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The paper looks at the role of two policies geared toward stimulating and shaping Global Value Chains (GVCs), namely deep Regional Trade Agreements (RTAs) and Bilateral Investment Treaties (BITs). In an augmented gravity model, we test the impact of both policies on a variety of trade in value-added indicators. We find that both policies are likely...
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Context 1
... second source of information is the database put together by the World Bank on the content of deep trade agreements ( Hofmann et al., 2017). The database shows the provisions of 261 agreements in 189 countries. 3 The provisions are arranged in 52 areas and classified according to their legal enforceability. As already pointed out by the authors there has been a surge in regional trade agreements over time ( Figure 2). In Figure 3, we show the type of provisions in the database separated in areas the fall under the WTO mandate (WTO-plus) and areas that go beyond the WTO mandate (WTO-extra). One can notice that WTO- extra provisions are far from common. 40 % of the agreements in the sample cover investment issues, which justifies looking at RTAs by their composition when comparing them to BITs. We also notice that the on average customs unions and economic integrated unions cover more provisions than most free trade agreements ( Figure 4). The web of trade agreements is also very interesting, as countries and regions with high value-chain activity are also well integrated in terms of the number of policy areas covered ( Figure 5). The European Union countries are the most integrated with respect to that. Korea, Peru, Mexico and Chile also have on average agreements that cover more policy areas than the average. Source: ITC based on World Bank. Content of Deep Trade Agreements; Hoffman, ...
