A collection of papers by some of the world's leading specialists on global value chains (GVCs). It examines how GVCs have evolved and the challenges they face in a rapidly changing world. The approach is multi-disciplinary, with contributions from economists, political scientists, supply chain management specialists, practitioners and policy-makers. Co-published with the Fung Global Institute and the Temasek

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Global value chains in a changing world

This paper uses a structural gravity model based on Anderson and van Wincoop (2003) to quantify and test the hypothesis that EU harmonization of food regulations increases EU bilateral trade. Using a self-constructed database that identifies processed food products at a detailed level covered by harmonization, our results suggest that bilateral exports subject to harmonized food regulations are 253% greater than bilateral exports not covered by harmonized food regulations for 1998. The paper also estimates a tariff equivalent of trade costs that arises from non-harmonized food regulations which ranges between 73% and 97%. Both of these effects vary across food sub-sectors.

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Harmonisation of food regulations and trade in the Single Market: evidence from disaggregated data

The authors test the hypothesis that product standards harmonized to de facto international standards are less trade restrictive than ones that are not. To do this, the authors construct a new database of European Union (EU) product standards. The authors identify standards that are aligned with ISO standards (as a proxy for de facto international norms). The authors use a sample-selection gravity model to examine the impact of EU standards on African textiles and clothing exports, a sector of particular development interest. The authors find robust evidence that non-harmonized standards reduce African exports of these products. EU standards which are harmonized to ISO standards are less trade restricting. Our results suggest that efforts to promote African exports of manufactures may need to be complemented by measures to reduce the cost impacts of product standards, including international harmonization. In addition, efforts to harmonize national standards with international norms, including through the World Trade Organization Technical Barriers to Trade Agreement, promise concrete benefits through trade expansion.

Help or Hindrance? The Impact of Harmonised Standards on African Exports

Grenzregionen und Grenzeffekte ziehen in der politischen Praxis und in der wirtschaftswissenschaftlichen Forschung gegenwartig groses Interesse auf sich. Ursachlich hierfur ist die Vermutung, dass die besondere geografische Lage von Grenzregionen spezifische okonomische Integrationseffekte bedingt. Dieser Uberblick fasst die Ergebnisse der okonomischen Theorie und empirischer Untersuchungen zu dieser Fragestellung zusammen. Es ist festzustellen, dass die okonomische Theorie keine eindeutigen Schlussfolgerungen erlaubt. Ob Grenzregionen von Integration profitieren, negativ beeinflusst werden oder unberuhrt bleiben, hangt von den konkreten Gegebenheiten ab. Auch die vorliegenden empirischen Studien zu Grenzregionen gelangen zu keinen eindeutigen Resultaten. Bisher gibt es allerdings weder eine direkte Uberprufung der Integrationseffekte in Grenzregionen noch umfassende Untersuchungen der wirtschaftlichen Entwicklung von Grenzregionen. Insgesamt zeigt dieser Uberblick, dass weitergehende theoretische und empirische Untersuchungen erforderlich sind, um fundierte Kenntnisse uber Integrationseffekte in Grenzregionen zu erlangen.

https://www.econstor.eu/bitstream/10419/19341/1/179.pdf

Integration Effects in Border Regions - A Survey of Economic Theory and Empirical Studies

This paper explores the economic consequences of the enlargement of the European Union with countries from Central and Eastern Europe We focus on integration aspects that go beyond the reduction of formal trade barriers, namely accession to the internal market and free movement of labour The economic implications for sixteen industries in several European countries are assessed by using WorldScan, a CGE model for the world economy The results suggest that the candidate member states will gain substantially from accession to the internal market, although some sectors in these countries will shrink Most EU countries will experience small welfare increases We also find that the internal market effects are large compared to the economic effects of removing formal trade barriers and migration

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EU enlargement: Economic Implications for Countries and Industries

With trade in industrial products between the EU and the countries of central and eastern Europe (CEECs) now essentially free of tariff and non-tariff restrictions, the principal impact of accession to the EU on trade flows will be through access to the single market of the EU. A key element of this will be the removal of technical barriers to trade. In this article we try to highlight the potential importance of technical barriers to trade between the EU and the various CEECs, distinguishing between sectors according to the different approaches to the removal of these barriers in the EU: mutual recognition, detailed harmonization (old approach) and minimum requirements (new approach). We use two sources of information on technical regulations: a sectoral classification from a previous study of the impact of the single market and our own detailed translation of EU product-related directives into the relevant tariff codes. The analysis suggests that the importance of technical barriers varies considerably across the CEECs. The adjustment implications of access to the single market are likely to be greatest for those most advanced in their accession negotiations.

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Technical Barriers to Trade in the European Union: Importance for Accession Countries

This paper brings together two important facets of current debates concerning trade policy and trade modelling: the importance of estimated border effects and the impact of technical barriers to trade. Here we try and identify the effect of technical barriers on the imports of EU countries by estimating gravity equations applied to data in which sectors are grouped according to the approach adopted by the EU to the removal of technical barriers (New Approach, Old Approach, mutual recognition) as well as an aggregate of sectors for which technical barriers are deemed to be unimportant. Our results suggest substantial border effects for all groups of sectors except for those subject to mutual recognition. The border effect is mitigated but remains considerable against trade with EU partners. High and persistent border effects are found for sectors where technical barriers are not important suggesting that factors other than policy-induced barriers are important determinants of the intensity of internal relative to external trade flows. The paper discusses the interpretation of these border effects in the context of measuring the extent of economic integration and argues that more information on the nature of preferences and on factors promoting local networks of buyers and suppliers is required before we can proceed to examine the policy implications.

The Extent of Economic Integration in Europe: Border Effects, Technical Barriers to Trade & Home Bias in Consumption. CEPS Working Document No. 171, August 2001

In this study of the footwear sector we seek to assess how producers in different EU countries have adjusted to increased competition from low-wage countries. There are a number of features of the performance of the sector in Europe which cast doubt over the applicability of the standard trade model, which has typically been used to assess the impact of globalisation . These characteristics also undermine a number of common perceptions regarding low-skilled labour intensive industries. Firstly, the trade data clearly demonstrate that as import penetration has increased so have export to output ratios. This suggests that adjustment to more intense import competition could entail the movement of resources into the production of higher quality differentiated fashion shoes and not necessarily the movement of resources to other sectors. Secondly, the group of production or unskilled workers in footwear is far from homogeneous, as is often assumed in discussions of the impact of globalisation . Thirdly, for footwear it is apparent that technological change has not been pervasive. Information regarding two new technologies shows widely varying rates of application across countries. Finally, some EU countries have been able to maintain employment and output in footwear whilst in other countries production has declined dramatically. This suggests that a variety of responses to globalisation are available to firms in OECD countries, including outsourcing and overseas investment, quality upgrading and increased flexibility in the context of industrial districts.

http://www-sre.wu-wien.ac.at/ersa/ersaconfs/ersa00/pdf-ersa/pdf/262.pdf

Marc Vancauteren

Papers

Technical Barriers to Trade in the European Union: Importance for Accession Countries

The Extent of Economic Integration in Europe: Border Effects, Technical Barriers to Trade & Home Bias in Consumption. CEPS Working Document No. 171, August 2001

Adjustment to Globalisation: A Study of the Footwear Industry in Europe