EU trade: deviations in multi-country input-output tables and their implications for trade policy

Territory and boundaries in international trade do not necessarily align with national borders. Trade governance does not merely organise flows between states as invariant territorial units nor is deterritorialised – instead, it can change boundaries and decouple the delineation of territory from national borders. Conceiving of the boundaries of territory in international trade – the space governed by trade rules – as subject to change, thus being endogenous to trade governance, avoids falling into the territorial trap. Adopting such a dynamic view of territory, this article develops a conceptual framework of changing boundaries in international trade. It identifies three conceptually distinct processes through which trade governance changes the boundaries of trade rules and, thus, of territory: (i) redrawing boundaries, when trading blocs as transnational agents negotiate common rules such as preferential trade agreements (PTAs); (ii) shifting boundaries, when trade rules are established by separate governance frameworks where spill-over effects give rise to interdependent trade policies that shift the actual boundaries of trade governance; and (iii) blurring boundaries, when trade rules are porous and entail provisions that extend to non-parties beyond their parties. Blurred boundaries render PTAs a ‘false dichotomy’ as formal membership does not fully delineate territory. Modern, deep trade governance intensifies these processes. Changing the boundaries of territory and maintaining their governance frameworks inherently entail political choices. Examples from EU and UK trade policy illustrate the three mechanisms of territorial change and the central role of political objectives: EU trade policy relies heavily on redrawing boundaries overseas. During Brexit, the UK selectively shifted the boundaries of EU trade governance, despite its policy independence. Lastly, blurred boundaries and overlapping territoriality in Northern Ireland are crucial to its post-Brexit governance architecture.

This chapter compares the narratives underlying the EU's approach to governing cross-border data flows and their reflection in the EU's trade policy with those of the US and China. It demonstrates that, although the policy concerns behind the EU, US and China's restrictions on data flows are different, the degree of regulatory autonomy these jurisdictions are willing to give up in order to promote cross-border data flows is more similar than is often assumed. The chapter suggests that this convergence could pave the way to a multilateral consensus on data flows at the World Trade Organization and reflects on other implications it might have for the multilateral trading system.

Interfering maximum residue limits (MRLs) for pesticides with agricultural trade is becoming important for food and trade policies in the early 21st century. Differing levels for pesticide residues among countries have the potential to disrupt trade significantly. We employ a non-linear and disaggregated stringency index to quantify the degree of regulatory heterogeneity levels for pesticides between trading nations for fruits and vegetables in 2013 and 2014 and investigate the trade-restricting nature of this measure using the structural gravity framework. Our findings indicate that stricter importer MRLs reduce bilateral trade to the tune of 8.8%. Looking closer at MRLs with US partners, the effect of stricter MRLs is quite elastic concerning its impact on the US - EU trade. In particular, the estimates imply that a more stringent MRL’s policy decreases the US export of fruits and vegetables to the EU members by a striking 13.8%. At the disaggregated level of MRL indices over different classes of chemicals, the results indicate that there is a significant gap in regulations regarding MRLs among several major US foreign markets for fruits and vegetables, particularly in the EU and the Trans-Pacific trading partners.

The liberalization of telecommunications has contributed to considerable price reductions in international telephony and to rising volumes of telecommunications. This raises the issue of the economic impact of international telephony. Falling international information and transaction costs should stimulate competition and enlarge the market radius for producers in the tradables sector—this lets us to expect trade creation effects of international telecommunications; this in turn should raise output provided that more intensive international telecommunications stimulates international diffusion of knowledge or brings about trade-related specialization gains. Based on a modified gravity equation which is taking into account the role of international telecommunication volumes—based on new ITU data—we show that international telephony has a significant positive impact on trade volume: A rise of the international telecommunications volume by 10% raises trade by 2% in Europe. At the same time the coefficients of the traditional variables, GDP in the exporting and the importing country, are smaller than in traditional approaches. Thus from a policy perspective the modernization and growth of the international telecommunications network—within a system of enhanced competition—is crucial for Europe: economic integration will be reinforced. From this perspective the Lisbon Agenda is right to emphasize the importance of creating a digitally networked knowledge society.

