Tristan Kohl

Do Trade Agreements Stimulate International Trade Differently? Evidence from 296 Trade Agreements

In a seminal paper, Rose (2004) found that the assumed positive impact of the WTO on international trade was questionable. This finding has been scrutinized and modified in subsequent research, using different datasets, econometric methods and separating the WTO from other forms of trade agreements. A key characteristic of this literature is the rather simplistic way in which trade agreements are treated whereby all trade agreements are lumped together. Trade agreements come, however, in many different forms and shapes. This paper addresses these differences in trade agreements. Using a unique database of 296 trade agreements, we distinguish 17 trade-related policy domains, 9 indicators of institutional quality and indicate whether the agreements contain legally enforceable commitments. This extensive and novel taxonomy of trade agreements enables us to allow for the possible heterogeneity of the impact of trade agreements on international trade. Using a gravity model, we find that trade agreement heterogeneity indeed matters for international trade, both positively and negatively.

The WTO’s Effect on Trade: What You Give is What You Get

Do countries trade more when they participate in the World Trade Organisation (WTO)? After Rose’s (Am Econ Rev 94:98–114, 2004) initial “non-effect”, the literature has developed in several ways to re-examine this unexpected result. This paper gives a detailed overview of the developments and exposes the main biases that plague previous contributions. Using a dataset covering 181 countries for the period 1948–2007, we show that zero trade flows are best incorporated using (zero-inflated) negative binomial maximum likelihood estimation. We find that formal members gained more than non-member participants, and the level of WTO participants experienced gains go hand in hand with the extent of their multilateral liberalisation commitments. Developed nations gain more than developing or least developed countries, although poor countries do benefit from trading under the Generalised System of Preferences (GSP). We also correct for selection bias with respect to economic integration agreements and find, overall, that regionalism has a lower trade-promoting effect than WTO membership.

Supply-chain trade and labor market outcomes : The case of the 2004 European Union enlargement

The structure of international trade is increasingly characterized by fragmentation of production processes and trade policy. Yet, how trade policy affects supply-chain trade is largely unexplored territory. This paper shows how the accession of 10 Central and Eastern European Countries (CEECs) to the European Union affected European supply-chain trade. We find that accession primarily fostered CEECs’ integration in global value chains of other entrants. Smaller integration benefits stem for East–West trade in services for lower-skill activities. These increases in value-added exports translate into sizeable job creation.

The development of trade blocs in an era of globalisation

This study investigates the economic geography of international trade during the period 1950–2005. We introduce a new trade bloc variable that relies on the intramax hierarchical clustering technique to identify endogenous trade blocs with annual trade flows. Multivariate analysis with gravity-equation-based variables is used to explain how mechanisms of globalisation have affected trade patterns over the past half century. In particular, proximity and economic integration agreements are key to explaining the persistence of region-based trade blocs in a globalising world economy.

Opening the Black Box of Trade Agreements

In this chapter the author presents a coding methodology to capture the heterogeneity of trade agreements and to facilitate quantitative analysis departing from qualitative legal differences in trade agreements. The coding is based on whether the provisions of the World Trade Organization (WTO) are covered by free trade agreements, as well as whether they are legally enforceable. Then, the author offers a heterogeneity index that is used to analyze the content of a trade agreement. The index can be used in gravity models to estimate the effect of FTAs on trade.