Trade Diversion Effects From Global Tensions Higher Than We Think

The paper builds a unique industry-level dataset by combining Mexico’s nationally sourced inputoutput data (INEGI) with cross-country sources (WIOD, UN Comtrade). Using this dataset to exploit higher supply linkages across a larger number of industries than what is available in cross-country sources, the paper estimates the trade diversion effect on Mexico’s exports to the U.S. from two episodes, with a focus on the first: the U.S.-China trade tension in 2018 and the U.S. sanctions on Russia in 2014. Difference-in-differences, local projections and few other empirical methodologies are used. For the first episode, the paper finds higher trade diversion effects than estimates in literature. Output tariff plays an important role, and there is some evidence of a positive impact through downstream tariffs. The effects are stronger when nationally sourced input-output data is used compared to those derived from cross-country sources. Importantly, the magnitude of trade diversion across industries does not depend on Mexico’s industry-level trade exposure to the U.S., but rather on the U.S. tariff changes on Chinese goods, the decrease in imports from China, product substitutability with Chinese products, and (weakly) on Mexico’s GVC integration. Similarly, for the second episode, the paper finds positive trade diversion effects. Overall, the findings suggest that trade diversion effect might be higher than previously thought and the proper accounting of dataset and supply linkages makes a difference.

The latest World Economic Outlook reports economic activity was surprisingly resilient through the global disinflation of 2022–23, despite significant central bank interest rate hikes to restore price stability. Risks to the global outlook are now broadly balanced compared with last year. Monetary policy should ensure that inflation touches down smoothly, while a renewed focus on fiscal consolidation is needed to rebuild room for budgetary maneuver and to ensure debt sustainability. Structural reforms are crucial to revive medium-term growth prospects amid constrained policy space.

"The ongoing COVID-19 pandemic marks the most significant, singular global disruption since World War II, with health, economic, political, and security implications that will ripple for years to come." -Global Trends 2040 (2021) Global Trends 2040-A More Contested World (2021), released by the US National Intelligence Council, is the latest report in its series of reports starting in 1997 about megatrends and the world's future. This report, strongly influenced by the COVID-19 pandemic, paints a bleak picture of the future and describes a contested, fragmented and turbulent world. It specifically discusses the four main trends that will shape tomorrow's world: - Demographics-by 2040, 1.4 billion people will be added mostly in Africa and South Asia. - Economics-increased government debt and concentrated economic power will escalate problems for the poor and middleclass. - Climate-a hotter world will increase water, food, and health insecurity. - Technology-the emergence of new technologies could both solve and cause problems for human life. Students of trends, policymakers, entrepreneurs, academics, journalists and anyone eager for a glimpse into the next decades, will find this report, with colored graphs, essential reading.

The global financial crisis of 2008/9 is the Great Depression of the 21st century. For many though, the similarities stop at the Wall Street Crash as the current generation of policymakers have acted quickly to avoid the mistakes of the past. Yet the global crisis has made room for mistakes all of its own. While governments have apparently kept to their word on refraining from protectionist measures in the style of 1930s tariffs, there has been a disturbing rise in "murky protectionism." Seemingly benign, these crisis-linked policies are twisted to favour domestic firms, workers and investors. This book, first published as an eBook on VoxEU.org in March 2009, brings together leading trade policy practitioners and experts - including Australian Trade Minister Simon Crean and former Mexican President Ernesto Zedillo. Initially its aim was to advise policymakers heading in to the G20 meeting in London, but since the threat of murky protectionism persists, so too do their warnings.

Shows that expanding commercial ties between states pacifies some, but not necessarily all, political relationships.

This flagship publication examines different aspects of the nature and role of international trade in the era of hyperglobalization and considers related policy challenges that will need to be addressed if trade is to contribute to a more stable and inclusive global economic order. Research provides authoritative data and analysis on trade, investment, finance and technology. UNCTAD offers solutions to the major challenges facing developing countries, particularly the poorest and most vulnerable nations. Beyond tailored analysis and policy recommendations, UNCTAD research also generates global standards that govern responsible sovereign lending and borrowing, investment, entrepreneurship, competition and consumer protection and trade rules.

An accessible overview of political, economic, and strategic dimensions of global supply chains in a changing global political economy.

"A very important and long-awaited major contribution to the debate . . . Her work cannot be ignored." --Nils Petter Gleditsch, Journal of Peace Research "Barbieri builds on a solid foundation of work on trade and conflict and specifies the conditions under which trade reduces and increases conflict. . . . The bottom line is that this is an important book in the study of trade and conflict because of its comprehensive approach." --Kathy L. Powers, Perspectives on Politics "Barbieri's analysis reveals the fundamental and intellectual weaknesses of the various arguments on this topic. [A] solid and timely contribution to the literature" --Choice The Liberal Illusion sheds light on an increasingly important question in international relations scholarship and the domain of policy making-whether international trade promotes peace. By examining a broad range of theories about trade's impact on interstate relations and undertaking a set of empirical analyses of the trade-conflict puzzle, Katherine Barbieri provides a comprehensive assessment of the liberal view that trade promotes peace. Barbieri's stunning conclusions depart from conventional wisdom in international relations. Consequently, The Liberal Illusion serves as an important counterargument and a warning call to policymakers who rely upon trade-based strategies to promote peace, strategies that appear to offer little hope of achieving their goals.