Analyzing a new database that makes it possible to disaggregate trade flows across many countries according to unit values, we show that international specialization in terms of quality within industries and product categories plays an important role in the dynamics of North-South competition. The different specialization of countries at different levels of development within products and across varieties is mirrored in the recent shifts in world market shares, which are very different across quality segments: the South is not gaining market share in high-value portions of trade pattern. In this respect Europe's specialization pattern appears to be different from that of the US and Japan, and may allow it to better resist the competitive pressure of the South
This paper develops a new method to measure difficulties in market access over a large sample of countries (both developing and developed), industries and years. It also offers a renewal of the assessment of the impact of regional trading arrangements. We use a micro-founded gravity-type model of trade patterns to estimate in particular the impact of national borders on revealed access to Northern markets by Southern producers. Everything else equal, in the nineties, a rich country imports on average 281 times more from itself than from a developing country, only 61 times more when importing from another rich country. Those difficulties in Northern market access have however experienced a noticeable fall during the last thirty years. While tariffs still have in general an influence on trade patterns, our estimates suggest that they are not an important component of market access difficulties faced by Southern exporters on Northern markets. The EU, CUSA/NAFTA, ASEAN/AFTA and MER-COSUR agreements all tend to reduce the estimated degree of market fragmentation within these zones, with an expected ranking between the respective impact of these agreements.JEL classification: F12, F15
We estimate the trade-related welfare gains from the European Union. Strong estimated trade effect of the EU-rising over time-based on structural gravity. The Single Market increases bilateral trade more than three times as much as a "normal" RTA. The costs of Non-Europe (weighted by country size) are estimated to vary between 3% and 7% on average for the EU depending on the counterfactual ("normal" RTA vs return to WTO rules notably). Wide variation across member countries: small open economies in Europe gain the most, particularly the Eastern part of the continent.
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