This paper examines how the European Union can leverage its position as a global leader in trade to tackle corruption. The issue is timely given the changing character of the EU’s trade policy that is poised to become more assertive, particularly in light of open strategic autonomy objectives. Furthermore, existing international and domestic anti-corruption frameworks, despite some positive steps such as extraterritoriality, fall short in addressing a novel type of corruption that has benefitted from globalisation and become truly transnational. Such ‘transnational’ or ‘international’ corruption means that, in an interconnected world, corruption in one part of the world can have an effect elsewhere, allowing malicious actors to cross borders and exploit jurisdictions with weaker anti-corruption measures to circumvent the stronger frameworks. The paper argues in favour of incorporating anti-corruption provisions into EU trade policy. It proposes to address the issue both through including robust anti-corruption provisions in EU trade agreements and through making compliance with such provisions a condition for receiving preferential trade. Through this ‘carrot-and-stick’ approach, the EU can assertively use its economic leverage to instil anti-corruption prevention, identification and penalisation among its trading partners.

The European Union has implemented various trade policies in the textile and clothing sector, a major global employment generator, over the past three decades. This paper investigates how these evolving policies have impacted the four largest exporters of textiles and clothing to the EU. A notable trend emerges: India’s share of the EU market has declined and China has stagnated, while Bangladesh and Vietnam have seen significant gains. Using an Augmented Gravity Model, the study examines whether this shift is a result of broader global market dynamics or specific consequences of the EU’s tariffs, non-tariff measures, and its preferential trade agreement—the Everything But Arms initiative—with Bangladesh. Drawing on New Trade Theory, the research explores the interplay between these policies and their differential impact on developed (China), developing (India and Vietnam), and least-developed (Bangladesh) countries. It highlights the strategic role of NTMs and questions whether the EU’s focus on supporting least-developed countries might unintentionally undermine trade fairness for other nations within the global textile and clothing market. The paper contributes to the ongoing policy debate on strengthening the India–EU trade relationship, particularly in the context of current discussions around the India–EU Free Trade Agreement.

The study of the EU’s foreign economic policy is one of the key topics in the modern scientific literature due to the EU’s significant influence on the global economic processes. This article analyzes evolution of the relevant research by Russian and foreign authors, including both modern works and publications of the early 2010s, when this topic began to gain relevance in the context of studying international trade relations. Special attention is paid to the issue of transformation of the EU Commission’s foreign economic policy formulation due to the implementation of the 2021 trade policy strategy, aimed at ensuring «strategic autonomy» of the Union. This article reviews existing discussions regarding the definition of this concept, as well as regarding its main instruments. In conclusion, the author identifies key gaps in respective scientific knowledge and presents directions for further study. It is proposed to investigate the ongoing changes using a paradigmatic research method that is based on the 1993 theory by Peter Hall. A deeper understanding of the EU's trade policy changes will allow Russia to more effectively adapt its behavior in the international arena, as well as its interaction with the other global players.

EU Trade and Aid Policies Towards the LDCs and CEECs

The EU’s trade agreements with third countries exhibit varying degrees of alignment with intra-EU rules. What factors explain this external differentiation? This article answers this question by relying on a large language model to measure the alignment of 62 EU trade agreements with intra-EU rules at the level of individual topics, such as trade in goods, intellectual property rights, or sustainable development. The results indicate that this alignment is higher for third countries (1) with large trade flows with the EU; (2) with an EU membership perspective; and (3) with a medium level of regulatory capacity. These associations are particularly pronounced for provisions tackling behind-the-border trade barriers. These findings contribute to the literature on external differentiation and advance our understanding of EU trade policy and preferential trade agreements.

