We build upon new developments in the international trade literature to isolate and quantify the long-run economic impacts of tariff changes on the United States and the global economy. In particular, we apply the most recent data and trade elasticity estimates to the Ricardian model of Caliendo...

Within global value chains (GVCs), services and manufacturing activities are intertwined. This report further investigates the role played by services in GVCs by looking at patterns of specialisation in 23 services industries over the period 2000-2014. Relying on the concept of revealed...

This report presents evidence on how services trade restrictions influence the decisions and performance of firms engaged in international markets, drawing on micro-data from Belgium, Finland, Germany, Italy, Japan, Sweden, the United Kingdom, and the United States. It first describes the...

This paper aims to provide policy makers with a broad overview of the issues that the digital transformation raises for trade with a view to informing how these might be reflected in trade policy design. It discusses how digitalisation has changed international trade and provides estimates of...

It is well established in theory that trade liberalization impacts on productivity through the reallocation of market share to more productive firms. Since more productive firms tend to pay higher wages, the market reallocation effect also increases average wages. In addition to these...

In a world with increasingly integrated global supply chains, trade policy targeting upstream products has unintended consequences on their downstream industries. In this paper, we examine whether protection granted to intermediate manufacturers leads to petition for protection by their...

Services have become significantly more tradable in the first two decades of the 21st century. This paper documents that trade costs for financial services, communication services and business services fell by between 30% and 60% between 2000 and 2019. Information and communication technology...

This paper provides an overview of the evolving nature of digital trade and digital trade policies. It shows that digital trade has been growing faster than “non-digital” trade. By 2018, 24% of global trade (USD 5.1 trillion) could be considered digital trade. In parallel, countries have...

Did the 2018/19 US-China trade war trigger adjustment of Global Value Chains (GVCs) and nearshoring to Mexico? We address this question with confidential longitudinal firm-level trade data from Mexico that covers the universe of international trade transactions over 2015-2021. By merging the...

According to the theory of comparative advantage, each country would recognize these facts and stop attempting to make more luxurious locally for engaging in trade. David Ricardo developed the classical theory of comparative advantage in 1817 to clarify why countries engage in international...