August 2023
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2 Reads
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August 2023
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2 Reads
June 2021
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493 Reads
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38 Citations
World Trade Review
The European Union (EU) often conditions preferential access to its market on compliance with Non-Trade Policy Objectives (NTPOs), including human rights and labor and environmental standards. In this paper, we first systematically document the coverage of NTPOs across the main tools of EU trade policy: its (association and non-association) trade agreements and Generalized System of Preferences (GSP) programs. We then discuss the extent to which the EU can use these tools as a ‘carrot-and-stick’ mechanism to promote NTPOs in trading partners. We argue that, within trade agreements, the EU has limited scope to extend or restrict tariff preferences to ‘reward good behavior’ or ‘punish bad behavior’ on NTPOs, partly because multilateral rules require members to eliminate tariffs on substantially all trade. By contrast, GSP preferences are granted on a unilateral basis, and can thus more easily be extended or limited, depending on compliance with NTPOs. Our analysis also suggests that the commercial interests of the EU inhibit the full pursuit of NTPOs in its trade agreements and GSP programs.
May 2021
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65 Reads
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31 Citations
Review of International Economics
We use the new International Trade and Production Database for Estimation to obtain benchmark gravity estimates for an unprecedented range of 170 industries. We document differences and similarities of standard gravity variables across four broad sectors: Agriculture, Mining and Energy, Manufacturing, and Services. We test the robustness of our main estimates against some key data and estimation approaches from the related literature. The findings from these experiments confirm the robustness of our main findings and reinforce some stylized facts, while highlighting possible caveats for gravity estimation in other contexts.
April 2021
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29 Reads
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7 Citations
August 2020
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153 Reads
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117 Citations
International Economics
This paper introduces and describes the new International Trade and Production Database that can be used for statistical estimation (ITPD-E). The ITPD-E contains consistent data on international and domestic trade for 243 countries, 170 industries, and 17 years. The data are constructed at the industry level covering agriculture, mining, energy, manufacturing, and services, so that the ITPD-E describes nearly completely the traded sectors of each economy. The time period covered commences in 2000 and extends to 2016. The ITPD-E is constructed using reported administrative data and intentionally does not include information estimated by statistical techniques. This feature and the unprecedented coverage of industries and countries with consistent international and domestic trade data renders the ITPD-E well suited for estimation of economic models, e.g., the gravity model of trade. We demonstrate the usefulness of the ITPD-E by running standard gravity regressions.
June 2020
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12 Reads
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10 Citations
June 2020
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40 Reads
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11 Citations
January 2020
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5 Reads
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5 Citations
SSRN Electronic Journal
January 2020
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55 Reads
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15 Citations
SSRN Electronic Journal
April 2018
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74 Reads
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77 Citations
European Economic Review
We develop a method to project missing sectoral services output and trade. For OECD countries, projected and observed output data match well. The basis is a structural gravity model to estimate barriers to services trade across sectors, countries and time. The model fits well and reveals key differences across service sectors. Border barriers fall over time but unevenly. Inferred border barriers are fitted to national geography, technology, income and endowments, and institutional determinants. The fitted model including fitted border barriers is used to project missing internal or bilateral trade flows, aggregating to projected output.
... Recent attempts involving the construction of STRIs include projects by the OECD (OECD 2009 andGrosso et al. 2015) and the World Bank (Borchert, Gootiiz, and Mattoo 2012). The STRIs derived by the OECD are only for OECD economies, while the World Bank covers 79 developing and transition economies, and 24 OECD economies. ...
June 2012
... Specifically, remittance fees were used as a proxy for cross-border transaction costs. To distinguish the cross-border transaction costs from fixed effects, domestic trade was included in the sample, following the approaches of Yotov (2012), Borchert and Yotov (2017), and Bergstrand and others (2015). ...
