The Impact of trade preferences on export prices in the European Union - who captures the preference rent?

Preferential Trade Agreements (PTAs) aim at increasing trade flows via reductions on applied tariffs and the incentives created by the difference between the applied and the most favoured nation (MFN) tariff, the preference margin. An often omitted element in PTAs evaluation is the possibility that the wedge between preferential and MFN tariffs may induce a preference rent. This paper analyses empirically who captures the preference rent by exploiting a unique dataset of imports in the European Union at a highly disaggregated level (CN-10) linked to information on the preferential regime used and the tariff applied. In order to remove potential bias and measurement errors from comparing preferential prices from specific countries and products with average MFN prices, this paper uses the prices from the same country, product and year. This is possible since we observe in the database a large number of cases where in the same year a preferential regime is both utilised and non-utilised. Our main findings suggest that on average an exporter obtain a larger price margin under a preferential regime than under MFN. However, this preference rent is only partially appropriated by exporters with a pass-through coefficient from preference to price margins that oscillates between 0.16 and 0.5.Preferential Trade Agreements; Unilateral preference; GSP; EBA; Price margins; Preference rent

Developing competitive HMM PoS taggers using small training corpora

This paper presents a study aiming to find out the best strategy to develop a fast and accurate HMM tagger when only a limited amount of training material is available. This is a crucial factor when dealing with languages for which small annotated material is not easily available. First, we develop some experiments in English, using WSJ corpus as a test-bench to establish the differences caused by the use of large or a small train set. Then, we port the results to develop an accurate Spanish PoS tagger using a limited amount of training data. Different configurations of a HMM tagger are studied. Namely, trigram and 4-gram models are tested, as well as different smoothing techniques. The performance of each configuration depending on the size of the training corpus is tested in order to determine the most appropriate setting to develop HMM PoS taggers for languages with reduced amount of corpus available.Postprint (published version

Distortions to Agricultural Incentives in Mozambique

Distorted incentives, agricultural and trade policy reforms, national agricultural development, Agricultural and Food Policy, International Relations/Trade, F13, F14, Q17, Q18,

The impact of North-South and South-South trade agreements on bilateral trade.

Free trade agreements (FTAs) lead to a rise in bilateral trade even if the signatories include developing countries. Furthermore, the percentage increase in bilateral trade is higher for South-South agreements than for North-South agreements. the results are robust across a number of gravity model specifications in which we contrl for the endogenity of FTAs (with bilateral fixed effects) and also take account of multilateral resistance in both estimation (with country-fixed effects) and compartive statics (analytically). Our analystical model shows that multilateral resitance dampens the imapct of FTAs on trade by less in South-South agreements than in North-South agreements, which accentuates the difference implied by our gravity model coefficients, and that this difference gets larger as the number of signatories rises. For example, allowing for lags and multilateral resistance, a four-country North-South agreement rasies bilateral trade by 53% while the analogous South-South impact is 107%

Explaining the Diversification Path of Exporters in Brazil: How Similar and Sophisticated are New Products?

A stylised fact of the economic literature suggests that export diversification is good for economic growth and is associated with economic development. In addition, there is evidence suggesting that the level of sophistication of countries’ exports “matters” for growth and development. This paper contributes to this literature by analysing two unexplored dimensions of export diversification: the degree of relatedness (similarity) and sophistication of new products in relation to existing ones. The objective of this paper is to understand the mechanisms through which firms are able to diversify to less related and more sophisticated activities. We do so using a unique dataset that links data on exports, innovation and firms’ characteristics at the firm level in Brazil. The main findings suggest that i) diversification occurs in very closely related activities, where firms have some core competences, ii) most diversification occurs in new products with lower level of sophistication than existing exports, iii) the degree of diversification and innovativeness of the production basket, and the position that the firm has developed in the domestic market appear to matter for diversification towards more or less distant products.Diversification; Relatedness; Sophistication; Trade; Innovation; Brazil

Does it matter who you sign with ? comparing the impacts of north-south and south-south trade agreements on bilateral trade

Free trade agreements lead to a rise in bilateral trade regardless of whether the signatories are developed or developing countries. Furthermore, the percentage increase in bilateral trade is higher for South-South agreements than for North-South agreements. In this paper, the results are robust across a number of gravity model specifications in which the analysis controls for the endogeneity of free trade agreements (with bilateral fixed effects) and also takes account of multilateral resistance in both estimation (with country-time fixed effects) and comparative statics (analytically). The analytical model shows that multilateral resistance dampens the impact of free trade agreements on trade by less in South-South agreements than in North-South agreements, which accentuates the difference implied by the gravity model coefficients, and that this difference gets larger as the number of signatories rises. For example, allowing for lags and multilateral resistance, a four-country North-South agreement raises bilateral trade by 53 percent while the analogous South-South impact is 107 percent.Free Trade,Trade Law,Trade Policy,Economic Theory&Research,Emerging Markets

The Economic Engagement Footprint of Rising Powers in Sub-Saharan Africa: An Analysis of Trade, Foreign Direct Investment and Aid Flows

Rising powers such as Brazil, China, India, South Africa, the Gulf states or Turkey have entered the development arena through their expanding relationships with low-income countries (LICs). One region where this engagement has been increasing more significantly is sub-Saharan Africa (SSA). Estimates suggest that over the last decade both trade and foreign direct investment (FDI) from emerging economies to Africa ballooned. However, some views suggest that the importance of engagement from these countries is still small compared to traditional OECD donors, and highlight that established relationships can sometimes be more likely to satisfy the commercial and economic interests of these new donors. The objective of this report is to understand and measure the engagement of rising powers in SSA.1 Specifically, the report attempts to clarify the importance and nature of their engagement and the distinctiveness of their economic relationships with SSA, among the rising powers themselves and also in relation to traditional OECD donors, and to start analysing their likely development footprint arising from their economic engagement.DFI