19 pandemic is en route to produce a chain of economic impacts worldwide through distortions in global trade and supply chain. The globalization of production and trade shocks in relation to China generate substantial threat to world trade. The aim of this paper is to provide a preliminary and broad-based understanding of likely trade implications of the pandemic. Beginning with an assessment on likely implications for trade between China and the rest of the world, the paper uses a standard trade analysis framework to explain the implications for world trade. The paper then presents a theoretical mapping that shows likely progression and span of trade implications and reviews emerging evidence to identify if real-life outcomes follow the map. The paper concludes that the pandemic is likely to not only introduce new patterns of world trade but also affect trade relations and globalization, making some economies winners and some losers. Given the scarcity of scholarly work on COVID-19’s trade implications, the paper contributes by offering a novel broad-based understanding, which could serve as a basis for advanced analysis. Assessments of the paper could help policy-makers in preparing for a new world order of international trade.

Examining Trade by Destination, Innovation and Human Development in FOCAC

There are few empirical research papers on the impact of trade by destination on human development, most of which focus on the direct impacts completely ignoring the indirect impacts through various channels. The main objective of this paper was to examine the impact of trade by destination towards strategic partners on human development through innovation channel captured using capital imports, while controlling for endogenous impacts from economic growth and at the same time providing new evidence on the direct impacts. This study was demonstrated using a sample of 40 Sub Saharan African countries (SSACs) and their trade partnership with China under the Forum for China-Africa Cooperation (FOCAC) framework for the period from 2000 to 2017. To avoid bias, the study controlled for other SSACs trade partners using rest of world trade patterns. The framework was estimated using two simultaneous equation generalized methods of moments (GMM) for economic growth and human development and also considering that trade and innovation can impact both economic growth and human development. The results indicated that both SSACs trade openness towards China and SSACs trade openness towards rest of world, had positive and significant impacts on human development at 1% level. The study also found that innovation from China and innovation from rest of world had both negative and insignificant impacts on human development. The results were robust to simultaneous equation three stages least squares (3SLS) and single equation two-step GMM. The study also found comparable results when time period was extended from 1990 to 2017 and innovation was instead captured using total capital trade. These findings suggest that trade partnerships matter for enabling potential gains from trade openness on human development and to maximize such gains, SSACs need to reform and incorporate human development aspects in their key policies including innovation as these create a conducive environment through which trade impacts can be sustainable and inclusive.

The China Shock: Learning from Labor-Market Adjustment to Large Changes in Trade

China's emergence as a great economic power has induced an epochal shift in patterns of world trade. Simultaneously, it has challenged much of the received empirical wisdom about how labor markets adjust to trade shocks. Alongside the heralded consumer benefits of expanded trade are substantial adjustment costs and distributional consequences. These impacts are most visible in the local labor markets in which the industries exposed to foreign competition are concentrated. Adjustment in local labor markets is remarkably slow, with wages and labor-force participation rates remaining depressed and unemployment rates remaining elevated for at least a full decade after the China trade shock commences. Exposed workers experience greater job churning and reduced lifetime income. At the national level, employment has fallen in the US industries more exposed to import competition, as expected, but offsetting employment gains in other industries have yet to materialize. Better understanding when and where trade is costly, and how and why it may be beneficial, is a key item on the research agenda for trade and labor economists.

New patterns of world trade and foreign direct investment growth in Egypt

During the last 30 years, the world economy becomes more globalised and the international trade and FDI were growing faster than many economic activities. The fast growth in international trade is through trade in parts and components which introduced a new phenomenon known as 'international fragmentation of production' and changed the pattern and trends of trade in the world economy. Trade in parts and components has opened up new opportunities for developing countries to participate in world production, which may affect on increase FDI. This paper deals with the relation between trade in parts and components and FDI, both theoretically and empirically, and investigates the effect of trade in parts and components on FDI in Egypt. The empirical analysis finds that trade in parts and components has a significance positive effect on FDI in Egypt during the period 1995-2013. Accordingly, we cannot ignore traditional determinants and institutional determinants (non-traditional determinants).