Agricultural trade is a key determinant in global food security (Figure 1), but international cooperation is necessary for trade to help coping with supply shocks, to spread variations in crop yield and to dampen price volatility on global commodity markets. If regional and bilateral negotiations expand at the expense of a multilateral agreement, there is a risk of fragmentation of the trading system.

The third chapter addresses the issue of the enforcement of trade defence measures. The European Union is exclusively competent in the area of common commercial policy and thus also regarding the law of trade defence instruments. The EU Commission is responsible for the imposition of trade defence measures. Given that trade defence measures both interfere with the competitive relationship between companies and require the disclosure of extensive confidential information by the companies to the Commission, the chapter also presents the procedural rights of the parties and the rule of law requirements for procedures under the EU's trade defence instruments, placing a particular focus on proceedings under the Basic Anti-Dumping Regulation.

• We examine the implication of food policies on body weight outcomes. • An increase in tariff rate on “unhealthy” foods is associated with reduction in obesity rates. • An increase in subsidy rate is associated with higher obesity rates. • These implications of these food policies are more pronounced among poorer individuals. • We highlight heterogenous implications of trade and fiscal policies. Understanding the public health implications of food policies is crucial to combat recently increasing overweight and obesity rates in many low-and-middle income countries (LMICs). This study examines the implication of food policies, mainly tariff rates on “unhealthy” foods (sugar and confectionery products as well as fats and oils) and governments’ subsidies, on individuals’ body weight outcomes. We compile several macro- and micro-level datasets that provide macro-level information on food policies and micro-level anthropometric data for several LMICs. We exploit temporal dynamics in tariff rates on “unhealthy” foods and governments’ spending on subsidies to estimate fixed effects models characterizing the evolution of body weight outcomes. We find that temporal dynamics in tariff rates on unhealthy and energy-dense foods are significantly and negatively associated with body weight. Conditional on several observable and time-invariant unobservable factors, a decrease in tariff rates on sugar and confectionary foods or fats and oils is associated with an increase in overweight and obesity rates. On the other hand, an increase in subsidy rate, as a share of government expenditure, is significantly associated with higher overweight and obesity rates. Interestingly, we find that the implications of these food policies are more pronounced among poorer individuals. This may be explained by the fact that poorer households usually spend a larger share of their income on food consumption or unhealthy foods; and that poorer individuals are often beneficiaries of government subsidies in many LMICs. These findings have important implications for informing public health policies in LMICs, which are experiencing an unprecedented rise in overweight and obesity rates.

Economic Reforms and Food Security

The past three decades have witnessed tremendous growth of supply chain activities around the globe thanks to the lowered trade barriers and free trade agreements among countries. The global supply chain management literature developed during this time provided theoretical frameworks and decision support tools for operational and supply chain decisions in the global context. Recent development in trade barrier debates as well as increasing uncertainties in countries’ trade policies have forced companies to rethink their global operational strategies. In this short paper, we draw insights from the existing global supply chain literature and in particular, focus on interpreting recent research contributions published in Manufacturing & Service Operations Management (M&SOM) on the topic to gain understanding of the implications of trade policies, especially tariffs, for firms’ global facility network design decisions. We also provide a discussion of important dimensions that were absent from the existing literature but are pertinent to providing a richer understanding of implications of trade policies for today’s interconnected supply chains. Future research that takes into consideration those previously less explored dimensions has the potential to offer insights not only to industry practitioners but also, to the policy makers. Developing an appreciation of potential reactions from complex connected supply chains in various industries would help policy makers better anticipate the impact of trade policy change.

This paper examines host country government (HCG) commercial policy towards imports resulting from intrafirm trade conducted by a multinational corporation (MNC). the effectiveness of the HCG's commercial policy is impaired by its limited information about the MNC's cost of production. the commercial policy consists of restrictions on intrafirm transactions. We construct and characterize the optimal commercial policy under imperfect information and find that under imperfect information the optimal policy entails a distorted transfer price and a lower level of intrafirm trade relative to the full information case. Welfare implications of commercial policy under imperfect information are also examined.