Deep Integration and Production Networks: An Empirical Analysis

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractIn this paper, the two way relationship between deep integration and production networks trade is investigated. Deep integration is captured by a set of indices constructed in terms of policy areas covered in preferential trade agreements. An augmented gravity equation is estimated to investigate the impact of deep integration on production networks. The results show that on average, signing deeper agreements increases production networks trade between member countries by almost 35 percentage points. In addition, the impact of deep integration is higher for trade in automobile parts and information and technology products compared with textiles products. To analyse whether higher levels of network trade increase the likelihood of signing deeper agreements the literature on the determinants of preferential trade agreements is followed. The estimation results show that, after taking into account other PTAs determinants, a ten per cent increase in the share of production network trade over total trade increases the depth of an agreement by approximately 6 percentage points. In addition, the probability of signing deeper agreements is higher for country pairs involved in North-South production sharing and for countries belonging to the Asia region.

Is the WTO Passé?

“…A first is presented in Antràs and Staiger (2012a), and relates to apparent difficulties in achieving negotiated reductions of tariffs on imported differentiated inputs for a set of countries acceding to the WTO. A second is contained in Orefice and Rocha (2014), who find evidence that an important predictor of whether two countries sign a deep-integration PTA is the share of their bilateral trade that is comprised of parts and components. seems appropriate, survives largely intact.…”

Trade Policy Implications of Global Value Chains

“…"Deep" provisions do appear to be more characteristic of RTAs than multilateral efforts so are more likely to address the specific needs of firms engaged in GVCs (Antràs and Staiger, 2012;Orefice and Rocha, 2013). That said, and having in mind the evidence on cumulative tariffs presented in the previous case studies and the interconnected nature of trade within GVCs, it would suggest that RTAs should cover as many countries and industries as possible to be supportive of as much as possible of the whole value chain.…”

The Post-2007 Crises and Europe's Place in the Global Economy

“…24 The 2000 Chiang Mai Initiative, a swap arrangement among the ASEAN+3 group (the ten ASEAN members plus China, Japan and South Korea), was expanded and multilateralized in 2009, but the amounts remained small compared to, say, the credit lines some of the participants had with the US Fed and the facility proved to be redundant during the 2008-9 crises (Pomfret, 2011, 58-73 (Table A15) Since 2000 Asian economic integration has centred on a network of bilateral trade agreements, especially in East Asia. This has been driven by the increased density of regional value chains, and perhaps by lack of progress on trade facilitation in the Doha Development Round (Pomfret, 2011;Orefice and Rocha, 2011;Xing, 2011;Sourdin and Pomfret, 2012). A consequence of the value chains is that the extent of the decline of global trade, which is measured by summing gross value at each border crossing, relative to the decline in GDP, which is measured by summing value-added, was exaggerated.…”