Импортозамещение в российской промышленности: текущая ситуация и перспективы

We describe the current situation in Russian economy concerning import substitution in the industry as a whole and in different economic activities. Three phases of the import substitution process are detected. Before the external shock of the mid-2014, there was a moderate import substitution accompanied by output growth. Then, the economy adapted to the shock quickly (turbulent import substitution). After the adaptation phase, import substitution stopped despite the continued weakening of the ruble (import dependence stabilization). The most intensive import substitution was observed in manufacturing of food products, transport equipment, metals and metal products. However, most industries experienced virtually no import substitution: for most cases, a significant drop in imports in physical terms was not accompanied by the corresponding drop in value terms. We provide preliminary estimations of the prospects of import substitution by industries that account for both relevance and potential of import substitution. The relevance of import substitution (relative level of import dependence) was calculated as the share of imports of a commodity in Russian GDP relative to the world share. Import substitution potential was obtained from the modified Hausmann-Klinger approach that accounts for the world trade patterns in the form of links between commodities and input coefficients for the corresponding industries from the Input-Output table. Our preliminary estimations show that both the need for import substitution and the ability to replace imports exist in agriculture and manufacturing of food products, several machinery industries, manufacturing of footwear, paints and varnishes, cleaning preparations and perfumes.

Comments by Shigeyuki Abe, on Global Value Chains and East Asian Trade in Value-Added

Shigeyuki Abe: This paper empirically analyzes global value chains (GVCs) in East Asia since the mid 1990s using the World Input Output Database. Estimations are carried out to identify the determinants of East Asian trade in value-added, incorporating the Heckscher-Ohlin model, the Ricardian model, and the gravity model. The empirical result reveals that world trade patterns can be better explained over time by capital–labor ratios and productivities. In the case of East Asia, high-skilled labor productivity has not contributed to the trade in value-added since the mid 2000s; instead, the importance of the distance variable has been rising significantly. East Asia has not been a technological innovator, meaning it has not fully benefitted from GVCs. Policy implications for Asian countries to follow include improving labor productivity, putting less importance on developing free trade agreements (FTAs), lowering tariffs further because of the acceleration of cross-border trade in intermediate goods promoted by GVCs, and keeping sufficient inventory to minimize the market risks.

Value Added in Motion: Modelling World Trade Patterns at the 2035 Horizon

We address in this paper the future geography of production, migration and energy at the world level, and the consequences for the largest European countries. We take scant account of the wide range of possible evolutions of the world economy in terms of technological progress and diffusion, education, demography including migrations and finally energy price and efficiency. Taking a 2035 horizon, we examine how world trade patterns will be shaped by the changing comparative advantages, demand, and capabilities of different regions, and what will be the implications in terms of location of value added at the sector and country level. We combine a convergence model fitting three production factors (capital, labour and energy) and two factor-specific productivities, alongside a dynamic CGE model of the world economy calibrated to reproduce observed elasticity of trade to income. Each scenario involves three steps. First, we project growth at country level based on factor accumulation, demography and migration, educational attainment and efficiency gains, and discuss uncertainties related to our main drivers. Second, we impose this framework on the CGE baseline. Third, we implement trade policy scenarios (tariffs as well as non-tariff measures in goods and services), in order to get factor allocation across sectors from the model as well as demand and trade patterns.

