Why non-tariff measures matter more in a world of sliced-up supply chains

Richard Baldwin, Daria Taglioni, 10 June 2012Global value chains are transforming world trade patterns. This column argues that the standard gravity formulation cannot be applied to trade flows where parts and components are important. This is because GDPs in origin and destination countries are poor proxies for supply and demand for parts and components.

Richard Baldwin, 30 May 2012In the late 1980s, developing nations that had eschewed all forms of liberalisation began to cut their import tariffs unilaterally. This column explains how the communication-technology revolution was the shock that altered the political-economy equilibrium against infant-industry protection and in favour of joining international supply chains which involved tariff liberalisation.Full Article: Unilateral tariff liberalisation

China has limited exports of so-called rare earth elements for years, frustrating foreign trade partners who want to access the metals used to make everything from cell phones to weapons systems.  

TWO quick additional thoughts on Apple, supply chains, and manufacturing. First, in manufacturing supply chains, cost isn't the only thing that matters; time does too. Here's the abstract from a new NBER working paper:

By Willem Thorbecke Today, we're fortunate to have Willem Thorbecke, Senior Research Fellow at Asian Development Bank Institute and a Consulting Fellow at Japan's Research Institute of Economy, Trade and Industry, as a guest contributor. Asia's role in the propagation of the global recession has been a subject of study, but relatively little attention has been devoted to the interaction of exchange rates a

OTTAWA • The Conservative government’s unexpected move to raise tariffs on goods from many developing nations may have as much to do with fighting currency manipulation and torquing trade talks as leveling the global playing field. More than 70 countries have been targeted by Ottawa to pay higher duties on products entering Canada, beginning in 2015. These include the so-called BRIC nations —Brazil, Russia, India and China — as well fast-developing countries such as South Korea.

Warnings that the world is headed for "peak oil" – when oil supplies decline after reaching the highest rates of extraction – appear "increasingly groundless," BP's chief executive said on Wednesday.

Natasha Xingyuan Che, Antonio Spilimbergo, 11 July 2012A major cause of the Eurozone crisis is the difference in income and productivity between the core and the periphery. This column presents evidence suggesting that structural reforms can be instrumental in fostering the development of lagging regions within a country.