January 2016
SSRN Electronic Journal
... Second, the trade data is always fraught with heteroscedasticity. As proposed by Santos Silva and Tenreyro (2006), the Poisson Pseudo-Maximum Likelihood (PPML) 11 estimator effectively handles the presence of "zero" trade flows and provides consistent estimates in the presence of heteroscedasticity as well as three-way fixed effects (Anderson et al. 2018;Yotov et al. 2016). Therefore, the gravity, Eqs. ...
January 2015
SSRN Electronic Journal
... The empirical importance and practical relevance of the latter motivation is questionable, but both possibilities are consistent with positive incentives for GVC-reliant firms to support disciplines in PTAs. 12 This has become a feature of the politics of trade in high-income nations that has increased in salience in recent years(Young, 2016;Borchert et al., 2021) ...
June 2021
World Trade Review
... This variable is defined as the product of a country's average geographic distance to other countries and the average centrality of other countries in the trade agreements network. Regarding relevance, countries geographically closer to highly central trade partners are more likely to form trade agreements with them (Anderson & Van Wincoop, 2003;Baier & Bergstrand, 2004;Borchert et al., 2022). Such agreements facilitate deeper integration into the trade network, enhancing the country's own centrality within the network. ...
May 2021
Review of International Economics
... Table 4 (columns 2 and 3) shows that the coefficients of the depth terms are larger for products compared to services. The coefficient of shallow (deep) agreements is almost 1.5 (1.36) times larger for products compared to services, confirming the fact that it has a few trade agreements focusing on services (Borchert & Di Ubaldo, 2021). ...
April 2021
... As shown by Hakobyan (2015), persistent uncertainty over the legislative fortunes of the US GSP program has likely diminished the program's effectiveness. Similar concerns over the uncertainty generated by the EU GSP program motivated a 2014 reform to enhance the stability of the program by relaxing existing rules on countries' "graduation" from the EU GSP when their share of EU imports surpassed stipulated thresholds (Borchert & Di Ubaldo, 2020). Work by Herz and Wagner (2011) surprisingly discovers that participation in GSP actually reduces beneficiaries' exports in the medium to long run, which they attribute to the effects of structural distortions in preference recipients' economies caused by the receipt of special preferences. ...
January 2020
SSRN Electronic Journal
... The domestic trade data are based on the latest update (second edition) dataset from the International Trade and Production Database for Estimation Release 2 (ITPD-E-R02), published in July 2022. The ITPD-E-R02 database covers the data for 265 countries or regions and 170 industries in the four sectors, including agriculture, mining & energy, manufacturing, and services, from 1986 to 2019 [74,75]. It is important to emphasize that the scope of this research is limited to trade in the goods sector and total trade costs. ...
August 2020
International Economics
... Extant scholarship largely follows the logic that the EU should use its power to "grant" preferences to "developing countries," often routinely referred to as "beneficiaries," who should in return comply with international standards. Studies even seem to go further than EU language in describing the conditionality as a "carrot and stick" mechanism (e.g., Koch, 2015;Orbie & Tortell, 2009;Wardhaugh, 2013) that "rewards good behavior" and "punishes bad behavior" (e.g., Borchert et al., 2020); and one otherwise critical study at some point talks about "a really backward country" as opposed to more "advanced" countries (Kishore, 2017, p. 26). It is this kind of discursive patterns that we aim to unmask and problematize. ...
January 2020
SSRN Electronic Journal
... The surveys of African economies were conducted in the context of the joint work by the World Bank and the WTO Secretariat to develop a comprehensive database on services trade policies to respond to the information needs of trade policy makers, regulators and the trade research community. Building on previous work initiated by the World Bank in 2008, both organizations now maintain and develop the joint Services Trade Policy Database (STPD), inaugurated in 2019 (Borchert et al., 2020a and2020b), and the associated joint Services Trade Restrictions Index (STRI), which quantifies the level of perceived policy restrictiveness embodied in the regulatory information. 6 This is done for policies that apply on a Most Favoured Nation (MFN) basis; that is, the nondiscriminatory regime applicable to all foreign services or services suppliers that do not qualify for any other preferential treatment. ...
June 2020