Likelihood of establishment of tree pests and diseases based on their worldwide occurrence as determined by hierarchical cluster analysis

The trade in woody plants for planting (WP4P) is a major pathway for the introduction of alien tree pests and diseases into Europe. Pest risk analyses are important tools to prevent such introductions, but they target recognised pests, their hosts and commodities that are likely to vector them. Moreover, the perception of risk partially depends on expert judgement. Our aim was to provide an objective assessment of the likelihood of establishment and potential sources of invasive species. We analysed distribution data for 1009 invertebrate pests and pathogens of woody hosts in 344 regions. Countries and regions with similar pest assemblages were identified for each organism group using hierarchical cluster analysis and the likelihood of establishment of those species was calculated as the frequency of each species in countries within the cluster containing EU and EFTA countries (“EU countries”). Meaningful European clusters were formed for all organism groups, except oomycetes, and species were ranked by risk to each EU country. The non-EU regions with the most similar pest assemblages to the EU are the Balkan countries, Japan, Kazakhstan, New Zealand, Turkey, Ukraine, parts of China, Russia and the USA, and EPPO countries, indicating that these may be the origin of new pests and pathogens. The quality of the assessment of the likelihood of establishment depends on the quality of distribution data for pests and pathogens, but data quality varies between countries and organism groups and records are often historical. For example, the recent increase in trade and the similar climate in which WP4P for the EU market are grown in China indicates that this may be an important source of new invaders, but this was not suggested by our analysis. Moreover, most pest species in our database are recorded in one or more EU countries and the risk of these species primarily comes from within the EU. Future studies should therefore take the potential spread and establishment of these species in Europe, as well as recent changes in world trade patterns into account.

Brexit Prize: Final Shortlisted Entries

Brexit Prize: Final Shortlisted Entries

Opening a Pandora's Box: Modelling World Trade Patterns at the 2035 Horizon

Economic projections for the world economy, particularly in relation to the construction of Computable General Equilibrium (CGE) baselines, are generally rather conservative and take scant account of the wide range of possible evolutions authorized by the underlying economic mechanisms considered. Against this background, we adopt an ‘open mind’ to the projection of world trade trajectories. Taking a 2035 horizon, we examine how world trade patterns will be shaped by the changing comparative advantages, demand, and capabilities of different regions. We combine a convergence model fitting three production factors (capital, labor and energy) and two factor-specific productivities, alongside a dynamic CGE model of the world economy calibrated to reproduce observed elasticity of trade to income. Each scenario involves three steps. First, we project growth at country level based on factor accumulation, educational attainment and efficiency gains, and discuss uncertainties related to our main drivers. Second, we impose this framework (demographics, gross domestic product, saving rates, factors and current account trajectories) on the CGE baseline. Third, we implement trade policy scenarios (tariffs as well as non-tariff measures in goods and services), in order to get factor allocation across sectors from the model as well as demand and trade patterns. We show that the impact of changing baselines is greater than the impact of a policy shock on the order of magnitude of changes in world trade patterns, which points to the need for care when designing CGE baselines.

World trade patterns and prices: The role of productivity and quality heterogeneity

This paper analyzes the role of product quality and labor efficiency in shaping the trade patterns and trade intensities within and across two groups of countries, the developed and richer North and the developing South. Recent empirical literature identifies two groups of evidence — the product lines evidence on different export strategies and sources of competitiveness across product groups and countries, and the aggregate trade flows evidence on a positive relation between the income per capita and both export and import prices (also conditional on the exporter). We attempt to provide a theoretical background for these findings and focus on the North–South productivity differences in a four country North–South trade model with two dimensions of firm heterogeneity. Differences in the firms' product quality and cost efficiency impose different competitiveness sources when entering more difficult markets and result in the observed export and import prices and consumption bundles across the rich and poor countries.

Visible and invisible walls: World trade patterns and the end of the Cold War

This paper revisits the empirical trade literature on East-West trade in the early 1990s and provides a replication of the traditional gravity findings of that period with the Baier-Bergstrand version of the model, providing thereby better estimates of the trade hindering impact of the Cold War by including multilateral and world resistance factors and simultaneously considering country fixed effects. Breaking down the Cold War Walls increased world trade by 2.7% of world GDP. The replication with the Baier-Bergstrand model also reveals that Cold War trade distortions also significantly impacted China’s trade with the West.