Geo-Economic Fragmentation and the Future of Multilateralism

Aiyar, Shekhar; Ilyiná, Anna; Chen, Jiaqian; Kangur, Alvar; Trevino, Juan; Ebeke, Christian; Gudmundsson, Tryggvi; Soderberg, Gabriel; Schulze, Tatjana; Kunaratskul, Tansaya; Ruta, Michele; Garcia-Saltos, Roberto; Rodríguez, S.

doi:10.5089/9798400229046.006

Cited by 71 publications

(44 citation statements)

References 62 publications

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“…According to Baldwin et al (2022[15]), over 40% of the nations in the OECD ICIO data have China as their top supplier. 6 China is also the most critical choke point in GVCs across a broad range of industries, both as a dominant supplier and as a dominant buyer (Schwellnus et al, 2023[14]). The central role of China in production networks is not limited to consumption goods.…”

Section: Baseline Simulation Resultsmentioning

confidence: 99%

“…This exercise relies on the list of ATPs provided by the United States Census Bureau. 7 The simulation scenario consists of a large and temporary drop of 50% in the supply of these products by China to all its partners uniformly. As previously mentioned, we do not specify the origins of the supply shock which could be attributed to a negative productivity shock in supplying firms, or to large-scale supply disruptions.…”

Section: Baseline Simulation Resultsmentioning

confidence: 99%

“…They represent 72% of the total value imported by the motor vehicle industry 5. See Figure3of the paper « Global Value Chain dependencies under the magnifying glass", bySchwellnus et al (2023[14]) 6. See Figure11inBaldwin et al (2022[15]).…”

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confidence: 99%

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Mapping and testing product-level vulnerabilities in granular production networks

2024

OECD Science, Technology and Industry Working Papers

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Working PapersOECD Working Papers should not be reported as representing the official views of the OECD or of its member countries. The opinions expressed and arguments employed are those of the authors. Working Papers describe preliminary results or research in progress by the author(s) and are published to stimulate discussion on a broad range of issues on which the OECD works. Comments on Working Papers are welcomed, and may be sent to Directorate for

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Section: Baseline Simulation Resultsmentioning

confidence: 99%

Section: Baseline Simulation Resultsmentioning

confidence: 99%

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Mapping and testing product-level vulnerabilities in granular production networks

2024

OECD Science, Technology and Industry Working Papers

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“…Citing an IMF study (Aiyar et al, 2023), the executive director of that institution, Kristalina Georgieva, states that the long-term cost of trade fragmentation could range from 0.2% of world GDP to 7% in a pessimistic scenario (Georgieva, 2023).…”

Section: Overview Of Related Literaturementioning

confidence: 99%

The Us Trade and Technology War Against China and the Resulting Geoeconomic Fragmentation: Potential Implications and Risks for the Global Economy

Nikolić,

Zvezdanović Lobanova,

Zvezdanović

2023

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The aim of the paper is to assess the possible consequences and risks for the global economy due to the increasingly pronounced geoeconomic fragmentation, dominantly determined by the trade and technological war of the US against China. Based on benchmark studies’ findings, we reason that decoupling and trade fragmentation could manifest through several main channels. These are, among other things: the slowdown in the growth of global trade, reduced migration, decreased FDI, and bans on the transfer of certain high technologies. In order to achieve the primary goal of the study, we suggested pragmatic ways to preserve as many of the benefits as possible resulting from trade openness, that is, international economic cooperation. First of all, in addition to more intensive communications of the main global economic actors, in which additional efforts would be made for compromise solutions along the lines of argumentation of the academic community and experts in relevant international institutions, the work of leading multilateral organizations should be revitalized, giving greater importance in their leadership to developing countries, especially China. In the end, we argue that, despite all the risks, it is not realistic that geo-economic fragmentation will lead to a significant decline in most types of economic cooperation at the global level since there are no valid (geopolitical) reasons why Western countries would stop importing price- and qualitatively competitive products from China. Instead, collaboration will primarily be reduced to a limited number of high-tech sectors, perceived in Washington, Brussels, and Beijing as strategically important.

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“…The global economic climate is currently characterized by multiple crises (for example, COVID-19 pandemic, rocketing inflation, food and energy crises, balance of payment challenges) and the emergence of new challenges for developing countries (for example, geoeconomic fragmentation, climate-related events) (IMF, 2023;World Bank, 2024;WTO, 2023a). It is essential that developing countries have at their disposal the requisite policy tools to navigate these crises and address new development challenges.…”

Section: Introductionmentioning

confidence: 99%

The Membership in the World Trade Organization and Trade Policy Space in Developing Countries

GNANGNON

2024

Preprint

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Many scholars and commentators have argued that the membership in the World Trade Organization (WTO) has resulted in the restriction of developing countries’ trade policy space, preventing them from industrializing and promoting development. The present article has tested empirically this assertion, using a sample of 87 developing countries over period 1986–2020. It has shown that the WTO membership genuinely has restricted developing countries’ trade policy space, and countries that had larger trade policy space have experienced larger trade policy space restrictions. However, these outcomes mask different realities across sub-samples, including Least developed countries (LDCs) - that enjoyed more generous flexibilities in WTO rules - versus NonLDCs, and Article XII member states - those that undertook greater trade liberalization commitments – versus NonArticle XII member states. Finally, countries with larger trade policy space tended to secure a greater trade policy space, as they improved their participation in global trade. JEL Classification: F13; F14.

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Geo-Economic Fragmentation and the Future of Multilateralism

Cited by 71 publications

References 62 publications

Mapping and testing product-level vulnerabilities in granular production networks

Mapping and testing product-level vulnerabilities in granular production networks

The Us Trade and Technology War Against China and the Resulting Geoeconomic Fragmentation: Potential Implications and Risks for the Global Economy

The Membership in the World Trade Organization and Trade Policy Space in Developing Countries

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